Vice President Dick Cheney’s Incredible and Deadly Lie

Vice President Dick Cheney’s Incredible and Deadly Lie

By Deceiving a Congressional Leader, Cheney Sent Us to War on False Pretenses and Violated the Separation of Powers – as Well as the Criminal Law

By John W. Dean

19/09/08 “” — – This week, I agreed to deliver a “Constitution Day” talk on a college campus. My talk was not partisan. Yet the subject matter I selected was prompted by the most incredible – not to mention the most deadly – lie Dick Cheney has yet told, which was reported earlier this week.

Last year, Washington Post reporter Barton Gellman and Jo Baker, now of the New York Times, did an extensive series for the Post on Cheney. Now, Gellman has done some more digging, and published the result in a book he released this week: Angler: The Cheney Vice Presidency. The book reveals a lie told to a high-ranking fellow Republican, and the difference that lie made. In this column, I’ll explain how Cheney defied the separation of powers, and go back to the founding history to show why actions like his matter so profoundly.

Cheney’s Bold Face Lie To Congress

According to Gellman (and to paraphrase from the Post story on his finding), in the run-up to the war in Iraq, the White House was worried about the stance of Republican Majority Leader Richard Armey of Texas, who had deep concerns about going to war with Saddam Hussein. According to the Post, Armey met with Cheney for a highly classified, one-on-on briefing, in Room H-208, Cheney’s luxurious hideaway office on the House side of the Capitol.

During this meeting, the Post reports, Cheney turned Armey around on the war issue. Cheney did so by telling the House Majority Leader that he was giving him information that the Administration could not tell the public — namely (according to Armey), that Iraq had the “‘ability to miniaturize weapons of mass destruction, particularly nuclear,’ which had been ‘substantially refined since the first Gulf War,’ and would soon result in ‘packages that could be moved even by ground personnel.’ In addition, Cheney linked that threat to Saddam’s alleged personal ties to al Qaeda, explaining that ‘we now know they have the ability to develop these weapons in a very portable fashion, and they have a delivery system in their relationship with organizations such as al Qaeda.'”

The Post story continues, “Armey has asked: “Did Dick Cheney … purposely tell me things he knew to be untrue?” His answer: “I seriously feel that may be the case…Had I known or believed then what I believe now, I would have publicly opposed [the war] resolution right to the bitter end, and I believe I might have stopped it from happening.”

In short, it was this lie that sealed the nation’s fate, and sent us to war in Iraq. By lying to such an influential figure in Congress, Cheney not only may have changed the course of history, but also corrupted the separation of powers with their inherent checks and balances.

Cheney’s monumental dishonesty, the news of which has been buried under the current meltdown of the nation’s economy, did not strike me as a topic for a Constitution Day speech. But a realistic discussion of the working of the separations of powers did seem a fitting topic, for college students need to understand the basics of our system. After we remind ourselves of those basics, Cheney’s great lie can be viewed not only as a great immorality and violation of the criminal code, but also and more fundamentally as the significant breach of his oath of office to protect and defend the Constitution that it is.

Our Constitutional Separation of Powers

Historians, not to mention contemporary historical documents, establish that no issue was more important to the founders of our national government than that of what its structure should be. Accordingly, in anticipation of the Constitutional Convention in Philadelphia during the summer of 1787, James Madison of Virginia plowed through historical accounts of governments and concluded that there are three basic forms of government: monarchy (the one), oligarchy (an elite few) and democracy (the many). Each form, however, had serious drawbacks.

As a result, Madison sought to take the best of each to create a “republic” – as had been done in varying degrees with many of the American colonies. Republics, of course, had been around a long time, for they were the forms employed by the Greeks and Romans. Thus, the republic was a form of government those who were meeting in Philadelphia well understood, in which sovereignty resides with the people who elect agents to represent them in the political decision-making process.

Madison’s republic combined elements of each type of government, in a mixing of forms. It featured an executive who incorporated the strength of monarchy without the evils of a King; a Senate that embodied the wisdom of an oligarchy; and a House that balanced the self-interest of such elites with a throng of representatives who spoke for the people of the nation.

Many delegates at the founding convention were mistrustful of a pure democracy since none had worked well in the past; moreover, the country was too large and diverse to directly involve everyone. Later, Madison nicely explained the differences in Federalist No. 14: “[I]n a democracy, the people meet and exercise the government in person; in a republic they assemble and administer it by their representatives and agents. A democracy consequently will be confined to a small spot. A republic may be extended over a large region.”

Most importantly, Madison’s structure had three separate branches of the government – legislative, executive and judicial — and each branch was empowered to check and balance the others, and thereby diffuse power.

Madison’s system, however, has not worked as designed even in the best of times, not to mention when there is an all-powerful Vice President hell-bent on gaming the system.

The Reality of Separation of Powers

An article in the June 2006 Harvard Law Journal Daryl J. Levinson and Richard H. Pildes, “Separation of Parties, Not Powers,” Harvard Law Journal (Jun. 2006) 2311 — provides one of the better analyses out there of the real-world workings of the separation of powers, and their accompanying checks and balances. Professors Levinson and Pildes argue that Madison’s vision of separation of powers has, in fact, been trumped in America by political parties. Their point is well taken, but as I see it their conclusion is far more applicable to the Republicans than the Democrats.

“The success of American democracy overwhelmed the Madisonian conception of separation of powers almost from the outset, preempting the political dynamics that were supposed to provide each branch with a ‘will of its own’ that would propel departmental ‘[a]mbition … to counteract ambition’,” Levinson and Pildes explain. This, in turn, they argue, made the underlying theory of the government – separation of powers – largely “anachronistic.”

When they looked at government, however, they found that when different political parties control the different branches – creating a divided government – then the parties working through those branches still do operate as Madison had hoped. Why? By sifting through the work of noted political scientists, Levinson and Pildes have concluded that it is not on behalf of protecting the institutional powers that the checking and balancing occurs; rather, it is through the influence of party politics operating through that divided branch.

I believe, based on the record (and as someone who worked on the Hill when Democrats controlled both ends of Pennsylvania Avenue) that Levinson and Pildes have it half right.

Democrats under unified government (i.e., when Democrats control both Congress and the White House) have been remarkably institutionally-minded, and the separation of powers has remained viable. On the other hand, conservative Republicans – as I have explained in my book Broken Government (just out in paperback too) – easily place party loyalty before the responsibilities of the governmental institution in which they serve. The first six years of the Bush/Cheney Administration, for example, were a travesty in Republican denial of institutional responsibilities. In contrast, there is a long list of Democratic House and Senate Chairmen who have a on-going history of refusing to be the rubber-stamps of Democratic Presidents.

For instance, unlike in the situation where Cheney lied to former Majority Leader Armey, when both the Democratic House and Senate suspected that President Lyndon Johnson had lied to them about the incident(s) in the Gulf of Tonkin that provoked Congress to authorize the war in Viet Nam, they took action. In contrast, Republicans have not acted on Cheney’s lie to Armey – and surely Washington Post reporter Barton Gellman is not the first person to learn about this lie.

Why Cheney Is Not Likely To Be Held Accountable

Those of us who follow these matters have long known – and I have written before – that it is Dick Cheney who is molding his hapless and naive president to his will, by effecting endless expansions of Presidential powers, and acting upon Cheney’s total disregard of the separation of powers.

Cheney does not seem to believe the Constitution applies to “real leaders,” who do whatever they believe they must do. Nor does he believe in the separation of powers. Indeed, Cheney absurdly claims he is himself part of the Legislative Branch because he is the presiding officer of the Senate – though, in practice, that position exists only to break tie votes. It has long been clear that Cheney has been corruptly bridging the constitutional separation of powers throughout the Bush/Cheney presidency.

If Armey is right, Dick Cheney has not only behaved improperly, but also criminally: In addition, when lying to Armey, Cheney clearly committed a “high crime or misdemeanor” in his blocking the Constitution’s checks and balances from stopping our march into Iraq. During the debates that took place during the Constitution’s ratification conventions, it was specifically stated that lying to Congress about matters of war would be an impeachable offense. Congress has also made it a crime.

Nonetheless, nothing is likely to happen to Cheney, for Congress is too busy dealing with the disastrous economy that he and Bush are leaving behind as they head for the door. No one seems inclined to hold Cheney responsible, and he appears totally unconcerned about the wrath of history. Yet in lying even to those in his own party, about reasons to go to war, he has sunk to a low level few have reached, and it is no hyperbole to call his actions treasonous to the structure and spirit of the Republic.

John W. Dean, a FindLaw columnist, is a former counsel to the president.

The Trap Behind The Curtain

The Trap Behind The Curtain

Jim Kirwan
All the financial markets are showing green lights, joyous profits! Have real profits returned to the world markets! NO, this is a response to the proclamation, underwritten yesterday by the central banks with $247 billion: What an insignificant amount to pay to guarantee tens of trillions in illegal profits down the road. Yet apparently the gullible, determined-to-believe-followers have apparently taken the bait!
This is a trap of global proportions designed to complete the shell game over ‘the ownership society’s’ claims on everything that matters, to them. What’s at stake is the future of everyone who works, all pension funds, and any remaining idea of retirement after the public has been irrevocably chained to a bailout plan that has no limits!
“US government policy has encouraged recklessness – most recently by taking extraordinary measures to privatize gains while socializing losses. As part of the agenda of its so-called ownership society (excepting ownership of responsibility by powerful bankers and insurers who fail) the govt. even sought to privatize public obligations – recall the Bush proposal to privatize social security. So why not play fast and loose if the rules are heads I win tails you lose?” (1)
All of this has been quietly put into play over the decades beginning with Reagan and continuing through Bush senior, Clinton, and finally to be enacted under Bush Jr. A lot of time went into this segregation of profits from costs, along with massive offshore operations that have hidden the true nature of all that has now failed. No records are available of these “private transactions” which ‘the people’ are now about to be locked-into paying off.
No oversight has been done throughout the last eight years. From the congress to the SEC to the courts! No one has been responsible for reining in any of the outrageous behavior throughout the entire financial community: hence this near total collapse should not have been a surprise-yet obviously the extent of the corruption has shocked most ordinary people-as severely as it has threatened the entire structure of Wall Street and the entire financial community on a global scale.
There were warnings of a more subtle nature, if only the public and the unions had been paying attention. Bill Fletcher on Democracy Now:
“Think about the Silverado Savings and Loan debacle at the end of the ’80s. You know, any time capital, big business, finds itself threatened, all of this whole thing about a free market just goes right out the window. And it’s at that point that they’re looking for government bailouts, for the government to step in and save them. And that happened in Silverado Savings and Loan.
But for working people, for farmers in the 1980s in the Midwest, for working people more generally, when they are being squeezed, the political operatives that represent the interests of big business step in and say, “No, no, no, no. You are not entitled to a bailout. You are not entitled to welfare. You are basically out of luck.” And just as you described, during a period when we were perhaps a little bit more stable economically, the Republicans were able to move that legislation in, that
But now we have-what?-Wall Street, where we’re suffering as a result of the irresponsible, absolutely irresponsible, investments in game planning-playing by these individuals. And what happens? Government is forced to bail them out. Otherwise, we are in complete meltdown.” (2)
By the way Obama’s running mate led the way in passing the draconian bankruptcy laws that currently punish ordinary people and protect the Corporations! Interestingly, the current foreclosures are only demanded on the primary home a person owns, second homes and more are excluded from Biden’s legislation.
If you liked Patriot Acts, One and Two, or HR 1955 & S1959 (Thought- control legislation) then you’re going to love this one because it’s another “VOTE ONLY DO NOT READ,” in the interests of National Security of course, and the panicked need to appear to get a solution quickly!
Congress cannot be trusted; they’ve proven this so many times over with all their wars, with the blunted impeachment attempts, with FEMA and with every other major failure of oversight responsibility during the last eight years!
What his trap amounts to is a reverse-version of The Federal Deposit Insurance Corporation. FDIC was created to protect our money: this piece of the unfolding treason will be created to insure that every citizen will be saddled with enough debt to permanently enslave us, while freeing the gambler’s, the power- brokers and the banks to reap all the profits while mandating our compliance to pay them for all their mistakes – even though
“We” have no idea of how huge this debt might eventually turn out to be!
When was the last time you signed any agreement without first looking at the books? Given the scale of this pending “solution” to the international monetary collapse, is it not necessary to give the public a full and unflinching accounting of what actually happened-along with the heads of those that let this happen!
This will all be accomplished, again, without congress even reading the legislation (per Pelosi’s orders), so that congress can maintain their deniability once this dagger is discovered for what it truly is – the end of individual profits and the beginning of total control over all the financial
assets’ of this nation.
This is a trap from which there will be no escape if we do not stop this from happening, before it too becomes “law”!

The economic meltdown is no accident


Since they are betting, drinking, gambling and enjoying music, so they are “new,” “modern,” “new style” Taliban and “new Afghan incarnation” for the reporter. But he won’t say the truth that these are ordinary Afghans

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more about “Dictatorship Watch :: Putting dictato…“, posted with vodpod

The Western media would keep on adding these adjectives only to add legitimacy to an illegal war and illegitimate occupation and justify mass murder in the name of the Taliban and Al-qaeda, despite the admission, as you will see in this report, that “no one talks about Osama, al-Qaeda or Mullah Omar.” All this discussion is part of the Western media and politics’ fantacy world they have created to fool their public into supporting the war of terror.

Satellites cast doubt on Iraq surge success

Satellites cast doubt on Iraq surge success
Sat, 20 Sep 2008 00:48:04 GMT

Satellite images suggest ethnic shift in Baghdad could be behind drop in violence.

An academic study using satellite imagery suggests that the drop in violence in Baghdad is due to ethnic redistribution and not the US troop surge.

The study by researchers from the University of California in Los Angeles used levels of light pollution to track the movements of social groupings within the city.

Superimposing satellite images over neighborhood maps showed that light levels had dimmed by more than 20% more in Sunni-dominated west and south-western regions of the city suggesting that Sunnis had “cleared out”.

Light levels in Shia areas and the Green Zone increased during the same period.

The researchers believe this is evidence of a demographic shift which concluded before the arrival of 30,000 extra US troops in February 2007, the date which supporters of the surge say was the beginning of a decline in sectarian violence in the Iraqi capital.

“By the launch of the surge, many of the targets of conflict had either been killed or fled the country, and they turned off the lights when they left,” UCLA geography professor John Agnew said in a statement.

“Essentially, our interpretation is that violence has declined in Baghdad because of intercommunal violence that reached a climax as the surge was beginning,” said Agnew, who studies ethnic conflict.

The study adds weight to the argument that it was not the US troop surge alone that reduced sectarian violence in Iraq but a range of factors.

Sunni Arabs were driven out of many Baghdad neighborhoods following the bombing of the Shia Samarra mosque in February 2006 which sparked a wave of sectarian violence.

Thomas Jefferson’s PREDICTION made in 1802 is NOW occurring

Thomas Jefferson’s PREDICTION made in 1802 is NOW occurring

Red Dawn wrote:“The first misconception that most people have is that the Federal Reserve Bank is a branch of the US government. IT IS NOT. THE FEDERAL RESERVE BANK IS A PRIVATE COMPANY”…

“I will close with Thomas Jefferson’s Warning To America :”

“I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”

” Written by Jefferson in a letter to the Secretary of the Treasury Albert Gallatin (1802).”…

“their children wake-up homeless on the continent their fathers conquered”…

I was thinking about Thomas Jefferson’s warning when the Fed (a PRIVATE corporation) took over Fannie & Freddie & AIG. The Fed is going to end up owning EVERYTHING, as Jefferson feared. Indeed, having all those loan facilities which the banks depend on means the Fed calls ALL the shots, and has the banks dancing to its tune. The Fed can tell the banks what to do and what not to do, and even control how much profits the bank make. This is effective ownership.


Systemic Failure of the United States- Game Over

Systemic Failure of the United States- Game Over

By: Jim Willie

We are in historically unprecedented times. The foundation is being laid for a default of USTreasurys in the wake of the greatest regulatory failure in modern history, and the collapse of the US financial system. Anyone who cannot see that suffers from poor vision, chronic nostalgia, low mental wattage, a paycheck from Wall Street, a post in financial press media, or owning an Economics advanced degree. So many changes come with each passing day, not week, that it boggles the mind. Many of us predicted $100 updays for gold, and we almost saw one. The wheels came off the US financial wagon long ago, but only now that fact is being recognized. The monetization largesse finally has gone beyond the corrupt bailouts of fraud kings on Wall Street.

My longstanding forecast has been that when the monetary inflation machinery spits output beyond the sanctimonious walls of the Wall Street whorehouses, INTO THE MAINSTREAM, that the gold price would rise substantially. That process has begun, starting with Fannie Mae & Freddie Mac, and now moving to AIG. Only when phony money floods the system where people live, not where the elite conmen with strangehold control the counterfeit processes, will gold shine. So many unexpected upcoming events will occur, enough to make a forecaster dream. Let’s begin with the most important. Much more details are provided to Hat Trick subscribers.


This is so important a topic, that it deserves top billing!!! Hidden inside the AIG bailout funding package, surely hastily cobbled together, but carefully enough to include a totally corrupt clause, was a handy dandy clause that permits raids. The conglomerate financial firms are permitted at this point to use private individual brokerage account funds to relieve their own liquidity pressures. This represents unauthorized loans of your stock account assets. So next, if the conglomerate fails, your stock account is part of the bankruptcy process. Finally the corrupt USGovt and corrupt Wall Street houses are desperate enough to put into policy, stated by the US Federal Reserve, outlining the authorized raid of your money.

Beware. A good route would be to remove your money, start a subscription here, and open a GoldMoney account, then purchase physical gold or preferably silver with my offered discount. That cannot be taken from you, and will rise 5x for gold and 10x for silver in the next two to three years. The actual evidence for legalized stock account raids by the financial firms can be found in recent articles in Financial Times and Wall Street Journal . So this is not a wild claim. The September 14th article on the Wall Street Journal entitled “Wall Street Crisis Hits Stocks” was the first exposure.

The runs on US banks are in progress. See Washington Mutual, where private email messages have been shared by WaMu bank officers. WaMu alone could deplete the entire Federal Deposit Insurance Corp fund for bank deposit coverage. Eventually the FDIC will compete for USGovt federal money for bailouts and nationalizations. Eventually, bank deposits will not receive 100 cents per dollar, in a compromise. Next the bank runs will push banks into failure, at a time when stock accounts are under raids, without broad public knowledge.


Did anyone notice that on Wednesday the 17th, gold was up big, like over $50, silver was up big, like over 70 cents, but the USDollar was essentially flat, even up a smidgeon? By afternoon, the gold rise intensified, and the USDollar fell hard. THE MESSAGE IS CLEAR: GOLD IS LEADING MOVEMENTS IN CURRENCY PRICES. The world did flock to the USTreasurys, surely led by mangled confused central bankers who have lost control. However, gold is finally being seen as a safe haven. It will become highly amusing to observe a clueless cast of corrupted minds attempt to explain why gold vaults past the 1000 mark, and why silver vaults past the 20 mark. They will offer up reasons, and if lucky, they will touch on at most three or four of the twenty relevant reasons. Their confusion includes observation of the decline in the crude oil price. Their eye is off the monetary panic.

Moral hazard is just an obstacle to be side-stepped in such times. Today, Bill McCullum of PIMCO actually said “We should not give one thought to inflationary consequences.” He was referring to gargantuan rescue packages and now global lending lines to central bankers. And people wonder why gold shot up $80 yesterday, and why silver silver shot up over $1 yesterday. PREPARE IN THE VERY NEAR FUTURE FOR GOLD TO RISE OVER $100 ON SUCCESSIVE DAYS, AND FOR SILVER TO RISE OVER $2 ON SUCCESSIVE DAYS. Inflation is soon to be seen as the remedy to prevent monetary collapse. Gold just hit 900, and silver has reached 12.70 today. The euro has risen 500 basis points just since Friday morning. Gold is not rising sharply due to inflation concerns alone, although plenty of monetary inflation is set to continue flying through the money pipelines. THE REAL REASON WHY GOLD IS RISING IS FOR THREAT OF SYSTEMIC FINANCIAL FAILURE CENTERING IN THE UNTIED STATES.

What factors are key to gold rising? Perhaps because the US financial system is imploding. Perhaps because the USGovt nationalization demands are accelerating. Perhaps because the threat of default for USTreasurys is seen as inevitable, even imminent. Perhaps because nitwits who have highjacked the White House and USMilitary are planning something truly reckless on the military front in Iran. Perhaps because the US Federal Reserve is depleted and secretly insolvent, even as they put word out of an INFINITE BALANCE SHEET. Perhaps because enormous demand has come in physical gold & silver, despite the low price set by corrupt US PaperHangers. Perhaps because fear has entered the room globally.


The financial firms are not just dead, they are corrupt to the core. Perhaps one or two Wall Street firms will be left standing in a year or more. Has anyone figured out why foreign pursuit of Wall Street firms is blocked? Partly because foreigners cannot assess the value of such complicated opaque assets, intertwined within nests of acid pits. The other reason is that US banking authorities wish to keep the protected corrupt evidence within the Manhattan fold. The South Koreans wanted a piece of Lehman Brothers, the best pieces. But they would have had access to evidence needed eventually in criminal prosecutions. See the KfW case of € 300 million theft, possibly soon to emerge against Lehman crooks. The German insurance titans wanted a piece of AIG, the dead insurance giant. But they would have been handed access to evidence of extreme vulnerability or criminality. Why were officers at Lehman permitted to remove box after box from their building, when it should be treated as a crime scene with yellow cordon tape? The answer has to do with the Fascist Business Model, the merger of state with business, where the syndicate facilitates fraud in deep collusion.

Why did Morgan Stanley stock go down hard after they announced early their quarterly earnings? Possibly because nobody believes they are honest. Morgan Stanley might be kept afloat longer, so as to enable theft of brokerage account funds. Lehman does not have private stock accounts, mostly bonds of the acidic type. So Lehman is free to enter the trash heap of liquidation and the de-bone process for assets. Meat is to be separated from bone. John Mack of Morgan Stanley had better be careful, as he appeals for a Chinese role in a merger. That could give the Chinese an important toe-hold in US mortgage bond ownership. They are looking to convert mammoth USTBond garbage paper into hard assets, as a foundation to a possible migration of one hundred thousand to one million elite Chinese, to California, Arizona, Las Vegas, and Florida. It is called colonization.

The moral of the consolidation story is that the dead are marrying the dead. The Bank of America merger with Merrill Lynch struck me as hilarious. Each is dead from insolvency. Each has big counter-party risk from coverage of failed bonds. So they will now serve as each other’s guarantor of counter-party risk? Not in this world! Imagine two fat men absent of musculature tossed overboard a ship. They tell each other, “Stand on my shoulders and you will be fine for breathing in this vast sea.” They both sink. The end game for such ludicrous indefensible consolidation is that the Wall Street fraudulent corporations go down all together. A friend called last night from the analyst community. He wondered aloud that nobody could expect the speed of the breakdown.

My response was to point out a strong message mentioned here repeatedly. Since the Bear Stearns bailout killjob merger by JPMorgan, all Wall Street investment banks are aligned in similar fashion, with common bond risk and common counter-party risk. So when one Wall Street firm goes down, several will immediately go down, and AIG is the umbilical cord to the Main Street economy. This point was borne out as wickedly true when the Lehman funding bailout failed. The parties trying to bail them out, offering funds, all found themselves as subject to writedowns immediately. The funds they offered were not available, since the loop of price reality reduced the level of the offered funds!!! That means they are all in the same boat, and if one fails, they all fail. So the system will desperately attempt to avoid any failing. Thus, the entire system fails.

As simple citizens, people should be concerned that the US Federal Reserve and US Dept of Treasury have begun to take actions far outside their own legal powers. The bailout of AIG was made illegally. The USFed cannot act to aid non-bank entities. Senator Jim Bunning has drafted Congressional legislation to limit the USFed action outside the banking realm. The system is losing control, especially with the law.

The parade of doomed deals continues. Talks have begun for JPMorgan taking over Washington Mutual. Could the JPMorgan ‘Garbage Can’ be inadequate soon? Bank of America has entered talks to take over Merrill Lynch, apparently striking a deal. Could BOA serve as the alternative ‘Garbage Can’ next, whose service would be as squire to JPMorgan? Now Morgan Stanley is in talks to take over Wachovia. The disaster du jour today seems to be State Street, which was down over 50%. The dominos are falling. THE MESSAGE IS CLEAR: THE DEAD ARE MARRYING THE DEAD. It is unclear what music to play at such events. My suggestion is something from “Phantom of the Opera” would be apt.


The US financial sector became unglued this week. In last week’s article, the point was made that the financial system had just that one week to lift the USDollar, to raid private accounts with games like yanked credit and a raft of paper naked short gold & silver future contracts. Then next week the brown excrement hits the fan. Over the weekend, deals were attempted to be forged into the night. Nobody seemed to ask the question why they were all acting like in an emergency. What emergency? A condition ordered by whom? My maintained point is that the Bank For Intl Settlements ordered the US bankers to fix it or flush it!

Big news was expected from my analysis, and my Hat Trick Letter newsletter. We got it! By the way, AIG was not on the radar for numerous analysts. It was on my radar, a secondary radar. The big banks are primary for my observation and monitor. WE ARE WITNESSING A CONCENTRATION OF RISK, OF RUINED CORPORATIONS, AND OF THEIR ACIDIC BALANCE SHEETS THAT IS SO GREAT THAT THE RISK OF US FINANCIAL IMPLOSION GROWS BY THE DAY !!!

Blame for speculators continues, as nitwit players within the fraud centers accuse others of speculation, and threaten prosecution by their watchdogs on leash. Recent research failed to disclose any collusion or illegal activity in the crude oil market. That does not stop continued claims, with hue & cry. These criminals are pathetic, if not consistent. Just when failed regulation is at the core of the financial crisis, Wall Street conmen and clueless Congressional legislators argue for more regulation and control, when the regulators and controllers deserve prison terms. Instead, prosecute the regulators and controllers, and begin with Alan Greenspan, and his knights of the Stupid Table at the Federal Reserve.

The financial crisis continues each day. Last Friday the currency markets smelled what was cited in broad terms as the end of the OPEN WINDOW for the US banks. The euro currency rose over 220 basis points that Friday, and the pound sterling rose over 330 basis points. Gold and silver firmed in price. Something tipped them off, like huge flows of private money out of the Untied States. This week, AIG and Merrill Lynch and Morgan Stanley dominate the news. On two different days this week, the NYSE Dow Jones Industrial index fell over 400 points. Today, when the Dow Jones Index was up 170 points, in a phone call to a trusted friend, we both agreed that the index would turn negative before the afternoon, and close down. So far, that call looks correct, as it was minus 100 points before now being up 50 to 60 points.

By the way, important option put stock positions are in place against Goldman Sachs. They point to a strong likelihood of the GSax stock falling to 80 or 85 imminently. The knock on GSax is that they have lied about their subprime mortgage exposure, and soon will be forced to come clean. The ‘GS’ stock shares plummeted from 160 in early September, now to under 100. Justice is served. My guess is their executives will profit privately from shorting their own stock. Even their 6-month corporate paper must pay out 20% in bond yield in order to attract funds.


OK, so finally the US Federal Reserve has opened the monetary spigots to England, to Europe, to Switzerland, to Japan, and later to Canada. Not only is the monetary spigot overflowing inside the Untied States, it is overflowing from the US to the world. At least to the world affected (infected) by US control. The total central bank infusions of liquidity (translated: phony money) is $180 billion in the last several hours alone!! This huge amount is not enough to quiet the LIBOR or the 2-year USTreasury swaps. Gold is rising versus the pound sterling, the euro, the yen, and Canadian Dollar, aka the loonie. This trend is new and powerful. Central bankers are growing desperate. Their measures to open numerous lending facilities have not stopped lending constraints. Even commercial paper has fallen by $52 billion last week.

Clownish anchors and analysts cannot seem to comprehend what is going on with the central bankers, liquidity injections, market tanking, USDollar decline, and gold & silver zoom. They wonder why the USDollar would continue to fall after central bankers reacted responsibly. BECAUSE THE USTREASURY IS DOOMED FROM INSOLVENT BANKS, EXTREME DEMANDS FROM NATIONALIZATION, AND RECESSION, AGAINST A BACKDROP OF ENDLESS WAR FOR PRIVATE SYNDICATE BENEFIT. It is obvious! Gold smells a systemic failure.


A hidden initiative has been in progress for the last two weeks. Foreigners are forced to supply credit for the Untied States. Nations led by Russia, China, Arabs, and Japanese are meeting to form a formal committee. They have a common purpose, to maintain and manage massive US$-based debt securities in danger. Their continued credit support is hampered by three magnificent factors, each a show stopper.

1) The US banks are insolvent,

2) The Wall Street bankers export fraudulent bonds, and

3) The USMilitary has acted with chronic aggression in violation of established contracts, international treaties, and disrespect for sovereign boundaries.

So they are working to organize a committee of giant USTreasury Bond creditors. They wish to confront the US debtor with a single voice. Regard this important step as a prelude to possible default of the USTreasurys . It is one thing to be in trouble from insolvency. Add corruption from export of fraud, and you have a bigger problem. Throw in military aggression, complete with misreporting by a controlled press, and you have a crisis in need of almost immediate remedy. My argument has been made for four years, that foreign held US debt creates a threat to national sovereignty. Since when are the Chinese our friends and allies? They are business partners turned rivals, now adversaries. Since when are Russians our friends and allies? They are energy and metals suppliers, betrayed by treaty violations, now adversaries, even on the military front. Since when are Arabs our friends and allies? For three decades an uneasy partnership has been in existence, one that has turned into a blatant protection racket. The endless concocted war on terrorism is seen by Arabs as a war on Islam.


Don’t be fooled by the drop in USTBond yields. That is a symptom of collapse in my view. Yesterday, it was with great disillusion yet satisfaction that my eyes and ears witnessed an interview by a Standard & Poor analyst. He said there was no imminent danger of a USTreasury debt security downgrade, but he did say that if pushed, the S&P would put them on NEGATIVE WATCH. Interpret that to mean the USTreasurys will soon be downgraded. Never is a denial of such importance made without coming to fact and fruition later. Why else is the topic even discussed? This line of thinking is basic when ripping the BS from US financial propaganda. Notice the Credit Default Swap price for USTreasury Notes. The price is around 0.24% for the AAA-rated USGovt debt. Without colossal continued corrupt pressure against the ratings agencies by the US thugs in financial orifices, the USGovt debt would have been downgraded immediately with the launch of the Iraq and Afghan Wars, or years earlier. The Shock & Awe should have been reflected in USTBond risk.


The US bankers have lost control badly. Even ill-equipped USFed Chairman Bernanke admitted recently as having lost control. He spoke to economist David Hale at a Florida financial conference last week. Bernanke said, “We have lost control. We cannot stabilize the dollar. We cannot control commodity prices.” The age of central bank control, ala Soviet Politburo, is coming to an end. GOLD RECOGNIZES IT. Check out the 1-month USTreasury Bill yield. Incredibly, it closed under 0.1% yesterday. This ultra short-term bond yield testifies to lost control and the advent of extreme conditions, the prelude to an historical storm. Just what should the USTreasury maturity yield curve look like before a default? Let me check, and get back to you. Ooops, no precedent! The TED Spread (difference between USTreasury and EuroDollar yield) has jumped up, another signal of banking turmoil.

In recent days, the tight grip control of certain commodities has been lost by the Evil Ones. Even Morgan Stanley has been forced to close down its trading desks at the Platts Window, where they trade crude oil. The USCongress is equally lost. Today, a quote came from Senate Majority Leader Harry Reid. They are unlikely to pass new legislation to overhaul financial regulations this year. He said, “No one knows what to do. We are in new territory, this is a different game. [Neither Federal Reserve Chairman Ben Bernanke nor Treasury Secretary Henry Paulson] know what to do, but they are trying to come up with ideas.” Gee! Maybe the chief architects of this grand failure have a solution? They should be ignored then imprisoned. Perhaps they are seeking final opportunities to steal, raid, and pilfer from the public till during the final months of this Administration.

The 2-year USTBill yield has also plummeted, but not as drastically. It is now far below the official USFed Fed Funds 2.0% rate. Some thought the USFed might cut rates in an act of desperation this week, me included. My guess is for two reasons, why they did not. 1) They did not want to project an impression of lost control, not after the Fannie Mae & Freddie Mac bailout, not after the failed Lehman Brothers deal, not after the shotgun wedding for Bank of America & Merrill Lynch, not after the secret eloped marriage in the works for JPMorgan & Washington Mutual, not after the merger of cadavers planned between Morgan Stanley & Wachovia. And 2) the Bank For Intl Settlements in Switzerland might have forbidden a USFed rate cut. My maintained position is firm, that the BIS ordered the US to fix it or flush it! Let’s watch to see if the 2-year TBill yield continues lower, a signal of even more lost control.


My greatest impatience is shown for those who attempt to argue whether inflation or deflation is winning, and where we stand. Such pursuits of chasing one’s tail serves to illuminate nothing and to waste time. We have both, will continue to have both, as both intensify. The key is for monetary inflation to enter the mainstream, which is underway finally. One can benefit little from putting the unique crisis into convenient cans for purposes of organization. This is not simple, and people should not attempt to simplify the ongoing collapse of the Great American Experiment in Counterfeit Monetary Systems. To be sure, we have gone past a tipping point. The move to flood the monetary pools of phony money beyond Wall Street is the big event. To be sure, the bankruptcies and deep insolvent events are accelerating. To be sure, the desperation for attempted mergers is palpable. To be sure, central bank activity with lending, swapping, and even accepting stock equity as collateral is a sign of total absence of any safeguard toward respect of moral hazard.

Looking for inflation vs deflation labels when the failure and default of USTBonds and receivership occur TOTALLY MISSES WHAT IS GOING ON. This is a death event for the US finances, US banking system, USEconomy structure, and USTreasurys, all rolled together like a gigantic vortex hurricane. Looking for (in) vs (de)flation in this environment is like observing color schemes on walking dead as they attempt to merge at a ceremony. They are of DEAD PARTIES ATTEMPTING TO SHARE COUNTER-PARTY RISK. Looking for (in) vs (de)flation when dead partners are marrying is like DECIDING WHETHER A HONEYMOON SHOULD TAKE PLACE IN THE CARIBBEAN OR FRENCH COAST. They both go to the recycling cemetery instead. The place to be now is in gold and silver, preferably silver since central banks own none and because silver has strong industrial demand. Besides, a silver default of sorts has been in effect for several months.

It is with pleasure to attend again the upcoming Cambridge House conference in Toronto on October 4 and 5. Thankfully, my Frequent Flyer miles were used to cover the airfare from Costa Rica, where the rainy season is coming close to an end. POR FIN! Is that inflationary or deflationary? With absolute certainty, one can say WHO CARES?

Buy gold, buy silver, do NOT use borrowed money or leverage, and rest comfortably at night, since it cannot be taken from you. Then patiently wait for gravity to work, for night to follow day, for evil to be unmasked, for foreign creditors to arrive with hatchets. dvz


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by Jim Willie CB
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