by Bob Chapman

Motivations for world government are behind elite manipulations of credit in US economy, credit crunch is getting louder, financial system continues to implode, intrigues of politics in Georgia, war but no response in gold and oil prices, markets too chaotic to make money anymore due to extreme volatility, contemplating the systemic failure of the financial system.

The Illuminati are worried and filled with fear over what they have done. In their attempt to continue the fleecing of the sheople, they have watched in horror as the inevitable outcome of their unparalleled fraud, corruption and greed has manifested itself right before their eyes in what can only be described as the ultimate in poetic justice. In their attempt to collapse the US economy and impoverish the US middle class to pave the way for world government, they have destroyed their power base, the bond and derivative markets. It is beyond repair, and even the transfer of losses to the sheople through the stealth tax of hyperinflation imposed by continual bailouts dripping with moral hazard won’t change that. The system is broken, and trust between participants in the system, including the always-fragile trust between sovereign nations, is now nonexistent. Bank’s won’t lend to each other, much less to non-bankers, so the fractional banking multiplier is broken and the banksters are unable to restore their vaporized balance sheets despite a half a trillion of monthly Fed largesse created out of thin air to keep the “living dead” fraudsters walking. Here we are a year later, and the credit-crunch is getting worse instead of better. That is because the system is unregulated, corrupt and opaque, and the major players are all lying pathologically to hide their financial destruction from the public.

The solution proposed by our corrupt Treasury Secretary, Hanky Panky Paulson, is to hand over the regulatory reins of our entire financial system to the Fed, which is the mastermind behind the whole evil, devious, fraudulent scheme to bring down our economy. Yeah, like that will inspire confidence in our broken financial system! Further, loan defaults are progressing geometrically as the fraud-laden loans that the Illuminist players made to keep the system afloat, and to ward off recession and depression in the wake of the failure of the dot.com Ponzi scheme, continue to implode in every imaginable category of debt one could think of. As the direct result of this loan fraud, and the accompanying profligate creation of money and credit and totally outrageous interest rate policies implemented by the Fed in collusion with the evil schemers in the executive offices of the corrupt Wall Street fraudsters, much higher interest rates, that will run into double digits sooner than most would think, are now on their way. These destructive new economy-killing interest rates will be imposed by the markets by necessity in order to compensate for massively increased risk caused by mounting defaults and by wildly negative rates of return caused by hyperinflation. The Fed and the ECB are now both irrelevant. They are both impotent to stop these higher rates of return from coming to fruition. They are boxed in and they cannot get out. They have painted themselves into a corner where the raising of interest rates will destroy the economies they are supposed to be protecting and promoting, and where the lowering of interest rates will rapidly stoke hyperinflation which will eventually destroy both US and European economies in any case. Therefore, the ensuing destruction of the multi-trillion dollar bond market and the quadrillion dollar mountain of credit default and interest rate swaps, which is nothing short of being a smoldering volcano with a caldera of toxic waste that is about to blow, are now both a lock. In the wake of this unprecedented Illuminist financial criminality, we are left with a “zombie economy” that it is already dead, but which has been reanimated by Illuminist lies about economic statistics and by deceitful corporate and banking financial statements that are the product of “creative accounting,” also known as “lying-through-your-teeth.” And all these lies continue unabated with the blessing of our so-called “regulators.”

From the mouth of Buck-Busting Ben Bernanke to God’s ears, all of our problems here in the United States Goldilocks Matrix will soon “moderate.” And if you believe that, we have a bridge for sale in Brooklyn, real cheap, but you will have to act quickly before one of the many dollar-dumping sovereign wealth funds grabs it first.

As the destruction of the Illuminist’s financial power base has transpired, rising superpowers Russia and China have stood by laughing hysterically as the Illuminati have bungled their way through wars in Iraq and Afghanistan in pursuance of the phony “War on Terror.” Russia and China must be smiling like the cat that ate the proverbial canary as they have watched the inept, inane forces of “Chaos” not only destroy their financial power base, but their military power base as well. Our struggling military is stretched to the limit, and financially we can no longer support it. This is what Russia and China have been waiting for - the fall of the American Empire. Russia and China have been building huge trade surpluses as the US has been building unsustainable trade deficits, becoming the world’s greatest debtor nation when only a few decades ago it was the world’s greatest creditor nation. And now, the Illuminati, in their unbelievable arrogance, are stoking the flames for World War IV, as they use their puppet country, Georgia, a former province of the Soviet Union, to bat the Russian hornet’s nest. Zbigniew Breszinski, aka Dr. Strangelove, the Brainiac of the European Illuminists, and foreign policy advisor behind-the-scenes for Barack Obama, and who incidentally is madder than a hatter, apparently thinks he can weaken Russia and China, and restore the balance of power, by picking a fight with the Russians right along their border and by eventually causing civil unrest for the Chinese by unleashing Muslim terrorist attacks out of China’s heavily Muslim, westernmost Xingjian province. Russia just swatted Georgia like a fly, and the Illuminists gained nothing but Russian ire. Their efforts in China will net similar results.

The Illuminist hope is to eventually distract Russia and China with conflicts of their own along their borders or in nations with which they have crucial economic ties, like Iran, thereby reducing the wealth and military resources of Russia and China as they attempt to level the playing field and keep feeding the US military-industrial complex. They want to try to break up China and Russia in preparation for the implementation of world government, and instead we will get World War IV. The Illuminati will be consumed in the resulting death and destruction. This is nothing short of psychopathic madness.

Making matters worse, Israel has been involved in this whole crazy process. Due to the crucial Baku-Tbilisi-Ceyhan oil pipeline that runs from Azerbaijan, through Georgia, to Turkey and the Black Sea, where the oil is then transported to the Mediterranean for Western consumption and to Israel for its own use and for export to Asian nations by transport to Eilat and the Red Sea, both US and Israeli military advisors are running the military operations in Georgia. This is going to rile the Russians, and that is the last thing that Israel needs. There has been much prophetic talk for decades about a Russian invasion of Israel based on the book of Ezekiel, and now we can certainly see why this might happen. That’s right, just keep batting that hornet’s nest, and soon we will add nukes to our economic woes. This madness at the behest of big oil is nothing short of surreal. We also note that it is of course okay if Kosovo breaks away from Serbia, but heaven forbid that South Ossetia should break away from Georgia. That is because there is one set of rules for the would-be lords of the universe, and quite a different, and less favorable, set of rules for everyone else.

You may have noticed that oil and gold prices did not respond one iota to all the madness in Georgia and Southern Ossetia. This shows you in spades that gold prices are being suppressed by the cartel, and that oil prices are not driven by news, but rather, the news is used as a pretext for big oil to move oil prices to levels, which they have predetermined in advance. After all, the Illuminati control both the events themselves, and the news coverage about those events. They can push gold down all they want, but it will bounce right back up again because the fundamentals demand it.

In spite of some spectacular one-day gains in the market, which are very common in a bear market what we are witnessing is ongoing de-leveraging. That is why the “Working Group on Financial Markets” is having such a difficult time keeping the stock market up. That is why commodities and precious metals (PM’s) have had such a quick move to the downside. Stocks, bonds, commodities and PM’s with gains have been sold to cover losses elsewhere. Markets are changing gears. This has nothing to do with the issues and their values and everything to do with de-leveraging. Lenders have cut back in a major way and the amount of speculative funds available has diminished in a big way. This isn’t a bust in all the above, it is a correction in everything. The only areas of relative strength are stocks and the dollar and that is because they are being manipulated by our government.

The dynamics are changing. We may be headed back to market normality. A market in which the antics of the PPT would stick out like a sore thumb; where no one professional or otherwise will have any doubt what the elitists in our government are up too. The speculative bubble has burst and a new game is in play. A game of value. The decline in speculation has already seen formerly market neutral strategies foundering. The results at hedge funds have been dismal, victims of wild volatility and creeping illiquidity. The easy days of leveraged spread trades, such as borrowing cheaply and lending at higher levels has become more difficult. All world markets are performing poorly so making successful bets on the long side of the market gets more difficult. That brought about spread trades, long commodities and short financials. That was for specs a trade made in heaven. Both sides were enormously profitable. At the same time everyone was short the dollar – another sure fire winner.

The specs were almost all drawn to the same trades. When they exited you saw the results of falling commodity and PM prices and rising prices in the financials. About that juncture, because of further pending bad news, the Treasury and other central banks decided to take the dollar back up if only for the short term. That caused some bullish short covering that drove the USDX from 71.77 to today’s levels close to 76. The results of all this is we have seen massive de-leveraging that has probably not as yet been completed. Now that we better understand what has transpired we are in a better position to deal with it. What is important is that we can see that the stock market and particularly the financials will remain under downward pressure. The dollar’s strength will soon dissipate and commodities and PMs will resume their upward bull markets. Leveraged speculation did play a strong role in commodities price gains, but the basic gains in this venue were due to exceptionally bullish fundamentals that are still strongly in place.

The extreme market volatility in all markets has made trading conditions next to chaotic. The worst volatility that we’ve seen in 48 years. All we are seeing in stocks and the dollar are melt- up bear market rallies.

What most investors do not consider because they are not involved in all markets is that agency debt is under severe pressure as are Treasuries and MBS spreads which have widened, while global bond prices have offered little performance help. Corporate debt has performed poorly and junk bonds even worse. Mortgage related derivatives are in the tank and the municipal market is almost frozen. The gains in financial stocks peaked a week ago. The short covering rally is over.

Earnings reports are fair to poor and they are going to get worse as corporations scramble to pass on increased costs to the consumer. Tightened credit is going to make life miserable for corporations, small businesses and consumers. That will grind on the stock market in a major way. Fannie is not making any more subprime and ALT-A loans, not just because of the risk, but because they do not have the funds to do so. It’s 20% down and good credit or you do not get loan. Both Fannie and Freddie are no longer lenders of last resort. This will further depress an already deeply depressed housing market.

Full article here…