World Killer

Morgan is the quintessential leviathan in the Interest Rate arena through their obscenely sized Medium-Term Interest Rate Swap book which stood at 59 Trillion at June 30, 2008.

The interest rate swap book, due to its sheer size, overwhelms the bond complex by creating artificial demand for government securities. This interest rate suppressive activity began in earnest back in the 1990's and has kept market rates of interest at artificially low levels. The FUNDAMENTAL [and ongoing] MISPRICING of CAPITAL - for many years - has led to a myriad of economic excesses like the Dot Com boom, subsequent housing boom and the financial asset boom itself.

Morgan's overbearing effect in the interest rate complex required the simultaneous suppression of the gold price. This was done to make falsified inflation data seem credible.

It has often been said that, "if real inflation heats up - BOND VIGILANTES would raise market rates of interest reflective of real inflation". The reality folks, the BOND VIGILANTES are extinct - they lost their jobs long ago - being swallowed by the black hole that is J.P. Morgan's derivatives book.

This is documented in a laundry list of articles archived at Kirbyanalytics.com.

"I fear that we are dealing with something far different at this time.

They have unleashed the forces of chaos upon us.

We witness the western governments giving their Treasuries the power to directly tap the income of the citizens to use in market manipulation.

The joke is that they are giving the citizen's wealth to the very same people who caused this debacle.

So much for the myth of humans having intelligent, discerning minds!

So now we know the rules.

Of course, the reason why J.P. Morgan's financial adventure-ism has not yet landed them in the financial dog-house is no doubt rooted in this:

Dawn Kopecki reported [spring of 2006] in BusinessWeek Online in a piece titled, Intelligence Czar Can Waive SEC Rules,

"President George W. Bush has bestowed on his intelligence czar, John Negroponte, broad authority, in the name of national security, to excuse publicly traded companies from their usual accounting and securities-disclosure obligations. Notice of the development came in a brief entry in the Federal Register, dated May 5, 2006, that was opaque to the untrained eye."

Folks need to realize that J.P. Morgan "IS" the Federal Reserve.

They undoubtedly have a "pass". This becomes clear when one stops and really analyzes the words of Dallas Federal Reserve President, Richard Fisher;

"The Federal Reserve will do what it takes to maintain its credibility, which is central to preserving the integrity of the US dollar," Dallas Federal Reserve Bank President Richard Fisher said on Tuesday.

This report, from Reuters, continues: "We seek to get it right. And the answer to your question is we will do what gets it right," said Fisher.

Answering audience questions after a speech to the Dallas Friday Group, Fisher said the US dollar is a "faith-based currency" dependent on the credibility of a central bank.

"In addition to a faith-based currency, we are the currency of the world and we must maintain its integrity..."

Don't you just love the way they maintain the faith, their credibility and keep getting it right?

This rancid injustice has already led to the situation where COMEX futures precious metal's prices have decoupled from, and bear no resemblance to the costs of obtaining physical stocks of the same.

This appears to have also happened in the interest rate complex with Libor [London Inter Bank Offered Rate - a futures generated price] becoming a poor proxy for where banks will actually lend money.

How long before this fecal odor infects the energy complex leading to the demise of the petro-dollar is anyone's guess?

Are you a believer?

Rob Kirby

email: rkirby@kirbyanalytics.com
website: Kirby Analytics

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