The Banker Scam has a timeline and the end result will be both Japan-like and volatile. Also see AIG Bailout chart here.
As I write this the VIX, a measurment of market volatility, is really low. Everyone is snoozing as the market goes up. I am betting on a lot of volatility, however, from here on out. To see why this may be it is worth the time to establish a timeline of events in the banking system scams. I will not take the time to provide exact dates as you can google these at your convenience.
1. Basel 1 raised capital requirements for Japan on the heels of their bubble collapse.
2. The BIS at Basel 2 in conjunction with our Federal Reserve allowed off balance sheet banking and low capital requirements. This occurred right after Basel 1.
3. The congress of the United States, by a 90 to 8 vote, repealed Glass-Steagall in 1999. This, along with the off balance sheet banking decision at Basel 2, allowed banks to write swaps (insurance), against the bad loans that they were hiding off their books. This was a deliberate and premeditated ponzi scam.
4. The bubbly dot com disaster popped, sending the US into a recession.
5. The Iraq War, in planning since 2001, was unleashed and Alan Greenspan urged W Bush to secure the oil ministry first thing.
6. The real estate bubble in the US and much of the world became a raging financial inferno, causing house prices to skyrocket and causing homeless folks to be real estate barons with no money down. Of course, they had no clue that this scheme was going to end. In Feb, 2004 Greenspan, who wanted Bush to secure the oil, advocated adjustable loans. The Fed was in on both follies.
7. The bubble popped and Henry Paulson said that it was contained to subprime. But the markets knew otherwise and spending for the holidays in 2008 was a disaster. Massive unemployment followed.
8. Mark to market helped to crash the markets and March, 2009 marked a new low.
9. In March, Mark to Market was lifted, and the stock market has been rallied miraculously regardless of the news. Tim Geithner bailed out the banks and interest rates were low, allowing the banks to borrow at 1/2 percent while refusing to reduce principles on toxic mortgage loans and credit cards.
What is coming:
The new idea is to reimpose high capital requirements on US banks through Basel 3. This could happen in 2012 or soon thereafter. The tinkering with the banking system is a function of the desired end. Loose money or tight money is no accident. And it is determined by the workings of Basel Accords through the Bank of International Settlements.
The Fed still wants low interest rates and will crash the market again if necessary to sell bonds. The Fed will do the bidding of the BIS and eventually restore high capital requirements on our banks. This will scare the sheeple and there will be a lot of volatility and bonds will be sold as people flee stocks.
I have written here at Seeking Alpha about the reverse repo market and the need for the Fed to sell bonds and unwind this private bank's balance sheet.
The European sovereign debt crisis could still jeopardize the ponzi banking system. This will cause investors to be taken again. They never learn.
I wonder how many times they can do this without the stupid long term investors waking up!!!
The whole process is a SCAM. Whether we turn out like Japan is not yet known but there are many similarities and a similar credit crisis with low demand for loans.
The Bank Scam Central: AIG Bailout
