2nd Quarter 2009: Surfing the Slow Burn

Our 2nd Quarter Wrap-up is called “Surfing the Slow Burn.” The “slow burn” is my term for a centrally managed economy in which a small group of insiders covertly subsidize themselves at the expense of the outsiders through (i) monetary policy, (ii) manipulation of government resources, regulation and enforcement and (iii) manipulation of financial markets and data.

What was most remarkable in the second quarter was the distinct advantage enjoyed by those who have taken the time to understand what is happening and have positioned themselves to navigate the changes underway. The lesson of the second quarter is that understanding the “real deal” is the basis for effective action.

Indeed, when enough of us begin to do so, the possibilities for effective change grow exponentially. So despite all the “shock and awe” around us, something very positive is happening as more and more of us shift our thinking, take action and reach out to collaborate.

In our year-end wrap up, 2008: Looking Back, I said that the big question of 2008 was the same one I have been asking as $4 trillion went missing from the US government: “Where is the money?”

In our 1st Qtr 2009: Looking Back, with bailouts approaching $12-14 trillion and counting (See Bailout Mo’ Money), I said that the importance of this question continued to grow.  With the laws related to public and private financial management treated by insiders as mostly irrelevant, the global financial coup d’ etat underway was becoming more apparent.

As I prepare our wrap up for the second quarter, the importance of missing money keeps growing as unemployment rises towards Great Depression levels and an out of control financial system keeps getting wierder. (See The Missing Money and $134.5 Billion Mystery Bonds)

The signs are growing that the Wall Street banks have now built their war chest and are moving to ensure that Main Street is on its knees or worse as they move in for the kill. (See Stimulus or Economic Hit?) Signals of subtle capital controls that will help to force the continued flow of capital to Wall Street are growing as well. (See Foreign Financial Accounts and Financial Coup d’ Etat…401k Trial Balloon?)

Legislation promoting control of food (See Food Safety Bill), health care (See Big Cuts in Medicare and Medicaid Coming and The Data Beast) and finance (See Obama’s Sweeping Financial Regulation Plan) is pending; as is energy legislation to create the framework for resource taxation and, through carbon trading, create a new generation of fraud and derivatives that embroils localization efforts in businesses that depend on government engineered corporate profits.

When all of this legislation is viewed in totality, there will be no need to formally shred the U.S. Constitution since no one will be able to understand, let alone comply, with the trillions of rules related to every aspect of our lives and we certainly will not be able to pay the taxes and fees associated with staying alive anyway.

It would appear that the American people understand the legislative and appropriation wave rolling over us. I estimate that for every $1,000,000 awarded or loaned to the large banks in bailout money, Americans purchased one gun and 10,000 rounds of ammunition.

As I described in my last June Solari Report, state governments have been temporarily supported with the stimulus package. As predicted, the pain at the state and municipal levels has continued to rise with the California budget crisis serving as a bellweather. (See Shock Doctrine California, Part IIIIIIIV.)

As hopes for a last minute bailout from the federal government continue, Martin Weiss is now predicting that default is inevitable on $59 billion of California municipal bonds. This could send shockwaves through the entire muncipal market. If the Feds let California go down, more states are likely to follow. State and local land and assets, such as parks and open lands, will be ripe for the plucking. (See Financial Ecosystems)

In this week’s Solari Report (Thursday, July 2), I will be looking back at the events of the last three months and discussing what they mean to our future.

Some of the topics:

  • Obama: The Thrill is Gone
  • 401k Uh-Ohs
  • Protecting Yourself from the State and Local Budget Squeeze
  • Is the Elite Safe? Governor Sanford Gets Spitzered
  • NWO Summer Watch: July G-8, The Russian Deal, & Bohemian Grove
  • Scam Watch: Green, Participatory Budgeting, Carbon Trading and Social Innovation
  • Your Food Safety Plan
  • Swine Flu: Why Biowarfare Works
  • Opportunities Round Up
  • Faith and the Way Forward

Following the second quarter wrap-up, Franklin Sanders of The Moneychanger will join me for our precious metals update on July 9th. Two weeks later, attorney Alan G. Phillips, author of The Authoritative Guide to Vaccine Legal Exemptions, will join me on July 23rd.

You can learn more about The Solari Report and subscribe monthly or annually here. Subscribers can access our complete archive of MP3 files.

I hope you’ll join us.


  1. Catherine,

    Congratulations for zeroing in on all the reconfigurations our spiritual and political enemies are have accomplished or are attempting to accomplish that will enslave us if we are not vigilant to stay ahead of their snares and traps.

    You are right when you say that the effect of new enforcement of Treasury reporting requirements will destroy the financial privacy and effective diversification of those who simply in prudence have placed wealth outside the political boundaries of the USA. These new regulations and enforcements amount to a negation of the wisdom of Solomon: “Cast your bread on the surface of the waters, for you will find it after many days. Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.” Eccl 11 v 1-2.

    Because of the banking turmoil worldwide, which the US banking system has caused, and this reporting business which turns foreign banks off for Americans, Solomon’s advice is no longer practical.

    The bottom line on overseas accounts for Americans is: You need to live where your money is. If you don’t live there, don’t try to bank there. (Bob Chapman needs to be credited with this thought, I did’nt originate it.)

    Other financial products from foreign sources are equally suspect as to return of capital, and also entanglment with the IRS over reporting requirements.

    Your advice to simplify was excellent. With the above going on, bring it back, pay the tax on the gains if any, and get physical metal.

    Really, all the ploys and devices that lawyers and accountants have advised to both avoid taxes and insulate from legal liability are being eviserated by new global government rules.

    It seems a sea change, and from now on we are on our own.

    Perhaps the wisdom of the wandering Jews are more applicable: 1/3 real estate, 1/3 gold, 1/3 diamonds; because you never know when you are going to have to pick up and move to another country when the persecutions start, and that way you only lose at most 1/3 your capital. If not the letter, then the spirit of this would be appropriate for this time of (lawless) rapid change.

    Anyway, thanks for your wrapping up everything so nicely. We appreciate your wisdom, too.


  2. Catherine… above is a very high quality presentation on how phantom shares and failure to deliver (FTD) work. Found via your blog but I can not retrace.. I first found http://www.deepcapture.com…including a long 60 page saga on the education of a CEO and usefulness of the blogsphere (overstock.com phantom share sales.) It even feature a visit by the Easter Bunny :> Then I keyed naked short selling in the community tab at http://www.investools.com and got a post “The Darkside of the Looking Glass” which directly roles to http://www.businessjive.com…a one hour + very high quality sound and slide presentation on topic including walk thru of selected actions and responses of the DTCC and External Clearing functions. A case study follows of a stock attacked by phantom selling of shares. Well worth the time to get clear on what the financial industry is facing/doing.

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