From the October 2008 Idaho Observer:

What if they gave a depression and nobody came?

By Hari Heath

The subprime-derivative-bailout-heist has captured the world’s attention. Why shouldn’t it? Life, as we have come to know it, pivots on what we call an economy, however fictional its foundation may be. Everyone, save those few remaining humans who live close to nature, is in a heightened state of economic anxiety.

But what is this "economic crisis?" Is it a collapse of the system from mismanagement and corruption, or was it engineered, like a war, to maintain our faith and allegiance? Is it also cover and subterfuge for a coup de etat by the global monopolists?

Amidst all the hype, fears and concern is a glimmering flicker of opportunity—the chance to face our fictional realities, forge our own financial freedom and return to the sound money Congress abandoned ninety-five years ago.

The worthlessness and criminality of the Federal Reserve Bank (FED) and its owners are now revealing themselves for all to see. This "crisis" and the response to it, by those pretending to be "our" government, has unified the people of the nation and the world with a common disgust and distrust of those in the political and economic spheres.

So what have we here?

The former CEO of Goldman Sachs, Henry Paulson, was appointed Treasury secretary in 2006, continuing a chain of Goldman Sachs appointees to the Treasury Department. What better aptronym could Paulson appoint as bag man for the great $700 billion dole out than his former Goldman Sachs VP—Neel Kashkari, AKA "cash carry."

With a little help from Uncle Sam, the derivative players (Goldman Sachs et al) can now "kneel" before "cash carry" to keep their game afloat just a bit longer. The $700 billion figure is merely arbitrary because the "bailout-er-rescue" bill also gave the Treasury secretary unlimited power to loan "money," in any amount, without oversight or review. The blank check of the nation is now forever in the secretary’s hands. Before the next few rounds of the shell game are over, a $multi trillion bailout will have been doled out, as the "crisis" continues.

The Devil’s triangle

But who is bailing out whom? Let’s see how confused we can get trying to make sense of this senseless situation: Congress has appropriated $billions to the Treasury Department to bailout the troubled bankers. Most likely, the treasury will borrow the "money" from the FED, since the Chinese and our other friends no longer give full faith and credit to our "dollar." So who owns the FED?

According to Andrew Gause ( "the Federal Reserve Banks are a privately-owned consortium controlled by the eight major stock-holding families: The Rothschilds of England and Germany, Moses Seif of Italy, Lazard Freres of France, the Warburgs of Germany, Kuhn-Loeb of Germany, Goldman-Sachs of the United States, Lehman Brothers of the United States, and the Rockefellers of the United States."

Are you starting to get the picture? Congress authorized the U.S. Treasury (now run by "ex" Goldman Sachs people) to borrow from the FED, what will be given back to some of the owners of the FED and their co-conspirators to "rescue" them from the "crisis."

The "crisis" is not so much a bank failure as it is a derivative pile up. A mere $700 billion and rising will be thrown at more than a thousand trillion$ in derivative holdings to keep the house of cards from falling while "We The People" get to shoulder the burden of another debt obligation that will be added to the already unpayable national debt. Are you outraged yet?

Go look in the mirror. Using an American population factor of 300 million, YOU, your spouse, your children and every person living in America have just been indentured for another $2,333 each, if $700 billion fixes the problem. It won’t. The estimated $5 trillion needed to merely stop the derivative market’s hemorrhaging will indenture you—every one of you—for $16,666. And that’s just to stop the bleeding of a "market" within which you are not a willing participant.

Some claim that it is the taxpayers of the future who will pay for this debacle, but what do "taxpayers" really pay? Since at least the Reagan era, taxpayers haven’t even kept up with the interest on the debts amassed by congressional appropriation.

The tax that will pay for this is the inflation tax, as the "dollar’s" present slide turns into a tumble down the slippery slopes of "Mount Fiat." This "bail out" will trigger a new inflation tax rate, which every user of FED "dollars" will pay directly to the currency-issuing FED banks.


So what is the real problem here? The world, or at least the "markets" and the bankers, are facing a derivative meltdown.

Having heard the term derivative bantered around, I tried to research and understand derivatives. What I discovered most was how little I, or anyone else, understood derivatives.

Based on what little I could glean on the subject, I will attempt to render a simplistic view of what derivatives are. If any other writers can deliver a more definitive and understandable tale about the fiscal metaphysics known as "derivatives," please send an article to The Idaho Observer. The world is awash in them and we know not what they do.

Many readers are already familiar with fractional reserve banking where banks are allowed to loan "money" they don’t actually have, as long as they maintain a "deposit" base that is a certain "fraction" of the "money" they have out on loan. Banks don’t actually loan money, they loan credit (but that is another story).

Derivatives follow a similar pattern of fractional extra-valuation, except that various traders in the markets can exchange credit obligations or other "assets" as the security for future promises to repay for "wealth" lent between players in the derivative game. It is important to understand that, with derivatives in particular and the present economy in general, a "debt" becomes an "asset" once it has been lent. Each new layer of debt becomes another "asset" suitable to be traded again—a derivative. The whole scheme works fine until someone gets too greedy, the margins get too thin, or an "asset" at the base of the derivative pile "fails."

John Q. and the banks

Since the "subprime" mortgage is alleged to be at the root of the current "crisis," let’s explain it with a hypothetical example using conservative 10 percent fractional margins:

John Q., with not much of a job, no money down and a questionable net worth, buys a real dump of a place for $100,000 with the help of Bank A and its creative financing package. He begins to make payments on time, which for the first 10 or 20 years will only pay interest and not principle. Bank A shows Bank B their "asset" of John Q’s debt and asks for a $1 million loan. Bank B agrees that Bank A will be good for it and loans Bank A the cool million. Bank B shows Bank C their "asset" of the million dollar loan to the well-respected Bank A. Bank B asks for a $10 million dollar loan from Bank C, who agrees Bank B will be good for it, based on their "asset" put as collateral.

On and on it could go except John Q’s live-in girlfriend enticed John into running up his credit cards including the new ones that came in the mail since his loan was approved. She then ran off with someone else and John’s car and all the credit card-purchased wardrobe and household items she could stuff in the car. John Q. looked at the house he was only paying interest on, the future at his dead end job, a massive, unsecured credit card debt and an empty home in need of repair. John did what many Americans have done—he walked.

John’s former $100,000 house has dropped with the collapse of the housing bubble to a $50,000 market value. Half the houses on his block are sporting for sale signs that are fading from sunlight.

Meanwhile, Bank C needs $10 million of the congressional "bailout-rescue" because it’s holding an empty bag of derivatives "caused" by John Q. and his failed loan. Who are we to let those poor bankers come up empty-handed? Are you mad as hell yet?

Real estate is only one foundational source for derivatives. You might have a contract for 20,000 tons of soybeans on the futures market, or 10,000 ounces of paper silver, or you may own 5,000 shares of (the now defunct/bought out/merged) Lehman Brothers stock. Any "asset" can become the basis for a venture into the derivative markets.

The two-faced "crisis"

It appears that, on one side we are faced with a crisis caused by failures in lending, market value collapse, greed and corruption fueling marginal schemes of finance and lack of regulatory oversight by a "government" that should have prevented this. The pundits proclaim this, the media echoes with their chorus and example after example can be found to smother our consciousness with this face of the "crisis" until we are sufficiently nauseated.

On the other side, this "crisis" is a precisely-engineered result designed to eventually and gradually condition us to not only accept, but also want the next level of the globalists fiat empire. Regional fiat currency schemes like the euro are to replace national currencies. The amero is planned for North America. Common Asian and South American currencies have also been suggested. Interestingly, I have not yet heard of any plans for an African economic unification model. Is Africa even on their map?

Even before the regional currency plan has been implemented, the G7 and the G20 have been meeting to discuss creating a global economic regulatory entity as a "response" to this "crisis." The "problem," of course, are the nationalistic tendencies of national currencies, which only a global super FED can "solve." Problem, reaction, solution?

Regional currencies are only a stepping-stone to a global currency—gateway drugs for a global fiat currency fix.

Crisis? What crisis?

Maybe I’ve been out in the woods too long and not paying attention, but what pivotal event actually caused the "crisis?" Is there something real here that we can put our finger on?

The banking cartel has created this entire economy from nothing. It creates money at will. Every "dollar" in circulation was loaned into circulation by them—they can bail themselves out any time they want by issuing more "dollars" and floating more loans into the fake-believe economy.

Is there a crisis because we simply were told there is a crisis? Are we falling for a ruse that somehow there is a new problem that didn’t exist before? How is the structure and performance of the "economy" today different from what it was a month or two ago? Have we fallen into the notion that there really is a crisis and we must act to bail out, er, "rescue" the troubled bankers and their economy of fiction?

Has the only real economic problem been the crimp of fear that was induced by news media that the economy was in "crisis?" How many of us stopped moving forward with our plans based on what we were told was happening? Is it real or manufactured in our minds? What else happened along the way?

Are we buying it?

The news that there is crisis and potential imminent failure of the economy seems to have created a serious concern across society. Panic, stasis from uncertainty and anger at the perceived threat were common responses, along with a near universal abhorrence of Congress and its "bailout" plan.

The packaged news has been delivering quite a bundle this year. Iconic Banks like Bear Sterns, Lehman Brothers, Washington Mutual and Wachovia have fallen to dime-on-the-dollar buy-outs, mergers and acquisitions.

The invincible mortgage agencies Freddie Mac and Fannie Mae have been put into conservatorship after their devaluing stock triggered a look at cooked books, millions in lobbying and campaign contributions, cover-ups and fraud.

Major insurance and brokerage funds have failed. They are no longer "Bullish on America" as news of corruption, indictments and insolvency flood the press.

Government leaders reassure us that everything will be fine while the markets around the world fall to record lows.

The FED appears to be losing control as everything it attempts fails to produce a positive result. Impotent? Irrelevant?

Gold is up, then pushed back down in defiance of free market principles. Silver follows suit. Just how do stocks falter, while the dollar drops AND gold and silver prices fall? Precious metals usually ride on the opposite end of the teeter-totter.

Rumors of bank lines create longer bank lines as the FDIC offers vain assurances of security.

The run on gold begins as people try to hold onto their wealth at this late hour. The physical supply of gold is dwindling under panic buying, yet the prices don’t reflect the laws of supply and demand.

Life savings and retirement funds have taken a big hit for those who kept their wealth in FED dollars and the stock market.

Bailout or sellout?

Perhaps the most stunning part of this whole debacle was the congressional sellout to the Goldman Sachs gang. The utter, venal, worthlessness of the Congress was revealed to the American people when it passed the "sweetened" Senate version of the "rescue." Add $150 billion in earmarks, remind them of their campaign contributions and members of Congress will ignore the calls and emails from their constituents, reportedly running a thousand-to-one against the bailout.

Who owns Congress? With no room for doubt now, it ain’t us.

The desperate gamble by the Goldman Sachs gang has paid off with the creation of an openly unaccountable, non-reviewable financial dictatorship in the U.S. Treasury Department. The Treasury has been delegated the absolute power of economic creation and control. They are wielding the sword of rescue and so far the other bankers are on bended knee before the throne.

Soon after assuming the powers of the dictatorship, Paulson brought the CEOs of the nine remaining major banks into his office, promised to make another $1.5 trillion in "senior debt" available, forced them to sign on to the "rescue" and thereafter bought shares in the banks.

Are you ready for some real confusion? Try following this. The Goldman Sachs Gang bought Congress who then empowered the U.S. Treasury (headed by "ex" Goldman Sachs CEO Paulson) with absolute monetary power and control. Most likely with money borrowed from the FED, the Treasury has bought shares in the banks, some of which are owners of the FED. The banks evidently own Congress outright and the Treasury by appointment and confirmation. And now the Treasury owns the banks. Have we achieved a perfect state of economic fascism?

In a round-about way, depending on who really owns whom, the FED for the first time in its’ ninety-five year history can now be described as "federal."

This arbitrary and capricious "economy" begs yet another question: If "we" owe nine or 20 or 70 trillion dollars, mostly to the FED (depending on the accounting) and we "bail out" some of the banks that own the FED (an amount that will soon exceed $2 trillion), will that amount be deducted from the amount "we" owe?

Yes, we should all be confused by now.


We can take solace in the fact that an economy of this magnitude is merely fiction. If it were real money, even in paper form, it would have considerable weight which, being concentrated in the Northern Hemisphere (and mostly around the perimeter of the Atlantic Ocean), would likely cause an imbalance of the planet. Like an out-of-balance washing machine on the spin cycle, we could oscillate out of orbit and away from the Sun.

Perhaps this is what happened to the mythical "Planet X." It is reported to have an extreme elliptical orbit that only brings it back in the neighborhood every 3600 years. It is also alleged that the inhabitants of Planet X collect all the gold we humans have mined since their last visit. Perhaps somewhere in their history they, too, allowed a fractional reserve, fiat economy to begin, which naturally devolved into a derivative market, upsetting their balance and sending their planet spinning off in an extreme orbit. They may be trying to use our gold to bail themselves out of their derivative pile up, balance their economy and rejoin the solar system in a more normal orbit. There could be something real about this "crisis" after all—something that could make global warming pale by comparison.

In reality…

Is the "crisis" really as bad as we are being told it is? Have you, your friends, family and neighbors been affected by any real economic events? Several weeks have passed since we were given the news. What’s real?

Gas prices are down which should keep other things from rising. Food prices seem to be holding steady for the most part. The shelves in the stores appear to be well stocked. Traffic seems normal, there’s no roadblocks or troops on the street—yet.

If we can believe the government’s numbers, the Consumer Price Index remained steady, unemployment is up a little and manufacturing is down. The only "problem" is a drop in our confidence since we were told there was a "crisis."

Our economy and the FED dollar only continues because we believe it has useful value and there remains cash in our pockets and/or an agreeable collection of numbers "credited" to our accounts. If we lose faith in its value or the banks pull back the numbers, its over.

The bright side

Even if there were a systemic failure of the national or global economy, there is a bright side. Researchers of the many and various Comprehensive Annual Financial Reports (CAFRs) from nearly every subdivision of government estimate that two-thirds of the stock market investments are government-controlled funds—retirement, slush funds, etc. As these benefits and resources wither away, so too will that giant behemoth, "government," for lack of a better word. With no retirement, benefits, a salary or a secure future, will government workers find motivation to follow the mandates of the empire?

Since we have been giving away half of our income to "government," through taxes hidden and otherwise, our personal income might improve. Those who "work" for the government will have to find gainful employment, creating competition in the marketplace, but the natural cycles of a free market will ultimately resolve this.

Will we learn?

If the present FED fiat money scheme reveals its inherent worthlessness will people accept the next level—a regional or global fiat scheme? Will we learn from this FED debacle and reject the amero or any similar scheme by making it a hanging offense to proffer any fractional or fiat money scheme? The Coinage Act of 1792, which created the American Dollar, made it a hanging offense to debase the alloy or weight of the coinage. Look at how debased we are now, under the FED and the Congress it evidently owns!

Time out

If we find ourselves with no money and only the things we acquired under the FED economy, we will have the luxury of time to refocus our priorities and adjust back to reality. We will naturally move away from the present bombardment of commercial images in our credit-driven consumer society when their funding ceases. When the media networks fail we can awake from our TV-induced slumber and, for the first time in a long time, begin to see the real world around us.

We may also discover the Achilles Heel of the global elite’s plan. They see through their eyes and think we are like them. Psychopathic, self-interested and motivated by base desires. Their plan may fail because they did not factor in the basic goodness of human nature. The new social security could be neighbors helping neighbors, without any government to account for it. Cooperative ventures may spontaneously erupt without any care for a Title 26 status. Property may become what you can hold and make useful without renting from the state or county as we do under the present confiscatory, taxing scheme.

The masses are awakening to the elite’s plans and corruption that is now very evident. I suspect a new poll of the people will drop Congress’ approval rating from nine to two percent. Once the inaugural ball is over, the next occupant of the White House will likely share a similar level of popular support. There is nothing about where the country is headed that any of us want.

The overlooked solution

Amidst all the hype and proposals to "solve" the "crisis," is an overlooked, real solution. It proved very workable in the past, maintaining a stable economic value in this country for over a century. Article 1, Section 8, Clause 5 of the Constitution gives Congress the power "to coin money and regulate the value thereof." It does not say "print" or "delegate the issuing authority to a banking cartel." It says, "to coin." The laws passed pursuant thereto are still in place. They just need reactivation along with the rest of the Constitution.

Millions of real dollars, already minted, are awaiting their usefulness in a new economy. Many astute preservers of wealth have "hoarded" lawful U.S. gold and silver coins, which can be spent back into circulation while the U.S. Mint restarts production and assumes its proper role as the lawful issuer of real money—gold and silver coins.

Banks can then be reformed to perform certain honest functions. They can hold people’s wealth in their vaults, for a fee. They can be a co-lender, sharing loan proceeds with their depositors. They can form networks to transfer real money between customers for a fee, making long distance commerce possible. And bankers can be hung from the nearest tree until dead if it is proven they operated any fractional money scheme.

With sound money and serious control of banking, both savings and investment will become possible. Some will argue that there isn’t enough silver or gold for today’s economy. If the natural market forces aren’t interfered with, any given commodity will find balance under the law of supply and demand.

Value adjustment

I predict that a lawful silver dollar will soon become worth two to three hundred FED dollars if the fiat economy continues its present descent into oblivion. Today, a silver dollar "sells" for between 10 to 20 FED dollars. Presently, one to three real dollars per hour are good wages depending on the skills, tools and results brought to the job. After the short-sold, paper silver scam reveals itself and the artificial suppression of precious metal prices are no longer possible, silver values will adjust to reality, quite dramatically. A dollar a day could again be a good wage, after there is a free market adjustment and inflation runs its course.

In reality

We have been told there is a "crisis." Fear induced by the news has instilled a quiet panic. Our reaction has largely manifested itself as moving forward more slowly in our daily routines with nervous anticipation or holding tight, waiting for the next economic bombshell to drop. It hasn’t happened yet. Their news is alarming, but life goes on.

What if they gave a depression and nobody came? It’s their depression, not ours.

The fiat empire of the globalists is thrashing about in desperation, boldly gambling that these moves will continue to maintain our indentured status as they attempt to institute their final plan. In reality, they need to keep their fiat system going. They can’t let it crash or they become nothing.

In our reality, we have our wits; we have each other; we have whatever real things are present and accounted for. From here we can build our tomorrow.

We have a future. The empire doesn’t.