Wednesday, April 30, 2014

GDP Shocker: US Economic Growth Crashes To Just 0.1% In Q1.........ANOTHER PESKY FACT!

GDP Shocker: US Economic Growth Crashes To Just 0.1% In Q1

Despite consensus at 1.2% growth Quarter over Quarter, the "weather" destroyed the fragile stimulus-led economy of the US which managed only a de minimus +0.1% QoQ growth (the lowest since Q1 2011).  Spending on Services, however, surged by the most since 2000 - heralded as great news by some talking heads - but is merely a reflection of the surge in healthcare and heating costs (imagine if it had not been cold and if Obamacare hadn't saved us). 

As a reminder - this is the growth that is occurring as QE has run its course, as stimulus ends, and as escape velocity nears... if the "weather" can do this much damage to the US economy, should stocks really be trading at the multiple of exuberant future hope that they are?



The full breakdown of GDP components:

Suspicious Deaths Of Bankers Are Now Classified As "Trade Secrets" By Federal Regulator.....DO NOT MISS THIS!

Suspicious Deaths Of Bankers Are Now Classified As "Trade Secrets" By Federal Regulator

It doesn't get any more Orwellian than this: 

Wall Street mega banks crash the U.S. financial system in 2008. Hundreds of thousands of financial industry workers lose their jobs. Then, beginning late last year, a rash of suspicious deaths(14 DEATHS SO FAR)  start to occur among current and former bank employees.  

Next we learn that four of the Wall Street mega banks likely hold over $680 BILLION face amount of life insurance on their workers, payable to the banks, not the families. 

We ask their Federal regulator for the details of this life insurance under a Freedom of Information Act request and we're told the information constitutes "trade secrets."

According to the Centers for Disease Control and Prevention, the life expectancy of a 25 year old male with a Bachelor's degree or higher as of 2006 was 81 years of age. But in the past five months, five highly educated JPMorgan male employees in their 30s and one former employee aged 28, have died under suspicious circumstances, including three of whom allegedly leaped off buildings – a statistical rarity even during the height of the financial crisis in 2008.

There is one other major obstacle to brushing away these deaths as random occurrences – they are not happening at JPMorgan's closest peer bank – Citigroup. Both JPMorgan and Citigroup are global financial institutions with both commercial banking and investment banking operations. Their employee counts are similar – 260,000 employees for JPMorgan versus 251,000 for Citigroup.

Bank-Owned Life Insurance - BOLI'

A form of life insurance purchased by banks where the bank is the beneficiary, and/or owner. This form of insurance is a tax shelter for the administering bank, as it is a tax-free funding scheme for employee benefits.

Both JPMorgan and Citigroup also own massive amounts of bank-owned life insurance (BOLI), a controversial practice that pays the corporation when a current or former employee dies. (In the case of former employees, the banks conduct regular "death sweeps" of public records using former employees' Social Security numbers to learn if a former employee has died and then submits a request for payment of the death benefit to the insurance company.)

Wall Street On Parade carefully researched public death announcements over the past 12 months which named the decedent as a current or former employee of Citigroup or its commercial banking unit, Citibank. We found no data suggesting Citigroup was experiencing the same rash of deaths of young men in their 30s as JPMorgan Chase. Nor did we discover any press reports of leaps from buildings among Citigroup's workers.

Given the above facts, on March 21 of this year, we wrote to the regulator of national banks, the Office of the Comptroller of the Currency (OCC), seeking the following information under the Freedom of Information Act (See OCC Response to Wall Street On Parade's Request for Banker Death Information):

The number of deaths from 2008 through March 21, 2014 on which JPMorgan Chase collected death benefits; the total face amount of BOLI life insurance in force at JPMorgan; the total number of former and current employees of JPMorgan Chase who are insured under these policies; any peer studies showing the same data comparing JPMorgan Chase with Bank of America, Wells Fargo and Citigroup.

The OCC responded politely by letter dated April 18, after first calling a few days earlier to inform us that we would be getting nothing under the sunshine law request. (On Wall Street, sunshine routinely means dark curtain.) The OCC letter advised that documents relevant to our request were being withheld on the basis that they are "privileged or contains trade secrets, or commercial or financial information, furnished in confidence, that relates to the business, personal, or financial affairs of any person," or  relate to "a record contained in or related to an examination."

The ironic reality is that the documents do not pertain to the personal financial affairs of individuals who have a privacy right. Individuals are not going to receive the proceeds of this life insurance for the most part. In many cases, they do not even know that multi-million dollar policies that pay upon their death have been taken out by their employer or former employer. Equally important, JPMorgan is a publicly traded company whose shareholders have a right under securities laws to understand the quality of its earnings – are those earnings coming from traditional banking and investment banking operations or is this ghoulish practice of profiting from the death of workers now a major contributor to profits on Wall Street?  WHO COULD EVEN IMAGINE A SICK SITUATION LIKE THIS?

As it turns out, one aspect of the information cavalierly denied to us by the OCC is publicly available to those willing to hunt for it. On March 24 of this year, we reported that JPMorgan Chase held $10.4 billion in BOLI assets at its insured depository bank as of December 31, 2013.

We reached out to BOLI expert, Michael D. Myers, to understand what JPMorgan's $10.4 billion in BOLI assets at its commercial bank might represent in terms of face amount of life insurance on its workers. Myers said: "Without knowing the length of the investment or its rate of return, it is difficult to estimate the face amount of the insurance coverage.  However, a cash value of $10.4 billion could easily translate into more than $100 billion in actual insurance coverage and possibly two or three times that amount" said Myers, a partner in the Houston, Texas law firm McClanahan Myers Espey, L.L.P.

Myers' and his firm have represented the families of deceased employees for almost two decades in cases involving corporate-owned life insurance against employers such as Wal-Mart Stores, Inc., Fina Oil and Chemical Co., and American Greetings Corp. (Families may be entitled to the proceeds of these policies if employee consent was required under State law and was never given and/or if the corporation cannot show it had an "insurable interest" in the employee — a tough test to meet if it's a non key employee or if the employee has left the firm.)

As it turns out, the $10.4 billion significantly understates the amount of money JPMorgan has tied up in seeking to profit from workers' deaths. Since Wall Street banks are structured as holding companies, we decided to see what type of financial information might be available at the Federal Financial Institutions Examination Council (FFIEC), a federal interagency that promotes uniform reporting standards among banking regulators.

The FFIEC's web site provided access to the consolidated financial statements of the bank holding companies of not just JPMorgan Chase but all of the largest Wall Street banks. We conducted our own peer review study with the information that was available.

Four of Wall Street's largest banks hold a total of $68.1 billion in BOLI assets. Using Michael Myers' approximate 10 to 1 ratio, that would mean that over time, just these four banks could potentially collect upwards of $681 billion in tax free income from life insurance proceeds on their current and former workers. (Death benefits are received tax free as is the buildup in cash value in the policies.) The breakdown in BOLI assets is as follows as of December 31, 2013:

Bank of America    $22.7 billion

Wells Fargo             18.7 billion

JPMorgan Chase      17.9 billion

Citigroup                   8.8 billion

In addition to specifics on the BOLI assets, the consolidated financial statements also showed what each bank was reporting as "Earnings on/increase in value of cash surrender value of life insurance" as of December 31, 2013. Those amounts are as follows:

Bank of America   $625 million

Wells Fargo           566 million

JPMorgan Chase    686 million

Citigroup                     0

Given the size of these numbers, there is another aspect to BOLI that should raise alarm bells among both regulators and shareholders. The Wall Street banks are using a process called "separate accounts" for large amounts of their BOLI assets with reports of some funds never actually leaving the bank and/or being invested in hedge funds, suggesting lessons from the past have not been learned.

On May 20, 2008, Bloomberg News reported that Wachovia Corp. (now owned by Wells Fargo) and Fifth Third Bancorp reported major losses on failed gambles with BOLI assets. "Wachovia reported a $315 million first-quarter loss in its bank-owned life insurance program, known as BOLI, because of investments in hedge funds managed by Citigroup Inc. Fifth Third said in a lawsuit filed last month that it had losses of $323 million from Citigroup's Falcon funds, which slumped more than 50 percent in the past year as the subprime market collapsed." Citigroup's Falcon Strategies hedge fund had lost as much as 75 percent of its value by May 2008.

Following are the names and circumstances of the five young men in their 30s employed by JPMorgan who experienced sudden deaths since December along with the one former employee.

Joseph M. Ambrosio, age 34, of Sayreville, New Jersey, passed away on December 7, 2013 at Raritan Bay Medical Center, Perth Amboy, New Jersey. He was employed as a Financial Analyst for J.P. Morgan Chase in Menlo Park. On March 18, 2014, Wall Street On Parade learned from an immediate member of the family that Joseph M. Ambrosio died suddenly from Acute Respiratory Syndrome.

Jason Alan Salais, 34 years old, died December 15, 2013 outside a Walgreens inPearland, Texas. A family member confirmed that the cause of death was a heart attack. According to the LinkedIn profile for Salais, he was engaged in Client Technology Service "L3 Operate Support" and previously "FXO Operate L2 Support" at JPMorgan. Prior to joining JPMorgan in 2008, Salais had worked as a Client Software Technician at SunGard and a UNIX Systems Analyst at Logix Communications.

Gabriel Magee, 39, died on the evening of January 27, 2014 or the morning of January 28, 2014. Magee was discovered at approximately 8:02 a.m. lying on a 9th level rooftop at the Canary Wharf European headquarters of JPMorgan Chase at 25 Bank Street, London. His specific area of specialty at JPMorgan was "Technical architecture oversight for planning, development, and operation of systems for fixed income securities and interest rate derivatives." A coroner's inquest to determine the cause of death is scheduled for May 20, 2014 in London.

Ryan Crane, age 37, died February 3, 2014, at his home in Stamford, Connecticut. The Chief Medical Examiner's office is still in the process of determining a cause of death. Crane was an Executive Director involved in trading at JPMorgan's New York office. Crane's death on February 3 was not reported by any major media until February 13, ten days later, when Bloomberg News ran a brief story.

Dennis Li (Junjie), 33 years old, died February 18, 2014 as a result of a purported fall from the 30-story Chater House office building in Hong Kong where JPMorgan occupied the upper floors. Li is reported to have been an accounting major who worked in the finance department of the bank.

Kenneth Bellando, age 28, was found outside his East Side Manhattan apartment building on March 12, 2014.  The building from which Bellando allegedly jumped was only six stories – by no means ensuring that death would result. The young Bellando had previously worked for JPMorgan Chase as an analyst and was the brother of JPMorgan employee John Bellando, who was referenced in the Senate Permanent Subcommittee on Investigations' report on how JPMorgan had hid losses and lied to regulators in the London Whale derivatives trading debacle that resulted in losses of at least $6.2 billion.


Home Ownership Rate Plunges To 19 Year Low.....ANOTHER PESKY FACT!

Home Ownership Rate Plunges To 19 Year Low

The US recovery summarized in a nutshell: nobody can afford to buy anymore, so everyone is forced to rent. The result: homeownership rate plunging to 19 year lows, while median asking rents just soared to a new all time high. Thank you Ben Bernanke for the "New Normal American Dream."


Tuesday, April 29, 2014

Not Even the US Government Wants US Dollars..........AMAZING!

Not Even the US Government Wants US Dollars

For more than 100 years, the US government has been receiving a royalty and tax revenue paid on the amount of oil or natural gas produced on American soil—a fee that was paid in US dollars. Bill 138 has changed this forever.

Instead of Alaska receiving its dues in US dollars, the state legislature has decreed through Bill 138 that the state will be paid "in kind." In other words, the state will be getting its share of royalty and tax revenue in natural gas instead of US dollars.

The Dollar Is Under Siege

Vladimir Putin's plan is to circumvent the dollar in global trade. He, together with China, is making alarming progress toward undermining the dollar's hegemony and all of the vast advantages the US Empire enjoys because of it.

The US government, of course, has a long history of protecting the dollar's dominance and won't let its special privileges go easily. 


First let's take a peek at the fate of three other prominent figures who dared to challenge king dollar:

September 2000—Saddam Hussein proclaims that he will sell Iraq's oil for euros instead of dollars.

March 2003—The United States invades Iraq. Nine months later, US forces find Hussein hiding in a spider hole.

December 2006—Hussein is hanged.


Late 2010—Muammar Gaddafi calls on African and Muslim nations to create a new gold-backed currency called the dinar to challenge the dollar.

March 2011—A coalition of Western countries attacks Libya.

October 2011—Gaddafi is either beaten or shot to death, depending on which report you believe.


February 2011—Dominique Strauss-Kahn, managing director of the International Monetary Fundcalls for a new world currency to challenge the dominance of the US dollar.

May 2011—A maid at the Sofitel Hotel in New York accuses Strauss Kahn of sexually assaulting her.
Strauss-Kahn loses his position at the IMF. 

Russia and China, of course, are no Iraq and Libya.


Is World War III On The Horizon?

Russia and China are becoming closer thanks to the incompetent Obama administration and their insane policies behind the NSA that have left America trying to find friends in a dark hour. 

The sanctions being imposed on Russia have sent China into its camp. The USA is finding it increasingly more difficult to be the bully in the school-yard. 

No former administration has ever acted with such arrogance and blind stupidity as the Obama Administration is. 

The net result is to empower Russia and to inspire a new dynamic-duo of Russia-China against the USA. China supported Russia, when Western countries launched an anti-Russian campaign. With both of their economies turning down, sanctions will be very damaging. All this policy is doing is re-enforcing Putin and placing him in the position where he must become more aggressive or seem weak in the shadow of Obama.

In keeping with the idea that the West/America plotted the fall of the Soviet Union as a covert plot rather than the economic collapse of Communism, feeds directly into the idea that the majority of people see whatever happens to them as a victim of someone else rather than the consequences of their own stupidity. Putin's statements that the fall of the Soviet Union was the greatest tragedy of the 20th Century is gaining momentum in Russia.

There is now talk of Mikhail Gorbachev being put on trial. Gorbachev was the last president of the USSR and the proposition to bring him to trial for the collapse of the Soviet Union is being bantered about. This is part of the propaganda machine to enrage the people to justify the invasion of at least Eastern Europe. Putting Gorbachev on trial will be an indictment of the West and further the conspiracy theory that it was a plot and not economics.

The Prime Minister Dmitry Medvedev delivered a well received speech in the Duma in Russia demonstrating the rise in power and determination of the New Russia. He stated regarding trade how the West suppressed Russia. "For 17 years, we were actually kept in the hallway, where we argued that we deserved the right to enter the world trading community, that we meet its standards. Now we have a full right to demand other WTO member countries should observe the regulations with respect to Russian goods."  SOUNDS A LOT LIKE GERMANY BELLY ACHING ABOUT BEING PUNISHED FOR WWI, PRIOR TO WWII!

The treatment of Russia by the Obama Administration has been appalling to say the least even before Crimea. The policies that are in place and the thinking is so outdated built around an ego of self-centered aggrandizement, it is hard to see how this cannot lead to any place other than armed conflict. The people should have decided this issue, not politicians. That should have been the serious solution just as East Germany was given back to the West. Failing to reach such a negotiated settlement allowing for real free elections has led to this confrontation with no escape. 

Both sides now have their backs against the wall and neither will back down fearing this will be a sign of political weakness.

Putin is playing into the conspiracy of a victim – not that Russia fell because of economics. This is going over very well internally and this is the serious danger, the seeds of war have been spread and sadly are growing.

Here's How Much Russia Controls Of The World's Most Important Commodities.........A GRAVE ECONOMIC DANGER!

Here's How Much Russia Controls Of The World's Most Important Commodities

Many are watching the geopolitical tension between Russia and Ukraine closely.

This is because Russia is a major commodities producer in terms of energy, metals and mining, and agriculture, and investors are worried about the impact this could have on the prices of various commodities. Russia produces 13% of global oil output and 14% of global natural gas output.

Of course the international community is also considering more sanctions on Russia.

"The importance of Russian energy flows to both Russia (via state revenues) and the US and Europe (via potential impacts on growth and inflation). 

Monday, April 28, 2014

The Fed Takes Our Money, Gives It to Banks, Who Then Loan It Back to Us At A Huge Profit.....

The Fed Takes Our Money, Gives It to Banks, Who Then Loan It Back to Us At A Huge Profit

What can we say about the Federal Reserve's policies that hasn't been said a million times? How about simplifying the two primary purposes of Fed policies? 

The Fed's money creation has leveraged a global bubble in assets. At 72-to-1 leverage, the Fed's $3.3 trillion money expansion has generated inflation as well as asset bubbles, though the Fed and its cronies deny both.

Inflation is the Fed's explicit, stated goal. The Fed wants prices to go up because that raises GDP (gross domestic product) and makes debt cheaper to service every year.

But alas, real income isn't keeping pace--it's declining. Median household income is down 7% since 2000, but if we strip out the top 1% households, the decline for the bottom 99% would be more than 7%. And if we strip out the top 10% households, the decline of the bottom 90% of households is much more than 7%.

Household income for the bottom 90% has been stagnant for four decades:

So the Fed is robbing primarily those in the middle, and everyone else of the purchasing power of their money as a matter of policy. In simple terms, the Fed is stealing purchasing power and delivering the stolen wealth to the financiers and banks, who borrow money from the Fed for near-zero rates of interest.

And what do the banks do with the money the Fed stole from us? They loan it back to us at high rates of interest, for an easy profit. Those of us who haven't just emerged from bankruptcy get offers from banks on a weekly basis: for transfers of credit card debt, new credit cards, cash advances, auto loans, home equity lines of credit, you name it.

A recent offer from a Too Big to Fail bank offered a teaser rate of 0% for a few months, after which the credit card's interest rate reverted to 16%.

This is how the Fed rebuilds the TBTF banks' insolvent balance sheets: it strips purchasing power from wage earners and savers and gives the banks free money which they loan to debt-serfs for somewhere between 5% and 24%, depending on the length of the loan and the collateral (or lack thereof).

In essence, the Fed steals our wealth, transfers it to the banks who then loan our money back to us at high rates.

The Fed implicitly claims (and many foolishly believe the propaganda) to be the ultimate financial power in the Universe:

If the Fed really is so powerful, why is it so cowardly and fearful that it has to cloak its theft of our money and its transfer of the wealth to the banks? What's it so afraid of? 

Taxes Around The World.........A GREAT GRAPHIC!

Taxes Around The World

A look at taxing around the globe, including what people pay and some of the more bizarre taxes around the world.
Taxes Around the World


Sunday, April 27, 2014

Trusting His Love to Provide..........

Trusting His Love to Provide

"And they that know Thy name will put their trust in Thee: for Thou, Lord, hast not forsaken them that seek Thee."

                      Psalm 9:10

After World War II, a group of humanitarians placed orphan boys in tent cities to care for them. But the boys would wake up in the night from nightmares. A psychiatrist surmised that their fear was because they had such an uncertain future.

He decided to feed the boys a big meal each night, then give them each a piece of bread. He instructed them to hold the bread in their hands so it could be their breakfast. Somehow just holding in their hand a piece of bread helped them to sleep all night.

When you go to bed tonight, I want you to have bread-not in your hand, but in your heart. He is the Bread of Heaven and His name is Jesus!

Take a walk with the Lord today. Tell Him your fears. Confidently place them before the Lord. 

Trust in His love to provide!

New Life, a New Creation in Christ...........

New Life, a New Creation in Christ

"For with Thee is the fountain of life: in Thy light shall we see light."

                                                                                                     Psalm 36:9

Jesus had a life that the grave could not keep. While He carried your sins to the grave and left them there, Jesus came out of that grave living, risen, and victorious!

When Jesus rose, you rose with Him. Christians are not just nice people, they are new creatures. We have the same power that raised Jesus Christ from the dead. We have come out of the grave of the old life. Our old master has no more hold on us. The old debt has no more penalty that we have to pay.

When Jesus came out of that grave, we came out with Him and we have been raised to walk in newness of life.

Are you walking around in the grave clothes of your old life? Shed them, my friend! Jesus came to give you new life! Believe that you are now a new creation in Christ!

The Life-Giving Christ........

The Life-Giving Christ

"But these are written, that ye might believe that Jesus is the Christ, the Son of God; and that believing ye might have life through His name."
                                                                                                                                                                                                                                                    John 20:31

The same Jesus who turned water into wine can transform your home, your life, your family, and your future. This same Jesus is still in the miracle working business. His business is the business of transformation.

And when we believe that Jesus is the Christ, we will receive life through His name. Someone has well said that nature forms us, sin deforms us, penitentiary reforms us, education informs us, the world conforms us, but only Jesus transforms us.

What are you asking Christ for today? A miracle? Or for more of Him? Your very next breath is a miracle. Thank God for the miracle of life He has given you today.

The Undeniable, Living Christ...........

The Undeniable, Living Christ
"...we believe and are sure that Thou art that Christ, the Son of the living God." 

                                                                                                                          John 6:69

Jesus Christ is a fact of history. All secular historians who have any merit admit that, regardless of what they believe about Him, Jesus lived! There's no way to explain that the Christian Church exists apart from the fact that Jesus Christ was here.

What did the early church preach? Not only that Jesus was here, but that He walked out of the grave. How do you explain that? Somebody said, "Well, they must have made up the story. They said they touched Him, they said they ate with Him." Oh? We're talking about men who died for their faith. Do you think they would willingly, knowingly die for a lie? A man may live for a lie, but few would die for one.

Are you willing to die for the cause of Christ? 

This man who died for you...are you willing to die for Him?

Moving His Son Into King's Row............

Moving His Son Into King's Row

"Yet have I set my king upon my holy hill of Zion."

                                                                     Psalm 2:6

The kingdoms of this world are being moved around like checkers, but soon God is going to move His Son into King's Row and say, "Crown Him King of kings!"

How many times have you prayed, "Thy kingdom come, Thy will be done on earth, as it is in heaven"?

Do you think God's will is being done on earth as it is in heaven? Look around at the crime, rape, murder, child abuse, and blasphemy. Do you think that's God's will? Of course not.

Do you think Jesus Christ would have taught us to pray a prayer that will not be answered? 

God is going to move Jesus into King's Row and say, "Crown Him King!"

And every eye will see and every knee will bow!

A Great Conflagration Is Coming...........

A Great Conflagration Is Coming

Now I saw heaven opened, and behold, a white horse. And He who sat on him was called Faithful and True, and in righteousness He judges and makes war. 

                                                                                 Revelation 19:11

The late Tom Clancy defined the military-thriller-doomsday genre. Almost all of his twenty novels were bestsellers, and many were made into movies. In all of his novels, the future of the world hangs by a thread as a nuclear, terrorist, military, or other scenario unfolds -- narrowly averted by one of his heroic main characters.

A bigger conflagration than Tom Clancy ever wrote about is coming -- and it is anything but fiction. 

The Bible says that at the end of the age, the nations of the world, led by the Antichrist, will be united in their goal to destroy Israel.

Just as they are about to unleash their destruction, the heavens will part and Jesus Christ will return to save Israel, destroy the Antichrist's armies, and judge the nations. It will not be the first time Israel has been saved from a doomsday scenario, but it will be the last: "And so all Israel will be saved" 

        Romans 11:26 

The Bible also says that seven years prior to Christs final return he will come in the twinkling of an eye to remove his church in the rapture and then the tribulation (seven years of hell on earth) will begin. We are seeing many signs that the days ahead will be unlike any ever seen in the course of history. Many will be unprepared, many will be surprised, many more will be full of regret because they paid no heed to Gods warnings and His Word.

Life is filled with close encounters. But God's promises govern them all. 

Grace is love that cares and stoops and rescues.

Saturday, April 26, 2014




Investing in the lives of others is always more rewarding and far more important than investing in markets!

The Atlantic And Pacific Oceans Are Connected......

The Atlantic And Pacific Oceans Are Connected

Here is a factoid that we have no doubt is widely known among Mountain West residents, but of which the rest of the country is almost certainly unaware: It's possible for a fish to swim directly from the Pacific to the Atlantic without having to dodge Panamax ships in the canal zone.

The area is commonly called Parting Of The Waters.

There's even a point marking the divide, called Two Ocean Pass, located in Wyoming. At this pass the Atlantic Creek (which flows northeast to meet the Yellowstone river) and the Pacific Creek meet (which flows southwest to join the Snake River). The point actually sits directly atop the Continental Divide, where a raindrop has a 50-50 chance of flowing out to the Pacific or down to the Gulf.

Atlantic Creek and the Pacific Creek meet.

It's a bit tricky to follow the full route on Google Maps, but it goes something like this:

Columbia River (Wa.) → Snake River (Ore.) → Teton streams (Wyo.) → Yellowstone Lake (Wyo.) → Yellowstone River (Wyo.) → Missouri River (MT) → Mississippi River and then out to the Gulf of Mexico. 

Here is map:

two ocean pass

The Art of the Insult........SOME VERY CREATIVE WORD SMITHING!

The Art of the Insult

A Member of Parliament to Disraeli: "Sir, you will either die on the gallows or of some unspeakable disease." "That depends, Sir," said Disraeli, "whether I embrace your policies or your mistress."

"He has all the virtues I dislike and none of the vices I admire." – Winston Churchill

I have never killed a man, but I have read many obituaries with great pleasure." Clarence Darrow

"He has never been known to use a word that might send a reader to the dictionary." – William Faulkner (about Ernest Hemingway)

"Thank you for sending me a copy of your book; I'll waste no time reading it." – Moses Hadas

"I didn't attend the funeral, but I sent a nice letter saying I approved of it." Mark Twain

"He has no enemies, but is intensely disliked by his friends." – Oscar Wilde

"I am enclosing two tickets to the first night of my new play; bring a friend, if you have one." – George Bernard Shaw to Winston Churchill.

"Cannot possibly attend first night, will attend second … if there is one." – Winston Churchill, in response.

"I feel so miserable without you; it's almost like having you here." -Stephen Bishop

"I've just learned about his illness. Let's hope it's nothing trivial." -Irvin S. Cobb

"He is not only dull himself; he is the cause of dullness in others." -Samuel Johnson

"He is simply a shiver looking for a spine to run up." – Paul Keating

"In order to avoid being called a flirt, she always yielded easily." – Charles, Count Talleyrand

"His mother should have thrown him away and kept the stork." – Mae West

"Some cause happiness wherever they go; others, whenever they go." – Oscar Wilde

"He uses statistics as a drunken man uses lamp-posts… for support rather than illumination." – Andrew Lang (1844-1912)

"I've had a perfectly wonderful evening. But this wasn't it." – Groucho Marx

Proven Ways To Reduce Stress In Your Life..........

Proven Ways To Reduce Stress In Your Life

Strees, Happify

Friday, April 25, 2014

How many times can so many turn their heads pretending they just doesn’t see? .......AN ABSOLUTE MUST READ!

How many times can so many turn their heads pretending they just doesn't see?

Since the centrally-planned market is so broken it no longer has the capacity to evaluate and respond to any geopolitical threats and shocks, here - lest anyone think that there is nothing to worry about - is a summary of all the simmering, and in some cases, searing and/or scorching geopolitical conflicts and other tensions around the world.

A Litany Of Tensions

Geo-political tensions have ratcheted up a notch recently and are likely to stay elevated throughout the year. Although geo-political risks always exist, current tensions seem particularly elevated compared to the last several decades. They also now come at a time when financial risk assets are priced for economic perfection and in a world has never been more globalized with extensive interconnected supply chains. 

This short article will provide a non-comprehensive list of some of those tensions without going into extensive detail on any of them.

President Obama recently said in Tokyo that the islands in the East China Sea disputed by Japan and China are covered by the US-Japan defense treaty. He is the first sitting US president to acknowledge them as part of the defense alliance.

The comments generated strong criticism in China.

Three days ago, PM Abe sent a traditional offering of a small potted tree to the Yasukuni Shrine to celebrate the annual spring festival. 168 members of parliament also made a group visit to the shrine yesterday. These gestures infuriated China and Korea who believe that Japan is making attempts to paint Japans' brutal wartime behavior in a more positive light.

Hamas and the Palestine Liberation Organization (PLO) signed a pact to form a unity government within five weeks to prepare for elections within six months. Both Hamas and the more radical Islamic Jihad will join the umbrella PLO. Israeli halted all talks.

This move undermines extensive efforts by John Kerry to broker a peace deal. Israel denounced the deal and PM Netanyahu said Abbas (PLO President) turned his back on peace. A PLO spokesman blamed "Israeli intransigence" and "American bias" for the breakdown of peace talks.

Ukraine ordered several more "anti-terror" operations to retake a few eastern cities occupied by pro-Russian forces. The move is partially motivated after forces found the dead and apparently tortured body of a city council official. Several road-blocks were destroyed and seven pro-Russian militants were killed. Ukraine's interim PM said that the red line has been crossed and called on the US and Europe to support his actions and to do more.

Russian officials have responded by launching military exercises on the border. Desiring a Federalist state, Russia has been accused of trying to dispute elections set for May 25,

The war in Syria which began as a revolt against an oppressive regime has morphed into a sectarian war and global ideological conflict. The world is so divided that UN negotiators haven't even been able to even agree on getting emergency supplies to desperate civilians.

The UN estimates that 9.3 million Syrians are in need of humanitarian assistance due to limited access to basic services including health care, water and sanitation. The  UN is also investing new claims of chemical weapons use.

The South Sudan is also in a downward spiral. Some are suggesting that last week's massacre has similarities to what unfolded into Rwanda in 1994. The UN peacekeeping base in the Sudan has swelled to 22,000, creating a public health crisis.

Catalonian President Mas has vowed to bring a referendum on independence from Spain in November – two months after Scotland's independence reference (Sept 18). Catalonia accounts for over 20% of Spain's total output.

In addition, the EU parliamentary elections on May 22 are expected to show gains by extreme parties.

Some other areas of tension: Thailand, Nigeria, Turkey, Venezuela, Ivory Coast, Bolivia, South Africa, Argentina, Brazil, Tunisia, Yemen, Libya, Iraq, Lebanon, Bahrain, Algeria, Pakistan, Moldova, Cyprus, Bosnia and Herzegovina, Greece.

Recent policy changes matter: Fed ending QE; China confronting credit bubble; Japan increasing its VAT; various foreign central banks hiking rates.

Other areas of concern: extreme weather; pollution; cyber-threats and cyber-crime.

Investor complacency is extraordinarily high. 

This is due to several factors: equities are near all-time highs; credit spreads are significantly compressed (yield-seekers); the VIX lumbers along at historic lows; EU sovereign rates and spreads are near historic low levels; and central banks continue to make out-sized promises of  over-accommodation.  WHAT COULD POSSIBLY GO WRONG?

Investors have been asking for over a year "when is the ideal timing for paring risk?" The answer in my opinion is now (the time has been now since January). Crowded trades (due to QE), risk-asset over-weights, lofty valuations, central bank policy pivots, important upcoming elections, compromised market liquidity, and elevated geo-political tensions, collectively suggest that market volatility is set to rise and investor complacency is ill-advised.

"How many times can a man turn his head pretending he just doesn't see?" 

                                          Bob Dylan


'World War III'.

Ukrainian Prime Minister Arseny Yatseniuk said Friday that Russia wanted to start "World War Three" by occupying Ukraine "militarily and politically" and creating a conflict that would spread to the rest of Europe. "The world has not yet forgotten World War Two, but Russia already wants to start World War Three," Yatseniuk told the interim cabinet in remarks broadcast live. "Attempts at military conflict in Ukraine will lead to a military conflict in Europe."

Russia has done nothing to implement Geneva accord
Ukraine will continue to comply with Geneva accord
Ukraine urges Russia to keep promises, condemn extremists
Ukraine calls on international community to unite against Russia,
Russian invasion will turn into Europe-wide conflict, and the punchline:
Russia Wants to Start Third World War

This Means War: US To Target Putin's Personal $40 Billion Stash

While the White House has continually threatened further sanctions against Russia for non-de-escalation, the specifics of the additional sanctions have been sparse. German CEO warnings over blowback from economic sanctions... the "nonsense" of replacing Russian gas with US gas...the Russian warnings of "interdependence" and "boomerangs"... all reduce the West's arsenal of financial sanctions. But, as The Times of London reports,perhaps the US has found a crucial pain point for Putin - a sanctions regime that would target Putin's personal wealth, which includes a reported $40 billion stashed in Swiss bank accounts.

Depositor In Failed Russian Bank Loses It, Takes Hostages, Demands $700,000 Ransom

The Central Bank of Russia announced that starting April 21, it would revoke the license of Moscow's Bank Zapadny. According to reports, "the bank had cooked its books and failed to comply with regulations on the amount of assets a financial organization must maintain to ensure its stability, the central bank said." In other words, your typical FDIC Failure Friday only on Monday morning. Hardly notable. It is what happened next that was shocking. Shortly after the bank shutdown announcement, an armed man took three hostages at a Belgorod branch of precisely this failed Bank Zapadny. Tt appears this may simply be the latest case of a disgruntled bank client taking matters into his own hands.  As RT reports, "he may be a client of the bank wishing to withdraw his deposit despite the bank losing its license.....Life News tabloid says it has identified one of the attackers as 46-year-old Aleksandr Vdovin, a client who holds the bank's promissory notes for a large sum, and who decided to reimburse them at gunpoint."

Furious Russia, Downgraded To Just Above Junk By S&P, Proposes "Scorched Earth" Retaliation Against NATO Countries

Russia should withdraw all assets, accounts in dollars, euros from NATO countries to neutral ones
Russia should start selling NATO member sovereign bonds before Russia's foreign-currency accounts are frozen
Central bank should reduce dollar assets, sell sovereign bonds of countries that support sanctions
Russia should limit commercial banks' FX assets to prevent speculation on ruble, capital outflows
Central bank should increase money supply so that state cos., banks may refinance foreign loans
Russia should use national currencies in trade with customs Union members, other non-dollar, non-euro partners

Ruble Tumbles Despite Russian Rate Hike

The USDRUB rate is back above 36.00 - nearing its record lows - despite a surprise Russian rate hike this morning aimed at stalling the capital outflows. It seems Lavrov's comments that Kiev will face "bloody justice" geopolitical angst is trumping any arbitrage or macro data flows for now. Russian stocks are also fading

Gold Tops $1300 As Russian Rumblings Stumble Stocks

Bonds, Gold, and JPY are bid this morning as US equity futures are fading fast. TheDow and S&P futures are now back below pre-AAPL/FB levels and Nasdaq futures falling fast. Gold is back above $1300 (up over $30 from yesterday's pre-Putin lows). Treasuries, led by the long-end, are rallying as safe-haven bids appear across the whole complex. 30Y yields are down to 3.53 - the lowest since July. JPY is bid once again as USDJPY tests back to the crucial 102 level.

What's The Difference Between Fascism, Communism And Crony-Capitalism?.........DO NOT MISS THIS!

What's The Difference Between Fascism, Communism And Crony-Capitalism?

The essence of crony-capitalism is the merger of state and corporate power--the definition of fascism.

When it comes to the real world, the difference between fascism, communism and crony-capitalism is semantic. Let's start with everyone's favorite hot-word, fascism, which Italian dictator Benito Mussolini defined as "the merger of state and corporate power." In other words, the state and corporate cartels are one system.

Real-world communism, for example as practiced in the People's Republic of China, boils down to protecting a thoroughly corrupt elite and state-owned enterprises (SOEs). The state prohibits anything that threatens the profits (and bribes) of SOEs--for example, taxi-apps that enable consumers to bypass the SOE cab companies.

What A Ban On Taxi Apps In Shanghai Says About China's Economy

The Chinese mega-city of Shanghai has been cracking down on popular taxi-booking apps, banning their use during rush hour. Until the apps came along, the taxi companies, which are government owned, set the real price for fares and collected about 33 cents each time someone called for a cab. That can add up in a city the size of Shanghai. Wang says the apps bypassed the old system and cut into company revenues.

Much has been made of China's embrace of capitalism, but — along with transportation — the government still dominates key sectors, including energy, telecommunications and banking. Wang says vested government interests won't give them up easily.

How else to describe this other than the merger of state and corporate power? Any company the state doesn't own operates at the whim of the state.

Now let's turn to the crony-capitalist model of the U.S., Japan, the European Union and various kleptocracies around the globe. For PR purposes, the economies of these nations claim to be capitalist, as in free-market capitalism.

Nothing could be further from the truth: these economies are crony-capitalist systems that protect and enrich elites, insiders and vested interests who the state shields from competition and the law.

The essence of crony-capitalism is of course the merger of state and corporate power. There are two sets of laws, one for the non-elites and one for cronies, and two kinds of capitalism: the free-market variety for small businesses that are unprotected by the state and the crony variety for corporations, cartels and state fiefdoms protected by the state.

Since crony-capitalism is set up to benefit parasitic politicos and their private-sector cartel benefactors, reform is impossible. 

Even the most obviously beneficial variety of reform--for example, simplifying the 4 million-word U.S. tax code--is politically impossible, regardless of who wins the electoral equivalent of a game show (i.e. Demopublicans vs. Republicrats).  !!!!!!!  YOUR VOTE IS WORTHLESS!

The annual cost of navigating the tax code comes to about $170 billion:

Since 2001, Congress has enacted about one new change to the tax law per day. Pathetic, isn't it? This tax code is a burden and a fiasco and deeply unpatriotic. As Olson's Taxpayer Advocate Service notes, this code helps tax evaders; hurts ordinary, honest taxpayers; and corrodes trust in our system.

Here's why the tax code will never be simplified: tax breaks are what the parasitic politicos auction off to their crony-capitalist benefactors. Simplify the tax code and you take away the the intrinsically corrupt politicos' primary source of revenue: accepting enormous bribes in exchange for tax breaks for the super-wealthy.

You would also eliminate the livelihood of an entire industry that feeds off the complexities of the tax code. Tax attorneys don't just vote--they constitute a powerful lobby for the Status Quo, even if that Status Quo is rigged, unjust, wasteful, absurd, etc.

It's not that hard to design a simple and fair tax code. Setting aside the thousands of quibbles that benefit one industry or another, it's clear that a consumption-based tax is easier to collect and it promotes production rather than consumption: two good things.

As for a consumption tax being regressive, i.e. punishing low-income households, the solution is very straightforward: exempt real-food groceries (but not snacks, packaged or prepared foods such as fast-food), rent, utilities and local public transportation--the major expenses of low-income households.

1. A 10% consumption tax on everything else would raise about $1.1 trillion, or almost 2/3 of total income tax revenues, not counting payroll taxes (15.3% of all payroll/earned income up to around $113,000 annually, paid half-half by employees and employers), which generate about one-third of all Federal tax revenues and fund the majority of Social Security and a chunk of Medicare.

As for the claim that a 10% consumption tax would kill business--the typical sales tax in California is 9+%, and that hasn't wiped out consumption.

2. The balance could be raised by a progressive tax on unearned income, collected at the source. Most of the income of the super-wealthy is unearned, i.e. dividends, investment income, interest, capital gains, stock options, etc. As a result, a tax on unearned income (above, say, $10,000 annually to enable non-wealthy households to accrue some tax-free investment income) will be a tax on the super-wealthy who collect the vast majority of dividends, interest, capital gains and investment income.

A rough estimate would be 20% of all unearned income.

This would "tax the rich" while leaving all earned income untaxed, other than the payroll tax, which is based on the idea that everyone should pay into a system that secures the income of all workers. This would incentivize productive labor and de-incentivize speculation, rentier skimming, etc.

The corporate tax would be eliminated for several reasons:

1. It is heavily gamed, rewarding the scammers and punishing the honest

2. All income from enterprises is eventually distributed to individuals, who would pay the tax on all unearned investment income.

But such common-sense reform is politically impossible. 

That's why the answer to the question, what's the the difference between fascism, communism and crony-capitalism is nothing.

Financial Preparation In A World Full Of Risk.......AN ABSOLUTE MUST READ!

Financial Preparation In A World Full Of Risk

What does a full-blown financial crisis look like? 

It's when your world collapses financially. It might come on the heels of medical problems and the resulting high bills and lost income, or it might come in tandem with runaway inflation or a political meltdown.

What about a financial catastrophe? 

Most of us have lived through a few bubble bursts and recoveries. Most of us, however, did not experience the big one like our parents did in the 1930s. Though one thing's for sure: It was bad, and it shaped the attitudes and values of a couple generations.

The goal of preparation is adequate protection. 

When the crisis comes, it will affect everyone. Those who prepared well are likely to fare much better and avoid catastrophic consequences… which brings us to core holdings.

Core holdings are, quite literally, survival insurance. They are assets we sock away and then hope, pray, that we never have to sell. They should make up at least 10% of your overall net worth and be diversified in form and location.

In light of the current warning signs, now is a good time to review your own core holdings. They form the base of your investment pyramid.

The first step in any financial plan is building your core holdings. The investments in our portfolio risk some capital with the intention of profiting down the road. Core holdings are a different animal altogether.

What types of investments should be in your core holdings? Well, that depends on the risk you're trying to protect against.

Protecting against inflation. 

Start with precious metals—gold and silver in particular. I recommend starting with "junk" silver, which you should be able to buy locally. Then add gold, silver, and platinum coins. One of the best ways to buy competitively is to go to a coin show. You will find several dealers displaying their wares and can quickly determine the market price.

As you increase your holdings, consider holding some metal internationally. You can have the metals stored internationally, here in the US, or have it shipped to you.

Don't confuse these holdings with gold stocks or exchange-traded funds. Those are not core holdings. They're paper investments purchased with the intention of selling for a profit at a later date. While they may move consistently with metal prices, unless you have a huge account, your paper is not redeemable for metal. You may want to own these in your portfolio, just like any other asset you think will go up in value.

Your core holdings, however, need not be limited to metals. You can hold foreign currency-denominated CDs from EverBank that are FDIC-insured. While their yield is currently low, holding them as a hedge against inflation is a good idea.

When the US dollar buys less, certain foreign currencies increase in value and will buy more. By way of example, I have held Swiss francs for years. They used to be worth $0.80 on the dollar; now they are worth more than $1.10.

Farmland is another great hedge against inflation. It's a valuable asset and is in limited supply. 

Protecting against confiscation. 

Historically, governments resort to extreme measures like confiscation when inflation gets out of hand. Confiscation can take more than one form.

President Roosevelt, by Executive Order 6102, made it illegal to own gold. Once people surrendered their gold, the government raised its official price from $20.67 to $35.00 per troy ounce. Think about that for a minute… One day you're forced to sell 100 ounces of gold coins to the government and receive $2,067.00 in paper for it. The next day they revalue it and decree that it would cost $3,500.00 to buy it back, but they're not going to sell it to you. Gold didn't go up in value overnight; the value of the dollar went down.

A second form of confiscation results in taxes, sometimes marketed as "emergency taxes." A government that's spending more than it takes in will eventually have its day of reckoning. Fearing a collapse, they'll resort to extreme measures. The confiscation in Cyprus last year, and now we're seeing similar things happening in Argentina are examples of a growing trend. Who are the targets? Anyone with money.

While no one can predict for sure what our government will do, prudent investors diversify some of their investment capital offshore.

The recently passed Foreign Account Tax Compliance Act (FATCA) highlights how the government is taking great measures to harass any prudent investor moving his money out of harm's way. Citizens of Cyprus have made it quite clear that those who moved some of their money offshore were spared. Once the government shut the currency window, however, it was too late for the others.

How bad could things get? 

I have no idea. Argentina has already confiscated much of its citizens' retirement plans and forced them to invest in the government's debt.

Can we say for sure that inflation of this magnitude will or won't happen in the United States? No. I am neither a prophet nor a soothsayer. Though I can tell you this: the Federal Reserve had been in business for around 100 years and had $800 billion on its balance sheet as recently as 2007. Now it has $4 trillion, which is somewhere between a 400- and 500-year money supply. 

What will happen if it tries to sell or has to sell all that debt?

The minute the world loses confidence in the dollar or it loses the status of being the world's reserve currency, the decline in purchasing power will be horrendous.

Even if the probability is a fraction of 1%, our biological clocks are ticking. Most of you are close to leaving the workforce or already out. The adverse consequences of high inflation and/or outright government confiscation of wealth are so catastrophic that an unprepared investor may never be able to recover. You'll be left to fend for yourself, which could mean bunking in your adult child's guest room instead of doing the million other fun things you'd planned for retirement.


Thursday, April 24, 2014

America is an Oligarchy and NOT a Democracy or a Republic..... DO NOT MISS THIS!

America is an Oligarchy and NOT a Democracy or a Republic

American democracy – once a glorious thing – has devolved into an oligarchy, according to two leading IMF officials, the former Vice President of the Dallas Federal Reserve,  the head of the Federal Reserve Bank of Kansas City, Moody's chief economist and many others.

But don't take their word for it …

A new quantitative study by Princeton's Martin Gilens and Northwestern's Benjamin Page finds that America is not a democracy … but is an oligarchy.

Here's a quick visual overview from the study:

In other words, when the fatcats want something, it will probably happen.  But when the little guys want something … not so much.

Highlights from the study:

A great deal of empirical research speaks to the policy influence of one or another set of actors, but until recently it has not been possible to test these contrasting theoretical predictions against each other within a single statistical model. This paper reports on an effort to do so, using a unique data set that includes measures of the key variables for 1,779 policy issues.

Economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while mass-based interest groups and average citizens have little or no independent influence. Our results provide substantial support for theories of Economic Elite Domination and for theories of Biased Pluralism, but not for theories of Majoritarian Electoral Democracy or Majoritarian Pluralism. 

Very few studies have offered quantitative evidence concerning the impact of interest groups based on a number of different public policies.

Prior to the availability of the data set that we analyze here, no one we are aware of has succeeded at assessing interest group influence over a comprehensive set of issues, while taking into account the impact of either the public at large or economic elites – let alone analyzing all three types of potential influences simultaneously.

The chief predictions of pure theories of Majoritarian Electoral Democracy can be decisively rejected. Not only do ordinary citizens not have uniquely substantial power over policy decisions; they have little or no independent influence on policy at all. !!!!!!!  YOUR VOTE IS WORTHLESS!

By contrast, economic elites are estimated to have a quite substantial, highly significant, independent impact on policy.

These results suggest that reality is best captured by mixed theories in which both individual economic elites and organized interest groups (including corporations, largely owned and controlled by wealthy elites) play a substantial part in affecting public policy, but the general public has little or no independent influence. !!!!!!!  YOUR VOTE IS WORTHLESS!

When a majority – even a very large majority – of the public favors change, it is not likely to get what it wants.  In our 1,779 policy cases, narrow pro-change majorities of the public got the policy changes they wanted only about 30% of the time. More strikingly, even overwhelmingly large pro-change majorities, with 80% of the public favoring a policy change, got that change only about 43% of the time.  

Our findings probably understate the political influence of elites.

What do our findings say about democracy in America? They certainly constitute troubling news for advocates of "populistic" democracy, who want governments to respond primarily or exclusively to the policy preferences of their citizens.

In the United States, our findings indicate, the majority does not rule — at least not in the causal sense of actually determining policy outcomes. 

When a majority of citizens disagrees with economic elites and/or with organized interests, they generally lose. Moreover, because of the strong status quo bias built into the U.S. political system, even when fairly large majorities of Americans favor policy change, they generally do not get it. !!!!!!! YOUR VOTE IS WORTHLESS!

If policymaking is dominated by powerful business organizations and a small number of affluent Americans, then America's claims to being a democratic society are seriously threatened.

No wonder the chairman of the Department of Economics at George Mason University said that politicians are not prostitutes, they are pimps … pimping out their services to the highest bidder.

The Supreme Court is not much better: their allowance of unlimited campaign spending allows the oligarchs to purchase politicians more directly than ever.

Moreover, there are two systems of justice in America … one for the big banks and other fatcats, and one for everyone else.

And not only do we not have democracy, but we also no longer have a free market economy.

Instead, we have fascism, communist style socialism, kleptocracy, banana republic style corruption, and – yes – "oligarchy".  WE ARE CLEARLY LOSING OUR COUNTRY! 

US financial showdown with Russia is more dangerous than it looks, for both sides...... DON'T MISS THIS!

US financial showdown with Russia is more dangerous than it looks, for both sides

The United States has constructed a financial neutron bomb. For the past 12 years an elite cell at the US Treasury has been sharpening the tools of economic warfare, designing ways to bring almost any country to its knees without firing a shot.

The strategy relies on hegemonic control over the global banking system, buttressed by a network of allies and the reluctant acquiescence of neutral states. Let us call this the Manhattan Project of the early 21st century.

"It is a new kind of war, like a creeping financial insurgency, intended to constrict our enemies' financial lifeblood, unprecedented in its reach and effectiveness," says Juan Zarate, the Treasury and White House official who helped spearhead policy after 9/11.

"The new geo-economic game may be more efficient and subtle than past geopolitical competitions, but it is no less ruthless and destructive," he writes in his book Treasury's War: the Unleashing of a New Era of Financial Warfare.

Bear this in mind as Washington tightens the noose on Vladimir Putin's Russia, slowly shutting off market access for Russian banks, companies and state bodies with $714bn of dollar debt (Sberbank data).

The stealth weapon is a "scarlet letter", devised under Section 311 of the US Patriot Act. Once a bank is tainted in this way - accused of money-laundering or underwriting terrorist activities, a suitably loose offence - it becomes radioactive, caught in the "boa constrictor's lethal embrace", as Mr Zarate puts it.

This can be a death sentence even if the lender has no operations in the US. European banks do not dare to defy US regulators. They sever all dealings with the victim.

So do the Chinese, as became clear in 2005 when the US hit Banco Delta Asia (BDA) in Macao for serving as a conduit for North Korean commercial piracy. China pulled the plug. BDA collapsed within two weeks. China also tipped off Washington when Mr Putin proposed a joint Sino-Russian attack on Fannie Mae and Freddie Mac bonds in 2008, aiming to precipitate a dollar crash.

Mr Zarate told me that the US can "go it alone" with sanctions if necessary. It therefore hardly matters whether or not the EU drags its feet over Ukraine, opting for the lowest common denominator to keep Bulgaria, Cyprus, Hungary and Luxembourg on board. Washington has the power to dictate the pace for them.

The new arsenal was first deployed against Ukraine - of all places - in December 2002. Its banks were accused of laundering funds from Russia's organised crime rings. Kiev capitulated in short order.

Nairu, Burma, North Cyprus, Belarus and Latvia were felled one by one, all forced to comply with US demands. North Korea was then paralyzed. The biggest prize yet has been Iran, finally brought to the table. "A hidden war is under way, on a very far-reaching global scale. This is a kind of war through which the enemy assumes it can defeat the Iranian nation," said then-president Mahmoud Ahmadinejad to Iran's Majlis. He meant it defiantly. Instead it was prescient.

The US Treasury faces a more formidable prey with Russia, the world's biggest producer of energy with a $2 trillion economy, superb scientists and a first-strike nuclear arsenal. It is also tightly linked to the German and east European economies. The US risks endangering its own alliance system if it runs roughshod over friends. It is in much the same situation as Britain in the mid-19th century when it enforced naval supremacy, boarding alleged slave ships anywhere in the world, under any flag, ruffling everybody's feathers.

President Putin knows exactly what the US can do with its financial weapons. Russia was brought into the loop when the two countries were for a while "allies" in the fight against Jihadi terrorism. Mr Putin appointed loyalist Viktor Zubkov - later prime minister - to handle dealings with the US Treasury.

Mr Zarate said the Obama White House has waited too long to strike in earnest, clinging to the hope that Putin would stop short of tearing up the global rule book. "They should take the gloves off. The longer the wait, the more maximalist they may have to be," he said.

This would be a calibrated escalation, issuing the scarlet letter to Russian banks that help Syria's regime.

He thinks it may already be too late to stop Eastern Ukraine spinning out of control, but not too late to inflict a high cost. "If the US Treasury says three Russian banks are "primary money-laundering concerns", do you think that UBS, or Standard Chartered will have anything to do with them?"

This will graduate to sanctions on Russian defence firms, mineral exports and energy - trying not to hurt BP assets in Russia too much, he adds tactfully - culminating in a squeeze on Gazprom should all else fail. Whether you are for or against such action, be under no illusion as to what it means. We would be living in a different world, and Wall Street's S&P 500 would not be trading anywhere near 1,850.

It is true that Russia is not the power it once was, as you can see from these Sberbank charts showing relative economic size against China and Europe.

This is not a repeat of the Cold War. There is no plausible equivalence between Russia and the West, and no ideological mystique.

It has $470bn of foreign reserves but these have already fallen by $35bn since the crisis began as the central bank fights capital flight and defends the rouble. Moscow cannot easily deploy the reserves in a slump without causing the money supply to shrink, deepening a recession that is almost certainly under way. Finance minister Anton Siluanov says growth may be zero this year. The World Bank fears -1.8pc, while Danske Banks says it could be -4pc.

Putin cannot count on global allies to carry him through. Only Venezuela, Bolivia, Cuba, Nicaragua, Belarus, North Korean, Syria, Sudan, Zimbabwe and Armenia lined up behind Mr Putin at the United Nations over Crimea, a roll-call of the irrelevant.

Yet as the old proverb goes: "Russia is never as strong as she looks; Russia is never as weak as she looks."

Princeton professor Harold James sees echoes of events before the First World War when Britain and France imagined they could use financial warfare to check German power.

He says the world's interlocking nexus means this cannot be contained. Sanctions risk setting off a chain-reaction to match the 2008 shock. "Lehman was a small institution compared with the Austrian, French and German banks that have become highly exposed to Russia's financial system. A Russian asset freeze could be catastrophic for European – indeed, global – financial markets," he wrote on Project Syndicate.

Chancellor George Osborne must have been let into the secret of US plans by now. Perhaps that is why he issued last week's alert in Washington, warning City bankers to prepare for a sanctions fall-out. The City is precious, he said, "but that doesn't mean its interests will come above the national security interests of our country".

The greatest risk is surely an "asymmetric" riposte by the Kremlin. Russia's cyber-warfare experts are among the best, and they had their own trial run on Estonia in 2007. A cyber shutdown of an Illinois water system was tracked to Russian sources in 2011. We don't know whether US Homeland Security can counter a full-blown "denial-of-service" attack on electricity grids, water systems, air traffic control, or indeed the New York Stock Exchange, and neither does Washington.

"If we were in a cyberwar today, the US would lose. We're simply the most dependent and most vulnerable," said US spy chief Mike McConnell in 2010.

US defense secretary Leon Panetta warned of a cyber-Pearl Harbour in 2012. "They could shut down the power grid across large parts of the country. They could derail passenger trains or, even more dangerous, derail passenger trains loaded with lethal chemicals. They could contaminate the water supply in major cities, or shut down the power grid across large parts of the country," he said. 

We may find out soon.

Sanctions are as old as time. So are the salutary lessons. Pericles tried to cow the city state of Megara in 432 BC by cutting off trade access to markets of the Athenian Empire. He set off the Pelopennesian Wars, bringing Sparta's hoplite infantry crashing down on Athens. Greece's economic system was left in ruins, at the mercy of Persia. That was a taste of asymmetry.