The Financial and Economic No Spin Zone

By: Ty Andros | Fri, Aug 27, 2010
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Depression Written into Law, Part I
Black Swans
Crack-up Dead Ahead

As the next leg down in the unfolding depression and global, financial crisis intensifies we all sit on a keg of dynamite known as the developed world's economies and financial systems and wait for some fool in government to light a match. In April I spoke about black swans taking flight, now they are about to land. An explosive event is unfolding as we speak. What you are about to read is the embodiment of the Cloward-Piven strategy -- economic collapse written into law, on purpose, by radical Marxist Socialist progressives inside the Capital of the United States: Washington DC.

Bubbles are still inflating because the printed money has to land somewhere, and capital flees to where it is treated best. In this case, it is to the emerging world where capitalism is thriving and governments are focused on ECONOMIC and INCOME growth, but the bubbles inflating there are enormous from all the hot money flowing to into them. Only a pinprick waits.

At no time in memory have the opportunities been as enormous as today. As the effects of money printing, deficit spending and Marxist legislation unfold in the developed world all markets (stocks, bonds, currencies, commodities, natural resources, etc.) are set to zoom up and down to price in the mayhem being implemented by public serpents, banksters, elites and crony capitalists. BUY and HOLD is dead. Actively managed, absolute-return alternative investments which have the potential to make money in up, down and sideways markets are essential diversification. In addition you must fix your paper money so you can store the purchasing power in it and insulate it from the rapid debasement that is unfolding. This is what I do....

To regular readers I apologize for my absence; I have been producing a video book entitled "When HOPE Turns to FEAR" -- we are at that junction NOW. The video is written and narrated by me. The video will be free to direct subscribers of this newsletter. Subscriptions are free at www.TraderView.com/subscribe

Much debate has centered on the Bond Market, but the message is clear as you shall see. This bond, bull market is now almost 30-years old, long in tooth and over owned and over loved, with fools known as the public at the top that is forming. Are bonds a bubble? The answer is yes, and the bond bull is enormously overbought but with room for additional absurdity before the BLOW UP. The global, financial and economic crisis will not be over until the bond and credit markets blow up -- up to and including those IOU's/bonds masquerading as money known as G7 currencies.

First we need some perspective and for that we will turn to the US ten-year note chart with a 200-day moving average for perspective, courtesy of Martin Weiss:

10 Year Yields Index

In this chart we see two crashes in interest rates (interest rates lower), one crash is known and the other I shall identify. The first event, on the left is the failure of Lehman Brothers and the financial system crash of 2008. On the right we see another, more orderly collapse, both signaling the same thing: economic collapse. One fast crash and one crash which is more gradual.

What event happened on late March 2010? The Patient Protection and Affordable Care Act was signed into law and as I reported it was a tax bill in disguise, as the middle class and small businesses are learning to their chagrin. Of course it was the antithesis of its title, as all legislation is. A cute cover to fool the useful idiots and sheeple who RELY on the main stream media for propaganda disguised as NEWS.

As the speaker of the house, Queen Nancy said: "we need to pass healthcare legislation to see what's inside". Talk about Benedict Arnolds; legislators who pass bills they have not read and defy the will of their constituents. Hopefully someday there will be truth commissions to find the legislators who violated their oath of office and NULLIFY this legislation they passed.

"The more corrupt the state, the more it legislates." --Tacitus

The evil rising out of this Pandora's Box of political corruption is happening daily. 2,500 plus pages of weasel words and unlimited opportunities for politicians to sell the healthcare industry to the highest bidders among their crony capitalists for years into the future (think about the US tax code). Meanwhile, every small business owner I speak to is facing 20 to 30 percent rate hikes (including me) for their employee's health insurance. The next weasel-word surprise is the redefinition of income to include the value of benefits which used to be tax free.

Beginning on January 1, 2011 the withholding on taxes will be from an amount that includes healthcare benefits. People at the lower rungs of the ladder will be facing almost $300 of additional taxes per month. What do you think will happen to private-sector demand when every household in Amerika has that much less to spend, save or invest? It will be a knockout blow for small families, delivered every time they get a paycheck. To the progressive democrats this is not a tax hike, just an adjustment in the definition of their weasel words.

What do you think a 20 to 30% rate increase will do to small business owners who are the backbone of job and business creation? They will dump the coverage, pay the 8% fine and send everyone into Medicaid. They have to; the alternative is closing their businesses or MASSIVE layoffs. You can look for BOTH in any event. Employees will go from the plans they are happy with into "misery spread widely"; healthcare decided by politically-corrupt bureaucrats; the definition of the policies of the beltway and the radical Marxists that control our federal government. Where are the policies of economic and income growth? NOWHERE.

Now let's look at the next little bit of fairy tale LEGISLATION disguised as protecting the public, also known as: "Dodd-Frank Wall Street Reform and Consumer Protection Act"; of course it is nothing of the sort. It is another 2,400 pages of crony capitalism and political rent-seeking along the lines of the tax code. Another Pandora's Box of evil is now open. Take a look at this monstrosity:

Twenty-three hundred pages of unfolding political and crony capitalist corruption. To put the enormity into perspective, the Federal Reserve act of 1913 was 31 pages, the Glass Steagal Act (separating investment banking from deposit institutions) of 1933 was 37 pages, the Interstate Banking Act of 1994 was 61 pages, the dreaded Sarbanes Oxley Act of 2002 was 66 pages, and Graham Leach Bliley Act was 145 pages. This is 15 to 50 times the size of those epic laws.

Well, first let's talk about what the financial reform law does NOT do. The financial reform bill was supposed to "fix" Wall Street and the financial system, but it did not do much of anything....

"The fat lady never sings in Washington. No decision is ever final; no word is a bond; no contract binds a congressman; no bill or resolution has force beyond the next election. That's the first principle of our government, and the second is similar: Every dollar of federal spending is pork first." -Thomas Donlan, Barron's

In Conclusion: The depression is intensifying due to these pieces of legislation, reflected in the unbelievable drop in interest rates as they price in the depression-era laws BEFORE and while they are being implemented. The collapse in interest rates is testament to this. I will be covering this further in the next edition of Tedbits, don't miss it, subscribe, it is free at www.TraderView.com/subscribe/ .

"I think this group does not understand what it takes to create jobs. And I think they're flummoxed by their experiment in Keynesian economics not working."... "Every business in America has a list of more variables than I've ever seen in my career." If variables like capital gains taxes and the R&D tax credit are resolved correctly, jobs will stay here, but if politicians make decisions "the wrong way, people will not invest in the United States. They'll invest elsewhere." - Paul Otellini, CEO Intel

Of course they will invest somewhere else, count on it. Capital flight is in full bloom, in the United States and in the European Union. Only 8% of the current corrupt crew in Washington has worked in the private sector. The bubbles in Asian asset markets are evidence of this. The purposeful final destruction of the middle class and the capitalist economy by socialist progressives is at hand. This is called the Cloward-Piven strategy, look it up on the internet. Their goal is to make the majority of US citizens DEPENDANT on government, rather than independent of them by collapsing the economy.

At no time in memory have the opportunities been as enormous as today. As the effects of money printing, deficit spending and Marxist legislation unfold in the developed world, all markets (stocks, bonds, currencies, commodities, natural resources, etc.) are set to zoom up and down to price in the mayhem being implemented by public serpents, banksters, elites and crony capitalists. BUY and HOLD is dead. Actively managed, absolute-return alternative investments which have the potential to make money in up, down and sideways markets are essential diversification. In addition, you must fix your paper money so you can store the purchasing power in it and insulate it from the rapid debasement that is unfolding. This is what I do....

Unemployment is about to SKYROCKET as small businesses close and the next group decides not to open their enterprises. By early next year you can expect monthly employment figures to reflect the bloodbath we saw in early 2009 of approximately 700,000 job losses a month, as small businesses flee the vipers in the beltway, close down, say enough is enough and REFUSE to be their slaves.

This is a currency and financial system extinction event and we know the destination; it is the zigs and zags to that destination that we seek to understand. The developed-world government and financial systems' MORAL and FISCAL insolvency is inescapable and inextinguishable, but the illusions of safety still persist. The moral and fiscal insolvency of public serpents, elites, banksters and crony capitalists are on plain display. Only the inevitable collapse will allow the developed world to return to its roots as capitalist, industrialized societies which produce wealth rather than consume it.

Don't miss the next edition of Tedbits "Depression Written into LAW" series, subscribe its free at www.TraderView.com

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Ty Andros

Author: Ty Andros

Theodore "Ty" Andros
info@TraderView.com
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Tedbits is authored by Theodore "Ty" Andros, and is registered with TraderView, a registered CTA (Commodity Trading Advisor) and TraderVest Clearing LLC a GIB (Guaranteed Introducing Broker). He currently is the principle of TraderView, a managed futures and alternative investment boutique. Mr. Andros began his commodity career in the early 1980's and became a managed futures specialist beginning in 1985. Mr. Andros duties include marketing, sales, and portfolio selection and monitoring, customer relations and all aspects required in building a successful managed futures and alternative investment brokerage service. Mr. Andros attended the University of San Diego, and the University of Miami, majoring in Marketing, Economics and Business Administration. He began his career as a broker in 1983, and has worked his way to the creation of TraderView of which he is the sole owner. Mr. Andros is active in Economic analysis and brings this information and analysis to his clients on a regular basis. Ty prides himself on his personal preparation for the markets as they unfold. Developing a loyal clientele.

For greater insight into the philosophy behind Tedbits, have a look at the Tedbits Overview - To help understand our mission in serving you, the TedBits Overview gives a broad description of what's unfolding globally and what you can expect from Tedbits as a regular reader.

DISCLAIMER AND TERMS OF USE: While TedBits strives to present accurate and useful information, we make no guarantee of accuracy or completeness. All information and opinion expressed herein is subject to change without notice. Opinions and recommendations contained herein should not be construed as investment advice. Under no circumstances does the information in this column represent a recommendation to buy or sell any securities or commodities. Do not assume that any recommendations, insights, charts, theories or philosophies will ensure profitable investment. The information contained herein is for personal use only.

Gold and silver backed means that various commodity options strategies in gold and/or silver may be used. When buying options, you may lose all of the money paid for the option. When selling options, you may lose more than the funds received for selling the option. Strategies using combinations of positions, such as spreads or straddles, may be as risky as taking a simple long or short position. A high degree of leverage is used to buy or sell a sufficient quantity of options and/or underlying futures contracts equal to the value of the entire portfolio. The high degree of leverage can work against you as well as for you and lead to large losses as well as large gains. Absolute-return is not meant to imply that a positive return can or will be achieved. Absolute-return describes investment strategies which are designed to have the potential to succeed in rising, market-neutral and falling market conditions. Gold and silver backed and absolute return investments do not mean the investor will take actual physical possessions of any precious metal. Nor should any promise or guarantee be implied that such investments will perform better than any other investment in any possible future scenario described herein nor that such investments can or will preserve or protect in such possible future scenarios.

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TRUE MONEY SUPPLY

Source: The Contrarian Take http://blogs.forbes.com/michaelpollaro/
austrian-money-supply/