12-09-2007, 09:23 PM
ECONOMIC CANNIBALISM
http://www.new-enlightenment.com/econ_crash.htm
"The near meltdown of the financial system produced by the subprime mortgage crisis in the United States is the outcome of the entrapment of the poorest sections of the population, in loans they could never repay, by the banks and lending institutions. It is indicative of the growth of financial parasitism on an unprecedented scale."
Source
America is a war zone; our people are being cannibalized 1 before our very eyes. Looting and plundering the world is the primary goal of the criminal cabal that controls America. We've previously demonstrated how they amass wealth by the destruction of people and material through the tactic of unending war.
In the late nineteenth and the early part of the twentieth century, their destruction was primarily targeted at foreign peoples such as the Cubans and Filipinos (Spanish-American War), Germans (World Wars I and II), Japanese (World War II), and Soviet citizens (Cold War). Beginning in the early part of the twentieth century, this international gang turned on Americans and began in earnest to cannibalize us.
Economic collapse is one of the final stages of the cabal's overall policy of cultural devastation. Many of their earlier phases of contrived collapse have been largely unseen or ignored by most Americans. But the final economic breakdown--now in its first stages with the bursting of the housing bubble and the collapse of the dollar--are realities U.S. citizens can no longer turn a blind eye to, because many Americans are literally being thrown out on the street through foreclosure and eviction.
Through real estate shell games, the super-rich have looted at least $10-$15 trillion from workers. "Buy a house with a low interest loan," they lied to the workers, "and it will rise in value indefinitely."
Workers were swindled into buying property with interest-only loans--or other predatory financing--deluded into believing that with their increased property value they could later refinance to pay off the balloon payments and sky-rocketing mortgages.
Since 2000, outstanding mortgage loans have more than doubled: up over $5 trillion. Unpaid mortgages soared and lenders were falling all over themselves handing out sub-prime loans 2 for up to 125% of the value of the property.
Now the real estate bubble has burst: property owners can't sell their homes or refinance them. They can't pay their mortgages so the banks foreclose and the house is sold on the courthouse steps. Within days they receive an eviction notice and they're out on the street. Since 2006, vacant dwellings have increased by more than 40% for existing homes and more than 20% for new homes. The personal tragedy these people face is overwhelming and heartbreaking.
Since private banking interests created the scam of the "Federal" Reserve System in 1913, seizing control of American financial powers, their ability to lend money at usurious interest rates has meant that they feed on American debtors. Until recently, they've been content to reap huge profits through ordinary money-lending means--as outlined below:
Bank Home Mortgage Scam
Mortgage Loan: $100,000.00 Interest Rate: 7.21%
Monthly Payment $679.47 Total of 360 Payments $244,609.20
Total Bank Profit $144,609.20 True Total Bank Profit Rate 144%
But reaping huge profits through interest wasn't enough for them; they decided they'd not only make money on interest but loot workers of their hard-earned savings and income--and then financially destroy them: foreclose and keep the property for sale to another sucker.
Something New in Housing Bubbles
The new real estate scam launched in the latter part of the twentieth century was the first in U.S. history to impact the economy in a much broader way than previous housing bubbles. Homeowners, using their rising house prices as collateral for mortgage equity cash withdrawal ("Use your home as an ATM machine!"), plunged as never before into additional debt to finance other kinds of spending (primarily credit card). Under the impact of this kind of financial insanity, the entire nation metamorphosed into a fantasy financial and political infrastructure built on nothing but shifting sand.
From the 1.5 million housing units in 2001, new single-family homes and multifamily homes increased in 2005 to 2.2 million units. Meanwhile, the constant quality price index for new homes rose 30% and the purchase-only price index of existing homes published by the Office of Federal Housing Enterprise Oversight (OFHEO) rose by 50%.
The "Federal" Reserve System set interest rates so low that they inflamed consumer borrowing, seducing workers into buying property and other goods and services they couldn't realistically afford. The increase in the net worth and the borrowing power of their houses drove workers to deranged consumption beyond their income growth. Americans were spending insanely, having been deluded into believing that their property "wealth" would continue to increase and would cover any future contingency. In contrast, personal saving in the U.S. dipped below 0% for the first time since the Great Depression, hitting negative .5% in 2005.
Having been miseducated to the point where they cannot think rationally, Americans began using their houses as cash machines, refinancing as they went. In 2005, private households raised $1.08 trillion through mortgages. Of this amount, they only spent $95.1 billion on higher-priced homes. Spending on goods and services rose in total by $539.9 billion, relative to an increase in disposable income of only $354.5 billion. In other words, about one-third of the increase in consumer spending was based on home mortgage borrowing.
The real estate bubble began to burst in the third quarter of 2005, with mortgage borrowing peaking at $1.23 trillion per annum. Falling steadily, by the second quarter of 2006, borrowing on home equity was down to $819.6 billion. Some of this sharp decline was also caused by increases in consumer credit costs.
If you want clear evidence of the incapacity of Americans to think reasonably, just listen to the large number of homeowners, faced with a 45% loss of value in their homes, saying: "I won't accept one penny less for my house than I paid for it." A recent survey showed that only 1 in 7 Americans believes that house prices will go down. These benighted souls are being forced out of their homes by the police who come to serve eviction notices.
Because mind-destroyed homeowners resist downward price adjustments, the market becomes illiquid, with unsold homes becoming a glut on the market. In many instances, only after foreclosure and eviction are prices lowered to realize necessary sales. Predatory lenders are happy to adjust their lending and selling practices to fit the changed market.
Unlike previous housing downturns, this current bubble burst hasn't been caused by credit tightening. The "Federal" Reserve has merely returned short-term interest rates to more normal levels and long-term rates are unusually low relative to those short-term rates. Unlike previous downturns caused by tight money that were followed by vigorous recoveries, this present real estate collapse, occurring despite low interest rates and loose money, will likely take a great deal of time for recovery, if there is ever a recovery at all.
How the Real Estate Scam Worked: Interest-Only Loans
Interest-rate only (IO) mortgages are a new variation of the Adjustable Rate Mortgage (ARM). 3 IOs are loans that permit the borrower to pay only the interest on the mortgage for a specified period of time—usually five or ten years. During this period, the monthly payment contains no principal.
How do these loans really work? Consider as an example a 30-year loan at a fixed rate of 6 percent on $200,000.
In a regular full amortizing (FA) loan, the homebuyer will make monthly payments of $1,199. In an IO mortgage with a five-year IO period, the homebuyer will pay instead $1,000 for the first five years, that is, 17 percent less than the FA loan. In exchange for initial lower monthly payments, however, the holder of an IO mortgage will see his or her monthly payments jump once the five-year IO period ends—in our example it would rise to $1,288, an increase of 29 percent over the initial payments and of 7.4 percent over the traditional FA loan.
Adding an IO period to Adjustable Rate Mortgages (ARMs) can reduce initial payment even further. The added risk on this loan is that following the IO period the loan holder will bear the risk of any interest rate rise. In our example, if interest rates climbed to 8 percent in five years and remained stationary for the rest of the mortgage’s life, our home buyer would have to make average monthly payments of $1,543 (a 54.3 percent increase) and if interest rates go up to 10 percent, he or she would have to pay $1,817 (an 81.2 percent increase).
Because IOs and IO/ARMs carry more risk, lenders should require higher standards for borrowers than the traditional FA mortgages. But this prudent rule is rarely followed. Always seeking to maximize profits, lenders have focused on homebuyers’ capacity to make payments today—and worry about higher future payments—and possible foreclosures—tomorrow. The lenders know that even if the borrower defaults, they (the lenders) will have the money already paid in plus the repossessed house which they can resell. 4
A Typical Real Estate Cannibal
To get a feeling for how economic predators propagandized hapless American workers into the real estate con game, let's examine a typical example of a con artist at work.
"How long can the real estate boom last? No one knows the answer, but this is the most exciting time in real estate during my almost thirty years in the business. The world is awash with liquidity, and real estate is capturing much of it for three reasons.
"First, because of the stock market crash of 2001, real estate has become a legitimate asset class and a good diversifier from stocks and bonds. Second, with graying populations in the West and Japan, real estate is particularly appreciated because it is a strong generator of current cash flow needed to pay pensioners. And third, the returns relative to all asset classes have been enormous.
"The boom may end when interest rates rise from a falling dollar or if there is a surge of commercial overbuilding around the country. A political or terror event could bring things to a halt. Most likely, it will be something unexpected that stalls real estate. It's anyone's guess. But history has taught us one lesson: In the end, even real estate will revert back to a mean and return to earth just like every other asset class."
Arthur Segel is a professor in the Finance and Entrepreneurial Management units at Harvard Business School.
This article, "The New Real Estate," appeared in Moneycontrol.com April 22, 2007, months after the housing bubble had burst.
Mea Culpa
Unfortunately, as we examine how lower and middle-class Americans have conspired mindlessly in their victimization, it's no wonder that Bush and other cabal predators are eating American workers alive. Just consider what Americans have done in terms of debt in recent years: 5
Americans have increased their borrowing on their credit cards to the point that the credit card industry took in $43 billion in fee income from late payments, over-limit, and balance transfer fees in 2004, up from $39 billion in 2003. In 2005, credit card late fees alone totaled over $11 billion.
Consumer debt has doubled since 1990, to $7.5 trillion—-more than $50,000 per household, over $25,000 for every man, woman and child in America.
Average household credit card debt has increased 167% between 1990 and 2004.
The average American had over seven payment cards in their wallet including credit cards, retail store cards, and bank debit cards in 2004.
The average interest rate paid on credit cards was approximately 14.54% in 2005.
45% of American cardholders were only making minimum payments in 2004, up from 42% who did so in 2003.
A typical credit card purchase is 12-18% more than if cash was used (as of 2004).
30 million Americans (40% of homeowners) refinanced their mortgages during the 3 years (prior to Q3 2005), with over half applying the proceeds to eliminate credit card debt.
Seven out of ten low and middle-income households, reported using their credit cards as a financial safety net, i.e., to pay for car repairs, rent or housing repairs and medical expenses, rather than relying on savings in 2005.
According to a national survey, the most significant predictor of financial stress is if households rely on using credit cards to cover non-discretionary living expenses like rent, groceries, and medical expenses.
In 2004, the average college student graduated with $16,500 in student loans, up 74% since 1997. (While this figure is an average, an incredible number of graduates leave college with more than a year’s salary in debt.)
In 2004, 65% of teens failed a financial literacy test according to Jump$tart Coalition.
In 2004, the average debt for Americans 65 and older was $4,000, up 89% in the past decade.
In 2004, the average personal wealth of a 50 year-old American was less than $40,000 including home equity.
In 2004, most credit card debt of older Americans was driven by healthcare expenses and the increased cost of prescription medication.
Examples of Consumer Stupidity
Example 1 Example 2
In Waretown, NJ, a single mother has lost her house through the fraud of a company named FundingForeclosure. The woman said she had sought to take out a $27,000 equity loan in 2005 after she quit her job. She said she had been emotionally affected by her parents' divorce and other life events. A mortgage originator referred her to FundingForeclosure because her credit was poor.
She said she was not aware she was selling the property. Two mortgages, worth $204,250, were taken out in the name of two straw buyers.
The woman said she simply signed the papers where a local notary told her to sign. She said she did not read them, but relied on what she was told by a friendly woman from FundingForeclosure.
"I don't know these things," she said. "Nothing looked like a deed. Nothing. This was my house. I bought this house for my son and me. I worked two jobs to get this house."
The woman, who is cleaning houses, said she's learned some lessons through the hardship.
"I wasn't always assertive," she said. "I've learned."
Homeowners struggling to make mortgage payments or in foreclosure, were contacted by a mortgage scam company and persuaded to agree to what sounded like a wonderful deal: An investor would buy their property temporarily, and then they would pay rent to live in their own house and buy it back within two years.
Most homeowners were unaware they were selling their property. The rent was uaually lower than their earlier monthly mortgage payments, or an influx of cash from the deal would pay off debt. Bottom-line, the scam clained to allow distressed homeowners time to catch up on bills, find new jobs and earn better credit ratings.
Third-party investors, or straw buyers, were excited, too. They were promised an income of $5,000 to $40,000 a year in exchange for lending their names and good credit scores to people who needed a hand. The company said it would make mortgage payments for the investors through the rent proceeds. Everyone would win, the company promised.
The criminal mortgage companies, unbeknownst to the victims, took out new, larger loans on the properties well above the mortgages they replaced. In most instances, these fraudulent loans were resold among mortgage companies and investment banks in the subprime, or high-interest rate, markets. Homeowners and straw buyers unwittingly signed waivers to wire the proceeds to the scam companies, such as Creative Loans LLC.
No More Safety Devices for Working Americans
A Vicious Cannibalistic Practice
Trailing interest is the practice of charging interest on an entire bill no matter what percentage of it is paid.
Suppose a consumer who usually pays their account in full, and owes no money on December 1, makes a lot of purchases in December, and gets a January 1 credit card bill for $5,020. That bill is due January 15. Suppose the consumer pays that bill on time, but pays $5,000 instead of the full amount owed. What do you think the consumer owes on the next bill?
If you thought the bill would be the $20 past due plus interest on the $20, you would be wrong. In fact, under industry practice today, the bill would likely be twice as much. That's because the consumer would have to pay interest, not just on the $20 that wasn't paid on time, but also on the $5,000 that was paid on time.
The consumer would have to pay interest on the entire $5,020 from the first day of the billing month, January 1, until the day the bill was paid on January 15, compounded daily." In our example, using an interest rate of 17.99 percent ... the $20 debt would, in one month, rack up $35 in interest charges and balloon into a debt of $55.21.
In a March 7, 2007 Congressional hearing, Senators and consumer advocates battled with three of the most powerful men in the credit card industry. Bruce Hammonds, president of Bank of America Card Services, Richard Srednicki, chief executive officer of Chase Bank USA, and Vikram Atal, Chairman and CEO of Citi Cards, all said that "trailing interest" is a practice shared by various lending schemes but were unwilling to give specific examples.
You might wonder why homeowners don't get out of debt through the age-old escape-hatch of bankruptcy. The answer takes us back to the cannibals we're examining in this essay: the super-rich members of the cabal. From the beginning of our nation's history, debtors were able to find relief through bankruptcy. But that meant that the moneyed predators were losing out when their victims escaped them by forfeiting everything--including debts.
The 2005 Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) was in fact the rewriting of bankruptcy laws to reduce the ability of those laws to protect consumers from predatory lending practices on the part of MBNA 6 and other credit card companies and to stiffen the capabilities of those corporations to collect from consumers already suffering from extreme financial hardships. MBNA, not incidentally, is the largest single contributor to the Republican party. Under the new law, poorer folk can't afford the new attorney fees and court costs, since it now costs roughly twice as much as it used to. Court fees were increased almost 50% (from $209 to $299 for chapter 7 and from $179 to $274 for chapter 13). Attorney fees also increased by about the same percentage. It used to be possible to prepare the paperwork in about an hour. Now things are completely different. An attorney has to have three different meetings with the potential client:
One free consultation on the ramifications of bankruptcy, wherein they receive disclosure forms mandated by the new law, informing them of the cost, telling them about the credit counseling requirement, etc.
A separate meeting wherein the attorney collects their 6 months of pay stubs for the Means Test calculations (which itself takes a couple of hours). Then the rest of the paperwork takes another hour or two to prepare.
A third meeting to re-review everything before filing as the new law creates a new liability on the attorney personally to verify that everything the customer tells him is true.
Debtors--Including Hurricane Victims--Are Raw Meat
The 2005 Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) was a massive restructuring of federal bankruptcy laws which punishes middle-class debtors and awards increased payouts of as much as $4 billion a year to their creditors, mainly banks and credit card issuers.
The cannibal corporations spent $40 million and eight years lobbying Congress for legislation that makes it virtually impossible for individuals to escape debt repayment. The 500-page bill was largely written by bank and credit card lobbyists. The law imposes a two-stage means test on bankrupt debtors that will reduce the number permitted to file for bankruptcy under Chapter 7, which provides for liquidation of most debts, and force more debtors to file under Chapter 13, which requires significant repayment.
The new law requires that debtors who have sufficient discretionary income to pay at least $100 a month to creditors and whose incomes are above the median for their state will be required to file under Chapter 13. Under Chapter 13, filers are required to follow a three-to five-year debt repayment plan to pay off some of their creditors. In 2004, over 1.1 million filed under Chapter 7, while some 450,000 filed under Chapter 13. In 2005, before the new law took effect, 2.39 million U.S. households filed for bankruptcy, a 67% increase over 2004. Under the new law, most debtors will be shifted from the more lenient to the more restrictive regime.
Bankruptcy judges previously had considerable discretion in fashioning or waiving repayment plans, but they are now required to follow much more restrictive guidelines. Before this cannibalistic legislation was passed, hundreds of judges and law professors expressed their opposition to these provisions, but their views were ignored.
In October of 2005--in the aftermath of the Katrina disaster--the Bush administration announced that it would not revoke or delay a law that made it harder for tens of thousands of working-class Americans to file for bankruptcy. With the support of the White House, Republican congressmen rejected calls from consumer groups and some Democrats to place a moratorium on the bill’s provisions for victims of Hurricane Katrina.
The Housing Bubble Burst Follows the Devastating 2001 Wall Street Crash
The March 2001 stock market collapse was one of the worst in U.S. history, totaling a whopping $4.6 trillion in losses for the deluded market players--and, of course, a $4.6 trillion profit for the Wall Street con artists. This crash was nearly five times that of the October 1987 Wall Street collapse.
U.S. stock market investor-victims suffered their greatest ever one-week losses during the March 2001 fiasco. The Dow Jones Industrial Average experienced three sharp declines in five days, including a drop of over 400 points on Monday and a 227-point drop on Friday, with a total weekly decline of 821 points—a loss of 7.70 percent. The S&P 500, a broader average of Wall Street stocks, showed a 7 percent decline, while the high tech-dominated NASDAQ index fell 8 percent.
By 2000, uninformed American investors had been so foolish as to put more than 60% of their assets in the stock market crap shoot. So the Wall Street collapse beginning in 2000 meant that U.S. household wealth declined for the first time since the federal government began keeping such figures in 1945. Previous recessions and crashes had only slowed the rate of increase in household wealth, never decreased it. The economic cannibalization effects are beginning to show clearly in the sinews of America.
The $4.6 trillion already vaporized in the 2001 Wall Street crash—and the trillions more which are now at risk because of the housing bubble burst--constitute the life savings of tens of million of working people in America. Millions of workers are discovering that their 401(k) plans, which have become a widespread substitute for guaranteed pensions, will no longer sustain them in a decent retirement because of recurring stock market collapses. Three-quarters of the funds held by 401(k) plans, about $1.7 trillion, are invested in the stock market. If you don't believe Americans have allowed themselves to be cannibalized, talk to the millions who've lost savings set aside to buy a new home, finance their children's college education, or protect against the threat of a major illness. American workers are living on the edge of disaster.
If it doesn't seem like there's cannibalizing going on--the super-rich devouring the poor--look at the fact that the top ten percent of the population--the super-rich--own over 70 percent of the national wealth, much of which they've made by beggaring American workers. The bottom 90 percent of the population, with less than 30 percent of the wealth, owe 70 percent of the consumer debt.
As Michael Hudson demonstrates, this current situation of American workers being in debt constitutes a new kind of slavery.
"Never before have so many Americans gone so deeply into debt so willingly . . . In the odd logic of the real estate bubble, debt has come to equal wealth.
"And not only wealth but freedom–an even stranger paradox. After all, debt throughout most of history has been little more than a slight variation on slavery. Debtors were medieval peons or Indians bonded to Spanish plantations or the sharecropping children of slaves in the postbellum South. Few Americans today would volunteer for such an arrangement, and therefore would-be lords and barons have been forced to develop more sophisticated enticements."
Michael Hudson, "The New Road to Serfdom," ITULIP.com
How Devastating Is the House Bubble Burst?
In a recent Bloomberg News interview, Kenneth Heebner, manager of CGM Realty Fund (Capital Growth Management), provided a realistic forecast of what we can expect in the near future as mortgage defaults increase.
“What you are going to see is the greatest price decline in housing since the Great Depression.
Question: "Will the losses in the mortgage market exceed those in the savings and loan crisis [$500 billion loss]?"
Heebner: “They're going to dwarf those losses because the losses could easily approach $1 trillion -- that dwarfs anything that has ever happened. Enron was $100 billion--this will be far greater than that . . ."
"So, where is all this headed?
"No one really knows. But when the housing bubble crashes into Wall Street’s credit bubble, we can expect the 'big bang.' That may explain why America’s wealthiest investors are running for cover before the whole thing blows. (A number of investors have already cashed out and put their holdings into foreign funds and currencies).
"One thing is certain, time is running out. With $1 trillion in subprimes and Alt-A loans headed for default, the system is facing its greatest challenge. US GDP has been revised to a measly 1.8 percent, foreign investment is down, and the dollar is losing ground to the euro on an almost weekly basis."
Mike Whitney, "Housing bubble boondoggle: Is it too late to get out?," OnlineJournal.org, Apr 26, 2007
Americans Must Learn From the Past and Plan for the Future
As we review the basic alterations in the very structure of American society, it becomes clear that these crippling changes were carefully planned and created by the criminal plutocrats who seized control of America in the first decades of the twentieth century.
Changes Beginning in the Middle of the Twentieth Century
Element Mid-20th Century After Mid-20th into 21st Century
Workers Good wages and training to be
competitive with other nations' workforces Worldwide low-wage workforce--
no need for American workers
Soldiers Intelligent and well-trained
to defeat other military forces No need for intelligence or training
since there is no intent of victory
Population Intelligence and integrity
to create an orderly society The less intelligent the population
the less awareness or dissent
Economy Capitalists and workers receive
somewhat equitable compensation The super-rich and the cannibalized
poor--forcing people into the military
Morality Fairness, justice, concern for
others, and a quest for excellence Egomaniacal greed, deliberate
ignorance, violence, and illiteracy
The demonic cabal that dominates the world at present has always carefully planned its strategies and has never been shy about making them public, since they believe (somewhat correctly) that world citizens are too unintelligent to understand them or discern their implications.
Had we studied their geopolitical plans in their books and major journals such as Foreign Affairs, we would not have been surprised when the cabal assassinated John F. Kennedy in 1963, seized power illegally through the Bush-Supreme Court coup d'etat in 2000, perpetrated the 9/11/01 atrocity, and started wars in Afghanistan and Iraq, politically and militarily dominating Eurasia and the world.
"America's global primacy is directly dependent on how long and how effectively its preponderance on the Eurasian continent is sustained."
Z. Brzezinski, The Grand Chessboard, 1997
We would have been aware that they fully intended to create a police state in the United States, destroying Constitutional liberties, and set up a permanent fascist dictatorship under the guise of a two-party democratic system.
"The pursuit of power and especially the economic costs and human sacrifice that the exercise of such power often requires are not generally congenial to democratic instincts . . . Democracy is inimical to imperial mobilization."
Z. Brzezinski,op. cit.
"Now let us suppose that the exigencies of the future, as we shall trace them out, point to the conclusion that only an authoritarian, or possibly only a revolutionary, regime will be capable of mounting the immense task of social reorganization needed to escape catastrophe. Might it not then be argued that the quasi-military devotion and sacrifice of such a task would be vitiated if the masses were exposed to the disagreements and diversions of intellectuals who strayed from, or opposed, the official line? "
Robert L. Heilbroner, An Inquiry Into the Human Prospect,, 1974
The future is already being planned by the cannibals--they know their victims won't tolerate their own slaughter forever. A 2007 report from the UK Defense Ministry, "Development, Concepts and Doctrine Centre," projects what might happen by 2035.
“The middle classes could become a revolutionary class. The growing gap between themselves and a small number of highly visible super-rich individuals might fuel disillusion with meritocracy, while the growing urban under-classes are likely to pose an increasing threat . . . Faced by these twin challenges, the world’s middle-classes might unite, using access to knowledge, resources and skills to shape transnational processes in their own class interest."
The life-and-death question is whether Americans can gain sufficient intelligence from studying their past mistakes (as in reflecting on and assimilating the information in this essay):
To be able to plan ahead to fight off the onslaughts of our archenemies
To gain sufficient awareness and power to overcome our destroyers.
We must recognize the more likely ploys these predators will use in their ongoing efforts to utterly destroy Americans:
The contrivance of a total monetary collapse as in 1930s Germany (image) followed by permanent imposition of martial law
Radicalizing and criminalizing (through co-optation and infiltration) the groups opposing them, as a pretext for putting dissidents into concentration camps
Bringing more foreign people into America with a servile mind-set so there is a cheap workforce--including a ready police and military force--and the impossibility of dissidence or uprising
Accelerating the current trends:
Globalization: increasing the use of cheap foreign labor 7
Barbaric annihilation: expanding the use of war as a means of amassing wealth through destroying war materiel and infrastructure which have to be replenished by "defense industry" cronies
"Capitalism turns men into economic cannibals, and having done so, mistakes economic cannibalism for human nature."
Edward Hyam, Soil and Civilization, 1952
What Americans Must Do to Avoid Destruction
We can no longer look at our lives as the ordinary pursuit of a career and some modicum of ease in a world where everything is safe and pleasant and everyone wishes us well. We must never again assume that people who appear "normal" are actually moral and sane, incapable of murderous intent.
We must be savvy enough to recognize that the criminals who seized power at the beginning of the twentieth century--and their chosen successors--literally have and continue to cannibalize Americans; that they are not the "pleasant" smiling, well-intentioned people they want us to think they are.
It's going to be necessary to learn to think in reference to long-term strategies and global dimensions. As Americans wake up from their sleep of ignorance and victimization, we must be able to help them learn to think in more realistic and far-seeing terms.
"Consider the wisdom of economist John Maynard Keynes: The rich are tolerable only so long as their gains appear to bear some relation to roughly what they have contributed to society. Think of it as proportional and justified economic success. This can be tolerated by poor and middle class people if they believe the economic system is fair and properly rewards those who work harder or have better capabilities. But truly obscene economic rewards angers people. When most prosperity and wealth is unfairly channeled to relatively few Upper Class people, it is only a matter of time until fuming, resentful people in the Lower Class decide enough is enough and revolt. Perhaps violently, if the political system remains controlled by the Upper Class."
Joel S. Hirschhorn, "Economic Armageddon is Coming,"
OnlineJournal.org, Apr 26, 2007
Americans must prepare financially, psychologically, and physically for the further onslaughts of the economic cannibals. Their present domination of the world through the use of economic coercion and preemptive military invasion and occupation will, sooner or later, begin to run up against factors that are more than troublesome for them.
Currently, they must pressure foreigners to commit 2 billion dollars per day into their markets in order to maintain dollar stability. In addition, they've amassed a total debt of over $8.6 trillion. At present, China is the cabal's manufacturing base, and in turn China buys US securities to finance their trade and war deficits. China now holds $800 billion of US bonds and Treasury bills and $1 trillion in foreign reserves--70% of the reserves in US dollars.
China may find it advantageous at some point in the future to break its current trade and manufacturing agreements with the cabal and strike out on its own. We're already seeing the rumblings of just such thinking on the part of the Chinese.
Unrestricted War: China’s Master Plan to Destroy America is a treatise for world domination written in 1999 by People’s Liberation Army Colonels Qiao Liang and Wang Xiangsui. In order for China to become a dominant global power over the United States, the PLA emphasizes "The Final War over Resources," must be won.
The Colonels state that the aggressor nation “must adjust its own financial strategy, use currency revaluation or devaluation as primary weapons, and combine means such as getting the upper hand in public opinion and changing the rules sufficiently to make financial turbulence and economic crisis appear in the targeted country or area, weakening its overall power, including its military strength. Whether it be the intrusions of hackers, a major explosion at the World Trade Center, or a bombing attack by bin Laden, all of these greatly exceed the frequency bandwidths understood by the American military..."
According to Bloomberg, foreigners now hold nearly 50% of our publicly traded debt. The major holders of our debt are Japan, China and the U.K. They currently hold $639.2, $342.1 and $207.8 billion of our treasury debt respectively. In all, foreigners hold about $9 trillion of U.S. financial assets. At some point this huge debt burden will collapse and the cabal will try to embroil American citizens in new wars of aggression which they'll spin as patriotic struggles against terrorists. We must be mentally and physically prepared to resist such propaganda and coercion.
Of the 6.5 billion people living on this planet at present, less than one billion have their home in what is called the "developed" world. Within that "developed" world ten percent of the population own 90% of the wealth. Increasingly, the other ninety percent are merely slaughter animals for the capitalist cannibals. At some point, as American and other workers gain more awareness of their situation, they must begin overcoming the cabal and take back their countries.
Is the Bush junta doing something about the billions of dollars lost in the U.S. mortgage crisis? You bet! Treasury Secretary Henry Paulson, officials of the Federal Reserve Board, and other US financial regulators met on November 29, 2007 with top Wall Street and home mortgage executives as well as housing counselors to come up with a plan. Will the plan help the millions of Americans cannibalized by the criminal activities of the big banks, hedge funds, and other financial scam institutions? Fageddaboudit! The plan, touted as relief for homeowners, is actually a means of averting a collapse of major US banks and other financial institutions that could be triggered by spiraling home foreclosures and the implosion of hundreds of billions of dollars in speculative investments tied to the subprime housing boom of previous years.
In essence, the scheme--euphemistically named the "Hope Now Alliance"--aims to contain the home foreclosure epidemic sufficiently to shield the major financial institutions from the full consequences of years of rampant speculation, accompanied by accounting manipulations that concealed the immense levels of risk behind the soaring profits and gargantuan salaries reaped by Wall Street executives. If the plan is implemented, it will allow holders of mortgage-backed securities to put off marking down their assets. In other words, make it possible for the thugs who created the whole housing crisis to continue their criminal behavior.
"Organized crime is now officially legal and combined with the stock and capital markets--all enforced by force and rigged profits. This is the economic infrastructure for fascism."
Catherine Austin Fitts, Former Assistant Housing Secretary
and past Managing Director of Dillon Read
The word "cannibalism" in this essay is not a metaphor--not meant to be taken in only a figurative manner. The international cabal that weilds political, economic, and military power throughout the world, is literally a group bent on looting as much wealth as possible, to the point of taking the life essence from countless millions of people. We Americans must wake up to the reality of our present situation : we are living under an actual political dictatorship in a fascist, militarist police state.
The difficulty in realizing this world catastrophe is the enormity of the cabal's devastation of human life; the barbarity and ruthlessness is so hyperbolic as to be hard to grasp. Here are illustrative examples of their staggering outrages:
The federal government is totally corrupt and tax dollars and dollars borrowed through debt are being siphoned off into the hands of the cabal members. Some of this financial and political corruption is too large to cover up:
"According to some estimates, we cannot track $2.3 trillion in transactions."
Former Secretary of Defense Donald Rumsfeld, September 10, 2001
Under the Bush I, Clinton, and Bush II regimes, all Secretaries of the Treasury have refused to produce audited financial statements and have reported a total of $4 trillion in "undocumentable adjustments."
On May 5, 2006,George W. Bush signed a memo entitled "Assignment Of Function Relating To Granting Of Authority For Issuance Of Certain Directives: Memorandum For The Director Of National Intelligence." In the document, Bush assigned intelligence czar, John Negroponte, the task of waiving Securities and Exchange Commission rules, established in 1934, pertaining to accounting disclosures by publicly traded companies. As a result of no longer needing to reveal financial information to shareholders in the name of national security, the cloning of Enron and World.Com is now complete. Instead of being required to disclose valid accounting information, U.S. corporations have now been given carte blanche to maintain fiduciary deception.
No sane American can persist in believing that the United States has a legitimate government.
Personally, you need to do these things:
Help to expose the propagandists and corporate cannibals behind the curtain
Examine honestly the mistakes you've made and learn from them
Free yourself from all unnecessary debt
Avoid making non-essential purchases
Band with persons you can trust in a time of crisis
Transfer most of your dollar assets into gold and silver.
While the Dollar's Long-Term Trend is Down, Gold's is UP
Stay away entirely from the Wall Street con game
Help as many people as you can to understand how Americans have been and are being cannibalized by economic predators.
Study carefully how these economic cannibals will be defeated through philosophical understanding and activity.
1) How Philosophy Overcomes Tyranny
2) Overthrowing the New Slavery
3) The New American Civil War
4) Realizing a New World
5) Overcoming the Present Dark Age
6) Realizing the New Commonwealth
7) How Philosophy Overcomes Propaganda
"The winning of freedom is not to be compared to the winning of a game – with the victory recorded forever in history. Freedom has its life in the hearts, the actions, the spirits of men and so it must be daily earned and refreshed – else like a flower cut from its life-giving roots, it will wither and die."
President Dwight D. Eisenhower, 1954
http://www.new-enlightenment.com/econ_crash.htm
"The near meltdown of the financial system produced by the subprime mortgage crisis in the United States is the outcome of the entrapment of the poorest sections of the population, in loans they could never repay, by the banks and lending institutions. It is indicative of the growth of financial parasitism on an unprecedented scale."
Source
America is a war zone; our people are being cannibalized 1 before our very eyes. Looting and plundering the world is the primary goal of the criminal cabal that controls America. We've previously demonstrated how they amass wealth by the destruction of people and material through the tactic of unending war.
In the late nineteenth and the early part of the twentieth century, their destruction was primarily targeted at foreign peoples such as the Cubans and Filipinos (Spanish-American War), Germans (World Wars I and II), Japanese (World War II), and Soviet citizens (Cold War). Beginning in the early part of the twentieth century, this international gang turned on Americans and began in earnest to cannibalize us.
Economic collapse is one of the final stages of the cabal's overall policy of cultural devastation. Many of their earlier phases of contrived collapse have been largely unseen or ignored by most Americans. But the final economic breakdown--now in its first stages with the bursting of the housing bubble and the collapse of the dollar--are realities U.S. citizens can no longer turn a blind eye to, because many Americans are literally being thrown out on the street through foreclosure and eviction.
Through real estate shell games, the super-rich have looted at least $10-$15 trillion from workers. "Buy a house with a low interest loan," they lied to the workers, "and it will rise in value indefinitely."
Workers were swindled into buying property with interest-only loans--or other predatory financing--deluded into believing that with their increased property value they could later refinance to pay off the balloon payments and sky-rocketing mortgages.
Since 2000, outstanding mortgage loans have more than doubled: up over $5 trillion. Unpaid mortgages soared and lenders were falling all over themselves handing out sub-prime loans 2 for up to 125% of the value of the property.
Now the real estate bubble has burst: property owners can't sell their homes or refinance them. They can't pay their mortgages so the banks foreclose and the house is sold on the courthouse steps. Within days they receive an eviction notice and they're out on the street. Since 2006, vacant dwellings have increased by more than 40% for existing homes and more than 20% for new homes. The personal tragedy these people face is overwhelming and heartbreaking.
Since private banking interests created the scam of the "Federal" Reserve System in 1913, seizing control of American financial powers, their ability to lend money at usurious interest rates has meant that they feed on American debtors. Until recently, they've been content to reap huge profits through ordinary money-lending means--as outlined below:
Bank Home Mortgage Scam
Mortgage Loan: $100,000.00 Interest Rate: 7.21%
Monthly Payment $679.47 Total of 360 Payments $244,609.20
Total Bank Profit $144,609.20 True Total Bank Profit Rate 144%
But reaping huge profits through interest wasn't enough for them; they decided they'd not only make money on interest but loot workers of their hard-earned savings and income--and then financially destroy them: foreclose and keep the property for sale to another sucker.
Something New in Housing Bubbles
The new real estate scam launched in the latter part of the twentieth century was the first in U.S. history to impact the economy in a much broader way than previous housing bubbles. Homeowners, using their rising house prices as collateral for mortgage equity cash withdrawal ("Use your home as an ATM machine!"), plunged as never before into additional debt to finance other kinds of spending (primarily credit card). Under the impact of this kind of financial insanity, the entire nation metamorphosed into a fantasy financial and political infrastructure built on nothing but shifting sand.
From the 1.5 million housing units in 2001, new single-family homes and multifamily homes increased in 2005 to 2.2 million units. Meanwhile, the constant quality price index for new homes rose 30% and the purchase-only price index of existing homes published by the Office of Federal Housing Enterprise Oversight (OFHEO) rose by 50%.
The "Federal" Reserve System set interest rates so low that they inflamed consumer borrowing, seducing workers into buying property and other goods and services they couldn't realistically afford. The increase in the net worth and the borrowing power of their houses drove workers to deranged consumption beyond their income growth. Americans were spending insanely, having been deluded into believing that their property "wealth" would continue to increase and would cover any future contingency. In contrast, personal saving in the U.S. dipped below 0% for the first time since the Great Depression, hitting negative .5% in 2005.
Having been miseducated to the point where they cannot think rationally, Americans began using their houses as cash machines, refinancing as they went. In 2005, private households raised $1.08 trillion through mortgages. Of this amount, they only spent $95.1 billion on higher-priced homes. Spending on goods and services rose in total by $539.9 billion, relative to an increase in disposable income of only $354.5 billion. In other words, about one-third of the increase in consumer spending was based on home mortgage borrowing.
The real estate bubble began to burst in the third quarter of 2005, with mortgage borrowing peaking at $1.23 trillion per annum. Falling steadily, by the second quarter of 2006, borrowing on home equity was down to $819.6 billion. Some of this sharp decline was also caused by increases in consumer credit costs.
If you want clear evidence of the incapacity of Americans to think reasonably, just listen to the large number of homeowners, faced with a 45% loss of value in their homes, saying: "I won't accept one penny less for my house than I paid for it." A recent survey showed that only 1 in 7 Americans believes that house prices will go down. These benighted souls are being forced out of their homes by the police who come to serve eviction notices.
Because mind-destroyed homeowners resist downward price adjustments, the market becomes illiquid, with unsold homes becoming a glut on the market. In many instances, only after foreclosure and eviction are prices lowered to realize necessary sales. Predatory lenders are happy to adjust their lending and selling practices to fit the changed market.
Unlike previous housing downturns, this current bubble burst hasn't been caused by credit tightening. The "Federal" Reserve has merely returned short-term interest rates to more normal levels and long-term rates are unusually low relative to those short-term rates. Unlike previous downturns caused by tight money that were followed by vigorous recoveries, this present real estate collapse, occurring despite low interest rates and loose money, will likely take a great deal of time for recovery, if there is ever a recovery at all.
How the Real Estate Scam Worked: Interest-Only Loans
Interest-rate only (IO) mortgages are a new variation of the Adjustable Rate Mortgage (ARM). 3 IOs are loans that permit the borrower to pay only the interest on the mortgage for a specified period of time—usually five or ten years. During this period, the monthly payment contains no principal.
How do these loans really work? Consider as an example a 30-year loan at a fixed rate of 6 percent on $200,000.
In a regular full amortizing (FA) loan, the homebuyer will make monthly payments of $1,199. In an IO mortgage with a five-year IO period, the homebuyer will pay instead $1,000 for the first five years, that is, 17 percent less than the FA loan. In exchange for initial lower monthly payments, however, the holder of an IO mortgage will see his or her monthly payments jump once the five-year IO period ends—in our example it would rise to $1,288, an increase of 29 percent over the initial payments and of 7.4 percent over the traditional FA loan.
Adding an IO period to Adjustable Rate Mortgages (ARMs) can reduce initial payment even further. The added risk on this loan is that following the IO period the loan holder will bear the risk of any interest rate rise. In our example, if interest rates climbed to 8 percent in five years and remained stationary for the rest of the mortgage’s life, our home buyer would have to make average monthly payments of $1,543 (a 54.3 percent increase) and if interest rates go up to 10 percent, he or she would have to pay $1,817 (an 81.2 percent increase).
Because IOs and IO/ARMs carry more risk, lenders should require higher standards for borrowers than the traditional FA mortgages. But this prudent rule is rarely followed. Always seeking to maximize profits, lenders have focused on homebuyers’ capacity to make payments today—and worry about higher future payments—and possible foreclosures—tomorrow. The lenders know that even if the borrower defaults, they (the lenders) will have the money already paid in plus the repossessed house which they can resell. 4
A Typical Real Estate Cannibal
To get a feeling for how economic predators propagandized hapless American workers into the real estate con game, let's examine a typical example of a con artist at work.
"How long can the real estate boom last? No one knows the answer, but this is the most exciting time in real estate during my almost thirty years in the business. The world is awash with liquidity, and real estate is capturing much of it for three reasons.
"First, because of the stock market crash of 2001, real estate has become a legitimate asset class and a good diversifier from stocks and bonds. Second, with graying populations in the West and Japan, real estate is particularly appreciated because it is a strong generator of current cash flow needed to pay pensioners. And third, the returns relative to all asset classes have been enormous.
"The boom may end when interest rates rise from a falling dollar or if there is a surge of commercial overbuilding around the country. A political or terror event could bring things to a halt. Most likely, it will be something unexpected that stalls real estate. It's anyone's guess. But history has taught us one lesson: In the end, even real estate will revert back to a mean and return to earth just like every other asset class."
Arthur Segel is a professor in the Finance and Entrepreneurial Management units at Harvard Business School.
This article, "The New Real Estate," appeared in Moneycontrol.com April 22, 2007, months after the housing bubble had burst.
Mea Culpa
Unfortunately, as we examine how lower and middle-class Americans have conspired mindlessly in their victimization, it's no wonder that Bush and other cabal predators are eating American workers alive. Just consider what Americans have done in terms of debt in recent years: 5
Americans have increased their borrowing on their credit cards to the point that the credit card industry took in $43 billion in fee income from late payments, over-limit, and balance transfer fees in 2004, up from $39 billion in 2003. In 2005, credit card late fees alone totaled over $11 billion.
Consumer debt has doubled since 1990, to $7.5 trillion—-more than $50,000 per household, over $25,000 for every man, woman and child in America.
Average household credit card debt has increased 167% between 1990 and 2004.
The average American had over seven payment cards in their wallet including credit cards, retail store cards, and bank debit cards in 2004.
The average interest rate paid on credit cards was approximately 14.54% in 2005.
45% of American cardholders were only making minimum payments in 2004, up from 42% who did so in 2003.
A typical credit card purchase is 12-18% more than if cash was used (as of 2004).
30 million Americans (40% of homeowners) refinanced their mortgages during the 3 years (prior to Q3 2005), with over half applying the proceeds to eliminate credit card debt.
Seven out of ten low and middle-income households, reported using their credit cards as a financial safety net, i.e., to pay for car repairs, rent or housing repairs and medical expenses, rather than relying on savings in 2005.
According to a national survey, the most significant predictor of financial stress is if households rely on using credit cards to cover non-discretionary living expenses like rent, groceries, and medical expenses.
In 2004, the average college student graduated with $16,500 in student loans, up 74% since 1997. (While this figure is an average, an incredible number of graduates leave college with more than a year’s salary in debt.)
In 2004, 65% of teens failed a financial literacy test according to Jump$tart Coalition.
In 2004, the average debt for Americans 65 and older was $4,000, up 89% in the past decade.
In 2004, the average personal wealth of a 50 year-old American was less than $40,000 including home equity.
In 2004, most credit card debt of older Americans was driven by healthcare expenses and the increased cost of prescription medication.
Examples of Consumer Stupidity
Example 1 Example 2
In Waretown, NJ, a single mother has lost her house through the fraud of a company named FundingForeclosure. The woman said she had sought to take out a $27,000 equity loan in 2005 after she quit her job. She said she had been emotionally affected by her parents' divorce and other life events. A mortgage originator referred her to FundingForeclosure because her credit was poor.
She said she was not aware she was selling the property. Two mortgages, worth $204,250, were taken out in the name of two straw buyers.
The woman said she simply signed the papers where a local notary told her to sign. She said she did not read them, but relied on what she was told by a friendly woman from FundingForeclosure.
"I don't know these things," she said. "Nothing looked like a deed. Nothing. This was my house. I bought this house for my son and me. I worked two jobs to get this house."
The woman, who is cleaning houses, said she's learned some lessons through the hardship.
"I wasn't always assertive," she said. "I've learned."
Homeowners struggling to make mortgage payments or in foreclosure, were contacted by a mortgage scam company and persuaded to agree to what sounded like a wonderful deal: An investor would buy their property temporarily, and then they would pay rent to live in their own house and buy it back within two years.
Most homeowners were unaware they were selling their property. The rent was uaually lower than their earlier monthly mortgage payments, or an influx of cash from the deal would pay off debt. Bottom-line, the scam clained to allow distressed homeowners time to catch up on bills, find new jobs and earn better credit ratings.
Third-party investors, or straw buyers, were excited, too. They were promised an income of $5,000 to $40,000 a year in exchange for lending their names and good credit scores to people who needed a hand. The company said it would make mortgage payments for the investors through the rent proceeds. Everyone would win, the company promised.
The criminal mortgage companies, unbeknownst to the victims, took out new, larger loans on the properties well above the mortgages they replaced. In most instances, these fraudulent loans were resold among mortgage companies and investment banks in the subprime, or high-interest rate, markets. Homeowners and straw buyers unwittingly signed waivers to wire the proceeds to the scam companies, such as Creative Loans LLC.
No More Safety Devices for Working Americans
A Vicious Cannibalistic Practice
Trailing interest is the practice of charging interest on an entire bill no matter what percentage of it is paid.
Suppose a consumer who usually pays their account in full, and owes no money on December 1, makes a lot of purchases in December, and gets a January 1 credit card bill for $5,020. That bill is due January 15. Suppose the consumer pays that bill on time, but pays $5,000 instead of the full amount owed. What do you think the consumer owes on the next bill?
If you thought the bill would be the $20 past due plus interest on the $20, you would be wrong. In fact, under industry practice today, the bill would likely be twice as much. That's because the consumer would have to pay interest, not just on the $20 that wasn't paid on time, but also on the $5,000 that was paid on time.
The consumer would have to pay interest on the entire $5,020 from the first day of the billing month, January 1, until the day the bill was paid on January 15, compounded daily." In our example, using an interest rate of 17.99 percent ... the $20 debt would, in one month, rack up $35 in interest charges and balloon into a debt of $55.21.
In a March 7, 2007 Congressional hearing, Senators and consumer advocates battled with three of the most powerful men in the credit card industry. Bruce Hammonds, president of Bank of America Card Services, Richard Srednicki, chief executive officer of Chase Bank USA, and Vikram Atal, Chairman and CEO of Citi Cards, all said that "trailing interest" is a practice shared by various lending schemes but were unwilling to give specific examples.
You might wonder why homeowners don't get out of debt through the age-old escape-hatch of bankruptcy. The answer takes us back to the cannibals we're examining in this essay: the super-rich members of the cabal. From the beginning of our nation's history, debtors were able to find relief through bankruptcy. But that meant that the moneyed predators were losing out when their victims escaped them by forfeiting everything--including debts.
The 2005 Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) was in fact the rewriting of bankruptcy laws to reduce the ability of those laws to protect consumers from predatory lending practices on the part of MBNA 6 and other credit card companies and to stiffen the capabilities of those corporations to collect from consumers already suffering from extreme financial hardships. MBNA, not incidentally, is the largest single contributor to the Republican party. Under the new law, poorer folk can't afford the new attorney fees and court costs, since it now costs roughly twice as much as it used to. Court fees were increased almost 50% (from $209 to $299 for chapter 7 and from $179 to $274 for chapter 13). Attorney fees also increased by about the same percentage. It used to be possible to prepare the paperwork in about an hour. Now things are completely different. An attorney has to have three different meetings with the potential client:
One free consultation on the ramifications of bankruptcy, wherein they receive disclosure forms mandated by the new law, informing them of the cost, telling them about the credit counseling requirement, etc.
A separate meeting wherein the attorney collects their 6 months of pay stubs for the Means Test calculations (which itself takes a couple of hours). Then the rest of the paperwork takes another hour or two to prepare.
A third meeting to re-review everything before filing as the new law creates a new liability on the attorney personally to verify that everything the customer tells him is true.
Debtors--Including Hurricane Victims--Are Raw Meat
The 2005 Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) was a massive restructuring of federal bankruptcy laws which punishes middle-class debtors and awards increased payouts of as much as $4 billion a year to their creditors, mainly banks and credit card issuers.
The cannibal corporations spent $40 million and eight years lobbying Congress for legislation that makes it virtually impossible for individuals to escape debt repayment. The 500-page bill was largely written by bank and credit card lobbyists. The law imposes a two-stage means test on bankrupt debtors that will reduce the number permitted to file for bankruptcy under Chapter 7, which provides for liquidation of most debts, and force more debtors to file under Chapter 13, which requires significant repayment.
The new law requires that debtors who have sufficient discretionary income to pay at least $100 a month to creditors and whose incomes are above the median for their state will be required to file under Chapter 13. Under Chapter 13, filers are required to follow a three-to five-year debt repayment plan to pay off some of their creditors. In 2004, over 1.1 million filed under Chapter 7, while some 450,000 filed under Chapter 13. In 2005, before the new law took effect, 2.39 million U.S. households filed for bankruptcy, a 67% increase over 2004. Under the new law, most debtors will be shifted from the more lenient to the more restrictive regime.
Bankruptcy judges previously had considerable discretion in fashioning or waiving repayment plans, but they are now required to follow much more restrictive guidelines. Before this cannibalistic legislation was passed, hundreds of judges and law professors expressed their opposition to these provisions, but their views were ignored.
In October of 2005--in the aftermath of the Katrina disaster--the Bush administration announced that it would not revoke or delay a law that made it harder for tens of thousands of working-class Americans to file for bankruptcy. With the support of the White House, Republican congressmen rejected calls from consumer groups and some Democrats to place a moratorium on the bill’s provisions for victims of Hurricane Katrina.
The Housing Bubble Burst Follows the Devastating 2001 Wall Street Crash
The March 2001 stock market collapse was one of the worst in U.S. history, totaling a whopping $4.6 trillion in losses for the deluded market players--and, of course, a $4.6 trillion profit for the Wall Street con artists. This crash was nearly five times that of the October 1987 Wall Street collapse.
U.S. stock market investor-victims suffered their greatest ever one-week losses during the March 2001 fiasco. The Dow Jones Industrial Average experienced three sharp declines in five days, including a drop of over 400 points on Monday and a 227-point drop on Friday, with a total weekly decline of 821 points—a loss of 7.70 percent. The S&P 500, a broader average of Wall Street stocks, showed a 7 percent decline, while the high tech-dominated NASDAQ index fell 8 percent.
By 2000, uninformed American investors had been so foolish as to put more than 60% of their assets in the stock market crap shoot. So the Wall Street collapse beginning in 2000 meant that U.S. household wealth declined for the first time since the federal government began keeping such figures in 1945. Previous recessions and crashes had only slowed the rate of increase in household wealth, never decreased it. The economic cannibalization effects are beginning to show clearly in the sinews of America.
The $4.6 trillion already vaporized in the 2001 Wall Street crash—and the trillions more which are now at risk because of the housing bubble burst--constitute the life savings of tens of million of working people in America. Millions of workers are discovering that their 401(k) plans, which have become a widespread substitute for guaranteed pensions, will no longer sustain them in a decent retirement because of recurring stock market collapses. Three-quarters of the funds held by 401(k) plans, about $1.7 trillion, are invested in the stock market. If you don't believe Americans have allowed themselves to be cannibalized, talk to the millions who've lost savings set aside to buy a new home, finance their children's college education, or protect against the threat of a major illness. American workers are living on the edge of disaster.
If it doesn't seem like there's cannibalizing going on--the super-rich devouring the poor--look at the fact that the top ten percent of the population--the super-rich--own over 70 percent of the national wealth, much of which they've made by beggaring American workers. The bottom 90 percent of the population, with less than 30 percent of the wealth, owe 70 percent of the consumer debt.
As Michael Hudson demonstrates, this current situation of American workers being in debt constitutes a new kind of slavery.
"Never before have so many Americans gone so deeply into debt so willingly . . . In the odd logic of the real estate bubble, debt has come to equal wealth.
"And not only wealth but freedom–an even stranger paradox. After all, debt throughout most of history has been little more than a slight variation on slavery. Debtors were medieval peons or Indians bonded to Spanish plantations or the sharecropping children of slaves in the postbellum South. Few Americans today would volunteer for such an arrangement, and therefore would-be lords and barons have been forced to develop more sophisticated enticements."
Michael Hudson, "The New Road to Serfdom," ITULIP.com
How Devastating Is the House Bubble Burst?
In a recent Bloomberg News interview, Kenneth Heebner, manager of CGM Realty Fund (Capital Growth Management), provided a realistic forecast of what we can expect in the near future as mortgage defaults increase.
“What you are going to see is the greatest price decline in housing since the Great Depression.
Question: "Will the losses in the mortgage market exceed those in the savings and loan crisis [$500 billion loss]?"
Heebner: “They're going to dwarf those losses because the losses could easily approach $1 trillion -- that dwarfs anything that has ever happened. Enron was $100 billion--this will be far greater than that . . ."
"So, where is all this headed?
"No one really knows. But when the housing bubble crashes into Wall Street’s credit bubble, we can expect the 'big bang.' That may explain why America’s wealthiest investors are running for cover before the whole thing blows. (A number of investors have already cashed out and put their holdings into foreign funds and currencies).
"One thing is certain, time is running out. With $1 trillion in subprimes and Alt-A loans headed for default, the system is facing its greatest challenge. US GDP has been revised to a measly 1.8 percent, foreign investment is down, and the dollar is losing ground to the euro on an almost weekly basis."
Mike Whitney, "Housing bubble boondoggle: Is it too late to get out?," OnlineJournal.org, Apr 26, 2007
Americans Must Learn From the Past and Plan for the Future
As we review the basic alterations in the very structure of American society, it becomes clear that these crippling changes were carefully planned and created by the criminal plutocrats who seized control of America in the first decades of the twentieth century.
Changes Beginning in the Middle of the Twentieth Century
Element Mid-20th Century After Mid-20th into 21st Century
Workers Good wages and training to be
competitive with other nations' workforces Worldwide low-wage workforce--
no need for American workers
Soldiers Intelligent and well-trained
to defeat other military forces No need for intelligence or training
since there is no intent of victory
Population Intelligence and integrity
to create an orderly society The less intelligent the population
the less awareness or dissent
Economy Capitalists and workers receive
somewhat equitable compensation The super-rich and the cannibalized
poor--forcing people into the military
Morality Fairness, justice, concern for
others, and a quest for excellence Egomaniacal greed, deliberate
ignorance, violence, and illiteracy
The demonic cabal that dominates the world at present has always carefully planned its strategies and has never been shy about making them public, since they believe (somewhat correctly) that world citizens are too unintelligent to understand them or discern their implications.
Had we studied their geopolitical plans in their books and major journals such as Foreign Affairs, we would not have been surprised when the cabal assassinated John F. Kennedy in 1963, seized power illegally through the Bush-Supreme Court coup d'etat in 2000, perpetrated the 9/11/01 atrocity, and started wars in Afghanistan and Iraq, politically and militarily dominating Eurasia and the world.
"America's global primacy is directly dependent on how long and how effectively its preponderance on the Eurasian continent is sustained."
Z. Brzezinski, The Grand Chessboard, 1997
We would have been aware that they fully intended to create a police state in the United States, destroying Constitutional liberties, and set up a permanent fascist dictatorship under the guise of a two-party democratic system.
"The pursuit of power and especially the economic costs and human sacrifice that the exercise of such power often requires are not generally congenial to democratic instincts . . . Democracy is inimical to imperial mobilization."
Z. Brzezinski,op. cit.
"Now let us suppose that the exigencies of the future, as we shall trace them out, point to the conclusion that only an authoritarian, or possibly only a revolutionary, regime will be capable of mounting the immense task of social reorganization needed to escape catastrophe. Might it not then be argued that the quasi-military devotion and sacrifice of such a task would be vitiated if the masses were exposed to the disagreements and diversions of intellectuals who strayed from, or opposed, the official line? "
Robert L. Heilbroner, An Inquiry Into the Human Prospect,, 1974
The future is already being planned by the cannibals--they know their victims won't tolerate their own slaughter forever. A 2007 report from the UK Defense Ministry, "Development, Concepts and Doctrine Centre," projects what might happen by 2035.
“The middle classes could become a revolutionary class. The growing gap between themselves and a small number of highly visible super-rich individuals might fuel disillusion with meritocracy, while the growing urban under-classes are likely to pose an increasing threat . . . Faced by these twin challenges, the world’s middle-classes might unite, using access to knowledge, resources and skills to shape transnational processes in their own class interest."
The life-and-death question is whether Americans can gain sufficient intelligence from studying their past mistakes (as in reflecting on and assimilating the information in this essay):
To be able to plan ahead to fight off the onslaughts of our archenemies
To gain sufficient awareness and power to overcome our destroyers.
We must recognize the more likely ploys these predators will use in their ongoing efforts to utterly destroy Americans:
The contrivance of a total monetary collapse as in 1930s Germany (image) followed by permanent imposition of martial law
Radicalizing and criminalizing (through co-optation and infiltration) the groups opposing them, as a pretext for putting dissidents into concentration camps
Bringing more foreign people into America with a servile mind-set so there is a cheap workforce--including a ready police and military force--and the impossibility of dissidence or uprising
Accelerating the current trends:
Globalization: increasing the use of cheap foreign labor 7
Barbaric annihilation: expanding the use of war as a means of amassing wealth through destroying war materiel and infrastructure which have to be replenished by "defense industry" cronies
"Capitalism turns men into economic cannibals, and having done so, mistakes economic cannibalism for human nature."
Edward Hyam, Soil and Civilization, 1952
What Americans Must Do to Avoid Destruction
We can no longer look at our lives as the ordinary pursuit of a career and some modicum of ease in a world where everything is safe and pleasant and everyone wishes us well. We must never again assume that people who appear "normal" are actually moral and sane, incapable of murderous intent.
We must be savvy enough to recognize that the criminals who seized power at the beginning of the twentieth century--and their chosen successors--literally have and continue to cannibalize Americans; that they are not the "pleasant" smiling, well-intentioned people they want us to think they are.
It's going to be necessary to learn to think in reference to long-term strategies and global dimensions. As Americans wake up from their sleep of ignorance and victimization, we must be able to help them learn to think in more realistic and far-seeing terms.
"Consider the wisdom of economist John Maynard Keynes: The rich are tolerable only so long as their gains appear to bear some relation to roughly what they have contributed to society. Think of it as proportional and justified economic success. This can be tolerated by poor and middle class people if they believe the economic system is fair and properly rewards those who work harder or have better capabilities. But truly obscene economic rewards angers people. When most prosperity and wealth is unfairly channeled to relatively few Upper Class people, it is only a matter of time until fuming, resentful people in the Lower Class decide enough is enough and revolt. Perhaps violently, if the political system remains controlled by the Upper Class."
Joel S. Hirschhorn, "Economic Armageddon is Coming,"
OnlineJournal.org, Apr 26, 2007
Americans must prepare financially, psychologically, and physically for the further onslaughts of the economic cannibals. Their present domination of the world through the use of economic coercion and preemptive military invasion and occupation will, sooner or later, begin to run up against factors that are more than troublesome for them.
Currently, they must pressure foreigners to commit 2 billion dollars per day into their markets in order to maintain dollar stability. In addition, they've amassed a total debt of over $8.6 trillion. At present, China is the cabal's manufacturing base, and in turn China buys US securities to finance their trade and war deficits. China now holds $800 billion of US bonds and Treasury bills and $1 trillion in foreign reserves--70% of the reserves in US dollars.
China may find it advantageous at some point in the future to break its current trade and manufacturing agreements with the cabal and strike out on its own. We're already seeing the rumblings of just such thinking on the part of the Chinese.
Unrestricted War: China’s Master Plan to Destroy America is a treatise for world domination written in 1999 by People’s Liberation Army Colonels Qiao Liang and Wang Xiangsui. In order for China to become a dominant global power over the United States, the PLA emphasizes "The Final War over Resources," must be won.
The Colonels state that the aggressor nation “must adjust its own financial strategy, use currency revaluation or devaluation as primary weapons, and combine means such as getting the upper hand in public opinion and changing the rules sufficiently to make financial turbulence and economic crisis appear in the targeted country or area, weakening its overall power, including its military strength. Whether it be the intrusions of hackers, a major explosion at the World Trade Center, or a bombing attack by bin Laden, all of these greatly exceed the frequency bandwidths understood by the American military..."
According to Bloomberg, foreigners now hold nearly 50% of our publicly traded debt. The major holders of our debt are Japan, China and the U.K. They currently hold $639.2, $342.1 and $207.8 billion of our treasury debt respectively. In all, foreigners hold about $9 trillion of U.S. financial assets. At some point this huge debt burden will collapse and the cabal will try to embroil American citizens in new wars of aggression which they'll spin as patriotic struggles against terrorists. We must be mentally and physically prepared to resist such propaganda and coercion.
Of the 6.5 billion people living on this planet at present, less than one billion have their home in what is called the "developed" world. Within that "developed" world ten percent of the population own 90% of the wealth. Increasingly, the other ninety percent are merely slaughter animals for the capitalist cannibals. At some point, as American and other workers gain more awareness of their situation, they must begin overcoming the cabal and take back their countries.
Is the Bush junta doing something about the billions of dollars lost in the U.S. mortgage crisis? You bet! Treasury Secretary Henry Paulson, officials of the Federal Reserve Board, and other US financial regulators met on November 29, 2007 with top Wall Street and home mortgage executives as well as housing counselors to come up with a plan. Will the plan help the millions of Americans cannibalized by the criminal activities of the big banks, hedge funds, and other financial scam institutions? Fageddaboudit! The plan, touted as relief for homeowners, is actually a means of averting a collapse of major US banks and other financial institutions that could be triggered by spiraling home foreclosures and the implosion of hundreds of billions of dollars in speculative investments tied to the subprime housing boom of previous years.
In essence, the scheme--euphemistically named the "Hope Now Alliance"--aims to contain the home foreclosure epidemic sufficiently to shield the major financial institutions from the full consequences of years of rampant speculation, accompanied by accounting manipulations that concealed the immense levels of risk behind the soaring profits and gargantuan salaries reaped by Wall Street executives. If the plan is implemented, it will allow holders of mortgage-backed securities to put off marking down their assets. In other words, make it possible for the thugs who created the whole housing crisis to continue their criminal behavior.
"Organized crime is now officially legal and combined with the stock and capital markets--all enforced by force and rigged profits. This is the economic infrastructure for fascism."
Catherine Austin Fitts, Former Assistant Housing Secretary
and past Managing Director of Dillon Read
The word "cannibalism" in this essay is not a metaphor--not meant to be taken in only a figurative manner. The international cabal that weilds political, economic, and military power throughout the world, is literally a group bent on looting as much wealth as possible, to the point of taking the life essence from countless millions of people. We Americans must wake up to the reality of our present situation : we are living under an actual political dictatorship in a fascist, militarist police state.
The difficulty in realizing this world catastrophe is the enormity of the cabal's devastation of human life; the barbarity and ruthlessness is so hyperbolic as to be hard to grasp. Here are illustrative examples of their staggering outrages:
The federal government is totally corrupt and tax dollars and dollars borrowed through debt are being siphoned off into the hands of the cabal members. Some of this financial and political corruption is too large to cover up:
"According to some estimates, we cannot track $2.3 trillion in transactions."
Former Secretary of Defense Donald Rumsfeld, September 10, 2001
Under the Bush I, Clinton, and Bush II regimes, all Secretaries of the Treasury have refused to produce audited financial statements and have reported a total of $4 trillion in "undocumentable adjustments."
On May 5, 2006,George W. Bush signed a memo entitled "Assignment Of Function Relating To Granting Of Authority For Issuance Of Certain Directives: Memorandum For The Director Of National Intelligence." In the document, Bush assigned intelligence czar, John Negroponte, the task of waiving Securities and Exchange Commission rules, established in 1934, pertaining to accounting disclosures by publicly traded companies. As a result of no longer needing to reveal financial information to shareholders in the name of national security, the cloning of Enron and World.Com is now complete. Instead of being required to disclose valid accounting information, U.S. corporations have now been given carte blanche to maintain fiduciary deception.
No sane American can persist in believing that the United States has a legitimate government.
Personally, you need to do these things:
Help to expose the propagandists and corporate cannibals behind the curtain
Examine honestly the mistakes you've made and learn from them
Free yourself from all unnecessary debt
Avoid making non-essential purchases
Band with persons you can trust in a time of crisis
Transfer most of your dollar assets into gold and silver.
While the Dollar's Long-Term Trend is Down, Gold's is UP
Stay away entirely from the Wall Street con game
Help as many people as you can to understand how Americans have been and are being cannibalized by economic predators.
Study carefully how these economic cannibals will be defeated through philosophical understanding and activity.
1) How Philosophy Overcomes Tyranny
2) Overthrowing the New Slavery
3) The New American Civil War
4) Realizing a New World
5) Overcoming the Present Dark Age
6) Realizing the New Commonwealth
7) How Philosophy Overcomes Propaganda
"The winning of freedom is not to be compared to the winning of a game – with the victory recorded forever in history. Freedom has its life in the hearts, the actions, the spirits of men and so it must be daily earned and refreshed – else like a flower cut from its life-giving roots, it will wither and die."
President Dwight D. Eisenhower, 1954