Oh, Say, Can You Still See?
Part 8: Anatomy of a Bailout (continued)

By Dr. Russell McDougal

Dear Reader,

You are being stolen blind.  You understand the mechanism of the theft via the Federal Reserve.  You also know the extreme necessity for grand larceny at this crucial point in time (see Part 7).  Let’s now look at how bailouts tend to take form.

You must always be mindful that the Fed is the lender of last resort in the United States.  They will steal … excuse me, I mean print … themselves and their friends out of any jam.  The U.S. Congress has granted this private corporation a license to monetize whatever is deemed necessary.  They can turn cow chips or empty paint buckets into Federal Reserve notes if they like.  There are no limitations as to how much funny money can be created.

My premise is that we are now in an age of bailouts, the likes of which the globe has never seen.  This is anything but business as usual. 

There are three main players in this tragedy:

1. The Fed (and other central banks)
2. Those closely associated with the Fed
3. Jane and Joe and their global counterparts

Bailouts typically are designed to come to the rescue of Fed cronies.  Insider rescue packages typically rape Jane and Joe.  You will want to watch closely in the coming months and years to see exactly how the coming bailouts play out.

The simplest form of bailout happens on a regular basis and has taken place for decades.  The U.S. government spends more money than it takes in each and every year.  Don’t try this at home.  How is the excess money that is spent every year raised?  Some of it comes as the Treasury sells their fancy bills and notes to willing takers.  There are fewer and fewer willing takers lately.  Whatever this funding doesn’t cover is monetized (Abracadabra! Money created!) by the Fed.

Who benefits from this type of bailout?  Those closest to the feeding trough of big government.  President Eisenhower warned U.S. citizens about the “military-industrial complex” in his 1961 farewell speech.  Since then, sadly, the U.S. has evolved even more into what has commonly been called “crony capitalism.”  These government and corporate alliances bring us the likes of Halliburton, Enron, the Carlyle Group, Goldman Sachs, JP Morgan, and multiple other “well-connected” parasites.

In this particular money printing scenario, government is bailed out from its reckless spending.  The Fed collects the interest and their corporate buddies make unimaginable profits.  Some benefits may eventually trickle down to the supposed beneficiaries of the various programs.  But Jane and Joe pick up the tab.  Deficit spending appeals to the something-for-nothing crowd.

Wars are the central bankers’ best friend and are often “off budget” expenses.  That means the money to pay for them isn’t there and they will be paid for largely by the hidden tax mechanism of the Federal Reserve.  It is not unusual for elitist bankers to fund both sides in a war.  Banking at its finest.

You can expect enormous real estate, banking, and financial institution bailouts in the coming months.  The scope of these bailouts will make history, as unfathomable debt problems continue to come home to roost.  Multiply what you read or hear in the news by a factor of 10 to get a truer picture of current desperation.

In the present game, failed financial crap is floating around looking for a final resting place.  Central banks are acting in unison on a scale not seen since 9/11.  They are desperately injecting “liquidity” designed to get the markets moving again.  When you see the word “liquidity,” think more cheap printing press money.  An historic $530 billion was added in a recent week by global central banks.  New money on a scale of this magnitude severely dilutes money already in circulation.  (See this Ambrose Evans-Pritchard article for more.)

This coordinated act is a broad spectrum bailout of troubled financial institutions across the globe.  Banking entities and other financial institutions are the recipients of the largess.  Global citizens just got their pockets picked.

A recent attempt was made to create a fund to bail out those holding some of the “sub-prime” mortgage paper.  Bank of America, Citigroup, and JP Morgan Chase spearheaded this effort at the request of the U.S. Treasury.  The idea was to fund a “Master-Enhanced Liquidity Conduit” (not kidding) that would take the failing bad mortgage debt onto its own books.  The idea has met utter failure to date.

A large part of the problem with bailouts is that the public seldom gets to see exactly what is happening. Behind-the-scenes arrangements are commonplace.  Click here for a detailed look at some of the secretive manipulations during the Long Term Capital Management hedge fund failure.  This type of activity will be commonplace in the coming months and years.

In the meantime, you might want to get as far away from the current financial chaos as you can.  The entire mess has been created by those who make and love fiat currency and its inherent byproducts.  This is what fiat does.  Gold just registered a nominal all-time high accordingly.

We will continue with this bailout theme for a while.

Invest Resourcefully,

Rusty

[Ed. Note: Dr. Russell McDougal has dedicated years of study and investing in the natural resources exploration sector. During that time he has closed out DOZENS of gains of 500%... 1,000%... 2,000% and more! Currently he is sitting on multiple thousand percent winners, including one stock that is up a whopping +5,000%. And for a select group of investors, Rusty has agreed to share his secrets of success... and his top stock recommendations. Click here to learn more... ]

Market Watch

Range Trading Made Easy

By Charles Delvalle

One of the easiest way to make money in the stock market is to buy and sell a stock that’s range bound.

All a range-bound stock does is float between two price points for a long time.  In other words, the stock has a hard time going above a certain price or staying below another price.  Take a look at the chart below to see what I’m saying.

Notice that for the past year, Nymex (NMX) usually doesn’t move higher than 135 or lower than 120.  That means the NMX is in a 15-point range.  Making money off this range is simple.

All you have to do is buy NMX at 120 and ride it until it hits 135.  That’s a 12.5-percent gain.  Once NMX hits 135, sell your shares and at the same time sell NMX short.  Once NMX falls back to 120, just buy your shares back and you’ll make 11.1 percent.

You can keep doing this until the stock gets out of its range.

Recently, I told readers of IDE’s Global Profits Hotline how to leverage this range with options.  In just a few days, they closed out half of their position at a 51-percent gain.  The other half is already up more than 60 percent.

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