you really should read this one.

  1. dub
    30,490 Posts.
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    There's a great article on Financial Sense On-line written by Rob Kirby and called Four Fed Hikes and a Funeral.

    The following is a short extract from the article - hopefully to whet your appetite/resolve to read the full thing.


    The Knight the Lights Went Out In Washington – Rubinomics

    At this point, I would like to take everyone on a little journey back in time. So wind your clocks and calendars all the way back to 1995, in the twilight of the first Clinton Administration. Sir Robert of Rubin was then Treasury Secretary and the U.S. government was facing default on its financial obligations due to a bitter, partisan debate causing delay on raising the debt ceiling. In the words of Robert Rubin himself in his book, In An Uncertain World, on page 170 he states,

    “Without an increase, the federal government would hit the debt ceiling before the end of 1995, possibly as early as October. Default and the President being forced to sign an unacceptable budget were both untenable. We needed to find a way out, rather than simply hoping that at the last minute the opposition would blink and increase the debt limit.”

    The ultimate response to this dilemma is chronicled by Rubin, on page 172, where he reveals,

    “It was Ed Knight, our savvy chief Treasury counsel, who suggested borrowing from the federal trust funds on an unprecedented scale to postpone default.”

    You see folks; as Mr. Rubin is well aware, the federal trust funds DO NOT AND NEVER DID CONTAIN ANY MONEY. These accounts exist in the minds of accountants and lawyers [ledgerdom] only. So here’s what really happened:

    Beginning Nov. 12, 1995, the Treasury started issuing government bonds, IOU’s, and putting them in the Social Security Trust Fund “cookie jar” – with the Fed then PRINTING the corresponding amount of money they needed and called this a ‘legitimate loan’. By accounting for their finances in this manner, the government got to understate their annual budget deficits by the same amount that they were burdening the cookie jar with IOU’s – all the while dramatically increasing the unfunded [off balance sheet] liabilities of the government by the same amount. Where I come from, this is neither savvy nor a loan. It is better described as both treasonous and outright fraud. Here’s the effect of what this paper shuffle maneuver did to the nation’s money supply:

    Fed Res. Chart compliments of Jesse:

    The cunning of these cads is beyond moral outrage. This massive deception was being perpetrated under the guise of the Clinton/Rubin/Summers “strong dollar policy” with the Wizard, Easy Al Greenspan manning the printing press, aiding and abetting. What these clowns were really doing was completely and utterly debasing the currency, all the while, claiming inflation was under control. Well folks, in light of these facts, inflation never was under control. What you can rest assured of is its debilitating effects have been masked [through long suspected gold price rigging] and other crucial data gathered has been skewed [CPI and PPI doctored] to keep everyone in the dark and interest rates at unnaturally, some might say larcenous, low levels. In the wake of this blatant money printing, paper financial assets [NASDAQ and DJIA] first rose to contorted levels, followed by real estate, oil and then the rest of the commodities. As all this has been playing out, our beloved money maker, Easy Al, has been spouting off -telling us all that inflation is under control and he has even had the unmitigated nerve to tell us that elevated oil prices are a transitory phenomena? For those of you out there in the deflationist camp, I can only suggest you first look at this chart, then fold up your tents and move on over to the inflationary camp where the fire, she’s a burnin.

    Reality Biting Back

    How many of you have ever heard the expression; a picture is worth a thousand words? Well, this one [above] graphically depicts what starts happening to your money supply when 1.5 TRILLION dollars created out of thin air. That’s right folks, the Social Security Trust Fund “cookie jar” now contains 1.5 TRILLION dollars worth of Treasury debt IOU’s and that same amount of money has been printed into existence by our good friends at the Fed at the urging of Treasury. No where else on this planet could such an unthinkable, deliberate financial hoax be perpetrated or tolerated. Thanks a heap Robert Rubin, Lawrence Summers, Paul O’Neal [to a lesser extent] and Johnny come lately Snow. .............

    If you're interested, read the full article at .

    What's been done to America is obscene in my view.


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