Karen Hudes – former World Bank senior council
Wed, Sept 18, 2013
Subject: Fire the Federal Reserve or Collapse
Former World Bank Senior Counsel Karen Hudes – commenting of the New Financial System, Corruption and Solutions, Ms. Hudes said essentially:
It’s pretty clear where we’re headed, and that’s toward something called "Permanent Gold Backwardation" — a fancy word for people loosing confidence in paper currency — because paper currency is exactly that – it’s paper.
Currency is something which has to be legal tender — that’s the first thing; you have to be allowed to use it as money. But the second thing is that it has to be worth something — it has to be valuable. And if people loose confidence… well, that’s where we are.
I can say that because the worlds foremost monetary economists who specialize in gold have been warning us that we’re headed to "Permanent Gold Backwardation", which means that the value of the currency in the future will be less than the value today — and that’s impossible because that would mean that a trader would earn money no matter what he did — and that’s not a tenable situation.
So what happened in July was that the central banks that like to make money leasing their gold — they stopped doing that because the risk of getting their gold back at the end of the lease term was unacceptable.
This is a situation that doesn’t happen that often — it happen just before we went off the gold standard in 1970 — it’s a sign of weakness in the fiat currency; fiat means, you just issue it.
When you try to purchase gold today you will usually have to pay a premium for immediate delivery, and you see people lining up in the Asian countries doing this because they had an experience when people who had gold were not willing to sell it at any price, because they had zero confidence in the currency.
Permanent Gold Backwardation is not just a bad event, it’s the Meltdown of all Meltdowns! It means that you cannot finance international trade. Think about what it would mean in terms of the jobless rate. It’s going to make any depression that we’ve ever had — in the 30s — in 2008 — pale in comparison.
We just can’t go there. We have to fix the problem before we get there. So we should be talking about how do we fix the problem.
Question: Let’s talk about the problem. That means we have to pay somebody in real gold or in dollars backed by gold, or something real, not just some printed money?
Well, there has to be a convention on it. You have to have agreed that that’s what you’re going to be doing. And that’s not the way international trade is normally conducted.
Although now, we have the situation where the BRICS countries — Brazil, Russia, India, China and South Africa — they’ve agreed that their trade, which accounts for 25% of world trade, is no longer going to be financed in dollars; it’s going to be offset; and that means barter. And at the end of the day, whether it’s a month, or three months, or whatever, they’re going to see who’s the party that owes the money, and they’re going to settle that with gold. That’s been decided. That’s a very big indictment of the strength of the dollar. It shows that the people are loosing confidence.
Question: So what would happen to the United States if the rest of the world shunned the dollar, if the banking system went under?
Well, the first thing is that our credit rating is going to be severely impacted. Standard and Poors lowered the credit rating and then Eric Holder sued Standard and Poors and Standard and Poors said that maybe we acted a little too quickly when we lowered the US credit rating because after all the US currency is the international currency, so let’s upgrade the US credit rating.
Now that was actually an under-handed move because they understood that the dollar is going to loose its value as an international currency.
Question: Like they’re saying one thing but knowing something else?
Well, they know everything about my case, and Fitch’s ruling and Moody’s, because the other two agencies just sat there and watched. And there’s a fourth credit rating agency about to be started by the Russians, and the Chinese and some commercial interests here in the US. And unless we embrace the Rule of Law and clean up this corruption, our credit rating will go down again.
A lot of this corruption is coming from the Federal Reserve, but the lion’s share is coming from the Vatican — from the Jesuits. And there’s something called State Capture — our legislature and our governmental institutions have been co-opted. As an example, the owners of the Federal Reserve own and control the mainstream media, so that the public is deliberately misinformed and kept from learning about all this.
If the credit rating tanks, you have to pay a higher interest rate. With the imbalance in our budget, the debt is only getting larger, so most of the budget is going to service the debt.
And don’t forget, the housing industry is a very important section of the economy. What this is going to do to the amount of jobs. Then there is the multiplier effect; for every job you loose, you loose more jobs because of the multiplier effect. This would be a major, major crisis — it would make everything we’ve experienced up until now look like nothing happened.
The banks would be bankrupt, and when the banks are bankrupt and you go to get money from the ATM, and push the button — nothing comes out. Prices would change on a daily basis; they would double. There would be zeros added at the end of the money. You would have lawlessness. Commerce would cease. Imports would cease.
But I’m saying something quite different.
I’m in touch with the World Bank because the Capital Increase to the World Bank will not be distributed until the effects of retaliation against World Bank whistle-blowers are eliminated. This was the condition that the US put onto the Capital Increase. They asked for a government accountability office audit of the World Bank, and the World Bank refused.
There is a very important lesson, to be drawn from here which is that, we’re actually not on track for all of this terrible scenario that’s being put out — we’re on track for the Rule of Law — for the first time in a long time this country is taking back its Rule of Law. People are learning about these problems and they’re holding their government to account.
Governor Martin O’malley, of MD, is co-chair of the Governors Counsel with Governor Terry Branstad , of Iowa, and these two governors are working together with the Department of Defense under Peter Varga. An executive order was issued that set this up and one of the people of this counsel is the current President of the Governor’s Association, Jack Martel, from Delaware.
All of the Governors are very aware of these problems. I have been writing them and keeping their Attorneys General informed — and the World Bank is not in compliance.
Germany has gold that is being held by the Federal Reserve. And Germany asked for 300 tonnes of gold back, and the Federal Reserve said that you’ll get it back in seven years — This is an Act of War!
I went to the Department of Defense and told them that I was not going to stand for them leading us down the path of a certain currency war. I said we are not going to have civil unrest; we are going to do our jobs!
The Department of Defense knows full well that these are the consequences if we do not get serious about fighting this corruption. The Stakeholder analysis I’m telling you about came out of the DOD.
I’m concentrating on getting up and ready to replace those fiat dollars before they go down. Now is the time that we can act. Every single person who is [reading] this has to go to their Governor and say they’ve been hearing what you need to do. We need to start a state bank — our state legislature needs to declare precious metals as legal tender, according to the Constitution.
The Federal Reserve is against the Constitution. Our Constitution prohibited this kind of banking.
NATO is not going to fall apart. We are all banding together to bring Rule of Law to bear. We should not sit back and wait for Rule of Law to be handed to us on a platter. If people start demanding that they get state banks, we will lick the problem together, and that’s what we need to do.
Go back and look at the Green Hilton agreement which President Kennedy signed ten days before his assassination — yes there is gold there that can be brought to strengthen the dollar.
And that’s exactly what has to happen. We have to go to the negotiating table and speak to all the nations of the world and let them know that the Federal Reserve is not a player any longer. They’re FIRED! The rest of the world is going to a commodity backed currency — any commodity that’s valuable.
I think that there’s enough value there that we don’t have to think about anyone being left out in the cold.
The real problem is trying to convene the parties, and that’s what the Bretton Woods Institutions are good for. And there’s going to be an Annual Meeting on the 9th of October. We have got to show our leaders that we expect the US to be a respectful nation that subscribes to the Rule of Law.
We’ve got a lot of cleaning up to do. We’ve been executing people with drones, without benefit of court trial. That’s acting like a rogue nation.
Market manipulation is illegal. They’re offering many times the amount of gold that’s existing in the world. That’s called a "naked short". That’s illegal — that’s breaking the law. It’s already happening as we speak.
The job is on us to solve this on a granular level through the state banks. We have to work where we can move – right now – as quickly as we can.
Everything is showing that we’re going to be working together, and the Rule of Law will prevail.
Think of it as a horse race and you’re trying to get yourself in the strongest position out of the gate, and the way to get ourselves in the strongest position is to have alternatives to their fiat currency right now! — and that’s very much within our power — right now!
Tags: Bretton Woods Agreement, Economic Collapse, Federal Reserve Crimes, Federal Reserve Gold, Fiat Currency, Fiat Money, Financial Collapse, Gold Manipulation, Green Hilton Agreement, Karen Hudes, Silver Manipulation, State Bank