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Gold and Silver Breakout as Fascist Business Model Crumbles, Mortgage Market Fraud

Commodities / Gold and Silver 2010 Oct 06, 2010 - 05:18 AM GMT

By: Jim_Willie_CB

Commodities

Diamond Rated - Best Financial Markets Analysis ArticleSome significant events are in progress, extremely important developments in the grand pathogenesis that reflects the deep decay and deterioration in the US financial structure. The most recent events pertaining to mortgage loans, home foreclosures, and disclosed fraud carry great potential to open extremely wide cracks in the American social order. Revealed systemic fraud is slowly coming into the open. Civil disobedience has already entered the arena of popular protest. However, the recent events surrounding illegal home foreclosure seizure of properties elevates the exposed fraud to a very clear high new level. This is a boil ready to break open, releasing financial puss.


The cases where people have been removed from their homes, even when no bank loan exists (as in owned free & clear), by means of fraudulent, forged, and counterfeited documents, has finally provoked RICO law provisions. Witness organized crime extended from Wall Street, whose roots lie most likely in Fannie Mae itself. The legal industry has finally joined the fray in class action lawsuits. Defense citing errors made have been met with accusations of fraud, quite a different game.

The Racketing Racketeer Influenced & Corrupt Organizations Act of 1970 was designed to fight organized crime. RICO has been invoked in class action lawsuits in at least two states in the past month, each related to mortgage fraud, securities fraud, and illegal property seizures. At the center of the firestorm lie JPMorgan Chase, Bank of America, and GMAC (now called Ally). Little did the USCongress realize that RICO laws might be used to fight profoundly deep criminal fraud on Wall Street. When the criminal activity is tracked with some forensic analysis, the roots are found with REMICs, those perverse financial instruments that functioned as umbilical cords to Fannie Mae in past years, acting like powerful centrifuges. They fed the housing bubble and mortgage finance bubble, each valued over $10 trillion in size. Bear in mind that RICO has been used primarily against mafias and crime organizations dealing with gambling, drugs, and prostitution, where property seizures are routinely carried out. Abuses have been seen in states like Florida, where motorboat owners guilty of owning small bags of marijuana have lost their boats in legal seizure. It seems that selective enforcement is obvious. The target within the crosshairs has moved to Wall Street banks and Fannie Mae under the USGovt protective wing. These are dangerous times.

Recent cases threaten to encourage the Strategic Defaults and highly charged Civil Disobedience which could actually contribute in powerful ways to commercial chaos, popular disorder, public disruptions, creeping distrust, and even systemic failure. Hundreds of thousands of people are not making their mortgage payments, intentionally stopping payments, many when they do have the ability. Over 250 thousand Bank of American mortgage holders have stopped making monthly payments, in open defiance and some financial distress. The topic of Strategic Default, together with challenges (even with attorneys) to the banks to produce legal property titles, has grown sharply in practice. The RICO cases underway threaten to toss an accelerant on that fire. Henry David Thoreau would certainly be observing closely, perhaps smiling, at the current developments of citizen action against corrupt bank practices, mortgage bond fraud, and forgery of securities as well as critical legal documents. His essay had a profound effect on me when young, when cruel abuses were observed within my catholic school locally and the Vietnam War globally. Of course, the Jackass does not sponsor, endorse, or encourage any such action, believing that the highest level bankers should receive their due. The question is what is due? Objective reporting of the news, such as the viral news of the fraudulent home foreclosures, seems to have escaped the mainstream news, a consistent theme that hints of syndicate sympathy or culpability. The last thing a network news systems wants is to encourage civil disobedience. They prefer to promote vast herds of docile sheep.

For four years, the Jackass has claimed that Fannie Mae lies at the core of a grand criminal fraud enterprise, serving as the central clearing house for USGovt agency sponsors of magnificent fraud. Their tools are mortgage loans, mortgage bonds, REMICs, and more recently the MERS title database. Real Estate Mortgage Investment Conduits were a necessary piece to the housing and mortgage bubble, from which extends colossal fraud. The REMIC acted like a mortgage futures contract, clear of any supervision or regulatory oversight and thus permitting an open door government green light signal to systemic fraud. Imagine a leveraged futures contract on twin bubbles where unbridled fraud was common. Recall that $1500 billion went missing from 1988 to 2000 in two HUD regional offices. One was Houston and the other was Oklahoma City, the home grounds for sitting presidents. The missing funds have fed black bag funds and diverse illicit financial operations. Few connect any association between the pyrotechnic events in April 1995 by Timothy McVeigh to big rooted branches and critical data records, an open question. The entire set of prima facie and secunda facie and tertia facie aspects of the mushrooming story are to be covered in the October Hat Trick Letter reports. But honestly, this is a huge moving target, whose capture is better described as herding cats on an open field.

M.E.R.S. DATABASE -- THE WEAK LINK

The mushroom has a primary point of vulnerability that has received very little attention. The Mortgage Electronic Registration Systems (MERS) was originally an innovative process that simplified the way mortgage ownership and servicing rights were originated, sold, and tracked. MERS is a property title database, intended by Wall Street and Fannie Mae to serve as a repository that kept order when mortgage bonds were traded fast and furious. In recent court cases in at least three states, the MERS database failed to attain legal standing in mortgage foreclosure challenges. The holder of the note (home loan) could not combine with the MERS database (title holder) to win property seizure. The system began to unravel. Now in at least one state, the MERS database is directly cited in a criminal fraud class action lawsuit that invokes the RICO statutes. MERS is the financial system's Achilles Heel. Maybe a big bank like Bank of America might collapse, fall into ruin, and dissolve from proof of racketeering, its assets confiscated by aggrieved parties to fraud. Obviously, Bank of America along with several other big banks have been dead for a long time, since October 2008 in my estimation. If not for the lax and complicit accounting rules by the Financial Accounting Standards Board, which permit banks to declare their own fictitious value for their balance sheet assets, imposed in April 2009, the big banks would undergo liquidation. They cling to control of the USGovt financial purse, its USDollar printing press, its conduits to financial centers, and its extended arm to legal prosecution control. Big bank liquidation is tantamount to liquidation of the entire US financial structure, its power and privilege, in plain words.

MERS has gained unwanted damaging attention in the legal arenas, and it will not go away. The class action lawsuits will establish the high ground, grow in number, and gain attention. The proof of the malfeasance, fraud, and forgery will be incredibly easy, breathtaking in implications, and shocking to the sleepy public. The risk of civil disobedience is acute. The directly associated risk of commercial degradation from contract law moving toward a field of abandonment is also acute. The domino effect carries risk to the business and thus the social fabric of the American society. The United States is on the verge of events leading to potential systemic failure. Few attribute causality to the Fascist Business Model broad implementation and secretive endorsement, but it lies at the center. The permitted criminal activity, not just with bond fraud, mortgage fraud, and property theft, extends far beyond white collar crimes. Take for instance the suspicious suicide of Freddy Mac CFO David Kellermann, found hanging by the neck in his Virginia living room in April 2009. He knew too much and wanted out, some believe. His suicide probably had assistance. My sources tell of a wave of middle level murders, where bankers have been systematically eliminated. The victims knew too much about the money trails, but lacked a critical level of protective support from rank. They are the dead mules. They were high enough to have knowledge, but not high enough to avoid being expendable. MERS is the errant tool. RICO is the thick cloud. Fannie Mae (FNM) is the grand sewage pit laced with fraud. The news is rarely reported unless they must since it is already widely known. The mainstream news finds itself competing desperately with the competent intrepid internet sources. In a strange attempt to force an equation from a disorderly situation, let it be simply stated that

MERS + RICO + FNM = CHAOS + FAILURE + DEFAULT

FASCIST BUSINESS MODEL CRUMBLES

One is left to wonder if it is possible that foreign creditors can invoke RICO laws and take over USGovt assets as part of a USTreasury default process? They might do so agency by agency, but start with the helm on Wall Street. By next year, national parks and lands will be sold off to creditors. The deep fraud is easy to prove. Identification of the participants is much more difficult. The movement of prosecution and perhaps restitution will begin with private homeowners, the vassals in the lost field of dreams. A crucial connection on legal obligation is the formal USGovt guarantee of USAgency Mortgage Bonds, which make them full blood brothers to USTreasury Bonds. They just pay a different yield, although we are witnessing a convergence between mortgage rates and USTreasury yields. The Fannie Mae cesspool is certain to drag down the global confidence and prestige of the USTreasury Bond itself, a process underway. Perhaps the USCongress can hastily include a rider on some war appropriation bill or jobless insurance bill or some other bill that is approved but not examined, which exempts USGovt agencies and Wall Street firms from RICO prosecution, even ex-post facto to cover past pecadillos. Harken back to Hank Paulson as USTreasury Secretary, trying to explain Wall Street bond fraud as errors of judgment. The ploy did gain some traction, but the recent lawsuits over mortgage fraud, forged foreclosure documents, and more, run the risk of opening the RICO window to the organized crime that is central to the US financial system. Its three loci of activity are the USFed, Goldman Sachs, and JPMorgan. This is just the financial wing of the syndicate. Apart from that is the war wing, with a common conduit in the USFed.

At great risk is ruin of the threads, tissue, and fiber of the nation. Many have called it the moral hazard in countless citations. The USDollar rests on the faith and trust of the USGovt. Enter systemic fraud and organized criminal activity, demonstrated in open court cases, and POOF, the faith and trust vanish. The USGovt might block some cases for national security reasons, the standard blanket to cover prevalent criminal behavior, a precedent started by Nixon. The same trust and faith underpin the USTreasury Bond complex, the debt securities for the USGovt debt. When the Fannie Mae failed toxic pool was adopted hookline & sinker in September 2008, the USTreasurys took on added risk, infecgted by the spread of toxic tissue and corrupted threads and absent moral fibers.

The original roots of the Fascist Business Model are difficult to trace in the United States. They could be from Big Oil, Wall Street Finance, Defense Contractors, even Big Pharma, but with timing in the 1970 or 1980 decades. The Vietnam War and deficit financing went hand in hand, a little recognized phenomenon. Full blossom of the business model, identified by a merger of the state with large corporate interests, took on new meaning after September 2001, when national security trumped everything, including the US Constitution, and certainly civil liberties. What came was license to commit financial crimes with impunity, provided the locus of criminal operations was a large corporation with direct association with the USGovt. Witness the ruinous fruit of the tight embrace endemic to the fascist business model. Witness the lack of prosecution for the perpetrators of criminal fraud. In fact, the larger the crime, the closer to zero is the likelihood of prosecution. Witness the popular backlash in civil disobedience from non-payment of mortgage bills. Witness the entrance finally into the arena of state courts, even some Supreme Courts like in Florida, Kansas, and elsewhere. Again, the defendant banks claim errors and mistakes, when the prosecutors are screaming fraud, forgery, theft, and corruption. A series of public spectacles comes soon.

The Fascist Business Model is so broadly affecting the USEconomy, like a grand latticework, that it is considered part of the American landscape, even grudgingly accepted as part of the system. It is diverse. A culture of fraud is engrained nationally, clearly perceived from foreign vantage points. See Halliburton and the missing $50 billion from the Iraq Reconstruction Fund. The firm is tied to former Vice President Cheney, and is the object of endless fraud accusations, prosecutions, and settlements related to the wars and their provided services. See Goldman Sachs and the 2004 reduction of the unleaded gasoline portion to the GS Commodity Index they manage, as the percentage was taken from 9% to 2%. Coordinated were drops in the price of gasoline, crude oil, and diesel. For some unexplained reason, the USMilitary decided to sell huge amounts of crude oil and diesel fuel at the exact time following the Goldman Sachs index alterations. The events occurred leading to the re-election of Bush Jr. The USMilitary, few realize, is the largest consumer of crude oil and diesel on the planet. See the Seven Sisters from Big Oil and the steady friendships forged with Saudi Arabia and points on the Persian Gulf. See the Citigroup tipoffs to Prince Al-Waleed, whose investments thrived for a while. See the cozy relationships between certain Big Pharma firms and the Swine Flu vaccines. See the British Petroleum oil disaster in the Gulf of Mexico. This one is trickier. The US Environmental Protection Agency engaged in numerous ocean water data tampering examples. Clean-up crews were photographed in numerous instances dumping dead fish, each punishable by a $10 thousand fine, ostensibly with BP at risk. The EPA levied no fines.

The US Coast Guard was involved cordoning off numerous sites where dead whales were disposed of. The public was not permitted nearby access, but that did not stop intrepid photographers from capturing the events on film. Again, BP was at risk of heavy fines imposed. The most egregious violations involve Goldman Sachs and JPMorgan, the agents for the USFed and USDept Treasury. Past actions featured gold leasing from Fort Knox (now empty), for the benefit of Wall Street gold short positions and corresponding USTreasury Bond long leveraged positions. That chapter was labeled the Decade of Prosperity. Insider trading and numerous illicit financial schemes prevail, while front running of policy is constant. These have become important income sources for the twin towers of syndicate finance. See Working Group for Financial Markets, hardly run by an independent pristine office. They operate with full impunity and even access to FBI usage. Refer to the UNIX box and stolen software taken from Goldman Sachs offices in 2009, retrieved dutifully by the FBI, a powerful sophisticated illicit tool used to read incoming stock trade orders.

The quintessential core of the Fascist Business Model is not the merger, but the conquest of the USDept Treasury by Goldman Sachs. New Treasury Secretaries must come from the marbled halls of Goldman Sachs with full pedigree in order to perpetuate entrenched ongoing activities, including vast role programs under the USGovt roof, in particular the Fannie Mae clearing house operations. Observe the Wall Street mortgage bond fraud, conflict of interest, counterfeit bonds, naked bond shorting, high frequency trade skimming, hidden monetization of USTreasury auctions, and the MERS database reliance. The MERS database and countless home foreclosures are at the center of legal investigations. Even a sitting US Senator has called for investigation of JPMorgan, Bank of America, and GMAC, regardless of their size, prominence, influence, or prestige. Not a single conviction has come to the elite in South Manhattan for criminal felonies of grotesque type. Again, if the theft or fraud is in the $billions, then chalk it up to extreme skill, outstanding research, exclusive pedigree, and a tradition of excellence, but never felony actions or shades of malfeasance. The TARP Fund has been declared a victory, saving the US human strain from depression and extinction. Please! Give me a break! Not mentioned in the TARP Fund disbursement is the payoffs for foreign investors extorting money from culpable Wall Street firms, even rumors of payoffs to quiet the death threats to Wall Street executives. The $700 billion did not go to mortgage portfolio relief, but instead to Wall Street firm preferred bank stock, the stuff of family fortunes and trust funds, vigorously protected. The TARP Funds still remain without an independent audit. As Paul Volcker said in his unprecedented diatribe harangue last week, the Financial Regulatory Overhaul Bill started out with strong motive to reduce the US Federal Reserve powers, but ended up giving it even more power. Credit goes to the $200 million lobby budget by Wall Street firms handed to the USCongress, the biggest pack of losers, petty thieves, influence peddlers, compromised hacks, and babbling idiots perhaps in existence.

At great risk is the breakdown of faith and trust in the USDollar and USTreasury Bond internationally, from a climax collapse of the Fascist Business Model itself. The deep hidden costs of the Fascist Business Model are diverse inefficiency, layered cost to the privileged corporatocracy, crushed middle class, interrupted capital formation, lost income engines, and the social effect of a recognized two-tier justice system. The primary threads of criminal fraud serve as its hallmark glue for cohesion. At great risk is the breakdown of contract law and legal obligation, a cornerstone of American commerce, even commerce globally. At risk is the revenue stream for the big banks, many of which are dirty up their ears in bond fraud creation, misrepresentation of bond sales, predatory lending, duplicate mortgage titles in bond securities, document forgery, and disguised property theft. If a significant portion of the American public decides to scoff at their legal obligation to pay on loans, initially here with home loans, but later possibly with car loans and credit card loans, then the US financial system will plunge into darkness and surely collapse.

The nation is at the doorstep of systemic failure, greatly at risk of the social accelerant of Civil Disobedience tossed on the fires of anger from betrayal, and despair from loss. Capitalism has failed in the United States of America, simply put. Its capitalist spirit was crushed by unsound money managed by a squatting central bank, raids upon the national gold treasury, abandonment of industry, wretched economic theories, labor union backlash, the high cost of military pursuit, price inflation (in particular labor) from war expenditures, and banking policy that encouraged a series of asset bubbles. The population is vulnerable to disseminated disease like the Swine Flu, vulnerable to poverty from wrecked wealth engines and wrecked wealth repositories, vulnerable to foreign blockade of imported supplies, vulnerable to resistance to high crimes being declared terrorist activities, vulnerable to information restrictions from internet censorship, vulnerable to incarceration of the dispossessed in FEMA Camps, and vulnerable to police suppression against efforts toward survival. The nation has never been closer to class war in its history. The nation is witnessing a climax of a systemic debt cycle. The Macro credit cycle is in the process of declaring the USGovt debt condition as unfixable and growing worse each year, a macro bankruptcy process at work. We finally see the USGovt dealing unsuccessfully with insolvency. Inescapable is the Macro credit cycle, where the USEconomy is drowning in oceans of debt, the US banks are stuck with toxic debt, the US households are weighed down by excess debt, US industry with its legitimate income is long gone to Asia, and the USGovt new debt issuance is as much a burden as debt service. The nation is plunging slowly into the Third World. Systemic failure has advanced in a grand tragic pathogenesis. The escalating gold price is urgent response.

GOLD & SILVER BREAKOUT

The increasingly visible vote of no confidence in the fast failing USGovt financial structure, and in the missing capital formation apparatus that was once Wall Street, and in the entire avalanche of paper in a valuation charade, is the GOLD & SILVER PRICE. Both metals are breaking out to the upside. They are registering votes of NO CONFIDENCE. They are putting investments in portfolios to hedge against MONETARY SYSTEM BREAKDOWN. They are insurance policies for private wealth, to protect from erosion of money through sponsored sanctioned monetary inflation. The problem with the current strategy of monetizing debt and inflating debt to a reduced level, is that it betrays creditors. It forces a debt writedown on creditor investments in USTreasurys and US$-based securities. It invites retaliation in trade war, whose financial expression is COMPETING CURRENCY WAR.

The financial friction is reaching a higher level each month. On Tuesday, the Bank of Japan announced a cut to 0% interest rate, this being done a full 20 years after their financial crisis stuck them with the dead-end 0% interest rate. The advantage of a trade surplus helped Japan for two decades. That surplus has disappeared, handed over to their Asian rival China. The two nations are in hot disputes in the last month. The ramping Competing Currency War is better described as a race to the bottom, in which only GOLD & SILVER win. Anyone wondering why an inert metal would prevail over investment in a financial structure is simply obtuse and of dull mind. Gold represents money in a land where money has been systematically ruined. Money today is nothing more than debt in disguise, and legal tender is nothing but denominated debt. The system is on the verge of failure, complete with failure of state, due to the cancerous nature of its faulty money. The high priest apologists have run out of lunatic justifications for their sequence of failed theories. Gold & Silver are refuges.

My forecasts in the past have been for a $1300 gold price, now achieved. My forecasts in the past have been for a $21.50 silver price, now achieved. The two precious metal markets are in a clearly recognized bull market breakout. The big banks are on the defensive, covering shorts, almost their entire positions being underwater. They will strive to shove their portfolios into some USGovt closet, like Fannie Mae or AIG or a hidden USDept Treasury offshore firm. The drivel and deceptive commentary has become humorous, about gold being in a bubble. Be amused by the desperate displays of propaganda and denial of the sinking ship, upon whose dismantled helm such analysts stand to glorify themselves.

  • The gold market represents a hedge against the USTreasury bubble.
  • The gold market represents a hedge against the breakdown of the monetary system.
  • The gold market represents a hedge against coordinated wreckage of the currencies by the central banks, resulting in uniformly lower purchase power of money.
  • The gold market represents a hedge against a ripple effect from a global spread of sovereign debt writedowns, defaults, and their extension to the currency system.
  • The gold market represents a hedge against the insolvent banks.
  • The gold market represents a hedge against an extended banking system shutdown.
  • The gold market represents a hedge against heightened trade war and great destruction.
  • The gold market represents a hedge against the loss of wealth, plainly stated.
  • The gold market represents a hedge against the US systemic failure in progress.
  • The gold market represents a hedge against the inevitable USTreasury default, whatever final form it takes.
  • The gold market represents a safe harbor for money, since it is true money.

Gold & Silver are investments in legitimate money. Gold & Silver are votes of NO against criminal syndicates. Gold & Silver are votes of NO against fraudulent money that permits big banks to print their profit schedules. Gold & Silver are investments in bullion whose price in no way properly reflects the obscene shortages and contract naked shorting by official chambers. Gold & Silver are investments in grossly under-priced bullion whose move toward equilibrium will bring about price advances of multiples higher, not just hefty percentages higher, like $3000 gold and $80 silver. Support of the US$ DX index at the 78 level is not holding. A further slide below 77 will invite calls for direct global USDollar intervention, and another upward thrust in the Gold price. The huge move in the Gold price over $25 and the huge move in the Silver price over $1.00 in a single day on Tuesday was triggered by the Bank of Japan, which registered commitment to the Competing Currency War. The issue is not inflation versus deflation, but rather of systemic breakdown and the revelation of tainted money, if not lost store of value. The officials cannot admit it, since that would be an admission of their failure. The Gold price will show a mid-term top only when anything is fixed. The USTreasury Bond rally is a loud signal of systemic failure. There is liquidity all around, supposed at zero cost, but it is all hemlock. It is not INFLATE OR DIE, but rather INFLATE AND DEFAULT. The stock market is the distraction steeped in irrelevance, since stocks could rally, but money is going worthless.

In case sleepy observers have not noticed, Team Obama in the economic dugout just disbanded. Nobody is left except a junior Senator posing as President, whose words are impressive but actions echo inside great voids. In his hip pocket is found a copy of "Dialectical of Materialism" without much public notice. The helm is empty. The Ship of State is adrift, a derelict vessel. Peter Orszag is gone (broken budget, spiraling deficits). Christina Romer is gone (wise mediocrity but ignored). Lawrence Summers is gone (loser preppy). Cindi Sparks is gone (stimulus plan architect). One can only hope that Tim Geithner departs too. Although not on any economist team, the exit of Rahm Emanuel should be interpreted as meaning that Obama is a political liability. Running for Chicago Mayor might raise difficult questions on his resume, best not asked, since he wears two hats. The legacy of US economic counselors in the past two or three decades has been heresy reinforced by stupidity, wrapped in rationalization, embellished by nonsensical obfuscation, touted as erudite, ignorant of history. In the current pathogenesis of systemic failure and debt default, Gold wins! The only question is how the dead will litter the battlefield.

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by Jim Willie CB
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Jim Willie CB is a statistical analyst in marketing research and retail forecasting. He holds a PhD in Statistics. His career has stretched over 25 years. He aspires to thrive in the financial editor world, unencumbered by the limitations of economic credentials. Visit his free website to find articles from topflight authors at www.GoldenJackass.com . For personal questions about subscriptions, contact him at JimWillieCB@aol.com

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Comments

Patty
08 Oct 10, 22:22
Could it have been planned?

"...the recent events surrounding illegal home foreclosure seizure of properties elevates the exposed fraud to a very clear high new level."

Today it crossed my cynical mind that perhaps the banks have set this robo-signing fraud up intentionally. I haven't thought it through yet, but for the past 2 years banks have been holding a shadow inventory of foreclosures because they didn't want to dump them all on the market at once. With the real estate market continuing to deteriorate, wouldn't halting all foreclosures serve some good purpose for the banks? Hmmm. I just thought I'd toss the idea out there and see what others think?

Thanks!


brian thiesen
10 Oct 10, 01:18
GOOD CALL

I think for sure you are onto something, imagine that people just stopped paying mortgages which is likely, can anyone imagine how much money that would free up? can you say inflation???

People wouldn't care what the govt did (including printing another 10 trillion a day.... if they didn't have to pay.... what freedom huh?

Especially since we can GUARANTEE, the fed will prop the banks with the tax dollars of the class of 2938 AD and beyond.

I think as well they are really trying to do a one world currency more than we think and they make it all look like china or whatever, what if they have "no choice" now but to ruin the dollar and all else, and then get the 187 nations to agree on a one world.... or else?

Like "there is no other responsible solution"

This is a test to the entire populace as if this works for them in a shock test be sure as they have since the beginning of it all accelerate it.

ANyone who wants this to end stop using credit, that is the only solution every time you use a cc, you create money into existence for your useless air miles and "points"

This keeps the game going, use cash and this thing ends much quicker, credit needs more credit


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