The Derivatives Beast is still very much alive.  The gnomes who created and then fed this Beast are also very much alive and well and demanding BONUSES while taking our tax dollars.  AIG is giving these guys, the ones in the derivatives division, huge bonuses as a reward for creating this infinite money system that is now an immense, churning vortex of destruction that destroyed the solvent parts of AIG and is now destroying not just all money but all trade and maybe, many countries.  Arrest everyone involved in this mess!  


A.I.G. Planning $100 Million in Bonuses After Huge Bailout –

 Despite being bailed out with more than $170 billion from the Treasury and Federal Reserve, the American International Group is preparing to pay about $100 million in bonuses to executives in the same business unit that brought the company to the brink of collapse last year.An official in the Obama administration said Saturday that Treasury Secretary Timothy F. Geithner had called A.I.G.’s government-appointed chairman, Edward M. Liddy, on Wednesday and asked that the company renegotiate the bonuses.


Rewarding failure always works!  HAHAHA.  It is like giving a bonus to house builders who build a house that falls down, burns and then sets the entire city on fire.  This is why rescuing criminals is stupid.  They should be arrested.  The criminal organization, AIG, pretended to be an insurance company but was really feeding the Derivatives Beast.  Anyone feeding this monster should be punished.


The Derivatives Beast is NOT vanishing at all.  It is still growing, believe it or not!  When our government discovered, at the collapse of Lehman Brothers, that this Beast eats wealth, they decided, very foolishly, to see if feeding it and allowing the gnomes who created it to continue feeding it, would save us.  This obviously isn’t working at all.


I was at the House hearings about the very first major bail out bill.  Everyone was scared, the government might not bail out the gnomes.  But when the GOP made a ruckus about giving the gnomes more tax cuts, they all smiled.  They knew they won.  They would get both tax cuts AND a bail out.  Now, we are going to hell in a Gucci pocketbook.  And no one wants to pay the price.  Giving gnomes bonuses for creating and feeding the Derivatives Beast is PURE INSANITY.

Administration officials said they had managed to reduce some of the bonuses but had allowed most of them to go forward after the company’s chief executive said A.I.G. was contractually obligated to pay them.


Legalized theft!  Did Congress try to pass laws, outlawing this sort of thing?  Namely, if one has to be bailed out by the US taxpayers, ALL CONTRACTS ARE VOID.  All the employees are open to being fired.  All executives should be arrested.  If they are so careless, stupid or greedy and cause a situation that endangers our nation so badly, they are traitors and thus, should be arrested.  


Madoff has nearly a billion dollars in assets and he carefully put everything in his creepy, criminal wife’s name so he could pretend she owned everything he got via criminal fraud.  Therefore, she can keep the loot he gave her!  This is why confiscation and arrest of anyone connected to these crimes is necessary.  100 years ago, the courts knew that married couples who went bankrupt were one economic entity and everything was confiscated all the way down to the children’s toys. 


One of my ancestors ended up like this and the sheriff decided to let the child keep her dolly.  But the point is, you go bankrupt and lose things but you are free to start over again.  200 years ago, you went to prison just for going bankrupt!  Here we are, with criminals being allowed to keep their loot if they pass it on to other Mafia family members, for example.  But if you make a few dollars, dealing illegal drugs, the government confiscates all property, no matter how little the profit.  Why can’t we do this with multi-billionaires who are cheats, frauds and criminals?


Wall Street Scores A Moral Victory –

Wednesday was a moral victory for Wall Street.


HAHAHA!  Since when is gambling ‘moral’? At least our ancient ancestors knew this was gambling.  They did this in coffee houses, outside on the non-city side of the Wall—incidentally, this is how Wall Street began: gambling outside the city limits, using a big oak tree as the gathering spot!  


Anyway, since when is a rising stock market ‘moral’?  It makes no sense at all.  And this is no ‘victory’, either.  A victory comes when you win a battle.  We are in a life and death battle with the Derivatives Beast and It is winning!  No doubt about that!


Stocks went up on the expectation the US will find some way of increasing our collective debts even more than before.  At the G20 meeting, all our trade rivals there were focused on only one thing: restarting the unbalanced trade we had for the last 35 years so they could profit while we go deeper into debt!  


All markets expect the explosion in US government spending, US government bail outs of the gnome community, to restart unbalanced trade so we can spend, spend, spend our way to victory.

The major indexes only made slim advances, but the market was able to hold on to Tuesday’s substantial gains. The Dow Jones industrial average ended trading on Wednesday essentially flat, up 0.1%, or 3.91 points, to 6,930.40.


Buffett Loses Sterling Credit Rating –

For decades, one of the brightest banners to fly above Warren Buffett’s castle was his company’s AAA credit rating, one of a handful in the United States. In his annual letter to shareholders he bragged that Berkshire Hathaway‘s credit was “pristine.” But the financial crisis is laying siege to even the mightiest balance sheets.


Buffet tried to pretend, he could sail merrily above the Vortex and not be touched by it.  He would have the Midas Touch which turns garbage into gold!  But, as usual, gold remains gold while anything that was fool’s gold turns back into garbage when the Goddess of Depression undoes all the magic spells.  


We were ‘enthralled’ by the thrilling magical moves that created all the illusions of wealth.  We thought, all we have to do is emulate this magician guy and we will be wealthy, too!  It didn’t work, of course.  Once the US decided to experiment with the process of lying about economic fundamentals, all economic systems, schemes and ploys that sprang up due to this manipulation, would collapse when the US itself, hit the bankruptcy wall.


Our nation is basically bankrupt.  We have patched none of the systems that are bankrupting us.  The Derivatives Beast is as powerful this year as last year.  The Pentagon is sucking down even more money this year compared to last year.  The US social obligations are increasing.  Taxes are collapsing.  Handing out tax rebates are climbing.  The US consumer is seen as our savior, not as a destructive force.


Buffet needs a sane economic system which he might be able to exploit to gain small profits.  Instead, he plays with a system that is set to go to infinity, fast.  Now that it is temporarily playing in a minor key and is reducing wealth, his own wealth is shown to be just as precarious as all the other gnomes.  He is, after all, just one more gnome in this army of grasping gnomes.  Below is a video of him talking to MBA graduates back in the halcyon years of 2007, in May, when the stock market was roaring to its last high:


YouTube – Warren Buffett MBA Talk – Part 1—May, 2007



Global Derivatives Market Now Valued at $1.14 Quadrillion!

The Bank of International Settlements, which seems to be the only institution that tracks the derivatives market, has recently reported that global outstanding derivatives have reached 1.14 quadrillion dollars: $548 Trillion in listed credit derivatives plus $596 trillion in notional/OTC derivatives.


Here is an example of the Goddess of Infinity at work:

See how easy it is to create 100 trillion dollars?  You just add lots and lots of zeros!  Bingo.  Magical, isn’t it?  We already saw the dollar lose over 90% of its value vis a vis what it was worth in 1900.  Much of this loss was in the last 35 years.  The more we cling to the system launched by Nixon and Burns in 1974, the faster we add zeros to everything.  These many trillion dollars this and trillion dollars that is just a bunch of zeros added onto things that don’t need them in the first place.
We do this devaluation because we are driving up our debts and paying debts with ever-worthless dollars is what all dead beats use to beat the system.  Borrow in one form of money and then pay it all back with cheaper money is an old trick.  This is why we have interest rates: somehow, the savers have to make some profit or they won’t save.
People are not saving, of course.  Why save if your money is debased even with interest rates?  Indeed, the savings interest rate is now approaching 0%.  People are buying gold.

US Mint Discontinues Fractional Gold Coins

Production of United States Mint American Eagle Gold Proof and Uncirculated Coins has been temporarily suspended because of unprecedented demand for American Eagle Gold Bullion Coins. Currently, all available 22-karat gold blanks are being allocated to the American Eagle Gold Bullion Coin Program, as the United States Mint is required by Public Law 99-185 to produce these coins “in quantities sufficient to meet public demand . . . .” The United States Mint will resume the American Eagle Gold Proof and Uncirculated Coin Programs once sufficient inventories of gold bullion blanks can be acquired to meet market demand for all three American Eagle Gold Coin products. Additionally, as a result of the recent numismatic product portfolio analysis, fractional sizes of American Eagle Gold Uncirculated Coins will no longer be produced.

The price of gold nearly hit $1,000 again.  When it rests at above $1,000 an ounce, this is a signal that our currency has to remove at least 2 zeroes from its paper currency.  1,000,000,000,000,000 which is a trillion becomes 10,000,000,000,000 which is only 10 billion.  The Derivatives Beast is over a quadrillion dollars.  If we continue debasing the dollar, the zeros become unmanageable.  Japan, for example, tries to have about 100 yen to the dollar so in yen, things are even worse when we try to calculate things.  As all currencies are devalued, the proliferation of zeros becomes a total menace.


This is because we can barely handle large number concepts.  Emotionally, we would all love to be trillionaires.  My computer’s dictionary has a word for millionaires and billionaires but no word for trillionaires!  Yet, anyone buying a loaf of bread in Zimbabwe has to be, by definition, a trillionaire!


If this keeps up, we will have to invent the word, ‘quazillionaire’ and ‘quintillionaire’ and notice how the words are getting unwieldy?  Billionaire is bad enough.  ‘Quantzillionaire’ sounds like an exotic jungle bird!  Once we pass this level after adding one three more zeroes, what next?  The need to invent and then disseminate new words to describe increasing numbers of zeroes is an immense mental problem.


Astronomers dealt with this problem, for example, by using time, not miles, to describe celestial distances.  They use light years.  Each light minute has a huge number of human miles which is a distance spanned by our ancestors,  usually, the distance between most villages, set to an arbitrary number over the course of several thousand years.


To cope with the vastness of the entire universe meant using this human foot-traffic sum and then giving it a neat name, light years being easy to remember and write, and then using it.  Even with this increase in measuring scales, when we talk about distant galaxies, they are far back in time!  Even so, the light year scale doesn’t go up to infinity.


The Universe is under 100 billion light years across.  It is right at the threshold of a trillion light years.  Even so, when Carl Sagan talked about these matters, everyone made fun of him using immense numbers.  Do buy his most excellent book, ‘Billions & Billions.’  


As a currency is debased, zeros proliferate.  Not only is the Derivatives Beast a creator of infinite zeroes, the nature of our floating currency tends to drift to zeroes growing rapidly, too.  In 1907 dollars, the Derivatives Beast would diminish in size by over 90%!


In Zimbabwe. to buy a loaf of bread requires over 100 trillion ZD.  We, too, have too many zeroes and we now have a banking system that is ZIRP.  This is 0% interest while adding zeroes to the currency!  So zeroes begin to proliferate at the opposite end of the financial spectrum.  Everyone tries to pay off their debts with debased dollars.  This makes it look like people are saving money but they are not.  They are clawing their way out of debt, as fast as possible


World Bank Says, Fix Banks First. Uh-Oh. — Seeking Alpha

The World Bank threw its two cents worth into the debate about what the G-20 needed to focus on. Robert Zoellick, the President, says it’s the banks, stupid.

“Stimulus packages alone are not enough,” the World Bank president said. “The International Monetary Fund research of some 122 financial and economic crises shows that turnaround can’t happen unless you clean up the bad assets and recapitalise the banks.”

This is one thing that I suspect Europe and the U.S. may well be able to agree upon. They both will roundly disregard this advice and proceed along their merry way, the Europeans pushing for a king to regulate the entire system and the Americans for more irresponsible spending.


Here is my own comment at Seeking Alpha:

Ah, sovereignty! Who gets to be the next floating currency fiat issue? Obviously, it is now going to be China. This is why a gold-based international trade resolution system is much more stable. Yes, there are still bubbles and downturns but modern regulatory systems such as the ones set up during the Great Depression can easily cope with this. Having international regulatory rules coupled with a gold-based system of international trade resolutions will prevent dysfunctional trade such as we have today with the US, during a global trade collapse, STILL running a trade deficit which is still nearly $40 billion A MONTH. Not a year, a month!

While our government celebrates this reduction in our debit rate, this is still unsustainable. The G20 know perfectly well, this is not a banking collapse but rather, a collapse of the US fiat floating dollar trade system. And NONE of the G20 want to change this system since all benefit from it. They want to restart it so we run a trillion dollar trade deficit again!





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  2. If you ever want to read a reader’s feedback 🙂 , I rate this article for four from five. Detailed info, but I just have to go to that damn yahoo to find the missed parts. Thanks, anyway!

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