The Togakure Report: 10-13-2008

Gang,

As I ponder all of the economic doom and gloom that has taken place this week, I grow more and more concerned. While I've always known that our current turmoil would cause Fedgov to eventually give up the ghost, I fear that Uncle Sam will go the way of Iceland, go utterly bankrupt, and be forced into Receivership by it's foreign creditors.

What is Receivership?

According to Wiki:

Receivership is used to denote a situation in which an institution or enterprise is being held by a receiver.

A receiver is:

In law, a receiver is a person "placed in the custodial responsibility for the property of others, including tangible and intangible assets and rights."[1] Three types of receiver appointments exist:[1]

1. a receiver appointed by a (government) regulator pursuant to a statute;
2. a privately-appointed receiver; and
3. a court-appointed receiver.[1] The receiver's powers "flow from the document(s) underlying his appointment – a statute, financing agreement, or court order.

Court-appointed receivers are "the most powerful and independent of the judicially-appointed managers."[2] Unlike special masters and monitors, "the receiver completely displaces the defendants: the receiver makes large and small decisions, spends the organization’s funds, and controls hiring and firing determinations."[2]

Again, this is my concern, not a matter of fact. However when I put all the evidence together, I'm afraid that this is where we are headed: being managed by a Receiver appointed by a coalition of various foreign and international entities which could include the IMF, the World Bank, and foreign creditors such as China and Japan.

Let's look at the evidence.

1) The United States of America is insolvent as I write this.

Dr. Chris Martenson writes:

Prepare to be shocked.

The US is insolvent. There is simply no way for our national bills to be paid under current levels of taxation and promised benefits. Our federal deficits alone now total more than 400% of GDP.

That is the conclusion of a recent Treasury/OMB report entitled Financial Report of the United States Government [a][b] that was quietly slipped out on a Friday (12/15/06), deep in the holiday season, with little fanfare. Sometimes I wonder why the Treasury Department doesn’t just pay somebody to come in at 4:30 am Christmas morning to release the report. Additionally, I’ve yet to read a single account of this report in any of the major news media outlets but that is another matter.

But, hey, I understand. A report this bad requires all the muffling it can get.

In his accompanying statement to the report, David Walker [c][d], Comptroller of the US, warmed up his audience by stating that the GAO had found so many significant material deficiencies in the government’s accounting systems that the GAO was “unable to express an opinion” on the financial statements. Ha ha! He really knows how to play an audience!

In accounting parlance, that’s the same as telling your spouse “Our checkbook is such an out of control mess I can’t tell if we’re broke or rich!” The next time you have an unexplained rash of checking withdrawals from that fishing trip with your buddies, just tell her that you are “unable to express an opinion” and see how that flies. Let us know how it goes!

Then Walker went on to deliver the really bad news:

Despite improvement in both the fiscal year 2006 reported net operating cost and the cash-based budget deficit, the U.S. government’s total reported liabilities, net social insurance commitments, and other fiscal exposures continue to grow and now total approximately $50 trillion, representing approximately four times the Nation’s total output (GDP) in fiscal year 2006, up from about $20 trillion, or two times GDP in fiscal year 2000.

As this long-term fiscal imbalance continues to grow, the retirement of the “baby boom” generation is closer to becoming a reality with the first wave of boomers eligible for early retirement under Social Security in 2008.

Given these and other factors, it seems clear that the nation’s current fiscal path is unsustainable and that tough choices by the President and the Congress are necessary in order to address the nation’s large and growing long-term fiscal imbalance...

With the passage of the bailout bill, and the recent expansion of money and credit by the Federal Reserve, it's pretty obvious what decision has been made... Reflation. And if Fedgov doesn't play its cards right (which it won't), Hyperinflation is a distinct possibility.

Consider that Secretary Paulson wants to "recapitalize" the banking system.

Dr Ron Paul, upon being asked what he thought of the plan, asked the critical question... what capital is being used to bail out these financial institutions?

Go back a little bit and click on some of the links provided. Where do you think Fedgov is getting all of these trillions to bail out the banks from? Do we have massive stockpiles of gold that will be sold to finance this transaction? Are we like the Japanese, sitting on billions of currency reserves?

I don't think so.

As Mr. Laurence Kotlikoff points out, the United States is bankrupt; already, today, and right now.

The only reason why our creditors were willing to make nice-nice is because foolish Americans such as myself bought tons of useless crap from foreigners, providing the illusion of growth for their manufacturing-centric economies.

Mr. Joel Hirschhorn writes:

The Most Powerful People in America

They are not the rich and superrich, nor the politically powerful running the two-party plutocracy, nor the greedy heads of banking and finance companies, and certainly not the media moguls and bloviating pundits.


The most powerful people are US, American consumers that account for over 70 percent of the economy. It is exactly now, when the economy is in the toilet, that consumers hold the maximum power. So why are we the people still deluding ourselves that the path to a better future rests on electing a new president?


We are suckers, conditioned by decades of clever marketing and advertising to believe the lies of politicians, and worst of all to believe that elections and our votes provide us with power. Wrong. Our real power can only be manifest through our spending dollars...

Mr. Hirshhorn makes two very important points:

a) American consumers are 70% (!) of all economic activity in the U.S. Our rampant buying habits fuel economies around the world.

b) The ultimate solution to our economic and other problems will not and cannot come from Washington, it cannot come from McBama, and it certainly won't come from Martial Law or a consortium of International Creditors (more on this later). The solution to this problem requires the American masses to do something they absolutely hate to do...

THINK.

Human beings have all the powers of Heavan and Earth at their command... if only they would accept the responsibility!

Forgive me... I digress. Back to the impending foreclosure of the United States of America.


The almighty American deb... consumer is showing signs that she is tapped out. The wealth has been squandered. The home equity line of credit has been closed, and her credit cards are next. As Mish Shedlock would say... Peak Consumerism has been reached.

The Ponzi scheme is unraveling, and the inevitable downturn in spending will trigger massive losses as the economy slows further. Not even Bernanke and Paulson can reverse this trend.

In essence, no matter what the government does to solve this banking crisis, it won't be enough to prevent the collapse of the dollar, unless we take action right now to turn this ship around.

That means:

a) Chill out with the wars and bring our soldiers home.

b) Eliminate wasteful government spending at Federal, State, and Local levels.

c) Abolish the Fed, return monetary operations to the U.S. Treasury under the strict oversight of Congress, eliminate unconstitutional Federal income taxes on individuals and lower the tax rates on businesses to a low, flat, and competitive rate.

d) Reinforce Constitutional government by repealing the Sixteenth and Seventeenth Amendments to the U.S. Constitution. By doing so, the financial power of the Federal government will be greatly reduced.

e) Ratify a Constitutional Amendment that states, in no uncertain terms, that the American dollar is to be backed by Gold and silver.

f) Abolish No Fault Divorce and replace it with premarital agreements [aa][bb][cc] that are absolutely binding and enforceable throughout the land, get rid of the current child support system, remove the government from marriage except to enforce laws against marriage of minors and marriage under duress, and repeal all discriminatory domestic violence laws.

g) Mandate that all family related, domestic violence, and permanent restraining order trials, civil or criminal, be trial by jury, and that no action be taken by the government unless the evidence is beyond reasonable doubt and a jury votes to convict the defendant of the crime or offense charged by the State.

Items F and G would go a long way towards strengthening the most fundamental unit of social, human, economic, and political capital, the married family unit. One cannot have a strong economy and a Constitutional Republican form of government when gender trench warfare dominates all aspects of life.

If these steps were taken, I would at once have a more optimistic outlook on America's economic future. Unfortunately, recent actions as undertaken by the Dynamic Duo of Paulson and Bernanke, the President, and the Congress tell me that collapse, pain, and poverty are all but guaranteed.


2) Foreign Creditors have serious skin in the game.


Let's take a moment to find out who America's creditors are, and how much money they have in play.

From the Sydney Morning Herald:

End of America's era - now it is China that calls the tune

SO THE Group of Seven leaders have vowed to "take all necessary steps" to stop the world's financial immolation. That's good news. But first they are doing whatever is necessary to secure for themselves what is left of their toasted assets.

Last week Gordon Brown's priority was to use money laundering and terrorism laws to seize the British vaults of a bankrupt Icelandic bank. He says he will seize more Icelandic assets "wherever is necessary" to secure £20 billion ($52 billion) invested by Britons and British local governments.International insolvency practitioners call it ring fencing - where rich countries, usually the United States, can lock down their borders to seize assets and jump in front of equally entitled but less muscular international creditors. That is why the US will get the lion's share of the leftovers of bankrupt investment banks like Lehmans.

But Iceland and Lehmans are sideshows in the new world of international financial cooperation and brinkmanship. The match-up that matters is between the mother of all debtors, the United States Government, and its primary financier, the Chinese Government.

By now China has accumulated more than $US2 trillion ($3 trillion) in foreign exchange reserves... experts in both China and the US estimate that 70 per cent of China's foreign assets are held in the form of loans to the US Government and its agencies...

From the China Daily:

The authorities are following closely Washington's response to the ongoing financial crisis as the turmoil has affected Chinese investment in the United States, especially the large amount of US bonds being held by the country, Chinese ambassador to the US Zhou Wenzhong has said.

"As China holds large amounts in Fannie Mae and Freddie Mac shares and in US bonds, the financial storm has definitely impacted Chinese investment. So we're paying a good deal of attention to the crisis," said Zhou in a speech on China-US trade relations at the Center for National Policy in Washington DC, on Wednesday.

The China Newsweek magazine reported on Oct 9 that $1.2 trillion of the country's $1.8 trillion foreign exchange reserves are held in the US markets. Nearly half of the funds have reportedly gone to US government housing insurers Fannie Mae and Freddie Mac, while most of the remaining half are in US bonds...

From Bloomberg:

... The world has a systemic problem that requires a broad solution -- if not a global approach, at least a pan-European one. First, governments must recognize the need for a comprehensive remedy.

Asian Money

Next, they need bucks, big bucks, to recapitalize large swaths of the global banking system -- especially in the West -- by purchasing worthless securities, making shareholders and creditors pay.

For that, as famed American bank robber Willie Sutton said, you go where the money is. Today that's Asia, home to more than 60 percent of the world's foreign-currency reserves. China has $1.8 trillion, Japan holds $971 billion and India has $283 billion. After them come Taiwan with $281 billion, South Korea with $240 billion and Singapore with $170 billion.

From the Milwaukee Journal Sentinel:

... Oil-rich states also became big buyers of U.S. debt. The Treasury tracks a 15-nation bloc of oil-exporting nations like Saudi Arabia, Iran, Kuwait and the United Arab Emirates, which collectively own $174 billion of America's debt, making that group the fourth-biggest lender to the United States, behind No. 3 Britain ($291 billion)...

Please note that China's Ambassador is keeping a close eye on the financial situation.

Why would they do that unless:

a) Foreign creditor nations are beginning to doubt our ability to repay

b) They have too much riding on this for the Americans to fuck it up now.

If you had over a trillion dollars invested in a shitty enterprise, wouldn't you want to make sure you get paid? What would you do to insure you didn't lose all of your hard earned cash? Is it that far fetched to assume that you, as a creditor, would be interested in exercising your legal rights [1][2][3]
[4][5]?

Please understand that I am not an international attorney. However it appears that there is a framework in place for a creditor nation, such as China, to bring action against the United States in a court of some kind. And one way that China's claims can be satisfied is if the United States is placed in Receivership.

Please remember that in Finance, love and money don't mix. When it comes to trillions of dollars and the general welfare of their people, don't think for a minute that foreign nations are going to cut us some slack just because we Americans are nice guys who are simply down on their luck. The entire system is corrupt, and the gangstas that have lent us these fantastic sums of money aren't gonna take no for an answer.

I can just hear the Saudis and other high roller investors now...







Can I get PAID Muthafucka??

One more thing before we move on... there is a historical precedent for the Receivership of nations. Check out what happened to the African nation of Liberia, and read about Iceland's declared bankruptcy here.

Keep in mind, however, that the world will never see a default as massive as the eventual American bankruptcy... so what will actually go down when it happens is anyone's guess. All hell could easily break loose at that fateful moment.


3) Rumors of takeover abound.


Here lately, I've come across some very interesting pieces that peaked my curiosity enough to write this post.

Jim Willie writes:

... The events (the ongoing credit crisis) are moving toward some upcoming surprises of historical magnitude. Think default and receivership, with foreign control. The massive rollover and refunding requirements from USTreasury Bonds will put monumental strain on the system, which the monetization US$ printing press cannot alone manage. Unless and until foreign creditors step in, the US financial sector will continue to operate like a crime syndicate, since regulatory bodies and law enforcement officials are all part of the coordinated congame...

... The four primary features that have pushed the United States into a certain position in Third World status are these:

1) globalization with deep Western investment in China

2) insolvency of four pillars of federal, trade, housing, banking

3) export of fraud with mortgage bonds, mainly to China, Europe, Russia, England

4) military aggression and annexation with continuous deceit and propaganda.



The many points describe a system broken without remedy, inviting default and receivership. Both are in progress behind the curtains, but on foreign soil. As Mohamed El-Erian of PIMCO (formerly Harvard Univ) said recently, “The unthinkable is thinkable.” Little known to the majority of Americans, foreign disgust grows. Their desire to isolate the United States is growing, in order to protect themselves from financial collapse and further spread of fraud. The German economics experts are saying “The World Shouldn't Have to Bear the Burden for America's Lapses” in Spiegel Online (click here) in a public article...

... A solution comes from foreign creditors that does not require Congressional approval or vote, constituting an event to pull the rug from under the Americans. The avenue will be via bank channels. A receivership committee is being formed...

Mr. Rob Kirby writes:

...In a related note, back on September 9, 2008 I wrote, The Stars Are Aligning - But For What? Where I highlighted the work of Adrian Douglas, GATA consultant and frequent contributor to LeMetropolecafe.com. Douglas’ work follows the Gold position of Goldman Sachs [a surrogate of the Federal Reserve] on the Tokyo Commodities Exchange [TOCOM]. I stated then:

The activities of Goldman Sachs “shorting gold” on TOCOM [Tokyo Commodities Exchange] was first brought to my attention by Adrian Douglas via Bill Murphy’s daily Midas commentary at Lemetropolecafe.com. on Jan. 10, 2006. Douglas has reported on Goldman’s daily TOCOM gold futures position changes for almost 3 years.

With Goldman Sachs representing a defacto surrogate of the Federal Reserve, it is clear that the Fed is moving from being “overextended short” to flat – or possibly going long gold.

I believe this transition is critically important, much like a fuse burning toward explosives.

When this position crosses over from short to long, as I expect it will sometime this month, I expect that some large deafening bells will be ringing – somewhere.

Well, I’d like to report that last night [as of Sept. 24, 2008], Goldman Sachs has further reduced their “short gold position” by over one thousand contracts on TOCOM to “net” 624 contracts short – from a high water mark of more than 50,000 contracts short a couple of years ago.

I now surmise that the “lit fuse” referred to above, is actually a count-down to the imminent imposition of “RECEIVERSHIP of the U.S.A” by a multi-national group of creditors.

I now expect this RECEIVERSHIP to be fully endorsed by the Federal Reserve and to help implement and enforce the proceedings:

U.S. Army Unit to Deploy in October for Domestic Operations

Washington, September 23 (RHC)-- The U.S. Army reportedly plans to station an active unit inside the United States beginning in October. The deployment marks the first time that an active military team has been given orders to serve as an on-call response unit in times of emergency.

According to media sources, the Third Infantry Division’s 1st Brigade Combat Team has spent 35 of the last 60 months in Iraq, but now the unit is training for domestic operations. The unit will soon be under the day-to-day control of U.S. Army North, the Army service component of Northern Command…..

Can any of you say Martial Law or hear the sound of jack-boots yet?

Speaking of Martial Law, Mr. Kirby is not alone in sounding the threat.


The Economicrot blogspot notes:

The plans to implement martial law in America have been taking shape for decades, hidden behind "Continuity of Government" contingency planning. Now, with public outcry over the banker bailout bill at fever pitch, all of the pieces are in place for the U.S. Army to start policing American citizens.

I have little doubt this economic crisis, if it continues to spiral out of control, will be used as the basis for Martial Law implementation. Additionally, regardless of my 21 years of honorable military service (USAF Retired), I will likely be one of those identified as a domestic terrorist - due to this Blog and my non conformist viewpoints against our banker/corporation controlled government...

To the author of Economicrot: You won't be alone friend. Togakure has nothing to lose, and everything to gain, by speaking the truth, no matter what happens.

As I said earlier, the People, at all times, have the power, even if they choose not to exercise it. Not even the awesome might of the U.S. Military can withstand it.

To my fellow government officials, police officers, and military serivcemen, who are reading this blog, understand that you have a DUTY to defend the Constitution from all enemies, foreign and domestic, and you will be called to fulfill that obligation at some point in the future. If you have evidence of your superiors violating the Constitution, and plotting against this nation, it is your duty to speak out and share what you know with as many people as possible. Guilty parties can only bring their plans to fruition if good people like you do nothing.

While International Bankers think that the American People will simply roll over and accept the fact that their government has sold them into debt bondage, and that Martial Law will aid in their efforts to collect on their payments, I would suggest that they think again, as any such unlawful and unconstitutional attempt will meet with justified violent resistance and failure. I have faith that many in government are true patriots who will, when the time comes, side with their brothers and sisters to arrest, try, and imprison the traitors who have brought our country to this dire predicament.

See Argentina as an example of how the will of the people, once angered, cannot be ignored.


4) Conclusion.


Dear Reader,

These are my speculations... I don't claim to be 100% accurate or correct about this issue. However, when one looks at the totality of the evidence, it becomes very plausible that our nation is headed in this direction.

I've often said that feminism is a symptom of a greater illness. And this crisis we find ourselves in is another manifestation of that sickness.

Cheap money and credit, and the overreach of government are also symptoms... they are not the root causes of our suffering.

The true illness that our Republic suffers from is a breakdown of our moral fiber, and the disregard of the Universal principles that lead to liberty, prosperity, and success.

A nation that harbors a "something for nothing" mentality, belittles those who exercise self control and self restraint, that murders children on demand, that fails to uphold the Universal Principles of justice and fairness, or that grants special rights instead of upholding Equal Rights cannot and will not maintain political, economic, or cultural supremacy. This has been the inescapable truth since Ancient Kemet, Classical Greece, Old Rome, and other civilizations that rose and fell on their adherence to, or estrangement from, the laws that govern creation and everything in it.

What Principles are these? Pick up a Bible. Or look in the works of Aristotle. Study the wisdom teachings of Kemet. Read the words of the Founding Fathers. Consult the Confucian Analects. Read works by Adam Smith, or Ludwig von Mises. Listen to seminars given by Napoleon Hill, Earl Nightingale, and others. Ponder the words of the Buddha.

The Principles have been phrased and rephrased by numerous Men of Old. They are not hard to find, if one earnestly seeks them out.

Unless and until we return to the fundamental principles that ensure peace, prosperity, freedom and justice, we will continue our downward spiral into irrelevancy. Success and failure is an effect, and not a cause. Doing the right things will lead to success. Doing the wrong things will lead to failure. It's really that simple.

The future has yet to be finalized... and I continually hope that the People will finally wake up from their slumber, recognize the power they possess, and take the necessary actions to confront and defeat the monsters of tyranny, injustice, and fear.

It's not an impossible task. What's done can be undone. What has been destroyed can be re-created. But first, one must believe as strongly in their right to be free, as much as the bad guys believe they have the right to dominate the entire world.

Time is running out.

Toku.