- Money Morning Australia

Why Australia isn’t so Different to Greece


Written on 27 April 2010 by Kris Sayce

Your editor is in Australian Small-Cap Investigator mode again this morning, so we may be brief with today’s Money Morning – unless we get carried away…

“Oh stop grumbling and just hand over the money.” That’s in effect what the German government is being told to do with its taxpayer euros.

According to the Associated Press (AP):

“A 45 billion euros ($A64.45 billion) bailout package from other eurozone countries and the International Monetary Fund (IMF) should see Greece through its borrowing needs for this year. But the bailout is complicated by German grumbling, which continued on Monday, about the burden of the bailout on its own finances.”

Do you know what, if your editor was German we think we’d grumble a bit too. In fact if we were German we’d tell the Greeks to stick a Banane^ up their Kokospalme.*

We’ve long thought the Euro currency was doomed to failure. Whether the debts piled up by Greece and other Eurozone countries is enough to cause its collapse is another matter.

But one day – probably sooner rather than later – it will fail. Just like all fiat currencies are destined to collapse.

For an indication of how bad things have gotten in Greece you need look no further than current Greek interest rates and compare them to German interest rates.

First take a look at this chart from Bloomberg:

Hell-enic Bonds

 

 

The worst thing is, that yield is only as of close of business on Friday. In overnight trade the interest rate on the 2-year bond increased to over 13%. A full three percentage point increase on Friday’s rate.

Make no mistake, that’s an absolutely massive move.

And as you can also see from the chart above, the yield has more than doubled during the past month alone.

But what this shows is that if you mess around with debt and interest rates it’ll eventually bit you on the bum.

It shows you that the attempts to manipulate interest rates by central bankers are doomed to fail. Because while the Greek government should hang its head in shame for criminally burdening its citizens with debt, the central bankers are equally culpable for drugging them up on cheap money.

Let me show you an example. Below is a chart for the same 2-year Greek bonds, except it’s showing the rolling yield going back five years:

Too low for too long

 

 

And remember, this chart only goes up to last Friday. Based on the prices from overnight, the current yield would be where I’ve placed the big red blob on the chart.

Now, we won’t claim to be an expert on Greek government debt. But the reaction of the bond market tells you what the problem is.

It’s telling you that the government has over-exposed itself to debt over a long period and that investors are no longer willing to accept a yield of between 2% and 5% that they were prepared to accept for the previous four years and eight months.

Importantly, the problems in Greece aren’t something that developed overnight. The Greek government didn’t change from an Ebenezer Scrooge type miser at the beginning of this year to a Paris Hilton style spendaholic yesterday.

The markets have obviously known about the Greek debt for some time. It’s only now that the realisation has dawned on investors that there are perhaps better places to stick their money…

Hence why the Germans are “grumbling” over sending some of their hard-earned southbound to the Mediterranean.

This is the sort of event the saps in the mainstream insist could never happen in Australia or the US. They’re mistaken.

You see, as our Slipstream Trader editor Murray Dawes wrote in Money Morning yesterday:

“I really believe that you can never succeed in the markets long term if you’re not constantly aware of the effect your psychology has on your results.”

A large part of the reason why investors are fleeing Greek bonds is psychology. Sure there are some mug punters that are prepared to buy Greek debt on a 13% yield, but that yield shows you just how risky the punters believe it is.

The main role of interest rates is to provide a visible price of money, another role is to indicate the supply and demand for money, and finally it provides an indicator on the relative risk of money and other investments.

To use an example. While the Greek 2-year bond is trading at a yield of over 13%, the German 2-year bund has a yield of just 0.88%. That’s a spread of over twelve percentage points!

The interest rate is now telling investors that German debt is low risk and Greek debt is super high risk.

Of course it’s all relative. And you shouldn’t forget that the German rate has been manipulated much lower than it otherwise would be by the European Central Bank. But you get the point.

Keeping interest rates low gives the false impression that no one needs to save. Low interest rates over the previous four years gave the market and investors the false signal that there is already enough saving and therefore there’s no need save.

The low interest rates also made the incentive to save a lot less too, even if they were inclined to.

So, what do governments and individuals do? They heed the signals from the interest rates and spend. Only it turns out that the signals were false. The signals were like faulty traffic lights stuck on green in all directions.

Investors were happy to drive through them and luckily they missed the carnage. But eventually their luck ran out and they’ve run head on into a semi-trailer.

Which is what makes headlines such as this sent in by Money Morning reader Karl all the more worrying: “Lifting rates will not stem rising market.”

The article opens with, “SOMEWHERE amid the fuzzy logic that drives the Reserve Bank’s interest rate policy is the notion we have a housing price bubble and that raising interest rates will deflate it.”

Sadly, in the short term the writer Terry Ryder is probably right. For a time investors and people will ignore higher interest rates because they assume it to be a sign of a positive economy. But taking that attitude is no different to what’s happened to the Greeks.

Whichever way you look at it, it’s a manipulation of interest rates. And despite the fact that interest rates are rising you shouldn’t forget that they are being kept much lower than the free market would otherwise have set them.

Rising interest rates should mean that it’s time to stop spending and it’s time to save. However, because of the entrenched idea that rising interest rates means a positive economy, individuals have been brainwashed by the mainstream commentators into believing that higher interest rates is also a good time to borrow and spend.

But don’t forget, despite Australian interest rates being higher than the official cash rate in other economies, they are still being kept artificially low.

And because the Reserve Bank of Australia (RBA) is keeping rates low, it’s masking asset bubbles and convincing investors and individuals that more can be borrowed – especially as rates are below ‘normal.’

Just as the Greeks were convinced to borrow more when their interest rates were kept artificially low.

The five-year chart above provides a perfect example of how a bubble can only be suppressed for so long before it eventually bursts.

It may not look like a bubble bursting because the chart shows the yield going up. But just remember, the higher the yield the higher the risk. And also remember that bond prices react inversely to bond yields.

So if you were to see the price of bonds as opposed to the yield it would look something like what we’ve magically created using the expensive software package known as – hehem – Microsoft Paint:

Kerrrrunch!

 

 

You can see the bubble being artificially expanded by low interest rates, reaching a crescendo in late 2009.

But then the market reached a tipping point if you like. Investor psychology took over. It begins where one by one investors start to dislike the risk profile of a particular asset class.

Eventually one by one becomes ten by ten, then one hundred by one hundred, until the flood of investors exiting an asset is unstoppable.

You’ve seen that for yourself in the stock market.

And now you’re seeing it with Greek government bonds.

There’s no reason why this can’t and won’t happen in the UK, the US, or more troublingly in China.

And there’s absolutely no reason why it won’t happen to Australia’s asset bubbles either.

Cheers,
Kris.

^ Banana
* Coconut tree


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38 Comments For This Post

  1. cb Says:

    This piece of writing is as good as any in taking the cake for its simple-minded, shallow analysis. Greece is a 10 year demolition job by robber barrons who want to loot the country, and demolish the Euro at the same time, so that it does not become a competing world reserve currency. Where is this part of the analysis? No amount of microdescription of how a bullet killed Henry will account for the fact that George drew his gun and pulled the trigger.
    Helloo0oooo …………..

  2. Nick Says:

    here’s another one who thinks he is doing “Gods work”

    http://www.youtube.com/watch?v=nRTB-J2-JLA&feature=youtube_gdata

  3. Nick Says:

    ahh!! guns again cb…Yeah Kris, how about a little more about the ones who pulled the trigger rather than the ones who caught the bullet?? hmmm??
    http://www.youtube.com/watch?v=deDDwBj0ZlQ&feature=youtube_gdata

  4. andy dufresne Says:

    Anything’s possible I suppose. A snapshot of 10 year bond yields taken about a fortnight ago sees us uncomfortably close to the PIIGS….

    Ten year government bond yields:

    Greece 7.29%
    New Zealand 6.02%
    Australia 5.83%
    Ireland 4.50%
    Portugal 4.40%
    UK 4.02%
    Italy 3.89%
    US 3.88%
    Spain 3.87%
    Norway 3.77%
    Canada 3.67%
    France 3.44%
    Germany 3.13%
    Switzerland 1.93%
    Japan 1.40%

  5. cb Says:

    Ah, Nick, Bill Gates is such a d!ckhead, honestly … He seems to be talking about lowering CO2 levels to zero. WTF !!!! Has this guy any idea? Does he know, for example, that at about half of current concentration levels plant life would largely go extinct? Algae and mosses, perhaps, might survive, but not trees, or crop plants. Gaaaaawd, who else is doing God’s work???

  6. GB Says:

    cb – you thoughts on Greece could actually be incorrect

  7. cb Says:

    GB – will you tell us more? From everything I have read, nothing comes close to explaining what is happening in the Eurozone like Max Keiser does. I don’t agree with Keiser on everything. For example, he is sold on the CO2 pollution idea, and I am clearly not, but as far as financial matters go, he is the one, along with Celente and a few others, that I have come to respect.

  8. GB Says:

    thats fine cb but it doesn’t mean Keiser is right.

    Another cause (not saying this is the correct one) is Greece like the rest of the western world went insane and increased debt to dangerous levels. Now that they are experiences a downturn Greece is finding it difficult to pay interest because they are no longer getting the revenues they were before. Because they cant get higher revenues, through increased growth or exports, or print money to cover interest payments people believe the level of risk to lend to Greece has increased and so they demand a higher return on their money, i.e. higher interest rates.

    As for the Eurozone – 1 monetary policy (ECB) and 20 odd fiscal policies wont work long term. To work they need to set the Eurozone up like Australia – each country becomes a state etc…

  9. Nick Says:

    Just when you thought Copenhagen was a “dud” in achieving its agenda of one world government. We may have set that one aside, but “they” haven’t.
    http://noworldsystem.com/2010/04/26/bank-tax-a-major-step-toward-world-government/

  10. cb Says:

    GB – No, it does not mean either that he is right, or that he has six toes on his right foot. What are you saying?
    My argument is that, given all the available evidence, the most plausible and compelling explanations are by reference to conciously and carefully laid plans by certain interests, who managed to lure and trap gullible and corrupt Greek politicians and successive Greek governments into taking on more and more insane and unpayable debt, and signing over the country’s choicest income producing assets for the privilege of being able to hide and continue to lie to the world, and to their own people, about the true state of the country’s finances.

    As Nick said, focusing on the gullible who have fallen into a trap and caught the bullet is only half the story. The other half, without which the story remains less than half told, is about who set the traps, pulled the gun and fired the bullet. In other words, what Sayce and you are describing is quite compatible with what Nick and I are saying, that there is far more to the story than what would appear to first meet the eye.

  11. cb Says:

    Nick, that is just unbelievable. Now that their plan to shock and suck the nations into the scam of carbon taxes and carbon trading has pretty much collapsed, they intend establishing a funding channel by collecting the money they need through the banks and financial institutions of the world, which the people by and large love to hate. The problem is that the money will be collected from the people. The bankers are not going to take a loss on it, that should be clear. Unbelievable.

    I have just been watching tonight’s Lateline, and Wrong Wong was unavailable, or anyone else from the Labor party for that matter, to explain why they have shelved their CPRS for three years. The only lone gunman to appear has been the very decent but dumb as shit Bob Brown. He promises, threatens more like it, to push for the introduction of a massive carbon tax if they should hold the balance of power after the election. The bloody thing is just not going to die, will it?

  12. cb Says:

    Here is again a fresh warning from Soc.Gen.
    Albert Edwards: Global economy to roll over in six to nine months’ time; bearish for shares
    Posted by Edward Harrison on 26 April 2010 at 9:40 pm
    http://www.creditwritedowns.com/2010/04/albert-edwards-global-economy-to-roll-over-in-six-to-nine-months-time-bearish-for-shares.html

  13. PuntPal Says:

    cb – Kris concluded by saying…

    “And there’s absolutely no reason why it won’t happen to Australia’s asset bubbles either.”

    His point is simple, here we sit in Australia laughing at how silly the Greeks are with all their debt and laszy Government, yet in Australia we think we are not heading down that track? and that our financial troubles couldnt emerge over the course of a few months…

    You obviously are not a true housing bear, so you find Kris’s logic strange, but if you believe that our households are so heavily indebted and our house prices so expensive, then you can see the comparison he is drawing.

    You talk about Robber Barrons blah blah blah, what about our Banks, our Media, our Politicians…are they not also deceitful. Who know what they are covering up.

    Greece and Australia therefore share the following similarities:
    1) too much debt
    2) naive population
    3) dependant on capital from other countries
    4) stuffed!

  14. Nick Says:

    You can now add Portugal to the spotlight. Its turn is next. So is it now also the ordinary Portuguese folk that deserve what they get or were they also victims to their corrupt leaders and those who ‘fired the gun”. Who’s next? Show me one western country that has not drunk from the same debt pond. Do you think that Australia is not on that list?
    http://www.nytimes.com/2010/04/28/business/global/28drachma.html?emc=na

  15. Nick Says:

    Puntpal…the way I interpret cb’s angle on things is that he prefers a “slow” decline as it would be less painful than a rapid crash. I can agree with that as the “pain” will be bad. Nothing would please me more than to have a well managed dampener to the out-of-control real estate wrought.
    However, I personally feel that there is no one capable or willing to take on this task, and frankly if there was, I doubt that they could take on the world trend. There are far greater forces at work.
    I have been preparing for such an occurrence hence I have been selling real estate and buying gold. I believe that we are being fed so much BS that this should be the magic indicator that something is wrong and they don’t want us to know about it. The financial world is in a rapid rate of decline. To assume it is not is like going for a swim while the shark alarm is sounding.
    As I have repeated many times, I was behind the pack in the last 15 years but stayed the course. Today the pack is back to the 15 year mark while I see nothing but open field ahead of me. The old “hare and the tortoise” thing we were taught in school.
    I’ve trained my kids the dog sled theory “ unless you’re the lead dog, the view always stays the same.”

  16. cb Says:

    PuntPal – I agree with all of that, and my pointing to the other half of the story which Sayce will not touch does not deny in any way that our goose is being similarly cooked, as we speak. In fact, you may recall that I have been saying the very same things awaiting us down the track. All I have been saying is that we do not know how far down the track the hit will come, because primarily this is not going to be a matter of some calculable economic law, but one of the robber barrons completing the setting of their traps and then pulling the trigger on us at a time of their own choosing. I cannot read their minds, so I don’t know when our own comeuppance will be visited on us.

    As for house prices, No, I am not a true blue bear, in that I do not consider the whole thing an inevitability. It could all be wound back and catastrophy for the economy avoided, but only if our own politicians came to their senses and started to watch what the hack they are doing.

    So, instead of continuing to load up the national credit card, for example, with more and more debt, like successive Greek governments have done, they should start cutting the public service now, and paying down debt, and bringing in laws that would similarly mandate the private sector to start paying down debt. Alas, that is not what the bastards are doing, so you may well turn out to be right, and we are eventually going to have our own crash we have to have.

  17. GB Says:

    cb you said “…as good as any in taking the cake for its simple-minded, shallow analysis”. You were having a dig at Sayce and what I meant was maybe you shouldn’t say that because Keiser might not be right.

    I think Keiser in general is right but personally I wont go along with ‘they planned this from the beginning theory’. That suggests that their motive was not greed.

    Did you know that if Greece defaults the majority of the losses will be taken by European banks which means that the Europeans killed the Euro by overlending to the PIIGS.

  18. GB Says:

    cb you said “…who managed to lure and trap gullible and corrupt Greek politicians and successive Greek governments into taking on more and more insane and unpayable debt”

    And what about everyone else – are the bankers so god like that they can use ESP to alter our thought processes to make us take on more and more debt too???? It wasn’t just the Greek government that took on more and mroe debt. Australian property owners are still doing it!!! US, EU, UK all did it, Dubai did it, Asia is still doing it…

    Keiser should focus on debt levels and what caused the world to go insane and demand ridiculus amounts of debt

  19. GB Says:

    cb – the CPRS is probably shelved but it will increase costs at a time Australia and the world cant afford it especially if it requires funding changes because the world is quickly running out of money

    I wonder what causes the end of a fiat currency? Is it because we run out of money so start looking for alternatives which leads people to realise paper money is worthless???

  20. Nick Says:

    GB.. do you really think that this wasn’t “planned” and that it was a random act that was purely due to the foolish behaviour of the Greeks?
    That no one stood to gain from their demise? Do you seriously feel that the culprits who orchestrated all this care less about what currency they destroy? To see the opportunity to make billions and say NO just due to their good conscience?
    http://www.youtube.com/watch?v=deDDwBj0ZlQ&feature=youtube_gdata

  21. Nick Says:

    Is it just me, or is there a trend. I used to listed to the gold price being reported at the end of the news on the radio. Now, this last two weeks or so I hear all the financials, including Oil, but not gold?

  22. Nick Says:

    Enjoy our conversations while we can folks. First they take our guns, then our wealth, and now our freedom to talk about it.

    http://www.youtube.com/watch?v=NkeXJ11geas&feature=youtube_gdata

  23. cb Says:

    GB – Greed has always been part of the picture, from corrupt, greedy politicians who signed up their nations to unpayable debts, to German, Swiss, French and Austrian banks who loaded up small and vulnerable economies with debt, to Goldman Sachs, who secretly aided these corrupt politicians to hide the mounting debt burden from the ECB and the people. Indeed, the blame extends even to German and other policy makers who were willing to include weak economies in the monetary union, while imposing debilitating conditions on them, so that they had become little more than consumers of German and generally Western European exports.

    For example, in countries like Hungary, the EU would subsidise people to destroy their vinyards, and commit not to replant that parcel of land with grape vines for a minimum of 50 years. This sort of policy is aimed at destroying one of the viable export industries in an already vulnerable economy, so that it will pose no competition to Western European producers. I could go on, but the point about greed and fraud have been well made now even in the MSM.

  24. GB Says:

    Nick @ 19
    Yes I am still leaning toward insanity and stupidity over a ‘planned’ attack but of course not ruling out the planned attack theory.

    From the link all I got was Wall Street bankers are immoral unethical greedy buggers out to make a quick buck no matter who gets hurt. Thats not motive to destroy a country thats motive to line your pocket with gold, i.e. greed!!!

  25. SV Says:

    Nick, “they” can try to censor the Internet, but these attempts are bound to fail, providing “we” are not complete idiots.
    You can easily and legally bypass filtering in China and will be able to do so in Australia. Technically, there are myriad ways to bypass them, undetected. If one legislates to make them all illegal, it is a nightmare to police and a magnet for young hackers to break.
    There is still no reliable way to stop virus makers. Stopping firewall bypasses is much harder.

  26. GB Says:

    cb @ 22
    When I worked in Bulgaria a few years ago the EU gave them a huge amount of money to buy new farming equipment to increase productivity. They went out and bought second hand equipment and pocketed the rest. They were also given a large pot of cash to upgrade the roads – when I left they hadn’t done much.

    Using your theory then the following must be true. Western European countries gave Bulgaria billions of dollars which was meant to increase the productivity of their countries but secretly they gave them the money to make the Bulgarian politicians rich.

  27. cb Says:

    GB – I have been following the likes of Keiser, Celente, Faber, GATA, etc., for quite some time, and they all make the points you emphasise about people everywhere being drunk on debt. So, there is no disagreement there. The only difference is that some of these analysts go further and talk about the debt pushers, the way they have been using debt to entrap individuals and entire nations, and making big money both through the good times while debt was flowing and money was plentiful, and then when they decided to push them over, and burn down their houses so that they could also cash in big time on their scam CDOs and similar, insurance-like shorts they have invented, and looting the mutual funds and pension funds in the process, who were dumb enough to take the other side of those trades.

    Seriously, if you want to understand how their scams work, and why Goldman Sachs is now being charged with fraud, you would need to listen more to the likes of Keiser and Celente. Otherwise, like Sayce, you are getting only half of the story. You only see the druggies, and the devastated families who are on the receiving end of the drug trade, and not the dealers and pushers, and the corrupt cops and politicians behind the trade. That is a fairly good analogy, actually.

  28. Fitch Says:

    Nick – I sat through the Crash of 29 link you offered. Most of it I knew some of it not. In any case I would now call on anyone to not pick the similarities but the differences. It’s all about people, always has been. We can now go to great lengths to complicate finances, credit and funding products and accounting theories and methods but ultimately it’s all about the good and bad people do. Unfortunately as a species we are predisposed to being bad.

    GB – I would much appreciate your comments on this “Does Germany now possess the perfect hedge?” “Are they in a WIN-WIN position.

  29. cb Says:

    GB – I do not follow that reasoning, and dare hope that it does not follow from anything I have said. Vulnerable countries have been exploited and set up by the dominant ones within the Eurozone. There is no question that it has been a predatory relationship, resulting ultimately in unpayable debts and perpetual enslavement through it.

    Greed has been the principal motive, debt has been the main instrument, with generous sprinklings of shady dealings and corruption along the way. The net result is widespread enslavement and impoverishment of entire economies and masses of people into perpetuity. The rest is small detail, which interesting and important to understand, but which, on its own, will never explain the most important aspects of what is going on.

  30. cb Says:

    I notice that the metals continue to be on the move.
    http://www.perthmint.com.au/metalPrices.aspx

  31. cb Says:

    GB – in response to your question about why fiat currencies tend to fail, the one common denominator has been excessive printing (creation) of money by the government behind the given currency.

    Creation of fiat money is essentially costless, and sooner or later, a good thing is taken too far. As the saying goes, there isn’t enough for anybody’s greed, so whether it is out of outright corruption, or out of trying to rescue an economy from a deflationary collapse, the government of the day ends up issuing too much of the currency, typically ending in a sudden loss of confidence in the currency until nobody wants to hold it any longer. Paradoxically, deflationary episodes often precede the demise of a currency, which itself tends to come in the form of hyperinflation, when nobody wants it any longer.

    I recall a very good interview with Mike Maloney on this very subject, which I thought was very informative. I will try to find it for you.

  32. cb Says:

    GB – I think I found it. It is a three part interview, well worth a watch.
    http://www.howestreet.com/audiovideo/index.php?pl=/fbn/index.php/mediaplayer/341

  33. Nick Says:

    SV..#24…and so the ordinary folk have to become “outlaws” just to preserve their freedom. Sorry to bring it up again, but the guns issue is exactly the same. “outlaw guns and only outlaws will have guns”. So they outlawed guns…and…more criminals than ever have them. Did they stop it? No! Just as you say, they can’t stop internet filtering also.
    However, if they pass a law that says such activity like by-passing filters on the internet is “illegal”, then all of us will be outlaws if we partake in the exercise.
    Just like when they introduced radar for speed detection, we came up with “radar detectors”..now they are “illegal”. It’s the cat and mouse game that should keep us open minded and try to be one step ahead.

  34. Nick Says:

    GB…here is another one that shows the “punters” are still at it. What is concerning though, is that does this mean that the US is next? Are we being distracted by having our eyes on Greece & the Eurozone?

    http://www.huffingtonpost.com/2010/04/27/banks-bet-against-us-citi_n_553891.html

  35. Nick Says:

    ……and here is some more…
    http://online.wsj.com/article/SB10001424052748704464704575208592421153342.html

  36. Nick Says:

    Fitch…I could not agree more. The sheeple of 1929 and the sheeple of 2010. This is really the only similarity that counts.

  37. Tony Clancy Says:

    Someone said’the very decent but dumb as shit Bob Brown. “…in my view he’s not dumb at all, he’s a decent person not tied to the manic nature of covetousness. Bob Brown is a man as we all might better be for the good of each other. We have however a system called “free market” which profits from the competiton of covetousness. I’d love to become wealthy on one trade especially since the utter demolition of my small superannuation account through slovenly incompetence world wide of superannuation guardians who went to sleep, if ever awake, which play conga-chain investment strategy.

    We were utterly ripped-off by companies pretending we had certain sums accumulated when in fact all we had was a % of share market investments running on risk ..in other words superannuation is a massive deception. All talk about the ” future gains” is useless to us approaching our life’s last quarter …

    I suggested to Cplus and so should we all to all companies that profit taking and accumulation into capital safe investments should occur many times a year in particular in the latter stages of a person’s normal working life….irrespective (and actually, for the good of) the “market”. If I have $100,00 shown as my account then that should not be able to reduce. How many of these lacadasical investment companies were made to account in answers and in money for their actions?..none?

    Banks here upped the interest rates owing to the American situation..why?…Why should we pay for their purported incompetence? My reply from the government they have the right to raise interest etc. blah blah but surely not for matters of cause elsewhere than here. The media simply went brain dead.

    Goldman Sachs’ fate is no surprise to me nor was the sacrifice of JP Morgan in this holocaust. I have written extensively since day one of the housing crisis on this conspiracy and its relationship to 1994 as I recall Rothschilds “we now need a major catastrophe to accelerate the introduction of a one world Government “(sic) . Well they did it and look at the recent US presidential candidates …all Bildergberger stooges, Obama, Clintons Mr and Mrs both admitted bilderberger lluminati and all passionate supporters of that well proven money launderer Israel. ..and that’s not a cheap shot at “jews” as will be the mindless knee jerk reaction of so many because jews don’t “run” Israel. Ask some.

    From the first inkling I had no doubt the “melt down’ was a fraud to further depress the world through increased debtt and political changes. It took a couple of run ups in the 80′s ,90′s to bowl the right ball and as rightly pointe out the greeat depression was another one that needed never to have happened. I wrote to ths newsheet several times with no response. Now I see the ideas blasting through.

    There was a simple and some might think simplistic solution at the outset. Unlike the Presidency I am not a stooge of the Central bank conspiracy for world domination so I think in terms of real solutions. Say there were a million homes involved and say each one was worth US$250.000 …which might well by actually 4 houses in most cases….the government could have bought the lot (and at massive discounting done properly) but say at par for $250 billion. Instead all the world panicked throwing billions and trillions at perceived problems. Had the USA done this purchase commencing immediately the houses could have been given freely to the mortgagees even on life tenancies at worst..jobs would have been saved, lives saved, people would not be sleeping in cars and on the streets with a domino effect. Were they just given the houses for life they might well have become more productive as well. The immediate reaction of “inflation!!” is nothing but trite. Control the financial system, humans invented it not the other way around …don’t have it controlling us.

    As however that buy-up solution would have solved the problem..it was one not to be even considered it seems…..the whole idea was not some kind of financial mismanagement but was a financial conspiracy. Here we are now with Goldmans being the next cog to turn, accused of doing precisely what I said long ago at the outset.

    Will they be sacrificed to hide even murkier dealings which will slowly uncover the central bank conspiracy? or will there be a cunning move to use Goldman’s to pretend there was no conspiracy. Time will tell. Remember this however…the French revolution, the American “war of Independance” the Russian revolution and its slaughter of revenge on the Tsars was for the same reason as the American WOI…the owners of the American central banking licence were refused renewal and the Tsar refused de Rothschilds the Russian licence and his doom and that of all his family and retainers was sealed.

    Fifty or so years later the 1905 attempt failed but 1917 didn’t. The same central bank owners as in USA controlling its foreign policy controlled Russia’s, (and Britains and Australia’s and….). Now let’s think about the cold war…!…?

    Let’s think about WW1 and WW11.A study of the history of the super rich rats in USA will also expose much of their financial supporting of the german military and it is quite certain that both World wars were generated by the same central bank and its allies in USA Britain Germany (Europe) and Russia.

    I’m no advocate of Hitler other than knowing his early life history is deliberately misrepresented. Nothing can excuse the carnage and horror of what he did. or his minions did. Hitler knew the pressure was on for instigating war just as Churchill had stated so certainly back in the 1920′s and he knew whence it came.In that Hitler and Churchill were in agreement.

    That comment has nothing to do with excusing anything good bad or worse he did because from the outset of the attack on Poland grotesque bestiality from each to the other was commenced. . There is nothing good about war…except for bankers and political boundary and culture shifting. In the wise words of that little song “Hokey Pokey” …’that’s what it’s all about’

    In closing good points are raised in this column which prompted my response. I raise this one…that what is happening to the Greek Government is not one of fuzzy thinking by the central bank but of clear thinking by the central bank’s world wide
    intelligence which causes massive damage and debt before the fuzzy thinking of those in denial becomes a little clearer….as with Goldman’s (but as I said Goldman’s is a ploy of one type or another..nothing happens without it being intended to happen at Bilderberger/Illuminati/ Central bank level)

    Though, deo gratias, lessening, denial is still enormously pervasive about the New World Order ‘s immense power in formulating overnight changes to the planet and the new serfdom reasons behind its ruse of globalisation and jettisoning of public assets which has been massively accelerated since the 1990. In the meantime the smarties get richer and the poor are trampled underfoot. Voila!

  38. Tony Clancy Says:

    Erratum: I said ” I have written extensively since day one of the housing crisis on this conspiracy and its relationship to 1994 as I recall Rothschilds “we now need a major catastrophe to accelerate the introduction of a one world Government “(sic) . ”

    I made a mistake….where I said “Rothschilds” I’d intended to write “Rockefeller” . The two are so intimate I guess I thought of de Rothschild. Apologies.

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