Richard Moore


Jim Willie CB - January 3, 2008

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coverage of several smallcap companies positioned to rise during the ongoing 
panicky attempt to sustain an unsustainable system burdened by numerous 
imbalances aggravated by global village forces. An historically unprecedented 
mess has been created by compromised central bankers and inept economic 
advisors, whose interference has irreversibly altered and damaged the world 
financial system, urgently pushed after the removed anchor of money to gold. 
Analysis features Gold, Crude Oil, USDollar, Treasury bonds, and inter-market 
dynamics with the US Economy and US Federal Reserve monetary policy.

EDITOR NOTE: My Spanish needs work, since 'Tonterias' was misspelled in the 
title, which prompted a couple corrections from Latino readers. Disculpame! Last
week's attempt to smash the Wall Street corrupt trumpets of information earned a
special kudo from a veteran NYSE floor trader. Tom said, "What a crock we hear 
every damn day? I have been on Wall Street 28 years. This is just unreal. What 
we hath wrought?!?"

The year 2008 will be the year that THINGS JUST PLAIN BREAK. It will be a truly 
deadly year, unavoidably lethal to the USEconomy and especially to the US 
banking sector. Nothing has been repaired. Some tangible solutions will be 
offered in the next section, all legitimate in a real world. However, we do NOT 
live in a real world, but rather in a Fairy Tale world of US Hegemony and Wall 
Street with a choke hold around the US entire system. Managed inflation is the 
policy never to be reversed, until total breakdown occurs. Treason is rampant, 
called simply Power Games. All attempts so far are to shore up the existing 
system, to enable Wall Street to sell as much of their damaged asset backed 
bonds to suckers, and to avoid international lawsuits against Wall Street firms.
In 2008, an alarming sequence is assured of enormous damage that puts the entire
US economic and financial system in a perilous situation. The powers survived 
the end of 2007, with heavy usage of band aids, rubber bands, and paper clips, 
but reality continues to itemize a relentless sequence of unfixable, tragic, 
intractable problems. The pressure points are big banks suffering from 
insolvency, prime mortgage bonds destined for massive losses, consumers without 
kitties to rob to keep spending, a worsening housing market from chronic 
inventory bloat, and deepening problems in the lending industry frozen from 
insolvency and distrust. Pitch in a global resentment of US fraud and heavy 
handed tactics, especially from the last couple decades.

What a prospect! Almost all of Wall Street firms are bankrupt, but still in 
control of the financial media. Citigroup is dead in the water, inevitably to 
enter restructuring without admission of bankruptcy and surely with no formal 
filing of such. Heck, even Goldman Sachs might be bankrupt, if they ever 
produced an honest balance sheet. The goal of Wall Street henchmen, who are 
clearly guilty of the grandest larceny even seen since Rubin opened the door to 
gold leasing at the USTreasury, is for the (mostly) men in three-piece suits to 
fleece their elite firms for personal gain as much as possible before their 
broadly suspected insolvency is recognized as clear bankruptcy. They choked on 
their own toxic mortgage fecal IN-securities, with the leverage in the 
derivatives backfiring on them. The hidden factor is new Basel rules on 
accounting, which in my view seems like a bankruptcy judge ordering Discovery 
Phase of bank assets during a Bankruptcy Proceeding. True to form, the Wall 
Street firms continue to operate in defiance, as they created a lunatic new 
Tier-3 balance sheet item. The greatest feat to date is the Wall Street urged 
Congressional adoption of the subprime mortgage freeze, dubbed 'The Teaser 
Freezer' in clever tones. A voice tells me that Basel might push for prosecution
of Wall Street bankster criminals.

My 2008 forecasts will be saved for the Hat Trick Letter, but a preview overview
can be listed. First, let us all revel at the Severe Comedy that has become US 
Presidential Politics. Good looks, meaningless promises, catchy campaign 
slogans, bulging campaign coffers, these all accompany a truly futile procession
of charlatans offering hope. Harken back to November 2006, when a new Congress 
was elected. They, under new leadership have done not a blessed thing promised 
to turn the country away from its disastrous course, regarding the war, the 
economy, taxation, budget allocation, in a follow through mandated by voters. 
Expect nothing at all in change from any viable presidential candidate, who all 
seem like midgets. If one revolutionary candidate in particular is elevated by 
voters, his life will likely meet an early demise, by accident, of course. The 
hidden secret which just cannot seem to find its way above ground is that 
Neocons are not Republicans, not Democrats. The current Bush is a known Neocon, 
a bizarre label to be sure. In my view Clinton was a Neocon also, certainly cut 
from a different cloth than most traditional Democrats. His central policy was 
to create the foundation for the Fascist Business Model, wherein the finance 
sector merged with the state. Two candidates, one on each side, represent 
uninterrupted Neocon rule and the inexorable march to a military state, the 
former 911 Mayor and the former First Lady. But mine is not a political pen. 
Somehow, the name NeoFascist does not sound as appealing to American voters as 
the mysterious Neocon. Call a spade a spade! Numerous legal executive decrees 
confirm the label clarification and trend. The pathetic fact of life is that in 
my travels and conversations with countless American adults, my experiment has 
been grossly revealing. After almost 40 direct questions on US soil, directly 
asking "What is Fascism?" to Americans, not one single correct answer. After 
all, a nation gets the government it deserves. The United States is on a sad but
unstoppable march to Third World status, complete with totalitarian rule. 
Nothing can block the path. One hundred years ago, H.L.Mencken called the USGovt
the best government that money can buy, and deemed the American landscape 
attractive like any circus. Nothing has changed, only the depth and severity.


The year 2008 will start with a resumption in the disorder breakdown buzz, a 
resumption in the gold climb, and new chapters in big bank bankruptcy throes, 
and eventually a nearly complete loss of respect and integrity in the US Federal
Reserve. The word 'Bankruptcy' will not be used until a big bank actually files 
for bankruptcy. The ring of the word Bankruptcy is more accurate, since it 
implies Hemorrhage, another great word. The collateral damage will include most 
bond insurers going bust, but holding firm to 'AAA' ratings in pure corrupt 
manner. The collateral damage will include most homebuilders going bust. 
However, the centerpiece of 2008 woes will be the PRIME MORTGAGE BUST, felt much
like the stage falling through the floor in the Victorian Theater. The decline 
in housing prices will continue to push prices down another 5% to 10% in the new
year, killing off prime mortgage portfolios and their bonds. The bust will take 
down the entire US banking system, which is now reeling and tipsy, like a 
punchdrunk boxer after enduring ten rounds of a pure beating, bloodied, wobbly, 
dizzy, blurred in vision. The mortgage debacle will extend to the commercial 
property arena, the degree of which will be uncertain.

The people have been misled for almost a full year on the mislabeled mortgage 
debacle as a subprime phenomenon. That is the exposed tip of the iceberg, since 
it is total mortgage debacle problem. In 2008, the avalanche of failed mortgages
of innovative adjustable variety will occur, with California providing the 
epicenter of failure and most publicized wreckage. US lending institutions once 
took pride in their absurd innovation in mortgage products, like fully borrowed 
down payments, like paying less interest than accumulates, like the borrower 
having no income or job. Next they will be embarrassed at the systemic stupidity
and universal ridicule. In the 1970 decade, we suffered STAGFLATION in an ugly 
era. In 2008, we will suffer a much more powerful bout of stagflation, with 
continued USEconomic recession (in third year for those based in reality), 
rising price inflation (already running over 10%) sure to attack even the 
doctored Consumer Price Inflation. In fact, 2008 might see progress with the CPI
adopting the house price component and putting off the owner equivalent rent, 
all boasted progress.

The mirrored central damage will be to the USEconomy, from both an exhausted 
household consumer and a lending climate reluctant to supply urgently needed 
credit. The dependence upon consumption will be unmasked as fatally flawed 
finally. Households will fail on car loans and credit cards as an echo to 
mortgages, resulting in severe loss of independence and freedom. One can live in
a house for free, but not ride a car or carry plastic for long without 
consequences. To compound the problem of credit supply, Wall Street burned our 
allies by cheating them blind. Expect a backlash felt in the year 2008, 
including international ugly lawsuits and unexpected Wall Street broken glass 
like a seven year delayed Krystalnacht. The entire banking system will go bust 
in the Untied States this year, in a highly visible manner, as the entire world 
watches in total horror. The nation in custodial duty for the world reserve 
currency, the USDollar, will suffer a failed banking & bond system, which 
undoubtedly will result in a grotesque USEconomic recession. It is just a bit 
late in its arrival. The parade of disasters will be mindboggling, offering 
little respite. Even the Plunge Protection Team, armed with $1500 billion in 
black bag money, pilfered largely from Fannie Mae in the two districts harboring
the home towns for the sitting presidents from 1988 to 2000, will not be capable
to stem the tsunami of stock market sell orders. They might focus attention on 
the biggest and baddest corporations, but the banking stock index collapse 
reveals how the PPT could only hold up the S&P500 index, but not their buddies 

People will run for cover. People will react with increasing anger. They will 
bristle with anger and frustration, even spark isolated riots, from rising food 
prices, rising gasoline prices with spotty supply, lost jobs from rising costs 
and outsourcing, lost homes from predatory lending followed by foreclosures. 
People will suffer realize that finances are not safe in banks, as bank runs 
spread amidst the fear in isolated cases, and some stock accounts are frozen 
unavailable amidst financial service conglomerate bankruptcies. The time honored
Glass Steagall Law made impossible the merger of banks, brokerage houses, and 
insurance firms, for a reason. As banks fail, insurance and stock brokerage will
be put at risk. The removed rule used to forbid shorting stocks on a downtick, 
but now will also render the system vulnerable. 2008 IS THE YEAR THE SYSTEM JUST


The year 2008 will bring with it a level of confusion never seen before in the 
nation's history. Economists will be found befuddled, scratching their heads, 
dazed, and without solutions. Politicians will be confused as to what to 
advocate, unsure what is potentially effective. The entire argument of 
'Inflation vs Deflation' will turn into a crazed debate, with ignoramuses 
spouting all manner of drivel without knowledge of what inflation is, how it is 
caused, the frustration in producing it intentionally, and the broken 
apparatuses no longer able to function when their levers are pulled. When 
inflation is not only misunderstood but also indoctrinated in heretic fashion, 
the concept becomes a gathering large cloud intended for confusion of the 
masses. When the banking system is seized up as it is, the mechanisms to spew 
money into the system fail to function. When banks distrust each other more than
individuals for their claimed collateral, the system fails to distribute money, 
even at lower interest rates. Issuing loans to individuals will fall to a low 
spot on priorities.

A huge event occurred in 2006, that being the flip of housing into a deflating 
asset. A huge event occurred in 2007, that being the flip of mortgage bonds into
a deflating asset. As the entire risk price model system continues to 
disintegrate, the powerful teeth of deflating assets held by banks will render 
the banks themselves as utterly impotent agents to stir inflation. Ironically, 
as credit derivatives are sold off, the USDollar might actually benefit. Many 
writers talk about USFed Chairman Bernanke as stepping soon to the table with a 
mission to drop money from helicopters. Wow, are they ever popping some stupid 
pills?!? The events in the last four months have taught anybody with a lucid 
brain, a keen eye, and an active pulse (which eliminates the majority of 
investors) that the US Federal Reserve has become far more than a little bit 
IRRELEVANT. The banking system is so broken over here that the London LIBOR has 
become strained to the hilt. The hapless clueless hidebound USFed cannot 
recognize the problem of insolvency within the banking system, and cannot treat 
the problem with lower interest rates. That will certainly not stop them from 
cutting rates, since Goldman Sachs, acting as lead sled dog among the Wall 
Street harnessed team, has ordered them to do so. If lower rates will not solve 
the bank problem, why are we given lower rates? Simple, because it supports the 
stock market from an ugly bloody crash. The system cannot afford for stock 
assets to flip into a deflating asset.

The confusion to reign in year 2008 will center on the challenge to actively 
produce price inflation, while leaning upon broken banking entities. Confusion 
will reign from requests to Bernanke to 'do his helicopters thing' when the 
winds of deflation will be so great that the cash drops are scattered into the 
deflation vortex. The desperate urgings made to Bernanke miss the lessons of the
last four months. His primary perceived plan is to rescue the Wall Street banks,
probably with far more redemptions, monetizations, and refunds delivered in 
basements and back rooms than the public will ever know. Such is the nature of 
the Fascist Business Model, to take care of the large corporations whose 
interests are merged with the USGovt, payola for the partners. The irony of the 
massive infusions of money, either with USFed injections or foreign capital 
infusions, is that they are extremely focused to rescue the ailing banks from 
insolvency. Except that they only rescue the ailing banks from illiquidity. Add 
money into an insolvent picture, account for it as an equity stake, and nothing 
is accomplished on the insolvency side. The new partners only have a larger 
share in the bankruptcy, better described as a vampire, walking dead. The system
is not activated, no jobs produced, no new loans granted.

The confusion in 2008 will culminate in the ratcheting upward of the official 
rescue attempts, measures, freezes, adoptions, initiatives, and eventual grand 
platform, as my forecast has steadily called for. Each plan will be recognized 
as insufficient and limited, thus motivated the next desperate measure. The 
Grandiose Resolution Trust Corporation will be granted broad powers, and rule 
for a full decade, with a possible cabinet appointment creation. Another ugly 
irony is festering. Neither the Administration and Congress is willing to press 
forward to initiate ANY broad rescue just yet, since the first pig in line would
be the Wall Street thieves, thugs, and conmen whose fingerprints are all over 
the mortgage bond debacle laced with criminal fraud. So the entire banking 
system will continue to slide into quicksand. Once politicians enter the 
picture, the problem worsens, no exception.


Meanwhile, gold will rise for many reasons, few being the traditionally 
recognized ones. Gold will rise from gradual recognition that the banking system
is destroyed. Gold will rise from the perceived need to generate price 
inflation, whether such efforts are successful or not, an expectation concept. 
Gold will rise from the Competing Currency Wars, as nations urgently print more 
money to stave off recession and grotesque asset deflation. The slowdown will 
hit China also, which has begun to hike prices but which will find itself 
saddled with overcapacity. Gold will rise primarily because the global money 
supply is rising at an astronomical rate, think Weimar, go global. Gold will 
rise because the smart ones will realize that the Untied States might seek war 
as a diversion amidst the crisis. Gold will rise from in response to failures in
most policy initiatives, perceived symptoms to systemic breakdown. Gold will 
rise as the global revolt against the USDollar continues, with the current focal
point being the Persian Gulf nations who must defend themselves from the ravages
of inflation. The entire price inflation argument is somewhat a straw dog, in a 
loose sense. The USDollar decline has prompted costs to rise, not wages, the 
result being economic dampers cast across the US landscape. This prompts 
monetary inflation motivation. Remove China and price inflation could be easily 
generated. However, the system cannot succeed in producing price inflation 
without killing the USTreasury Bond complex altogether, as long-term rates would
rise to smash and upend the credit derivative pyramid. More evidence that the 
USFed is the most irrelevant player at the table. Gold will rise as the globe 
finally reckons that the USFed, traditionally the most powerful among the 

The chaos in the financial sector will be matched by growing chaos in the 
beehive of the USEconomy, the business complexes, the neighborhood communities. 
Watch for lawless behavior to rise, as chaos envelops the system. Watch for 
civil disobedience to crop up, as high crimes among Wall Street bankers and 
USGovt leaders go unaddressed. In the year 2008, the bylines will be 1) 
Gold will rise as the bylines hit the press & media strewn with these messages. 
The system breaks in 2008. Denials will be laughable.


The year 2007 said goodbye to quite a long list of notables. The music world 
lost Dan Fogelberg, Porter Wagoner, Ike Turner (beat me), and Tommy Newsome, 
plus opera stars Luciano Pavarotti and Beverly Sills. Hollywood and the 
entertainment sphere lost Joey Bishop, Joel Siegel, Charles Nelson Reilly, Jack 
Valenti, Tom Poston, Ingmar Bergman, Merv Griffin, Robert Goulet, Yvonne 
DeCarlo, Tom Snyder, Jane Wyman, and Marcel Marceau. The political arena lost 
LadyBird Johnson, Art Buchwald, Tom Eagleton, Henry Hyde. The writing world lost
Sydney Sheldon, Norman Mailer, Kurt Vonnegut, and historian Arthur Schlesinger. 
The sports world lost Phil Rizzuto (the Scooter), and recently Sean Taylor 
(Washington Redskins). Also lost were restauranteur Bob Evans, spirited Jerry 
Falwell, and astronaut Wally Schirra. The bizarre corner lost Tammy Faye (Baker)
Messner, Leona Helmsley, Anna Nicole Smith, and Evil Knievel. Closer to home, my
family lost my mother Maureen, who coined the name Jackass for me, due to my 
persistent outspoken, stubborn, and mischievous manner. She called me 'My 
Charming Rogue' affectionately. She is missed deeply, her effect felt.


Greed is powerful, especially when subjected to those in charge of the world 
reserve currency for several decades. Rescinding the Bretton Woods Accord, 
wherein the USDollar was tied to gold, unleashed Pandora's Box of financial 
evils. The abusive usage of monetary inflation as a remedy for excessive debts 
is perhaps the most pernicious destructive phenomenon in the last century. In a 
vicious disguise, monetary inflation kills entire industries, fleeces savers 
dry, transforms asset managers into casino players, and causes pervasive cost 
inflation, all of which impoverishes a nation. Tragically, all nations who 
hitched their monetary wagon to the Untied States risk tremendous damage from 
shared inflation wreckage. See Saudi Arabia, the entire Persian Gulf, even Hong 
Kong. Europe will not be spared either. The competing currency wars renders all 
as victims. The last deaths occur with the nations whose currencies rise, since 
they enjoy a rush of investment and enjoy reduced costs, but their export trade 
is harmed badly.

Over dinner tables when the Hat Trick Letter was inaugurated, my father 
repeatedly asked me what solutions could be offered. A literature professor not 
versed in financial matters, he grew weary of incessant talk by me on the 
unfixable nature of the current system. My pragmatism owes to his constructive 
nature. My constant reply was that the system would resist all solutions, since 
they would cause severe pain for both the system and its leaders, the Ruling 
Elite. My sassy reply was that a solution article would be an exercise in 
futility. My offering was ten solutions, which even he realized were totally 
impractical in today's day and age. Now, four years later, my list seems comical
and totally outside the real of possibility. For humor and completeness, as much
as a treatise on the many sins committed by our economic and banking chieftains,
here is my list.

- dismantle the US Federal Reserve

- back the USDollar with gold or silver or coal or Great Lake fresh water

- balance the USGovt budget
- end all monetization efforts to support financial instruments
- enforce all regulations against outsized futures contract positions
- remove all lobbyists from Congressional contact
- dismantle the military defense network with contractors in US firms
- end all fractional banking practices (lend 10x deposits)
- tighten all financial accounting, with felonies charged routinely

- severely limit the credit derivative contract creation and its system

- prosecute the fraud from the $1500 billion Fannie Mae theft (1988 to 2000)

- separate Goldman Sachs from Dept Treasury, due to insider trading risks

- separate JPMorgan from USFed, due to insider trading risks and extreme 

- prosecute JPMorgan for serving as the Enron instructor

- end all illicit talks between stock & commodity regulators with Wall Street

- require 30% down payments on all home mortgage loans

- end all private deals between Chinese leaders and Wall Street for IPO stocks

- dismantle at least 75% of the foreign US Military bases, bring soldiers home

- dismantle all US security agency participation in contraband trafficking

- dismantle the Bank of Baghdad as central clearing house for that trafficking

- dismantle all tight relationships with USMilitary and Halliburton

- install a broad manufacturing base in the United States, even if attached to 

- institute framework for foreign receivership of US capital structure and 

- give China, Japan, Saudis, and Persian Gulf Coop Council seats on US Prez 

- give China, Japan, Saudis, and GCC veto power on US federal budget approval

- create a Cabinet level post of Special Prosecutor with ties to International 

- create a Cabinet level post to manage the housing & mortgage Resolution Trust 

- encourage numerous voter referendums annually, which bypass Congress

- reduce the influence of Israel in dominating security and military related 

- forbid any US citizen from working as World Bank or Intl Monetary Fund 

- end all tax incentives to relocate business overseas (which kill US jobs)

- end the Alternative Minimum Tax burden completely
- rescind the Medicare payment system and its entire program
- install legitimate economic statistics for GDP, CPI, Jobs, and more

- install proper Cost of Living Adjustments in Social Security and USGovt 

- install tax incentives to save from income outside the 401k & IRA pension 

- dismantle all the concentration camps (230 of them) on US soil, recently 

- reopen a 911 Commission to issue a verifiable report, not a whitewash BS 

- end all chemtrail experiments in the upper atmosphere to control weather

- release American Medical Assn cures for cancer which are available in Latin 

- begin massive US infrastructure repair, a reconstruction initiative with 
foreign funding

- admit to the world that the Untied States has become a Third World nation

Happy New Year. Be sure to take cover during a truly deadly year upcoming. The 
country might not be recognizable by the time the 2009 page is turned.

newslog archives: 

Escaping the Matrix website: http://escapingthematrix.org/
cyberjournal website: http://cyberjournal.org

How We the People can change the world:

The Post-Bush Regime: A Prognosis

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