The $15 Trillion Mystery

By Jeff Nielson
02/24/12 – 08:06 AM EST

The following commentary comes from an independent investor or market observer as part of TheStreet’s guest contributor program, which is separate from the company’s news coverage.

These are the two principal questions being framed today, after Lord James of Blackheath (a member of the UK House of Lords) unveiled documentation (and accusations) concerning a mounting of illegitimate cash: $15 trillion.

At the moment, only Lord James is asking these questions. However, if he gets his way there will be an official inquiry into this massive, money-laundering operation. Already, Lord James possesses documents with the signatures of people like Alan Greenspan and Timothy Geithner on them, as well as massive transfers of funds to virtually every mega-bank in the U.S. and UK.

While Lord James (himself a former banker) is holding the “paper trail” for all of this dirty money, he has no firm ideas about either the source of the money nor the intent of all of these massive transfers (all in the hundreds of billions) to U.S. and UK banks. Perhaps I can help him out?

Regular readers will be familiar with some of my own speculation into U.S. money-laundering (and counterfeiting of its own currency). Of interest, my own theorizing was based on a series of logical deductions that implied that some massive money-laundering operation (of counterfeit currency) must be taking place in the dying U.S. economy. And now we have a detailed paper-trail on the largest (known) money-laundering operation in history.

To refresh the memory of regular readers and to inform new readers, back on Jan. 3, I published a commentary titled “Maximum Fraud in U.S. Treasuries Market”. In that commentary, I outlined a series of simple-yet-obvious deductions pointing out the following facts:

There are (virtually) no visible buyers for U.S. Treasuries on the planet (at any price).

Even if there were interested buyers, there are no sources of capital available to mop up all the trillions in supply being dumped onto the market each year.

Even if there actually were interested buyers, and even if they could scrounge the $trillions to buy this worthless paper, it is utterly absurd to suggest that these buyers would pay (by far) the highest prices in history for this paper at a time of maximum supply. It defies every basic principle of supply and demand.

Taking this scenario from “absurd” to outright insanity, the U.S. economy has never been less solvent in its entire history. This directly implies that U.S. Treasuries should be fetching the lowest prices in history — not the highest — just like the worthless bonds being flogged by Europe’s deadbeat-debtors.

In other words, by process of simple deduction it was totally obvious that a gigantic, money-laundering operation was being conducted, with the primary goal being to prop-up the totally fraudulent U.S. Treasuries market. All that was missing was a paper trail to prove this fraud, and now Lord James of Blackheath has been kind enough to provide this.

Undoubtedly many readers will be skeptical of this, assuming that there would be no need to get into such a cloak-and-dagger (and blatantly illegal) process to pretend that worthless U.S. Treasuries still have value. Supposedly, these bonds have more “value” than at any time in history – despite the issuer of those IOU’s being hopelessly insolvent and merely delaying its own bankruptcy.

The $15 Trillion Mystery: Opinion – TheStreet.

Corporate Margins And Profits Are Increasing, But Workers’ Wages Aren’t

By Pat Garofalo on Feb 22, 2012 at 12:50 pm

As we’ve been noting, corporate profits have made it back to their pre-recession heights (even if corporate tax revenue hasn’t followed suit). In fact, in 2011, corporate profits hit their highest level since 1950. But as Bloomberg News noted today, this hasn’t translated into wage growth or more purchasing power for workers:

Companies are improving margins and generating profits as wage growth for the American worker lags behind the prices of goods and services…While benefiting the bottom line for businesses, the decline in inflation-adjusted wages bodes ill for the sustainability of economic growth as consumers may eventually be forced to cut back. […]

Of the 394 companies in the Standard & Poor’s 500 Index that have reported since Jan. 9, earnings for the quarter ended Dec. 31 increased 5.1 percent on average and beat analyst estimates by 3.2 percent. Some 70 percent of the companies have posted better-than-projected results.

This pattern has become all too familiar during the slow economic recovery. In fact, real wages fell in 2011, despite record corporate profits. “There’s never been a postwar era in which unemployment has been this high for this long,” explained labor economist Gary Burtless. “Workers are in a very weak bargaining position.”

Between 2009 and 2011, 88 percent of national income growth went to corporate profits, while just 1 percent went to wages, a stat that is “historically unprecedented.”

via Corporate Margins And Profits Are Increasing, But Workers' Wages Aren't | ThinkProgress.

Ron Paul’s 0% Tax Proposal Would Create Most Jobs “In History of the World”

As The Wall Street Journal’s Stephen Moore explained on FOX Business to Judge Andrew Napolitano after Monday night’s debate:

Judge Napolitano: But the biggest sound bite of last night comes from another cowboy from Texas. Congressman Ron Paul, whos tax ideas outgunned his opponents.

Ron Paul: We should have the lowest tax that we’ve ever had, and up till 1913 it was 0%. What’s so bad about that?

Debate moderator: So you’re answer is 0?

RP: Zero

Judge Napolitano: Zero! Joining me now to discuss abolishing the income tax is a man who’s no stranger to studying and analyzing taxes. He’s Stephen Moore, head of the editorial board of the Wall Street Journal.

Judge Napolitano: Can we take Congressman Paul seriously at his word? That were he to be nominated and elected President, he would move to reduce the income tax rates to zero, or as he says, gradually abolish the income tax, shrink the government down to its Constitutional size, and force it to go to other resources for cash.

Stephen Moore: This is a point Ron Paul made very effectively last night, which was for the first roughly 130 or 140 years of our nation we didn’t have an income tax, and yet we did have a prosperous country, we got richer every year, and so there’s no reason we can’t imagine what America would be like without an income tax.

Stephen Moore: As an economist, can you imagine America’s competitive position in the world if Ron Paul were able to get our income tax rate down to zero, when other countries have 30, 40, 50% rates… you would see the most insourcing of jobs into America in the history of the world.

Ron Paul's 0% Tax Proposal Would Create Most Jobs "In History of the World" | Ron Paul 2012 Presidential Campaign CommitteeRon Paul 2012 Presidential Campaign Committee.

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