Everything Is Broken

Customers swamp IndyMac to withdraw money
PASADENA, Calif. (AP) -- Worried customers with deposits in excess of insured limits flooded IndyMac Bank branches on Monday, demanding to withdraw as much money as they could or get answers about the fate of their funds.

With the failed bank now under federal control, hundreds of people lined up before dawn outside its headquarters branch in Pasadena.

The crowd swelled throughout the day, with customers seeking shelter from the hot sun under makeshift tents. Many waited for hours to get inside what became IndyMac Federal Bank after its takeover Friday by the Federal Deposit Insurance Corp.

"I didn't think this could happen," said Charles Tengeri, a retired school teacher who emerged from the bank with a check for $171,000 -- an amount he said represented most of his savings.

"I'm glad to get anything out," he said.
http://biz.yahoo.com/ap/080714/indymac_customers.html

The beginning of the end? Yes, and the end is nowhere in sight. IndyMac is the largest regulated thrift to fail and the second-largest financial institution to close in U.S. history, according to its regulator, the Office of Thrift Supervision. This is a stunning statistic. The wave of bank failures we have been prepared for have only just begun, and the first tree to fall in the banking forest is one of the biggest. How many little trees are going to come down with it? How many more big trees are going to join IndyMac on the banking forest floor, belly up?

The Philadelphia Bank Index fell 4.66 points today to 50. Absolute Carnage. Recall that it was collapsing banks and runs on those banks that led to the Great Depression. Could we be staring down the barrel of the Greater Depression today?

Forex Traders and investors on Wall Street today were not fooled by the latest attempt by Bumbling Ben Bernanke and Hanky Panky Paulson to bamboozle them with another government sponsored bail out. Amatures and fools bid these markets higher at their opens today, only to see their gains crushed by the pros that sold into them. The bailout of Fannie Mae and Freddie Mac are in NO WAY good for the Dollar. The bailout signals to anybody paying attention that the banking/credit crisis has now entered the catastrophic runaway phase that even the "great and powerful" US Federal Reserve is powerless to halt. This government bailout is grossly inflationary and a gargantuan burden on the American Taxpayer. America has just seen it's future pass before it's yes, it's only destiny a lifetime of debt paybacks. The seeds of revolution are now being sown. Damn, this is going to get ugly.


Shock, Denial, Frustration, Anger??
By Peter Grandich
Up until President Nixon’s term, America was truly a world power both militarily and economically. Though it was being challenged as teaching about God was being removed from schools, the moral fabric of America was firmly in place. Slowly, the Hippie culture of “do what you want and to and the heck with the consequences” began to take hold. But, it was a presidential move that would truly set off an economic time bomb that is now close to exploding: President Nixon decided to remove America from the Gold Standard.

What Nixon did was remove our government from having to be strictly fiscally responsible. It allowed governments to effectively print money without having anything else to back the money other than its promise to make good on it. That promise or ability to make good has decreased as the United States would become so fiscally irresponsible by running up debts that now not only leave it at the mercy of its lenders, but have all but certainly caused critically important social services like Medicare and social security to be in danger of disappearing or greatly diluted in the coming years. Our former U.S. Comptroller, the man who was in charge of the government books, tried warning us for years but has recently left office in part because on our refusal to take heed. The removal of the gold standard will IMHO be looked back on as the match for the economic time bomb that’s before us.

As plain as possible, what America has done as a government is to literally create money out of thin air, and we’ve done so over so many years that the interest owed is going to be difficult to repay, not to mention the principle. How important is this? If we did this as a business we would have been out of business a long time ago. If we did it as individuals we’d be in jail.

Americans have indebted themselves to the point where the average American has little or no real savings. Furthermore, the two key areas they have continued to borrow against to continue a lifestyle way beyond their means – the stock market and real estate market – are no longer viable means of borrowing against our future.

You must understand that the real net worth of America is negative. Yes, there are a small percentage of Americans who are indeed rich. But the large middle class that used to make up the bulk of Americans has shrunk with a few going up the ladder but most falling off or clinging to the bottom rung.

So, no matter what Wall Street, Washington or the media may try to tell you, you must sadly accept that as a nation we are heavily in debt, our cash flow has been seriously impacted and our ability to continue borrowing is fast reaching an end. It would be political suicide, but America’s debt should not be rated triple AAA anymore. Our creditors know that, and that’s why our currency has fallen so much.

There has been a once-in-a-lifetime shift in wealth in the world. America, which once was truly an economic power and a creditor nation, has seen its wealth leave for several key countries that have seen incredible economic growth like China, India, and several countries in the Middle East.
http://www.kitco.com/ind/grandich/jul092008.html

Mr. Grandich's essay is quite an eye opener. I suggest reading it in its entirety to get the full spectrum of the peril we as a nation face. If you have a weak stomach, don't read this if you just made a deposit at your bank. It should be quite clear to anybody reading this blog, or this essay that Gold and Silver are the only things that may see you through the darkness that is just up ahead for our nation.

Ignore the headlines about Gold being up on fears of any attack on Iran. This is the "controlled" media's way of trying to shift attention away from the banking crisis that is about to swallow the nation. Gold is up for reasons that are twofold, and will continue to rise far into the future because of both of them: Systemic failure of the financial system, and the exponential inflation in the nations money supply to be used in a failed attempt to avert that systemic financial crash.


Stocks decline as worries about financials persist
NEW YORK (AP) -- Wall Street extended its slump into yet another week Monday as investors worried that even a safety net set up for mortgage financiers Fannie Mae and Freddie Mac won't head off further troubles in the financial markets.

Investors' latest unease about the banking sector comes in a week when many financial names are to issue quarterly reports -- many of which will likely include sizable write-downs of souring mortgage debt.

The rumors and sell-off of regional banks reflect the unease investors have about where financial troubles might emerge.

"My sense is that investors are taking a pretty cautious stance," said Jack A. Ablin, chief investment officer at Harris Private Bank in Chicago. "The government can't bail out the whole industry."
http://biz.yahoo.com/ap/080714/wall_street.html

It has got to be somewhat devilishly amusing that following the Feds bailout of Bear Stearns, investors actulally believed the fed would bailout, and/or save the entire banking system from any threat of collapse. The Fed just made it's last bailout with Fannie Mae and Freddie Mac. This is the only bailout they should have made because these two agencies are "government backed" to begin with. The Bear Stearns bailout set the banking industry up for the collapse it is about to experience by creating the "false hope" that the Fed was here to save it from itself. Nothing could've been further from the truth. The Bear Stearns bailout simply bought time for the "smart money" to exit the banking sector on Wall Street and leave the taxpayers and the swindled depositors holding the bag.


Fannie Mayhem: A History
http://online.wsj.com/article/SB121599777668249845.html?mod=googlenews_wsj

A train wreck six years in the making, and yet people act as if this happened "suddenly". Never forget that the government "sponsored" these two enterprises. And never forget that the government is at the root of this systemic financial failure that is about to steal our way of life from us. This story should be THE HOT TOPIC of discussion in the Fall's political debates...it is likely to get little more than lip service. The government would rather risk the consequences of war with Iran, than let the truth about their culpability in the destruction of the country's financial well being come to light. Take that to the bank, and ask to be given all your money. Buy Gold. Buy Silver.


THE INTERNATIONAL FORECASTER: Bob Chapman
The Night of the Living Dead, meaning dead, bankrupt and insolvent banks, will soon be upon us. Their deadly losses are going to rise up and destroy us. It's time to flee in terror! According to Fortis, a banking, insurance, and investment company, based in Belgium, the zombies could be 6,000 strong. Try not to scream!

After the end of this year, you will never see three figure gold again in your lifetime, and five figure gold is a distinct possibility.

You are not powerless to prevent the losses you are experiencing. By staying in the general stock market, or in dollar-denominated bonds, or in any kind of fiat currency-denominated bonds for that matter, you are not in it for the long term as Charles Schwab would have you believe. Instead, by doing nothing to diversify into gold, silver and their related shares, you will be in it for the long pole, a pole which the Illuminati will grease and apply vigorously to a delicate part of your rear end's anatomy. So you had better either diversify into gold and silver, or bend over and get ready for the long pole. When the stock markets go down this time, it will take decades for them to recover, even to their nominal levels. When it comes to preeminent disasters, this is the real McCoy. This is not a drill. Instead, those who do not prepare are going to get drilled.
http://news.goldseek.com/InternationalForecaster/1216044298.php