Iraqi Dinar, recently being said: ...

The Rumor Mill News Reading Room 

Iraqi Dinar, recently being said: ...

Posted By: hobie [Send E-Mail]
Date: Tuesday, 31-Jan-2012 15:15:30

(Thanks, B. :) Reader B. sends us: ===== 1-31-2012 Guru Freeway Bill This baby could literally drop at any moment...Agreements have been made and we are on an "hour by hour" watch. 1-31-2012 Guru Cap1 cash in should be starting on wednesday...some believe we need to hurry to cash in because the rate is going to drop, some say it will be 30 days. the rate will be in the $8 range. 1-31-2012 Guru Frank26 We need to raise the value because inflation is getting out of control. Inflation is likely touching 10% and maybe even 11% now. Syria and Iran causing issues? Think on these things. the budget is really done and is awaiting the GOI and CBI to release it anytime now. we will see the rate before they see Ch. 7. Read more: http://www.dinarguru.com/#ixzz1l3ts9upa

BREAKING NEWS --- JIM SINCLAIR W/ ELLIS MARTIN

http://www.youtube.com/watch?v=9802NwSSS6U&feature=player_embedded

IMPENDING - 5 LARGEST MAJOR BANKS BANKRUPTCY NOW  --- MUST HEAR!


There are, as many of you know, ongoing "haircuts" for debtors in the Euro markets. Say you've loaned Greece money by buying a bond. You expect to get a certain amount back (more than you put in, obviously). But with the recent Eurodoom, debtohlders have to take "haircuts" -- 30% for example. 

Now, when this happens, a certain type of insurance is supposed to kick in for some investors. A CDS (type of derivative) is one example. Say you are a US investor ten years ago, and you wanted to invest in Greek bonds but you are worried (understandably - look what happened) about the risk. You might buy a CDS, which is similar to an insurance contract. It says you will be paid such-and-such amount if Greece defaults.

It's not a bad idea in theory, but what happened is the elite financial world started to gamble on CDS even for instruments they don't own. It would be like if I took out insurance that would pay me huge amounts if you have an auto accident. Then I get you drunk and convince you to drive. 

Since there is nowhere near enough money to make good on all thes promises (for both rational investors and wall street megabanks that have glommed on to this stuff like crack), bondholders are not going to be compensated for their losses (money they expected and may even have booked in accounts), and the mega banks aren't going to get what they expect either, so they have much, much, MUCH less money than they expect.

There is a potential for total systemic collapse. "The Big One."


http://www.godlikeproductions.com/forum1/message1770181/pg1

WHISTLEBLOWER: MONSANTO WANTS TO KILL THE BEES TO MAKE WAY FOR ITS SUPER-BEE

Subject: WHISTLEBLOWER: MONSANTO WANTS TO KILL THE BEES TO MAKE WAY FOR ITS SUPER-BEE 

This will help to de-populate the world !!!! Jan. 28, 2012    Soon to be whistle blower who worked for Monsanto will be releasing documents detailing how Monsanto planned to kill off bee colonies in order to introduce a “new and improved” species of bee that will only pollinate Monsanto crops Relevant: Monsanto buys company researching death of bees: http://www.businessweek.com/ap/financialnews/D9Q1M0UO0.htm And for those who said crops aren’t pollinated by bees? You’re wrong. Alfalfa is http://blog.targethealth.com/?p=58 And if you think Monsanto isn’t dominating our government? Read some cables released bywikileaks all about our officials asking for talking points from them, our ambassadords urging trade wars on their behalf: http://themomu.wordpress.com/2011/04/02/wikileaks-cables-show-u-s-threatening-retaliation-if-europe-wont-accept-monsanto-corn/ Are they evil enough to do this? Read up about Monsanto: http://www.vanityfair.com/politics/features/2008/05/monsanto200805?currentPage=1 http://www.pakalertpress.com/2012/01/26/whistleblower-monsanto-wants-to-kill-the-bees-to-make-way-for-its-super-bee/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+pakalert+%28Pak+Alert+Press%29

The Word of The Lord for February 2012 & Beyond

Phyllis Ford Carpenter’s Touch Ministries, Arlington, Texas
www.carpenterstouch.org 

The Word of The Lord for February 2012 & Beyond
“Daniel 2:21-22 And he changes the times and the seasons: he removes kings, and sets up kings: he give wisdom unto the wise, and knowledge to them that know understanding: He reveal the deep and secret things: he know what is in the darkness, and the light dwell with him.”

“Colossians 1:16 For by him were all things created, that are in heaven, and that are in earth, visible and invisible, whether they be thrones, or dominions, or principalities, or powers: all things were created by him, and for him: and he is before all things, and by him all things consist.”

“This is a time where you will see the ranking order of nations/kingdoms shift. For the thrones of the enemy will come into full view this year. My glorious kingdom shall be fortified and further established by my sons that are being birthed forth as partakers of the promise that I am assembling from my heavenly throne. You will begin to see an aligning of those who I have called and prepared to rise up. It is time to declare your position and make known your rightful place says the Lord. I will give you the power of my authority to rule, to reign, to decree and declare as you progress throughout this year. In this time and even this month will mark several serious events that will come to pass because of my righteous judgments. The consequences of men have gone too far due to the sin of greed, pride and deceit.”

“I am removing kings and setting up kings and now you will see the overturning and drastic changes of governments, economic systems and those who are in places of authority, there will be a transition and shift, and there will be those who will show their hands (and their hidden plans) as others exert their authority in the land. Within these systems there will be new revisions that have been put in place to help mend the old plans but they will not remedy their offer to help the current systems that are in need. The foundation built by greed and mammon are about to give way. At the same time there are evil plans that are being set in place and are ready to be implemented to attempt to add to the confusion and fear upon the land and the people. These external forces are demonic systems that will operate through natural enemies to try to bring forth destruction, chaos and fear. So several things will be in operation at the same time, because you are now on an accelerated course and you must take action so that my plan and purposes are fully carried out.”

“Time is of the essence, be diligent in prayer and be vigilant. Watch for the signs that are before you. But also know that I will rebuild my people and I will complete the manifestation of my light and glory in order to restore that which the enemy is trying to destroy. I declare this now in the heavenlies before you; My heavenly government will arise in great might by my own hand, and all the plans that the enemy has set forth at this time for the destruction of my people will not SUCCEED. The time of advancing the work of the kingdom is now. For I will open up the two leaved gates and they shall not be shut, and I will set in place key things to strengthen your position for your provision. But you must carefully follow my instructions because there is great resistance to that which I am bringing forth. Don’t allow anything to frustrate you and distract you, nor to deter and hinder what is being supplied.”

“It is important for you to focus upon building the most essential things and set them in order because you will have to initiate major plans in a short window of time. Know I have prepared all things and know that this is the hour that my people shall come forth with my wisdom to do my bidding upon the earth, in order to be prepared for the trouble that will occur. Listen carefully, It is important to hear clearly in order to know what to initiate and what to wait on because now everything has an order and everything has a set a time, and all must be completed in the right sequence to achieve the right results. In order to know these things you must stay in my presence. Watching and obeying is very significant right now.”

“For the winds of change are blowing; and as the hands of the righteous have risen up—so shall the hands of those who render evil will be revealed. So you must not take anything for granted because much will be happening right now. In this hour you will make great strides toward good. Major victories will be won in the uncovering, but there will be also major challenges and minor setbacks. See things clearly for what they are, don’t allow your fears to over think your position. Watch and pray. Keep advancing and moving forward.”

“Mighty doors will be open to you and great availability will be present before you and none shall hinder them. I will rain down righteousness upon those who have not denied my name and have aligned their lives according to my will and purposes. Remember that your greatest weapons of battle and protection are within you. Your faith, Prayer, praise, the declaration of my word, and the exercising of your inheritance in me are powerful tools that I have given you, according to my covenant. You are sons, my redeemed and that which I have set forth will arise out of you with great power and glory.”

“You must recognize that even as there is a foreboding feeling of uncertainty and trouble, know that I am also moving forth to guide you, and instruct you. This is important for you now so that you will be able to handle the challenges of the day. I am protecting, preserving and even moving swiftly to help you counter the enemies’ plans. Your ability to accomplish every task has everything to do with that which has been given to you. These are being realized through the very love that is flowing from the heart of your Father, says the Lord.”

For those who feel stuck:
“It is time to move on, move beyond the old places and experiences that you might have thought were significant. Places of hurt, lack, and not knowing what to do or where to go from here. But I say to you, your future is before you and what you move forth to establish far outweighs what you feel you have endured in the past. In fact these were stepping stones to cross over into a new hour, and a new plan in me. So don’t allow the troubles of the pass to hinder or stifle you---don’t look back continue to advance for the time of advancement has come. Look for me in the glory that shall come down in the midst of regions that are crying out before me. Look for me in the victory that didn’t seemingly look like it could happen, yet suddenly it came to pass. Look for me in great breakthroughs which will take place even in this month –you will see. Know I will be in the midst of you working out situations miraculously.”

Prophetic Insights:
Much will be taking place in this month. It is one of the most significant months this year. The Lord began to speak to me about “thrones,” the evil ranks of the enemy that are in position. He also spoke concerning those whom He has positioned to overcome the works of the enemy. These clashes that are in conflict will affect the shifts in government that we will see.

The Lord spoke to me about watching North Korea and that right now even though it may not seem apparent plans are already being set in place for major upheaval to come---Russia as well is planning. (these things were revealed to me during night watch prayers). The Lord spoke of several confrontations:

“Nations will clash during this time. Some with power and influence will flex their strength to threatened and even to push/and intimidate with great sounds of authority. But there are those who are quietly planning who are the most dangerous in their rendering-–these silent enemies are like lions watching and waiting looking for a time to strike. Keep your eyes open and your spirit alert, for there are those who are preparing to move not with sound, but strike in dark silence.”

Watchmen stand on your post. Keep your hour of watch----The Lord will meet us there and release to us strategies, battle plans, and show us areas of trouble ahead.

There are a series of sounds going on right now. The Lord spoke to me:

“There is a sound that is coming from the earth. There is a sound in the atmosphere and there is a rumbling in the cities. One is the sound of travail upon the earth, and the other is a sound from those who are before me in intercession and prayer. Hear the sounds that are coming forth in this season and know also there shall be a sound of my judgment. For that which must come forth at this time will come forth. For this is the season of My release of glory and light to shine upon the dark places in the earth.”

“The birthing process is now beginning and is being established. This is the time of my coming, and my appointing. Know that I am preparing you. In this month you shall see and shall hear the Rising up of my sons and daughters to awaken and come forth into the light of my glory. You shall signs in the heavens and upon the earth. These are all signs and signals leading to the turning of the events that will mold and shape the things that about to come forth, says the Lord.”

Watch the last ten days concerning serious financial woes. (see Word of the Lord 2012).

Key scriptures: Joel 2:17-23, Isaiah 66:6-10, Psalm 122, Mt 19:28, Colossians 1:16, Wisdom 5:23, Daniel 2: 21-23.

Clean the Wells of Your Inheritance

JUDY BAUMANJewels From Judywww.thefathersloveim.org

Clean the Wells of Your Inheritance
January 30, 2012

A prophetic word of exhortation from the Father to His Church: Clean the Wells of Your Inheritance

“How many people throughout history do you think were unable to fully walk out their destinies in Me?

“People, both now and in the past, have been kept locked up by religion and religious activities; they have been bound by culture, and handcuffed by political systems. Deep in their hearts they know there was something more. These world systems, particularly religious ones, have come in and made promises to fulfill. However, they are the actual jailer to My people with the goal of turning them into slaves to their system. Even the best plans of man cannot outmatch Mine.

“Beloved, I am concerned for My Church – not for My sake, but for hers. She has gotten so caught up in “causes” that she has forgotten “My cause”! She has failed to see how My own Son dealt with the world’s systems or listen to what Jesus said in regard to His Coming.

“I showed Jesus and He followed My every directive. He went about doing His Father’s business and His life was My example to mankind. Jesus made His mandate clear in Matthew 28:18-20. This Scripture states that My beloved Church is to “Go make disciples.” Disciples are people who will follow Jesus’ example and obey His commands. They are both doers of the Word who have heard and do what Jesus said. These are the ones who have built their lives on The Rock and not the sand. I did not leave My Church without instruction! Yet most who are in My Church, which is not a building but the people who make up the Body of Christ, is building on sand. They hear the Words of Jesus but they do not do them. They are making disciples for themselves and their denominations. They are making followers of man; they are making men their security and means of prosperity for themselves – without regard for the eternal consequences! Leaders in My Church have used My Word – MY WORD! – to cause people to become enslaved to their whims.

“It is time for the Wells of your Inheritance, the stopped up wells, to be cleaned out. How much inheritance do you think you have waiting for you when My word states that I show love to a thousand generations to those who love Me and keep My commandments? Many that loved Me throughout time were kept from My completed purpose being fulfilled in their lives, so My storehouse is full of Promises waiting to be claimed! Their unfulfilled destinies are part of your inheritance, Child! There is more! Those who walked in My fullness have mantles waiting to be claimed like Elisha did with Elijah. You are surrounded by a great cloud of witnesses who are cheering you on – awaiting their reward. It is My desire for fresh, clean, Living Water to flow from your belly – from the belly of My Church. I want My glorious Church to rise up out of the ashes of self-inflicted wounds and wounds caused by others who have sought to stop up the Well of My presence. I have so much awaiting My Church and it is My desire for Her to come out of Her politically minded, man-made, self-promoting mindset and come to Me.”

"Come to Me, all you who are weary and burdened, and I will give you rest. Take My yoke upon you and learn from Me, for I am gentle and humble in heart, and you will find rest for your souls. For My yoke is easy and My burden is light." Matthew 11:28-30

“When My beloved Church does what is written here in Matthew, all these things troubling her will be shown for what they are – straw readied for the fire. As My people, those who have taken My name, humble themselves in fasting and seek My face in prayers of repentance, My lovingkindness will touch every hurting part and bring healing to your land. Come to Me and together let us clean the Wells of your Inheritance.”

Scripture References:
2 Chronicles 7:14; Exodus 20:6; 2 Kings 2:9-14; Mark 13:31-33; Matthew 4:23; 7:21-29; 24:36, 44; Luke 2:49; John 5:19; 1 Corinthians 3:11-16; 2 Corinthians 1:20; Romans 2:6-16; Hebrews 4:11, 14-16; Hebrews 11:39-12:1; and my prayer for you from the Father ~ Ephesians 3:14-21

Personal Note:

Beloved, we are not to quarrel and create strife, but to be gentle and able to patiently teach. (See 2 Timothy 2:22-26). The Church has gotten so focused on being “right” that we as a whole have failed to notice those souls watching from the sidelines. They are becoming more confused by observing our un-Christ-like attitudes than anything else; instead of being led to Christ, they are being led away from Him. How do you think Jesus would react to such things? What did His Father show Him? When Jesus was confronted by the Pharisees, whose goal was to accuse Him, He did not argue with them. He made His point and then moved on. Did God send in a gunman to kill Herod or Pharaoh to stop them from killing the innocent babies who happened to be born at the time of Jesus and Moses? No! Did He rally the people to protest against the oppressive Roman government? No! God’s purposes are not stopped by such things, but flourish in spite of such gross darkness. If our Father can do bring forth His will through such great wickedness, and even greater evil meant by nailing Jesus to the Cross, He can certainly do it in our circumstances today. (See John 10:10).

O glory to His name!!! Break off the shackles and handcuffs! Take off the grave clothes! Church – it is time to “clean out the Wells” and let the Lord fill us with His Living Water so that we can reach those who are thirsty and have never tasted the Living Water! AMEN.

Seniors Discounts

Senior Discounts

Keep this list. Send a copy to your Senior friends.

 

As I was waiting in line behind an older gentleman at Wendy's recently, I heard him ask for his senior discount. The girl at the register apologized and charged him less. When I asked the man what the discount was, he told me that seniors over 55 gets 10% off everything on the menu, every day. Being the age I am, I figured I might as well ask for the discount too. As I waited for my turn, I thought about the consequences of doing so. If the employee asked me for I.D., it could be embarrassing having to show my license. But if she didn't ask for proof, I would get depressed that I really did look "old" and that I didn't need to prove it. Since I always like to save money, I boldly asked for the discount, and sadly she just rang up the discount (even though I’m convinced I don’t look my age (Haha). Anyway, this incident prompted me to do some research, and I came across a list of restaurants, supermarkets, department stores, travel deals and other types of offers giving various discounts with different age requirements. I was actually surprised to see how many there are and how some of them start at the young age of 50. This list may not only be useful for you, but also for your friends and family. Hmmmm, Dunkin Donuts gives free coffee to people over 55. If you're paying for a cup every day, you might want to start getting it for free. Restaurants Applebee’s: 15% off with Golden Apple Card (60+) Arby’s: 10% off (55+) Ben & Jerry’s: 10% off (60+) Bennigan’s: discount varies by location Bob’s Big Boy: discount varies by location (60+) Boston Market: 10% off (65+) Burger King: 10% off (60+) Captain D’s Seafood: discount varies on location (62+) Chick-Fil-A: 10% off or free small drink or coffee (55+) Chili’s: 10% off (55+) CiCi’s Pizza: 10% off (60+) Culver’s: 10% off (60+) Denny’s: 10% off, 20% off for AARP members (55+) Dunkin’ Donuts: 10% off or free coffee (55+) Einstein’s Bagels: 10% off baker’s dozen of bagels (60+) Fuddrucker’s: 10% off any senior platter (55+) Gatti’s Pizza: 10% off (60+) Golden Corral: 10% off (60+) Hardee’s: $0.33 beverages everyday (65+) IHOP: 10% off (55+) Jack in the Box: up to 20% off (55+) KFC: free small drink with any meal (55+) Krispy Kreme: 10% off (50+) Long John Silver’s: various discounts at participating locations (55+) McDonald’s: discounts on coffee everyday (55+) Mrs. Fields: 10% off at participating locations (60+) Shoney’s: 10% off Sonic: 10% off or free beverage (60+) Steak ‘n Shake: 10% off every Monday & Tuesday (50+) Subway: 10% off (60+) Sweet Tomatoes: 10% off (62+) Taco Bell: 5% off; free beverages for seniors (65+) TCBY: 10% off (55+) Tea Room Cafe: 10% off (50+) Village Inn: 10% off (60+) Waffle House: 10% off every Monday (60+) Wendy’s: 10% off (55+) White Castle: 10% off (62+) Retail And Apparel Banana Republic: 10% off (50+) Bealls: 20% off first Tuesday of each month (50+) Belk’s: 15% off first Tuesday of every month (55+) Big Lots: 10% off Bon-Ton Department Stores: 15% off on senior discount days (55+) C.J. Banks: 10% off every Wednesday (60+) Clarks: 10% off (62+) Dress Barn: 10% off (55+) Goodwill: 10% off one day a week (date varies by location) Hallmark: 10% off one day a week (date varies by location) Kmart: 20% off (50+) Kohl’s: 15% off (60+) Modell’s Sporting Goods: 10% off Rite Aid: 10% off on Tuesdays & 10% off prescriptions Ross Stores: 10% off every Tuesday (55+) The Salvation Army Thrift Stores: up to 50% off (55+) Stein Mart: 20% off red dot/clearance items first Monday of every month (55+) Grocery Albertson’s: 10% off first Wednesday of each month (55+) American Discount Stores: 10% off every Monday (50+) Compare Foods Supermarket: 10% off every Wednesday (60+) DeCicco Family Markets: 5% off every Wednesday (60+) Food Lion: 6% off every Monday (60+) Fry’s Supermarket: free Fry’s VIP Club Membership & 10% off every Monday (55+) Great Valu Food Store: 5% off every Tuesday (60+) Gristedes Supermarket: 10% off every Tuesday (60+) Harris Teeter: 5% off every Tuesday (60+) Hy-Vee: 5% off one day a week (date varies by location) Kroger: 10% off (date varies by location) Morton Williams Supermarket: 5% off every Tuesday (60+) The Plant Shed: 10% off every Tuesday (50+) Publix: 5% off every Wednesday (55+) Rogers Marketplace: 5% off every Thursday (60+) Uncle Guiseppe’s Marketplace: 5% off (62+) Travel Alaska Airlines: 10% off (65+) Alamo: up to 25% off for AARP members American Airlines: various discounts for 65 and up (call before booking for discount) Amtrak: 15% off (62+) Avis: up to 25% off for AARP members Best Western: 10% off (55+) Budget Rental Cars: 10% off; up to 20% off for AARP members (50+) Cambria Suites: 20%-30% off (60+) Clarion: 20%-30% off (60+) Comfort Inn: 20%-30% off (60+) Comfort Suites: 20%-30% off (60+) Continental Airlines: no initiation fee for Continental Presidents Club & special fares for select destinations Dollar Rent-A-Car: 10% off (50+) Econo Lodge: 20%-30% off (60+) Enterprise Rent-A-Car: 5% off for AARP members Greyhound: 5% off (62+) Hampton Inns & Suites: 10% off when booked 72 hours in advance Hertz: up to 25% off for AARP members Holiday Inn: 10%-30% off depending on location (62+) Hyatt Hotels: 25%-50% off (62+) InterContinental Hotels Group: various discounts at all hotels (65+) Mainstay Suites: 10% off with Mature Traveler’s Discount (50+); 20%-30% off (60+) Marriott Hotels: 15% off (62+) Motel 6: 10% off (60+) Myrtle Beach Resort: 10% off (55+) National Rent-A-Car: up to 30% off for AARP members Quality Inn: 20%-30% off (60+) Rodeway Inn: 20%-30% off (60+) Sleep Inn: 20%-30% off (60+) Southwest Airlines: various discounts for ages 65 and up (call before booking for discount) Trailways Transportation System: various discounts for ages 50 and up United Airlines: various discounts for ages 65 and up (call before booking for discount) U.S. Airways: various discounts for ages 65 and up (call before booking for discount) Activities And Entertainment AMC Theaters: up to 30% off (55+) Bally Total Fitness: up to $100 off memberships (62+) Busch Gardens Tampa: $3 off one-day tickets (50+) Carmike Cinemas: 35% off (65+) Cinemark/Century Theaters: up to 35% off U.S. National Parks: $10 lifetime pass; 50% off additional services including camping (62+) Regal Cinemas: 30% off Ripley’s Believe it or Not: @ off one-day ticket (55+) SeaWorld Orlando: $3 off one-day tickets (50+) Cell Phone Discounts AT&T: Special Senior Nation 200 Plan $29.99/month (65+) Jitterbug: $10/month cell phone service (50+) Verizon Wireless: Verizon Nationwide 65 Plus Plan $29.99/month (65+). Miscellaneous Great Clips: $3 off hair cuts (60+) Super Cuts: $2 off haircuts (60+) You're very welcome!

Web of Financial Fraud and Criminality : America's Shadow Banking System By Ellen Brown

The Rumor Mill News Reading Room 

Web of Financial Fraud and Criminality : America's Shadow Banking System By Ellen Brown

Posted By: watcher51445
Date: Tuesday, 31-Jan-2012 03:22:41

VKD: This is an article which is written in a fashion by an attorney, understandable by any one who takes the time to read.] ============================================== Web of Financial Fraud and Criminality : America's Shadow Banking System By Ellen Brown URL of this article: www.globalresearch.ca/index.php?context=va&aid=28878 Global Research, January 26, 2012 Web of Debt The Wall Street Journal reported on January 19th that the Obama Administration was pushing heavily to get the 50 state attorneys general to agree to a settlement with five major banks in the “robo-signing” scandal. The scandal involves employees signing names not their own, under titles they did not really have, attesting to the veracity of documents they had not really reviewed. Investigation reveals that it did not just happen occasionally but was an industry-wide practice, dating back to the late 1990s; and that it may have clouded the titles of millions of homes. If the settlement is agreed to, it will let Wall Street bankers off the hook for crimes that would land the rest of us in jail – fraud, forgery, securities violations and tax evasion. To the President’s credit, however, he seems to have shifted his position on the settlement in response to protests before his State of the Union address. In his speech on January 24th, President Obama did not mention the settlement but announced instead that he would be creating a mortgage crisis unit to investigate wrongdoing related to real estate lending. “This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans,” he said. The Deeper Question Is Why Whether massive robo-signing occurred is no longer in issue. The question that needs to be investigated is why it was being done. The alleged justification—that the bankers were so busy that they cut corners—hardly seems credible given the extent of the practice. The robo-signing largely involved assignments of mortgage notes to mortgage servicers or trusts representing the investors who put up the loan money. Assignment was necessary to give the trusts legal title to the loans. But assignment was delayed until it was necessary to foreclose on the homes, when it had to be done through the forgery and fraud of robo-signing. Why had it been delayed? Why did the banks not assign the mortgages to the trusts when and as required by law? Here is a working hypothesis, suggested by Martin Andelman: securitized mortgages are the “pawns” used in the pawn shop known as the “repo market.” “Repos” are overnight sales and repurchases of collateral. Yale economist Gary Gorton explains that repos are the “deposit insurance” for the shadow banking system, which is now larger than the conventional banking system and is necessary for the conventional system to operate. The problem is that repos require “sales,” which means the mortgage notes have to remain free to be bought and sold. The mortgages are left unendorsed so they can be used in this repo market. The Evolution of the Shadow Banking System Gorton observes that there is a massive and growing demand for banking by large institutional investors – pension funds, mutual funds, hedge funds, sovereign wealth funds – which have millions of dollars to park somewhere between investments. But FDIC insurance covers only up to $250,000. FDIC insurance was resisted in the 1930s by bankers and government officials and was pushed through as a populist movement: the people demanded it. What they got was enough insurance to cover the deposits of individuals and no more. Today, the large institutional investors want similar coverage. They want an investment that is secure, that provides them with a little interest, and that is liquid like a traditional deposit account, allowing quick withdrawal. The shadow banking system evolved in response to this need, operating largely through the repo market. “Repos” are sales and repurchases of highly liquid collateral, typically Treasury debt or mortgage-backed securities—the securitized units into which American real estate has been ground up and packaged, sausage-fashion. The collateral is bought by a “special purpose vehicle” (SPV), which acts as the shadow bank. The investors put their money in the SPV and keep the securities, which substitute for FDIC insurance in a traditional bank. (If the SPV fails to pay up, the investors can foreclose on the securities.) To satisfy the demand for liquidity, the repos are one-day or short-term deals, continually rolled over until the money is withdrawn. This money is used by the banks for other lending, investing or speculating. Gorton writes: This banking system (the “shadow” or “parallel” banking system)—repo based on securitization—is a genuine banking system, as large as the traditional, regulated banking system. It is of critical importance to the economy because it is the funding basis for the traditional banking system. Without it, traditional banks will not lend and credit, which is essential for job creation, will not be created. All Behind the Curtain of MERS The housing shell game was made possible because it was all concealed behind an electronic smokescreen called MERS (an acronym for Mortgage Electronic Registration Systems, Inc.). MERS allowed houses to be shuffled around among multiple, rapidly changing owners while circumventing local recording laws. Title would be recorded in the name of MERS as a place holder for the investors, and MERS would foreclose on behalf of the investors. Payments would be received by the mortgage servicer, which was typically the bank that signed the mortgage with the homeowner. The homeowner usually thinks the servicer is the lender, but in fact it is an amorphous group of investors. This all worked until courts started questioning whether MERS, which admitted that it was a mere conduit without title, had standing to foreclose. Courts have increasingly held that it does not. Making matters worse for the servicing banks, Fannie Mae sent out a memo telling servicers that in order to be reimbursed under HAMP—a government loan modification program designed to help at-risk homeowners meet their mortgage payments—the servicers would have to produce the paperwork showing the loan had been assigned to the trust. The hasty solution was a rash of assignments signed by an army of “robosigners,” to be filed in the public records. But the documents are patent forgeries, making a shambles of county title records. Complicating all this are tax issues. Since 1986, mortgage-backed securities have been issued to investors through SPVs called REMICs (Real Estate Mortgage Investment Conduits). REMICs are designed as tax shelters; but to qualify for that status, they must be “static.” Mortgages can’t be transferred in and out once the closing date has occurred. The REMIC Pooling and Servicing Agreement typically states that any transfer significantly after the closing date is invalid. Yet the newly robo-signed documents, which are required to begin foreclosure proceedings, are almost always executed long after the trust’s closing date. The whole business is quite complicated, but the bottom line is that title has been clouded not only by MERS but because the trusts purporting to foreclose do not own the properties by the terms of their own documents. John O’Brien, Register of Deeds for the Southern Essex District of Massachusetts, calls it a “criminal enterprise.” On January 18th, hecalled for a full scale criminal investigation, including a grand jury to look into the evidence. He sent to Massachusetts Attorney General Martha Coakley, U.S. Attorney General Eric Holder and U.S. Attorney Carmen Ortiz over 30,000 documents recorded in the Salem Registry that he says are fraudulent. From Lending Machines to Borrowing Machines The bankers have engaged in what amounts to a massive fraud, not necessarily because they started out with criminal intent, but because they have been required to in order to come up with the collateral (in this case real estate) to back their loans. It is the way our system is set up: the banks are not really creating credit and advancing it to us, counting on our future productivity to pay it off, the way they once did under the deceptive but functional façade of fractional reserve lending. Instead, they are vacuuming up our money and lending it back to us at higher rates. “Instead of lending into the economy,” says British money reformer Ann Pettifor, “bankers are borrowing from the real economy.” Shewrote in the Huffington Post in October 2010: [T]he crazy facts are these: bankers now borrow from their customers and from taxpayers. They are effectively draining funds from household bank accounts, small businesses, corporations, government Treasuries and from e.g. the Federal Reserve. They do so by charging high rates of interest and fees; by demanding early repayment of loans; by illegally foreclosing on homeowners, and by appropriating, and then speculating with trillions of dollars of taxpayer-backed resources. Not only has the system destroyed county title records, but it is highly vulnerable to bank runs and systemic collapse. In the shadow banking system, as in the old fractional reserve banking system, the collateral is being double-counted: it is owed to the borrowers and the depositors at the same time. This allows for expansion of the money supply, but bank runs can occur when the borrowers and the depositors demand their money at the same time. And unlike the conventional banking system, the shadow banking system is largely unregulated. It doesn’t have the backup of FDIC insurance to prevent bank runs. That is what happened in September 2008 following the bankruptcy of Lehman Brothers, a major investment bank. Gary Gorton explains that it was a run on the shadow banking system that caused the credit collapse that followed. Investors rushed to pull their money out overnight. LIBOR—the London interbank lending rate for short-term loans—shot up to around 5%. Since the cost of borrowing the money to cover loans was too high for banks to turn a profit, lending abruptly came to a halt. Fixing the System The question is how to eliminate this systemic risk. As noted by The Business Insider: Regulate shadow banking more tightly, and you probably have to also provide government backstops. Shudder. Try to shut the thing down or restrict it and you suck credit out of the system, credit which much of the non-financial “'real” economy uses and needs. Interestingly, countries with strong public sector banking systems largely escaped the 2008 credit crisis. These include the BRIC countries—Brazil Russia, India, and China—which contain 40% of the global population and are today’s fastest growing economies. They escaped because their public sector banks do not need to rely on repos and securitizations to back their loans. The banks are owned and operated by the ultimate guarantor—the government itself. The public sector banking model deserves further study. Whatever the solution, a system that requires the slicing and dicing of mortgages behind an electronic smokescreen so they can be bought and sold as collateral for the pawn shop of the repo market is obviously fraught with perils and is unsustainable. Please contact your state attorney general and urge him or her not to go through with the robo-signing settlement, which will be granting immunity for crimes that are not yet fully known. Phone numbers are here. The surface of this great shadowy second banking system has barely been scratched. It needs a very thorough investigation. Ellen Brown is an attorney and president of the Public Banking Institute,http://PublicBankingInstitute.org. In Web of Debt, her latest of eleven books, she shows how a private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her websites arehttp://WebofDebt.com and http://EllenBrown.com.