Robert Rubin

September 28, 2008

Farfel (usagold.com 28September2008; 19:41)

It is now abundantly clear that Wall Street engineered a “false prosperity”
these past two decades, as follows:

1. Goldman Sach’s proxy, Robert Rubin, engineered collusive hedge fund
raids against various currencies during the Nineties (e.g. SouthEast Asian
currency crisis, South American currency crisis, Russian currency crisis,
etc) for purposes of driving capital into the US dollar, US bonds, US
stocks, and US real estate.

2. Goldman Sachs’s proxy Robert Rubin introduced the concept of hedonics, a
means of hiding the true inflation picture from the public. Hedonics
utilized subjective measurements for distorting price increases (e.g., if a
computer’s price increased 25% and the computer speed increased 50%,
hedonics would state that, in reality, the computer price dropped since the
computer speed increase more than compensated for any negative impact
resulting from the price jump).

3. Goldman Sach’s proxy Robert Rubin engineered all variety of duplicitous
measures for controlling the gold price in order to hide the true inflation
picture. Through aggressive usage of paper gold leasing, super-sized gold
miner hedges (e.g., Barrick Gold’s massive forward sale of FIVE year’s of
its gold production) and reckless Western central bank gold sales, the gold
price dropped dramatically even as money supply surged alarmingly, averaging
a 10%-12% increase per annum. In theory, the gold price should be a
function of MONEY SUPPLY movement, not merely US Dollar strength. That is
because, for those of short memory, there was a time when the US dollar
served as merely a paper proxy for gold….so that the more paper/digital
proxies for gold in circulation, then the more the price of gold MUST
increase.

4. Goldman Sachs proxy Rubin engineered a variety of commodity/currency
carry trades for purposes of pumping international liquidity into US
markets. The currencies of commodity nations such as Canada and Australia
were shorted collusively into the dirt while key “commodities” (notably gold
and silver) were attacked simultaneously. The fall in commodities and
national currencies dependent upon commodities became a vicious spiral
downward — and the net result were outflows of liquidity into the US
dollar, US stocks, US bonds, and US real estate. Wall Street firms amassed
billions in profits through this collusive illegal effort while unwitting
counterparties (notably gold and silver investors) were DEFRAUDED of their
rightful profits. Of course, the most egregious carry trade (the YEN carry
trade) was accomplished, not via the “commodity” short attack, but rather by
convincing acquiescent Japanese financial authorities to maintain their
interest rates far below USA rates.

5. Interest rates effectively dropped to zero following the tech bubble
collapse in order to shift the stock market bubble into a real estate
bubble. Once again, the market was subverted from finding its proper
equilibrium level through inappropriate interventions by a Fed controlled by
the Treasury controlled by Wall Street investment firms.

6. Real estate mortgages were securitized in order to enable Wall Street
firms to treat a growing problem as though it were an asset rather than an
escalating dangerous debt. Moreover, the securitization of such debts
allowed Wall Street cronies to reap gargantuan profits from yet another
derivative concoction built upon a foundation of nonsense. These
“combustible” securities were sold to a cartel of Wall Street cronies –
very much similar to the Mike Milken junk bond cartel of the Eighties — in
which certain “club members” knew the mortgage securities were bogus while
many others were conned into believing that they were true “assets.”

These six fore-mentioned strategies are merely the most notable in a litany
of market subversions utilized by a USA government that is categorically and
unashamedly controlled by its Wall Street masters. There is no longer even
the pretext or hint of a Chinese Wall between Wall Street and US Treasury.
That the politicos are merely servants to Wall Street is best exemplified by
the Paulson coronation. During hearings to determine Paulson’s suitability
for the position of Treasury Secretary, a long list of subservient politicos
failed to ask the ONE question screaming to be answered:

“Mr. Paulson, given that Robert Rubin, a former Chairman of Goldman Sachs,
controlled the US Treasury under President Clinton…and given that you
served recently as head of Goldman Sachs…then would you not say that
Goldman Sachs exerts too much influence over the Treasury of the USA?”

The failure to ask this foregoing question — THE obvious question that any
six year old child would have considered — negates all claims by USA Repubs
and Dems to any semblance of “independence.” Unfortunately, the major
reason for politicos’ dependence upon their financial masters revolves
around one indisputable fact: the typical USA politician seems barely
capable of balancing his own bank account, let alone interpreting a budget
or understanding financial/economic esoterica.

And the question that should be asked of the allegedly “independent” Senator
Obama is this:

“You claim to represent a “change” in America — yet you have brought former
Treasury Secretary Robert Rubin into your circle as an economic
advisor….so, Senator Obama, given this fact, tell us whether there will
ever come a day when the American people can be liberated from the
tyrannical control of their financial affairs as exercised by Goldman Sachs
and its various Wall Street cronies?

There can be no genuine “bail-out” for the financial system until the
market is allowed to operate freely again, rather than operating under the
thumb of various monopolies, cartels, oligopolies, and compromised market
regulators whose key members pay themselves bulti-billions in undeserved
bonuses, stock options, obscene salaries, and tax-deductible perks. Any
erudite economist would tell you that a free market cannot operate
efficiently when it is subverted constantly by financial, political, and Big
Media elites.

The only appropriate bail-out ideally should include the following
conditions:

1. NO bail-out until the key financial “advisors” of the nation are
replaced summarily. That means a speedy farewell to both Paulson and
Bernanke, to be replaced by two choices determined by an “economic jury,”
comprised of 12 senior academic economists selected randomly from 12
randomly selected universities.

2. NO bail-out until the financial regulators operating the SEC and CFTC
are replaced summarily. You cannot restore the integrity of the USA
financial system while the same regulators who allowed this mess to develop
remain in place. Nor is it encouraging to learn that the CFTC is finally
getting around to “investigate” the artificial suppression of the silver
market when what is truly needed is a formal body to investigate the CFTC
itself. It is far past time to determine the exact nature of the myriad
connections linking Wall Street to the SEC and CFTC. We have already
learned of one most egregiously corrupt connection, specifically the fact
that Hank Paulson was a member of the committee that awarded Richard Grasso,
former head of the NYSE, approximately 300 million dollars as a farewell
gift for looking the other way while Wall Street rigged a tech bubble in the
late Nineties for purposes of lining crony pockets at the expense of the USA
middle class.

3. NO bail-out until genuine Chinese Walls are erected between Wall Street,
the Treasury, the Fed, Big Media, the Presidency, the Senate, the Congress,
and the judiciary. As it stands, Wall Street cronies have far too much
influence over the principals comprising each sector — and until there are
laws in place with real teeth that GUARANTEE the autonomy of each sector,
rather than their subordination to Wall Street interests, then America will
continue to operate as a plutocracy rather than the democracy originally
intended.

4. NO bail-out until, first and foremost, the massive extraordinary
compensations afforded key Wall Street partners, corporate chieftains, and
market regulators are terminated and, most importantly, retroactively
disgorged. In other words, there is no reason to expect the hapless USA
taxpayer to contribute a penny toward this “emergency” bail-out until the
true beneficiaries of the past TWO decades’ false prosperity make their own
contributions to the effort. For example, it is entirely preposterous to
allow 200 Goldman Sachs partners to walk away with 15 BILLION dollars in
bonus compensation awarded in 2006 — an obscene reward provided for
generating bogus profits — while the poor fireman, nurse, paramedic,
school-teacher, sanitation worker, etc., struggling to pay their monthly
apartment rent, must pay increased taxes for the errors of Wall Street ways.

5. NO bail-out without radical political reform. What that means is that,
upon election, politicians must pass certain minimum standards requirements,
no different than standards they demand their electorate pass all the time.
For example, the electorate must pass tests to prove eligibility to drive a
car…and it is only appropriate that tests be devised to ensure that
politicians have at least a minimum understanding of economy and
finance….otherwise Wall Street will once again gain excessive leverage
over the nation’s politicians since, in most cases, the politicians hand
Wall Street that leverage on account of their gross ignorance pertaining to
all things related to money. Most importantly, the two party system is
outdated and allows for financial elites to exercise excessive control over
politicians of both parties. There must be new laws that ensure THIRD PARTY
protections, such that Third Party candidates can no longer be hidden from
view, such that Big Media can no longer exclude Third Parties from the
national debate. Until Third Parties have such protections, then the USA
plutocracy will continue to subvert every aspect of democratic ideals.

6. NO bail-out until compensatory damages (plus interest) are awarded to
gold/silver investors who have had their investments artificially suppressed
or destroyed by a collusive Wall Street cartel acting in secret against
those investments, not for the benefit of a nation, but rather solely as a
means of feathering their own nests. As part of this settlement, ALL SHORT
SELLING AIMED AGAINST GOLD/SILVER INVESTMENTS SHOULD BE OUTLAWED UNTIL SUCH
TIME THAT A STABLE PRICE EQUILIBRIUM WITHIN THE GOLD/SILVER MARKET IS
ACHIEVED. If this results in a radical revaluation of both the gold and
silver price, well so be it. In the past, America did well enough despite
huge revaluations of gold and silver prices, and there is no reason to think
it cannot do so again.

I could list many more issues that should be addressed prior to a bail-out
but I consider the foregoing points to be of salient importance.

We are witness to a genuine existential event transpiring in the markets or
what some would describe as a “rogue wave.” What that means is that all
standard methodologies previously utilized to deal with market problems are
likely to be ineffective in any long run sense. Instead, it is far past
time to employ radical measures to terminate the rogue wave and allow for
speedy heeling of a very corrupt dysfunctional economic system.

If the nation fails to take such drastic measures, then it is quite possible
that further existential events will transpire, the kind of shocking left
field events that few Americans would imagine to be conceivable.

As America continues down the path of economic corruption, moral relativism,
and lowest common denominator cultural priorities — all acting
synergistically with each other — who knows what might transpire? There is
tremendous frustration and fury developing with the current abysmal status
quo.

If the nation were to awake to a military coup someday and the overthrow of
the current dysfunctional government, frankly, would it really be such a
shock?