9/11:Explosive Testimony - Mark Basile Chemical Engineer

Is Dollar Headed for a Crash?

U.S. Dollar Unhinges (Review), Commodities Surge

There was a massive flash crash in the dollar this weekend -

If this crash in the DXY (seen below) had happened during regular hours, apparently driven not by the dollar but by DXY component EUR (there was no comparable move in other USD pairs), it would have created a complete market collapse. Luckily it happened an hour after close.

Followed up by issues Sunday night -

Goldman came out with a report basically demanding (you know how these guys are) $4 trillion in money printing - so says the FX chatter and Zerohedge.

The result? The dollar took an instant header, down more than a 1/2% this evening alone.

How about the price of some of the things sensitive to threats of monetary debasement? These are all price changes since the futures started trading this evening - that is, they're six hour changes in price. These are all things you need to buy, either directly or indirectly.

Oil, up 1%.

Wheat, up 1.49%.

Corn, up 2.05%. (Oh yeah, and ethanol on your gas will soon be mandated to be 15%, not 10%.)

Soy, up 1.5%.

Rough Rice, up 1.51%.

Oats, up a stunning 4.27% (!)

Cotton is lock-limit up 500 ticks. To be fair there's a crop disruption related to Cotton, which is adding to the problem. Dollar debasement, of course, isn't helping.

How is the dollar fairing overall?

The dollar's slump could get far worse if the dollar index takes out last year's low, Robin Griffiths, technical strategist at Cazenove Capital, told CNBC Monday.

"If the (dollar index) takes out the low that was made roughly a year ago I really think that will not only encourage more sales, it will cause a little bit of minor panic," Griffiths said. "A year ago it was deemed too cheap, if it goes any lower than that it's actually become toxic waste." 

The Real Effect
We have made no secret of the prediction that the dollar was going to get thoroughly trashed -

August 5, 2005 -

Look for an increasing economic slide of the economy in the 2nd half of 2005 that causes the dollar to slide even further against the Euro setting the stage for a Union currency proposed to be called the Amero.

August 10, 2005 - 

I believe that the globalists are attempting to strip the American Economy by devaluing the dollar, weakening the American military through multiple prolonged conflicts and the removal of what was outstanding American influence over many countries in order to prepare us for a Global Union.

July 11, 2008 - 

The dollar continues to tank with countries virtually lining up to fling it off the monetary cliff. This is while costs stack up from the Afghan/Iraq conflict.

June 15, 2009 -

The US dollar is going to tank (think Iceland) 

Notice the escalation in rhetoric over the years as the position of the Real Effect goes from "slide" to "tank"? This is because we are looking at long term trends, not immediate conclusions. So while the dollar may go up for a little while from here, it will continue to return to this position repeatedly, creating new lows along the way. Then, at some unfortunate point, the entire situation becomes uncontrollable and the US becomes a banana republic.

This position seems closer every day, but I believe that the illusion needs to be maintained until after the Republicans regain seats in Congress, then the situation can be "blamed" on them.

No taxation without representation - Nigel Farage MEP

Fraudclosure: "MBS Investors are Calling Their Lawyers" 10-18-2010

Bank of America Gets Creamed - Issues Surrounding the Housing Debacle

“Crime is contagious. If the government becomes a law-breaker, it breeds contempt for the law.” – Justice Louis D. Brandeis

From the ninth gate of hell -

The New York Federal Reserve Bank is part of a consortium of eight large institutional investment firms that is demanding that Bank of America repurchase loans included in mortgage securities.

Bloomberg reported earlier Tuesday that the New York Fed had joined with the Pacific Investment Management Company, better known as Pimco, and investment management firm BlackRock in an attempt to force BofA to buy back $47 billion in mortgage bonds.

The markets responded accordingly, slaughtering BOA's stock by 4.38% for the day.

The Real Effect
There are so many issues, where do we even start?

• Issue #1 - The banks fraudulently loaned money to parties they knew could not repay. (Subprime crisis)
• Issue #2 - They committed fraud against the deed recording agencies by knowingly transferring deeds against many state law in a complex shell game called MERS. This was to avoid paying taxes on these transfers which would have sucked out the profits on the transactions.(These are the supposed "clerical errors")
• The institutions committed loan title fraud to hide this fact by shredding documents to keep things easy and clear.
• Issue #3 - They then split the mortgages into tranches and then fraudulently sold these investment instruments to individuals and companies that used these in part for leverage to the tune of quadrillions of dollars.
• Mutual and pension funds invested in these assets believing they were solvent.
• The sellers of the securities lied repeatedly.

"It appears as though many loans and other mortgage-related assets have been double and even triple-pledged to various constituencies."
- Bank of America, U.S. Bankruptcy Court, Jacksonville, CASE NO. 3:09-bk-07047-JAF

• Issue #4 - The banks went before the Congress screaming that "The sky is falling!" and demanded the taxpayers "bail them out" via TARP. These institutions would not exist otherwise. 
• These jerks even threatened that tanks would roll down the streets if they are not rescued from their own myopic stupidity.
• The very next day, Treasury Secretary Paulson stated that he would not use these funds for that purpose. In short, he lied.
• These people are refusing to tell us where the money we are spending is going. 
• Issue #5 - The Government (FBI) knew about these abuses years ahead of time.
• Issue #6 - Individuals did not pay their mortgages in a housing price inflated environment driven in part by the fraud and further bankrupted by a Depression created by the banks?

And we as a country are up in arms about issue #6? There is an environment of rampant criminality in America being committed from the top down and we're worried about people, some of which are being destroyed by these institutions?! What many of these institutions deserve is cake handed to them with a guillotine!

Bank of America might have to eat $47 billion which will blow it up? Good!  Let's face it, they have technically been insolvent for years already. We as a country are just pretending they are solvent and forcing these issue into the open will end the charades.

Banks tanking, fraud, rampant losses. Now where have we seen all this before...

States Going Belly Up Part 13 - The Endgame Timeline

We continue our fine series on the fiscal calamities facing state budgets, namely pensions -

#1 Illinois
Year pension fund runs out: 2018
Bill in the following year: $13.6 billion
Share of state revenue: 32%

Speaking of Illinois...


#2 Connecticut
Year pension fund runs out: 2019
Bill in the following year: $4.9 billion
Share of state revenue: 27%

#3 Indiana
Year pension fund runs out: 2019
Bill in the following year: $3.6 billion
Share of state revenue: 17%

#4 New Jersey
Year pension fund runs out: 2019
Bill in the following year: $14.4 billion
Share of state revenue: 34%

#5 Hawaii
Year pension fund runs out: 2020
Bill in the following year: $1.7 billion
Share of state revenue: 24%

#6 Louisiana
Year pension fund runs out: 2020
Bill in the following year: $4.3 billion
Share of state revenue: 27%

#7 Oklahoma
Year pension fund runs out: 2020
Bill in the following year: $3.7 billion
Share of state revenue: 30%

#8 Colorado
Year pension fund runs out: 2022
Bill in the following year: $7.8 billion
Share of state revenue: 54%

#9 Kansas
Year pension fund runs out: 2022
Bill in the following year: $2.5 billion
Share of state revenue: 23%

#10 Kentucky
Year pension fund runs out: 2022
Bill in the following year: $5.3 billion
Share of state revenue: 35%

#11 New Hampshire
Year pension fund runs out: 2022
Bill in the following year: $1.0 billion
Share of state revenue: 30%

The Real Effect
Woo boy, that's pretty soon. Now, I'm going to go out on a limb here and guess that these projections factor in an economic recovery and do not include the current housing crisis let alone the Depression. Following the government time rule of 1/3 (to factor in the propensity of government to massively step up their idiocy) that would mean Illinois will be bankrupt in 2015 without a housing crisis. Add in some losses in a few major banks and some extra dependency claims and this becomes a crisis that needs dealing with NOW.

Taken together, the bill for the top 11 states would be 62.8 BILLION dollars. That's just the top 11, and doesn't even include other expenditures. Now what public service worker in their right mind is going to like loosing their pension? Oh that's right, the politicians got a solution to this problem.

Austerity Coming to the U.K.?

It looks like some major economic hurt is coming to the U.K. in very short order here -



The Real Effect
I warned way back in February, the U.K. was in trouble and explained further in August the "austerity" that was coming to America and the world -

Irregardless of the specific subject of austerity, from government's perspective, the one who will always pay is the taxpayer. The bourgeoisie view the populace at large as a resource to be harvested and culled as needed in order that they can continue to "do God's work." To the career politician, the only job is convincing the subjects to go along with the haircut and indeed this is exactly how we have arrived at the abysmal conditions that we are subject to today.

Max Keiser: Dollar to be Buried Way Before 2018

How to Fix the Mortgage Mess

I think Vox nails the core of the issues here -

The only way to respect the law and minimize the effects of the damage that has already been done to the American economy by the mortgage-selling banks is as follows:

1) Free and clear title must be granted to homeowners who took out loans in which the chain of title was broken. This will mean that some people will get free houses – better innocent homeowners than criminal banks. This will support the housing market as well as the credit market since many people who are presently underwater on their home loans will be able to borrow against the value of their debt-free property.

2) Audit the mortgage-backed security sellers and force them to reimburse all buyers of fraudulent securities. This will significantly help state and local governments, whose pension funds were the primary victims of the security fraud.

3) Shut down MERS. State and local governments that lack laws enforcing the ancient land title system should immediately pass laws banning the use of electronic documentation as a legal substitute for actual paper documentation with signatures held at the county.

4) State and federal prosecution of banking employees responsible for committing MBS fraud, title transfer fraud, and foreclosure fraud, beginning with the CEOs and boards of directors.

5) Wind down the insolvent banks, including Bank of America, Citi, Wells Fargo and JP Morgan Chase. If they are not bankrupt already (and there is sound reason to believe that they are since at least 40 percent of their reported assets are in fact worthless), they will be after reimbursing the pension funds and international investors they ripped off by selling fraudulent mortgage-backed securities.

6) Congressional investigations of the regulatory bodies whose failed oversight made this vast series of banking frauds possible.

There is no question that this will be a long and painful process for the economy, but the important thing to remember is that the damage has already been done. There is no way to retroactively undo it. Every attempt to deal with the matter in any less straightforward manner is not only doomed to failure, but will definitely make matters worse because the banks responsible are still engaging in exactly the same activities that led to the present situation.

The Real Effect
Exactly. This is not going to be resolved by bailing out the banking industry again, throwing mortgagees in prison or burning down "unwanted" houses. We fix this by going back to the beginning and letting the chips fall where they should. If that bankrupts the industry, then the American people need to come with grips that we are only realizing a situation that has existed for years if not decades.

Red Alert - Major Cracks In the US Economy

Foreclosure-gate is a mess, but the fallout is going to be far more catastrophic -

as Tracy Alloway says, mortgage-bond documentation generally says that if more than a minuscule proportion of notes in a mortgage pool weren’t properly transferred, then the trustee for the bondholders can force the investment bank who put the deal together to repurchase the mortgages. And it’s looking very much as though none of the notes were properly transferred.

"None of the notes were properly transferred"? Uh oh. That's trouble but what's even more troubling is the sentence right before it - "if more than a minuscule proportion of notes in a mortgage pool weren’t properly transferred, then the trustee for the bondholders can force the investment bank who put the deal together to repurchase the mortgages."

Get that? The trustees for the bondholders can take that "toxic derivatives" and shove it right back down the banks throat. Gee, I wonder how that bodes for the big banks, what being forced to buy back TRILLIONS of their own crappy financial instruments? (At least it looks like they're getting ready for it.)

How much? I'm glad you asked! -

More importantly, a separate study by SNL Financial has determined that the total amount of residential (not commercial) mortgages in foreclosure between directly serviced, and those serviced for others, for the big three banks alone (JPM, WFC, BAC) is nearly a quarter of a trillion dollars!

Following the triple rule of government, I'm willing to bet that this particular issue will cost closer to 3/4 of a trillion at least. But wait I'll throw in more, for..well...free!

The hole could end up being as large as a trillion if one throws in the CMBS properties that are delinquent and in foreclosure ($61 billion in August per RealPoint).

The Real Effect
As I hate saying, well I do somewhat enjoy saying it - I hate it when I'm right, again and again. But enough posturing, you pay me to make predictions! For the moment let's look at what is coming next and you would do well to listen this time.

• This problem is only starting to be uncovered - it will get MUCH WORSE. When it does we will get the following -
• Fannie and Freddie which are backed by the taxpayers and will start hemorrhaging money. (If you can't foreclose, and squatters aren't paying on their mortgage debts, these two companies start losing more money.) Did I mention they're taxpayer backed? Guess who pays for their "losses"? That's right, YOU.
• When the MBS (Mortgage Backed Securities) referenced in the article go belly up, the investors in the MBS sue the pants off companies - JP Morgan, Citibank, etc because they sold the investors a LEMON. Just who are these investors? This splits into several probable issues: 
• A) Public pensions (Cops, firefighters) vaporize - Cops go on strike, crime goes up. Think France.
• B) Private pensions vaporize - Your grandmother goes broke. She riots with half the city! 
• C) The aforementioned companies go broke. After all, they're being sued into the ground. 

Poof, your retirement is gone! Well, isn't it fortunate that the Democrats are here to save your pension! After all it's not fair that your neighbor's money didn't get vaporized but yours did. He should pay his fair share!

Now, what's a new Republican Congress to do? The whole system is collapsing and don't you know that those dirty, dirty Democrats did it with all their Marxist thinking. (Never mind the fact the Republicans have been along for the ride.) Well, they just have to bail out the financial sector, again because this is the worst crisis evarrrrr! I'm sure Glenn Beck, Malkin and all the RINOs will go along for the ride.

At this point they will have no choice but to nationalize everything - police, firefighters, towns, people...you all belong to the Federal Government.

But wait, won't all this downward pressure put a crushing burden on the dollar? Great, now all we need is a bad bond auction to shake the confidence of the Treasury holders. At this point we will have two choices -

1. Sell the military to the highest bidder
2. Attack a country (preferably the one holding the bonds) to get it's people back to work.

Do you speak Mandarin? A shame, your new bosses will!

Ron Paul speech to Tea Party Uncensored

Checkpoints - They Come in the Seatbelt Variety

The safety Nazis continue their expansion of the Reich -

The police chief in Pine Lawn, Rickey Collins, fired one shot at a man who allegedly fled the scene of a seat belt checkpoint Friday night.

Collins has said the driver swerved around a police cruiser near the 4400 block of Rosewood Avenue to avoid the checkpoint, striking an officer and racing off. Collins said he and another officer then pursued the suspect about a half-mile until the driver struck a light pole along Bircher Street. Collins said he chased the man as he ran from the car and, when the man made a motion as if he had a gun, Collins fired once at him.

Collins missed, but the man was arrested nearby. No gun was found on the man or in the area.

Pine Lawn police on Monday approached McCulloch's office to seek charges against the suspect. McCulloch instead asked county police to investigate the incident and took the warrant request under advisement, Fitch said.

The Real Effect
Here are some important questions and points -

• Can we be honest about this? This is not about seatbelts, rather the "safety" argument is a politically expedient way to excuse harassing people and increase revenue generation.
• The argument about "saving just one life" is a trumped up reason that creates an incentive to turn more activities into crimes.
• I'm guessing that the "struck officer" wasn't so much hit as he was bumped.
• No mention of what would cause the man to avoid the checkpoint. Curious...
• "Made the motion as if he had a gun" And what would that be? He moved his arms? Or is this another throw away CYA by an overzealous police department?
• And all of this justifies KILLING the man?

This doesn't get any better...but wait, it's happened before -

In June 2006, Collins — then a Pine Lawn police captain — fired a shot at a driver at a sobriety checkpoint in Pine Lawn. In that case, the driver was struck in the forearm. Collins told authorities then that he fired by accident.

This argues very well for the removal of these checkpoints. Catching slightly guilty individuals on equipment and other minor violations as well as the occasional "big criminal" does not justify terrorizing neighborhoods with badge toting thugs that see "pieces" around every corner.

As I have heard said - In order to have a police state, first you need police.

Odd Arnold News

From the oddly interesting front -

Arnold Schwarzengger inspected the foundations of Russia’s planned Silicon Valley on Monday, and heaped praise on everything from the ruling tandem to the president’s driving.

In return he was jokingly invited to take up the role of Moscow mayor when his gubernatorial term ends early next year as Dmitry Medvedev kept up the old pals patter perfected on his trip to California this summer.

Medvedev has made modernisation the focal point of his administration and is keen to bring US know-how to Skolkovo. He visited Silicon Valley during his visit to the United States in June and met Schwarzenegger during the trip.

He received a commitment from Cisco to invest $1 billion in Russian technology projects, including Skolkovo, and invited Schwarzenegger to visit Russia to see how Californian expertise could synthesise with Russian potential.

Business high-flyer and Skolkovo leading light Viktor Vekselberg played down expectations that the Kremlin and Schwarzenegger-led delegation would sign “political” contracts. The visit was “another step towards boosting cooperation between the US and Russian companies,” he told RIA Novosti.

The Real Effect
For some reason, my BS detector is screaming about this article. Something just seems all wrong about this and while I can peg some former oddities, I don't have anything solid yet. 

• It is no secret that Arnold would like to be President of the U.S. Is this an attempt to solidify his post crisis role in a new United States?
• Why now? Right before the elections.
• There is too much fluff in this article - 

• “Had a great talk abt entrepreneurship and technology [original spelling preserved],” he tweeted enthusiastically. It was followed by “Riding with Mr President in his great car. You’re a great driver Mr President!”

• More odd statements - “As it happens you have arrived at a time when there is no mayor of Moscow,” Medvedev told Schwarzenegger at the presidential residence at Gorky. “In January you are leaving the governorship. If you were a Russian citizen you could have worked here,” Lifenews.ru reported.

Of course, there are other issues like his death's head belt buckle, or the fact that his father Gustav, was an Austrian police chief and member of the Nazi Party and SA. Then there's his issues with women, racism, or plethora of other problems.

At this point, most of this is pure observation, so we watch with a wary eye.

Democrats Get Your 401K, Republicans Get Your House and Stocks and the Globalists Win

The Real Effect is known for making some pretty bold statements throughout the years and for those of you that have been paying attention, these have been statements of fact. One such statement has been beaten on this blog like a dead horse -

The long and short is they are bleeding the real assets out of the United States and passing them into foreign control. Make no mistake, they will bleed this country dry. Savings, checkings, 401K, gold, assets, they want it all and will not stop until they get it. The only companies that survive will be those that primarily serve the industrial military complex. Overnight this country will be transformed into the new prison state for the Global Order. Get food, get water, get a gun and get ready to defend yourself.

Now I want you to take note of several things:

1. I made no distinction between Republican or Democrat; because in actuality the distinction is merely on paper. Both parties have sold out to the globalist's agenda. (Don't believe so? Try not paying your property tax, or better yet, your income tax. It doesn't matter who's in control, you'll still get thrown in jail.)
2. The actual target of any of the actions taken is real assets like physical commodities - Houses, 401ks, gold, cars, grain, companies. Note the price of some of these items are exploding.
3. They want it all. There is NO MATHEMATICAL WAY that this can be resolved without taking a massive haircut. The banks created QUADRILLIONS of CDO's and other "Weapons of Financial Destruction". This is significantly more than the world GDP and will result in -
4. Legalized slavery. Hence the final comment about defending yourself.

Don't believe me? Look at the facts - Under every administration for decades now, the size and scope of government has grown massively. You purchasing power has plunged, your "support" payments are shrinking, your job prospects are nill unless you have a government supported job.

The Democrats -

Democrats in the Senate on Thursday held a recess hearing covering a taxpayer bailout of union pensions and a plan to seize private 401(k) plans to more "fairly" distribute taxpayer-funded pensions to everyone.

Sen. Tom Harkin (D-Iowa), Chairman of the Health, Education, Labor and Pensions (HELP) Committee heard from hand-picked witnesses advocating the infamous "Guaranteed Retirement Account" (GRA) authored by Theresa Guilarducci.

(You can find the blistering interview with Guilarducci by radio talk show host Mark Levin in 2007 at the link).

In a nutshell, under the GRA system government would seize private 401(k) accounts, setting up an additional 5% mandatory payroll tax to dole out a "fair" pension to everyone using that confiscated money coupled with the mandated contributions. This would, of course, be a sister government ponzi scheme working in tandem with Social Security, the primary purpose being to give big government politicians additional taxpayer funds to raid to pay for their out-of-control spending.

The Republicans -

The Journal analysis showed that an aide to a Republican member of the Senate Banking Committee bought Bank of America Corp. stock before results of last year's government stress tests eased investor concerns about the health of the banking industry. A top aide to the House Speaker profited by trading shares of Freddie Mac and Fannie Mae in a brokerage account with her husband two days before the government authorized emergency funding for the companies. Another aide to Republican lawmakers interested in energy issues, among other things, profited by trading in several renewable-energy firms.

The aides identified by the Journal say they didn't profit by making trades based on any information gathered in the halls of Congress. Even if they had done so, it would be legal, because insider-trading laws don't apply to Congress.

The Real Effect
If you're headed the wrong way, something I don't think that is in dispute, then logic dictates that you - TURN AROUND! If we've tried a century of increasing "social planning" and "expert" run institutions, then the logical conclusion is to turn the free market economy loose again. It is demonstrable that every time that this has been instituted, the economy and the country has rebounded in short order. After all, what do we have to lose?

Celente: National Emergency Will Trigger Bank Holiday

Ron Paul and Judge Napolitano on the Federal Reserve 10/06/10

Keiser Report №83: Markets! Finance! Scandal!

Harvard Agrees With the Real Effect

Good to see that the colleges are getting a Real education by borrowing a page from our book -

Weaker than expected reports on private payrolls and planned layoffs Wednesday refueled expectations the Federal Reserve will soon embark on another round of stimulus, a.k.a. "QE2".

More Fed purchases of financial assets is "good for the bank," says Jeffrey Miron, a Harvard economics professor and a senior fellow at the Cato Institute. "But I don't see it having a very big affect in tricking down in terms of getting more investment, more lending."Miron is among a growing number of economists and market experts who believe the Fed is pushing on the proverbial string, i.e. can't do much to help the "real" economy.

The Real Effect
From the July 21st update U.S. Blows Trillions Trying to Push a String -

...the government is going to have to service this new debt (boulder) with new debt at either a higher amount of debt borrowed or higher rate . Yet, the market is saturated with debt both private and public viciously competing for whatever available liquidity is left. (The wall) In order to succeed in averting further crisis, the boulder needs to be kicked through the wall.

Is this possible? As long as there are gullible willing senior citizens clients to buy ever more debt, the boulder can be exchanged for a bigger one and successfully kicked through the wall.

At some point though, demand for U.S. debt will cease to an extent (2011?) and the bills will come due. At this point the government is going to have to figure out a new trick to take care of the debt fiasco. If that trick is money printing, (hyper-inflation) lookout as everything you think you own will suddenly belong to some man down the road named Chen.

Now,we didn't even have to make it to 2011 for the demand of US Treasuries to fall of dramatically. Once the European smokescreen subsided, the dollar crashed and the Fed became the buyer of last resort effectively monetizing the debt.

But wait, what's that!?! Is Greece on fire again!?

NIST - Firemen Explosion Testimony

Keep in mind, these are not "nutters" or individuals that have something to gain, these are people that were actually there.