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Most Read Posts (64 articles) – Discover which articles Underground Investor™ readers are most interested in. See the full database, including the most recent articles that may not be listed below,  by clicking the link above.

Sept. 27, 2007 – 101 Reasons Why Managing Your Money is the Quickest Way to Build Wealth
Sept. 25, 2007 – 10 Surefire Ways to Make an Investment Fortune
Sept. 15, 2007 – Why the U.S. Feds 0.50% Rate Cut Won’t Save the Markets
Sept. 15, 2007 – U.S. Interest Rate Cut to Have Little Long-Term Positive Effect
Aug. 20, 2007 – How Much Does the Gov’t Really Manipulate Markets
Aug. 9, 2007 – More Gov’t Foolishness (or Lies) Again: Markets are Sound…NOT!
Aug. 9, 2007 – Chinese Tariffs and the Nuclear Option
Jul. 24, 2007 – How to Invest Like the World’s Greatest Investors
Jun. 17, 2007 – Get Out of Dollar-Denominated Bonds While You Still Can!
May 1, 2007 – Uranium Stocks are Finally Getting the Attention They Deserve
Apr. 23, 2007 – The Emperor’s New Clothes Abound in the Investment Industry. Don’t Get Cheated by Your Advisor
Apr. 20, 2007 – Use Intelligent Strategies to Push Risk Back onto Investment Firms
Apr. 19, 2007 – In Risky Markets, Follow the Behavior of the Ultra-Rich, Not the Rich
Apr. 12, 2007 – The Secret to Investing

Gold Investments (37 articles) - Use traditional rules to invest in gold stocks and you’ll lose money hand over fist with this asset class. Learn more about one of the most important components of every portfolio for future years to come. See the full database, including the most recent articles that may not be listed below, by clicking the above link.

April 23, 2008 – Will U.S. Markets Crash Now or Later?
Feb. 4, 2008 – Could Chinese New Year’s Fuel the Next Rally Higher for Gold Stocks?
Jan. 29, 2008 – Even After This Strong Run, Gold Stocks are Still a Bargain Today. Here’s Why.
Jan. 5, 2008 – A Sneak Peak at Our Premium Level Information
Nov. 4, 2007 – Is Hyperinflation Coming to the U.S.? It’s Time to Stock Up on Gold.
Nov. 4. 2007 – Gold is the Best Investment Today, History Tells Us So.
Nov. 2, 3007 – Gold Expensive at $791/oz.? Not by a Longshot
Jun. 5, 2007 – Learn How NOT to Invest in Gold
Mar. 30, 2007 – Navigate the Minefields of the Investment Information Highway
Mar. 7, 2007 – This Bounce in Gold Markets Merits a Cautious Approach
Mar. 6, 2007 – Gold Stocks Correction – What it Means?
Feb. 28, 2007 – How to Profit from a Weakening Market, Gold Stocks, & More, Part II
Feb. 28, 2007 – Buying Opportunity in Gold Stocks
Feb. 28, 2007 – How to Profit from a Weakening Market, Gold Stocks, & More, Part I
Feb. 23, 2007 – Uncover the Ignored Asset Classes
Feb. 12, 2007 – How Do I Know that Institutional Money is Still Not on Board with Gold?
Jan. 25, 2007 – If You Don’t Own Gold Stocks, You Need To
Jan. 23, 2007 – Building Wealth Requires More than Just Contrarian Investing
Jan. 14, 2007 – Use the Long Tail of Investing to Accurately Predict the Price of Gold
Jan. 11, 2007 – The REAL DEAL about Gold and Energy
Dec. 13, 2007 – Commodities and Asians: Apparently We All Look Alike
Nov. 6, 2006 – Sometimes Silence is Golden
Oct. 10, 2006 – Shock and Awe Awaits Global Markets
Oct. 4, 2006 – Is Gold’s Correction Over Yet?
Oct. 2, 2006 – Fiat Currency Concerns Give Rise to a Gold & Silver Backed Currency System
Oct. 1, 2006 – The Gold Timeline – A History of Gold Prices
Sept. 16, 2006 – Has the Commodities Bubble Burst? No, No, No!
Sept. 13, 2006 – Sell the Rumor, Buy the News
Sept. 11, 2006 – Gold’s Speculative Stigma is Unwarranted
Sept. 3, 2006 – Gold’s Glitter is Genuine
Aug. 14, 2006- Knowing Your History is More Important to Creating Wealth than Fundamental Analysis

Financial Crisis, Dollar Crisis & Recession Proof Investing (30 articles) – Foolish investors’ eyes lit up as New Century Financial dropped from $30 to $20 a share during the recent subprime mortgage fiasco. Their hearts thumped with excitement as shares dropped from $20 to $10 and they doubled down. When shares dropped to $5 they thought it had to be the bottom and put their last remaining money into New Century. A month later, they lost everything. There is similar optimism surrounding the dollar today from self-declared currency experts. Discover why the dollar is much more likely to go the way of New Century than experience a comeback like Muhammad Ali’s Rumble in the Jungle. For the most recent articles, perhaps not listed below, click the above category link.

June 26, 2008 – The One Question That Will Have the Greatest Impact on Your Financial Future
May 14, 2008 – What’s Driving the Price of Oil Higher? It’s the Dollar, Stupid!
April 30, 2008 - How Low Will the Feds Go?
April 17, 2008 – Monetary Inflation. How Increased Paper Wealth Can Translate into a Lower Standard of Living
March 3, 2008 – Why Investors Will Never Make Money in this Bear Market
Feb. 20, 2008 – The Secret to Building Wealth in Volatile Markets
Feb. 6, 2008 – Is Recession in the U.S. Coming? We’re Already in One.
Jan. 28, 2008 – The Outcome of the Fed’s Interest Rate Cuts? History is the Best Oracle.
Jan. 24, 2008 – The Fed’s 0.75% Interest Rate Cut – A Recipe for Future Disaster
Dec. 7, 2007 – The Dollar Panic. Is it Real?
Sept. 19, 2007 – Signs of a Peak Investment Crisis Keep Coming
June 18, 2007 – Alan Greenspan’s Call of Checkmate on China is Premature
June 17, 2007 – PIMCO’s Bill Gross and the Economist Agree with SmartKnowledgeU 6 Months After the Fact!
May 28, 2007 – The Politics of Higher Oil Prices
May 26, 2007 – Asian Countries Pooling Reserves to Protect Themselves from the Incredible Shrinking Dollar, Part II
May 25, 2007 – Asian Countries Pooling Reserves, Part I
May 3, 2007 – The Death of the 3-Year Treasury Note
Apr. 1, 2007 – The Next Cold War Will be an Economic One
Jan. 25, 2007 – Dollar-Denominated Bonds Faltering
Jan. 9, 2007 – Use the Longtail of Investing to Accurately Predict Dollar Behavior
Jan 7, 2007 – 10 Reasons Why Dollar-Denominate Bonds Aren’t Safe
Dec. 21, 2006 – Iran Presents More Trouble for the U.S. Dollar
Dec. 7, 2006 – The U.S. has Perfected the Incredible Shrinking Dollar

Free Stock Picks (24 articles) – While our top-shelf stock picks and ideas that have since returned 100% to 200% returns are reserved for our members only, here read articles about some mid-shelf stock picks and ideas that have already returned 30% returns in less than a year. Access the full database, including the most recent articles that may not be listed below,  by clicking the topic link above.

Jun. 4, 2007 – To Prove the Effectiveness of Our SmartKnowledgeU™ Investment System, Even Our Weakest Picks that We’ve Given Away for FREE Have Soared
Apr. 29, 2007 – After BAIDU, Possibly Focus Media
Apr. 2, 2007 – Profit, Don’t Lose From Market Corrections
Apr. 2, 2007 – Global Warming Presents Easy 30% Gains for Underground Investor Readers
Mar. 13, 2007 – Beware the Perpetual Bulls, Part II
Feb. 18, 2007 – Banking Sector FY 2008 – Positive for Japan & India, Negative for China
Jan. 4, 2007 – Chinese Technology Companies to Watch in 2007
Dec. 19, 2007 – MSFT and Internet Protocol Version 6
Dec. 12, 2006 – It’s Time to Keep a Close Eye on Indian Stocks ICICI & HDFC
Dec. 7, 2006 – The Ocean Becomes a New Growth Point in the World Economy
Oct. 30, 2006 – What’s the Safest Place to Invest in the Oil Industry Now?
Oct. 30, 2006 – You’ll Find Ignored Investment Opportunities in the DRC & Libya
Oct. 23, 2006 – Indian Banks Anyone? Four Letters: HDFC
Oct. 9, 2006 – Don’t Believe the Hype – Avoid Chinese Bank Stocks

The Peak Investment Crisis & Stock Market Crash (57 articles) – Bubbling underneath the surface, there lies a peak investment crisis. When it hits, savvy investors will build a fortune. Unfortunately, most investors will be blindsided and lose great fortunes instead. Access the entire database, including the most recent articles that may not be listed below,  by clicking on the above category link.

Nov. 4, 2007 – Is Hyperinflation Coming to the U.S.? It’s Time to Stock Up on Gold.
Nov. 4. 2007 – Gold is the Best Investment Today, Part II
Oct. 15, 2007 – Our New Forum on Facebook: Crisis Investing
Oct. 9, 2007 – Beware the Turbulence that Lies Beneath the Surface, Part I
Sept. 20, 2007 -The Signs of a Peak Investment Crisis Keep Coming
Sept. 19, 2007 -Why the U.S. Fed’s 0.50% Rate Cut Won’t Save the Markets
Aug. 9, 2007 – More Gov’t Foolishness Again
Jun. 29, 2007 – Don’t Let the Strength of the U.S. Markets in the First Half of 2007 Fool You
Mar. 11, 2007 – It’s the Difference Between Chasing & Building Wealth
Mar. 6, 2007 – What this Correction Means for Gold Stocks
Feb. 28, 2007 – How to Profit From a Weakening Market & Gold Stocks
Sept. 9, 2006 – The Peak Investment Crisis
Aug. 11, 2006 – How to Protect Your Portfolio During Turbulent Markets

A New Investment Paradigm for the 21st Century (11 articles) – Fundamental and Value investing may take years of patience to pay off (i.e. Apple Computers was a huge value stock at $13 a share and took more than four years of waiting to pay off huge), Growth investing often leads to chasing hot sectors that correct rapidly. Discover why changing conditions in today’s global market has created a new investment paradigm that is hands down the best way to invest today. Click the link above to see all articles, including the most recent articles that may not be listed below,  in this category.

Jul. 24, 2007 – How to Invest Like the World’s Greatest Investors
Feb. 25, 2007 – Frontrunning Can Make You a Fortune
Jan. 30, 2007 – The New Paradigm of Successful Investment Strategies
Jan. 21, 2007 – 10 Reasons the Longtail of Investing is the Only Way to Build Wealth
Jan. 16, 2007 – Use the Longtail of Investing to Predict Major Market Events with High Accuracy
Jan. 9, 2007 – Accurately Predict U.S. Dollar Behavior
Sept. 1, 2006 – What Mark Cuban Failed to Realize About Investing

The Biggest Investment Myths (62 articles) – All investment professionals, from investment firms to financial consultants to the financial journal purposely spread tales of lies and deception. Jim Cramer, an investment professional that amassed a fortune as a hedge fund manager, recently stated that the last thing he ever wanted to do is to tell the truth. Find out why deception is part of the game in the investment industry.  Click the category link above to access the full database, including the most recent articles that may not be listed below.

Oct. 25, 2007 – New Home Sales Went Up. So What?
Oct. 15, 2007 – Beware the Turbulence that Lies Beneath the Surface, II
May 6, 2007 – Economic Reports Drive Short-Term Behavior, but Hardly Represent the Truth
Mar. 21, 2007 – The Short-Term May be Rosy, but Beware the Financial Crisis that is Building Steam
Mar. 4, 2007 – Foreign Markets aren’t as Risky as the Pundits Say
Feb. 23, 3007 – Evolve Your Investment Strategies with Evolving Technology
Feb. 6, 2007 – My Problem with Investment Newsletters (except ours, of course!)
Feb. 4, 2007 – 10 Questions to Help You Find a Superior Financial Consultant
Jan. 30, 2007 – A New Paradigm of Successful Investment Strategies
Jan. 25, 2007 – Despite Evidence to the Contrary, Millions of Investors Will Believe Whatever they Want to Believe
Jan. 7, 2007 – 10 Reasons Why Dollar Denominated Bonds Aren’t as Safe as You Think
Jan. 5, 2007 – How Understanding MMA Champions will Make You a Better Investor
Dec. 18, 2006 – The True Determinants of Wealth Have Nothing to do with Asset Allocation
Nov. 12, 2006 – The Greatest Investment Myth Exposed: Why Modern Portfolio Theory WILL NEVER Make You Rich.

Wealth Literacy (88 articles) – Wealth Literacy is the new Financial Literacy. Financial Literacy may teach you to be fiscally responsible but you can still be financially literate and remain poor. Wealth Literacy fills in all the holes of Financial Literacy and teaches you how to build wealth today. Click the category link above to see new articles that may not be listed below.

Oct. 15, 2007 – Our New Facebook Investment Group – Crisis Investing
Oct. 9, 2007 – Beware the Turbulence that Lies Beneath the Surface, I
Apr. 23, 2007 – Beware the Emperor’s New Clothes -Don’t Get Cheated by Your Adviser
Apr. 20, 2007 – Intelligent Investment Strategies Push Risk Off of You & Back onto Investment Firms
Apr. 19, 2007 – In Risky Markets, Follow the Behavior of the Ultra-Rich, Not the Rich
Apr. 17, 2007 – Why Wealth Literacy is More Important than Financial Literacy, Part II
Apr. 15, 2007 – Why Wealth Literacy is More Important than Financial Literacy, Part I
Apr. 13, 2007 – Pop Investing is All the Rage, but it’s a Loser’s Game
Apr. 12, 2007 – The Secret to Investing in 3 Easy Rules
Apr. 10, 2007 – Build Wealth by Answering These 5 Questions
Mar. 30, 2007 - How to Navigate the Minefields of the Investment Information Highway
Mar. 12, 2007 – The Short-Term May be Rosy, But Beware the Financial Crisis that is Building Steam
Mar. 11, 2007 – The Difference Between Chasing Wealth and Building Wealth
Feb 23, 2007 – Uncover the Ignored Asset Classes
Feb. 21, 2007 – Why Traditional Education Stifles Your Ability to Build Wealth
Feb. 15, 2007 – 7 Habits of Highly Effective Investors
Feb. 8, 2007 – 10 Reasons Why a Professional Athlete’s Best Friend Needs to be his Financial Adviser

Politics and Stocks (30 articles) – Think you don’t need to understand politics to be a good investor? Think again. If you don’t understand politics, you’ll never fully understand the most likely future direction of global stock markets, oil, gold, and currency markets. Click the above category link to see the full database of articles, including the most recent articles that may not be listed below.

Apr. 11, 2007 – Building Great Wealth in Stocks Requires Understanding Politics
Apr. 1, 2007 – The Next Cold War will be an Economic One
Apr. 1, 2007 – Possible U.S. Military Intervention in Iran
Mar. 13, 2007 – To Err on the Subject of Chinese Tariffs May Expedite a Shakespearean Tragedy
Dec. 17, 2007 – Do Free Markets and Free Trade Exist?

Oil Crisis (15 articles) – Think oil prices are controlled by supply and demand, futures traders, or Peak Oil Theory? Think again. Discover the true determinants of oil price behavior, primarily dollar devaluation. Click the above category link to see the full database of articles, including the most recent articles that may not be listed below.

May 14, 2009 – What’s Driving the Price of Oil Higher? It’s the Dollar, Stupid!
May 28, 2007 – The Politics of Higher Oil Prices
Nov. 26, 2006 – Does the end of Mid-Term Elections Mean Higher Gas Prices Again?
Nov. 8, 2006 – The Peak Oil Theory was Created by – You Guessed it – Big Oil!
Oct. 30, 2006 – The Safest Place to Invest in the Oil Industry Now? – Oil Refiners, Pipeline Manufacturers, Deep Sea Platform & Drilling Manufacturers, and 4D Imaging Companies
Oct. 30, 2006 – You’ll Find Ignored Investment Opportunities in the DRC and Libya
Oct. 12, 2006 – How Has Prince Bandar bin Sultan Affected Oil Prices in Years Past?

Uranium Investments (3 articles)– The bulk of this information is contained within our members only area, but you’ll find an article or two here. Click the above category link to see the full database of articles, including the most recent articles that may not be listed below.

May 1, 2007 – Uranium Stocks are Finally Getting Some Attention. Better Late than Never.
May 1, 2007 – What Does Uranium Futures Mean for the Future of Uranium Stocks?

Africa Investments (5 articles) – For the more daring investor willing to place small bets for HUGE returns, Africa awaits.

Canada Investments (4 articles) – Articles about Canada and the Canadian stock market and hands down some of the best opportunities in ANY global stock market.

China Investments (21 articles) – Articles about Chinese stocks and the Chinese stock market.

India Investments (4 articles) – Articles about Indian stocks and the Indian stock market.

Japan Investments (4 articles) – Articles about the Japanese economy and stock market.

Russia Investments (1 articles) – Articles about the Russian economy and stock market

U.S. Stocks (25 articles) – Articles about U.S. stocks and the American stock market.

Vietnam Investments (3 article) – Articles about Vietnam and the explosive yet unregulated Vietnamese market.

Investment Psychology (22 articles) – One of the most important but yet most overlooked and ignored aspects of investing is psychology. Discover how an improper mindset can be the difference between huge losses and huge gains in your portfolio. Click the above category link to see the full database of articles, including the most recent articles that may not be listed below.

Feb. 7, 2007 – Investors Should Apply the Rule of Shopping 101 to Buying Stocks
Jan. 3, 2007 – Will the 2006 Year End Rally Continue into 2007?
Dec. 21, 2006 - Perception Can Overrule Reality in Driving Behavior but Reality Will Overrule Perceptions in Driving Outcome
Nov. 30, 2006 – The Recency Effect Hurts Investment Decisions
Nov. 2, 2006- Canadian PM Stephen Harper & Hungarian PM Ferenc Gyurcsany – the More Things Change the More They Stay the Same
Nov. 2, 2006 – Irrational, Not Rational, Behavior Often Drives Markets
Oct. 24, 2006 – The Financial Media are Like Bad Weatherman
Oct. 8, 2006 – The SmartKnowledgeU Reader’s List
Oct. 4, 2006 – Hungarian PM Ferenc Gyurcsany: We LIED Morning, Noon, & Night!
Sept. 26, 2007 – Move Over Harry Potter! The Deceptive Wizardry of Fund Managers
Sept. 17, 2006 – When it Comes to Investing, You Get What You Pay For
Sept. 16, 2006 – Why Do People Believe One of the Dumbest, Most Flawed & Deceptive Measures of Economic Conditions?
Sept. 13, 2006 – Why Book Smarts Won’t Help You Build Wealth
Sept. 10, 2006 – Investment Psychology 101
Aug. 24, 2006 – To Become Wealthy, Abandon Widespread Beliefs About Investing
Aug. 18, 2006 – Following Mainstream Media Will Lead You Down a Disastrous Investment Road
Aug. 3, 2006 – Following Short-Term Fluctuations Will Create Poor Investment Decisions

Options Investing (10 articles) – We don’t discuss options much here but occasionally, if there is a compelling play, we’ll write an article or two.

Water Investing (1 article) – Read articles about investing in water as a commodity as the world’s fresh water supply becomes more scarce.

The Zen of Investing (42 posts) – Read articles from our resident martial arts expert regarding how understanding principles of martial arts can make you a much better investor. A combination of “The Art of War” and “The Art of Investing” if you will. Click the above category link to see the full database of articles, including the most recent articles that may not be listed below.

Technorati Tags: investment blog, investment strategies, dollar crisis, financial crisis, oil crisis, stock market crash, howto invest gold, recession proof, best ways to invest, Wall Street bailout

Consider, the story about Goldman Sachs and the theft of its trade secrets last week. Bloomberg reported the following just this week on this breaking story:

Sergey Aleynikov, an ex-Goldman Sachs computer programmer, was arrested July 3 after arriving at Liberty International Airport in Newark, New Jersey, U.S. officials said. Aleynikov, 39, who has dual American and Russian citizenship, is charged in a criminal complaint with stealing the trading software. At a court appearance July 4 in Manhattan, Assistant U.S. Attorney Joseph Facciponti told a federal judge that Aleynikov’s alleged theft poses a risk to U.S. markets. Aleynikov transferred the code, which is worth millions of dollars, to a computer server in Germany, and others may have had access to it, Facciponti said, adding that New York-based Goldman Sachs may be harmed if the software is disseminated.

“The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways,” Facciponti said (emphasis mine), according to a recording of the hearing made public today. “The copy in Germany is still out there, and we at this time do not know who else has access to it.”The prosecutor added, “Once it is out there, anybody will be able to use this, and their market share will be adversely affected.” The proprietary code lets the firm do “sophisticated, high-speed and high-volume trades on various stock and commodities markets,” prosecutors said in court papers. The trades generate “many millions of dollars” each year.

It’s curious to note that Goldman Sachs has admitted that it has developed trading software that could be used to, in their own words, “manipulate markets in unfair ways”, yet nobody in the mainstream media has questioned whether Goldman Sachs was/and is using its proprietary trading platform to manipulate markets in unfair ways. Only extremely naive investors with zero understanding of how global stock markets operate would deny that there has been continual and excessive intervention into US stock markets to prop them up over the past several months. The announced breach of Goldman Sach’s trade secrets coincided with an inexplicable omission of Goldman Sachs from the NYSE’s weekly report of the most active trading programs for the week ending June 26, 2009, though on Monday, July 6, 2009, a NYSE spokesman explained to Reuters that “the exchange was to blame for Goldman missing from the list, adding the bank reported its data to the exchange correctly and on time.” Even if this fishy explanation regarding the omission of Goldman Sachs’s trading activity from this weekly report is true, Goldman Sachs in light of this recent development, has undoubtedly had to proceed much more cautiously with their trading activities given that there may be unknown persons out there privy to their every move right now.

What is highly curious, in my mind, is the fact that oil plunged 10.5% from a high of $71.60 to a low of $64.05 in just the last four trading days and the fact that US stock markets plummeted on July 2nd, before a major US holiday weekend, at a time when Goldman Sachs has most likely not been participating in markets at their regular activity level given these recent developments. Typically before a major US holiday, trading volume on US markets is very light. During the recent rally in US markets from early March to early June, unidentified institutions have taken advantage of very low trading volumes to prop up US markets whereas higher than normal trading volumes often resulted in an aberration of a heavy down day. I fully expected July 2nd, due to the low trading activity that normally accompanies a pre-holiday market, to be a day when US markets would be propped up, yet July 2nd was a very heavy down day in US markets. Secondly, every trader recognizes the importance of Goldman Sachs’s activity in crude oil markets. In fact, if Goldman Sachs makes significant changes to the weightings of its GSCI (Goldman Sachs Commodity Index) components, virtually every commodity fund manager in America accordingly changes the weightings of his or her portfolio to mirror the changed weightings of the GSCI. I’m haven’t researched how many times in recent history that the price of oil has plunged 10.5% in four trading days, but I’m guessing not too often.

Could stock and select commodity markets actually have been driven more by the free market forces of supply and demand than by market manipulation and by free-market intervention schemes for several days while “the invisible hand” of Goldman Sachs has been temporarily tied behind its back? Just a thought.

e

(1) Dump many of the worst performing stocks in their portfolios; and/or

(2) Add some stocks that had the highest returns of that quarter to their portfolios.

Why do fund managers engage in this practice? Because investment firms are required to disclose their funds’ holdings to their clients and shareholders, and the holdings at the end of each quarter is the list of stocks disclosed to clients and future prospects. Thus, a good number of fund managers attempt to make themselves appear much smarter than they really are to clients and to prospects by “window dressing” their portfolios.

Is this an honorable practice? No. Is it a truthful practice? No. Is it a deceitful practice that helps investment firms sell more investment funds to their clients and new prospects? Yes. In fact, Investopedia even defines one example of window dressing as “investing in stocks that don’t meet the style of the mutual fund. For example, a precious metals fund might invest in stocks that are in a hot sector at the time, disguising the fund’s holdings, so clients really have no idea what they are paying for.” Thus window dressing theoretically allows a fund manager to simply dump all the stocks that fall outside the fund’s stated objective before each quarter-end to deceive shareholders into believing that the fund is remaining true to its stated objective even if it is not. If this occurs, an investor in such a fund would never know that the fund manager is engaging in considerable style drift.

So why isn’t this practice illegal? Since window dressing serves absolutely no purpose that is beneficial to the client or prospect and fund managers engage in it solely to deceive clients, almost all rational people would agree that it is unethical. The Securities and Exchange Commission (SEC) states on their very own website that its mission is “to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation”. Yet the practice of window dressing violates every single aspect of the SEC’s stated mission. Window dressing contributes to inefficient markets since a number of high-profile losers get pounded on at the end of each quarter for no reason other than the fact that fund managers want to conceal from investors the fact that they had purchased said losing stocks. In addition, a number of high-profile winners will see an appreciation in share price due to buying that is spurred only be a desire to paint a false picture to current and future shareholders.

Since every insider of the investment industry, including the SEC, has known about window dressing for decades, why has the SEC done nothing about it? (this is a rhetorical question as we have all learned that the SEC is as much interested in protecting fraud as prosecuting it, depending upon the offending party.) As I explained in my earlier article, “How the Financial Elites Enronized America”, legislation increasingly rarely has anything to do with ethics. These two concepts, in the financial world, are often exclusive of one another. Clearly, window dressing is unethical. Yet it is has been legal for many years with little real debate to end it.

If the SEC wants to know how to prevent the fraudulent practice of window dressing, I’ll solve this problem for them right here in this article in less than ten minutes time. At the end of each quarter, require all fund managers to disclose in all marketing materials handed to existing and prospective clients the following two pieces of information:

(1) the exact date that they bought the most material positions of the stocks that presently constitute the top fifteen most heavily weighted stocks in their portfolio; and

(2) the exact date that they sold the most material positions of the stocks that constituted the fifteen most heavily weighted stocks that were sold that particular quarter.

If the SEC simply passed these two disclosures into law, a deceitful fund manager would no doubt be embarrassed into halting his practice of window dressing if he was a manager that repeatedly engaged in window dressing to add winners to his portfolio in the weeks or days before each quarter end. Secondly, a fund manager prone to window dressing would also likely stop dumping all his top losers right before the quarter-end if clients knew the only reason he dumped those losing stocks was so that they would not know that he held these stocks for 86 out of the 90 days of that quarter. The two above disclosures would not only halt the deceitful intent of window dressing practices, but it would also halt huge inefficient anomalies from occurring in stock markets at the end of each quarter.

Those in the industry that wish to continue the deceitful practice of window dressing will argue that increased disclosure, per my above proposals, is problematic because it reveals firms’ trade secrets that can then be leeched by other fund managers at competing firms. This is a bunch of nonsense for the following reasons. If you were to disclose the top 15 most heavily weighted sells in a portfolio, if they were sold to lock in profits, then even if a manager plans on re-buying some of these stocks, no one will know the exact date of when the manager re-buys these stocks in the next quarter, or even if he does re-buy these stocks, they will not know this information until the end of the next quarter. And if a manager dumped the stock because it performed horribly, then providing the exact dates these stocks were sold would hardly be disclosing any information of value to a competitor.

But what about stock purchases? Wouldn’t that provide valuable trade secrets to competing firms? To begin, every investment firm already lists the top 10-15 holdings of each portfolio in freely distributed material. After all, it’s required by law (depending on the size of the fund) and it would be immensely difficult to sell a fund without disclosing its top holdings to prospective investors. However, there is great irony in this statement, for the practice of window dressing allows an investor to purchase a fund whose current top holdings at the end of each quarter as presented in marketing materials may be materially different than the fund’s holdings during the remainder of the following quarter. Thus, if a manager had to disclose that 5 of his top 15 holdings were purchased in the last week of the quarter, an obvious attempt to “window dress” a fund’s holding, no investor would trust such a fund manager with their hard-earned cash. Thus, the practice of “window dressing” on the buy side would also cease.

For those interested in helping restore honesty and integrity to our financial world, please write your local Congressman or Congresswoman and lobby for a law to make the practice of window dressing illegal or contact the SEC directly here to voice a complaint. With enough pressure, new legislation can increase transparency and end deceit in the financial world. It is time for all of us to collectively take action now. If we do not, we have no right to complain about continuing fraudulent financial industry practices.

The last great contribution to society was the Industrial Revolution. Before the Industrial Revolution, 61 hours of labor were required to produce an acre of wheat. By 1900, thanks to the advances of the Industrial Revolution, only 3 hours, 19 minutes were required to produce an acre of wheat. Our current monetary system and the rampant fraud in the financial industry have reversed a great deal of the benefits of the Industrial Revolution to humanity. Before the year 2000, if 2,000 hours of labor earned a person USD $50,000 with which he or she bought a basket of goods, in just 8 years, by 2008, at the same pay scale, that same person had to work twice as many hours, 4,000 hours, just to buy the same basket of goods that 2,000 hours of labor would have purchased him or her 8 years prior! The next great revolution that will improve the life of every citizen in the world is a Monetary Revolution in which we end fraudulent financial practices and the unsound monetary system that supports them. Learn more about how you can permanently end financial fraud through participation in a worldwide initiative here.

LONDON (MarketWatch) — Two attorneys at the Securities and Exchange Commission are being investigated by the Federal Bureau of Investigation over possible insider trading, according to an internal SEC report. The report, which was published on the Web site of CBS News, said the investigation into the two enforcement lawyers — a man and a woman — began in January last year.

Among the suspicious activity identified, the report said the female attorney sold all of her shares in a large health-care company around two months before an investigation into the company was opened in her group. Both attorneys also traded in the stock of a large financial-services company, even though they had been told of three separate investigations into that company. Both denied any wrongdoing.

The report was also critical of the SEC for not monitoring the trading by its employees. “The Commission has essentially no compliance system in place to ensure that Commission employees, with the tremendous amount of non-public information at their disposal, do not engage in insider trading,” the report said.

It added that the regulator uses an “honor system” for employees to report stock trades, but it doesn’t perform spot checks or get duplicate records from brokers to validate the trades and there is widespread, poor understanding of the reporting requirements

Consider the following highlights (or lowlights depending on your viewpoint) from a story released by Bloomberg on May 11th:

“Bank of New York Mellon Corp., Capital One Financial Corp., U.S. Bancorp and BB&T Corp. will sell shares to repay U.S. aid after stress tests showed they don’t need additional cushion against a deeper recession. BNY Mellon, the world’s largest custody bank, said today it will sell $1 billion of stock in a public offering and may use the funds to repurchase preferred shares sold to the U.S. Treasury under the Troubled Asset Relief Program. Capital One said it would sell 56 million shares of common stock to raise as much as $1.55 billion, U.S. Bancorp said its sale would total about $2.5 billion and BB&T began a public offering of $1.5 billion of stock while reducing its dividend.”

“Regulators examining the 19 largest U.S. lenders last week said the four firms wouldn’t need more capital to survive a deeper, longer recession. U.S. Bancorp Chief Executive Officer Richard Davis and BB&T CEO Kelly King had both said they wanted to repay their $6.6 billion and $3.1 billion in TARP funds as quickly as possible. BNY Mellon got $3 billion from TARP.”

“This was something that was really hanging over the group, so a lot of peoples’ viewpoint on it is that, ‘Hey, the worst-case scenario got taken out, this group’s going to still be around,’” said Kevin Fitzsimmons, a Sandler O’Neill & Partners LP analyst. “

“Capital One, the McLean, Virginia-based credit-card lender that received $3.56 billion from TARP, said in a statement it would sell shares at $27.75 each, an 11 percent discount to the bank’s $31.34 closing price on May 8. The shares dropped $4.24, or 14 percent, to $27.10 at 4:03 p.m. in New York Stock Exchange composite trading.”

“KeyCorp, which the government deemed needed an additional $1.8 billion in capital after the stress test, today registered to sell as much as $750 million in common shares. The bank said it expects to raise about $739.4 million from the offering after expenses and commissions.”

“Cleveland-based KeyCorp, which last month slashed its dividend to 1 cent, said that because of the economic and regulatory environment the company didn’t expect to increase the quarterly dividend “for the foreseeable future and could further reduce or eliminate our common shares dividend.”

“We firmly believe this action is in the long-term best interests of our shareholders and our company because of the risk and uncertainty associated with being a TARP participant,” BB&T’s CEO Kelly King said in a statement. King said the decision to cut the dividend was “the worst day in my 37-year career.”

“Banks that accepted TARP money are subject to government oversight and restrictions on compensation that that they say put them at a disadvantage to competitors. Banks that want to repay the funds must get approval from the government and show they can sell debt in the public market without federal backing.”

“U.S. Bancorp also plans to sell $1 billion of five-year notes without a government guarantee as soon as today, according to a person familiar with the offering who declined to be identified because terms aren’t set.”

“Wells Fargo & Co., which the government said needed $13.7 billion in additional capital, raised $8.6 billion selling shares last week, more than planned. Goldman Sachs Group Inc. in April, before stress test results were released, said it would raise $5 billion to repay federal rescue funds. Principal Financial Group Inc., the Des Moines, Iowa-based life insurer, today said it would offer 42.3 million shares to raise funds for “general corporate purposes.”

“Morgan Stanley last week raised $8 billion by selling stock and debt. The stress tests found that New York-based Morgan Stanley needed $1.8 billion in additional common equity as a buffer against potential losses.”

So let’s analyze the most pertinent points from above:

Bank of New York Mellon Corp., Capital One Financial Corp., U.S. Bancorp and BB&T Corp. will sell shares to repay U.S. aid after stress tests showed they don’t need additional cushion against a deeper recession. If there is a better example of an oxymoron, I don’t know one. So if these four financial institutions don’t need any more capital whatsoever, why do they need to execute significant secondary offerings that will inevitably massively dilute shareholder value. If they are so well capitalized as the stress test results indicated, why can’t they repay the TARP money from operational earnings?

Banks that accepted TARP money are subject to government oversight and restrictions on compensation. BB&T’s CEO Kelly King stated that he was cutting dividends and diluting shareholder value by offering another $1.5 billion of stock to help payback TARP money more quickly because it was in the best interests of shareholders. US Bancorp is conducting a secondary offering of $2.5 billion of new shares as well as an additional $1 billion offering of corporate debt and Capital One is offering $1.55 billion of more shares. Since when is slashing dividends and diluting shareholder stock in the best interests of shareholders, unless the shareholders are the executives that have used this pump & dump scheme to dump stock at artificially high prices and now can begin the process of paying back TARP money so they can start raising their compensation levels to obscene, exorbitant amounts again?

To date, Wells Fargo & Morgan Stanley have moved the quickest of all financial institutions to use their artificially elevated stock prices to already complete respective secondary offerings of stock (& debt) of $8.6 billion and $8 billion.

Capital One issued a statement regarding a secondary offering of shares at $27.75 each, an 11 percent discount to the bank’s $31.34 closing price on May 8. An 11% discount to market prices at the time of a secondary public offering announcement is huge and always in the worst interest of current shareholders. It is not rare for well- run companies to issue secondary offerings that are even above market share price in the interest of protecting their current shareholders. A 2% or 3% discount is sometimes understandable, but by offering a huge discount through a massive secondary offering, executives reveal the belief that their shares are overvalued.

In a pump and dump scheme, there is always a phase II. Note the urgency of many financial institutions to complete their secondary public offerings of stock and debt as soon as possible. This urgency is a classic sign of a pump and dump scheme as it signifies that the rapid rise in current bank share prices have been built on zero fundamentals and is thus unsustainable. Now that the pump scheme is largely in play already or in some instances, has even been completed, get ready for phase II – the dump.

Below, I’ve summarized pertinent points of this growing food crisis:

• Though the mass media has continued to virtually ignore this massively important story, food riots, instigated by soaring food prices, occurred in about 30 countries last year, including Haiti, Zimbabwe, Ethiopia, and Bangladesh. Due to shrinking food stocks, leading agricultural commodity exporters such as India and Argentina imposed bans on overseas sales of food products.

• Last year, global rice stocks fell to a 30-year low after droughts decimated crop yields in China and Africa. At one point, during a two-week period in April of 2008, prices of rice rose 50%. Rice is the staple food for more than 3 billion people. According to the World Bank, the real price of rice and wheat respectively rose to a 19-year and a 28-year high last year.

• At the recent G8 Agriculture Ministers meeting held in Treviso, Italy in April of 2009, US Secretary of Agriculture Tom Vilsack stated that climate change had materially affected the challenge to feed the world’s population – expected to reach 9 billion by 2050 from today’s current number of 6.5 billion. As a solution, he called on the G8 to back the use of science in agriculture, including genetically modified organisms, to boost productivity.”

• In 2009, for the first time ever, the United Nations reported an unprecedented 1 billion+ people went hungry every day and predicted that this number would continue to rise due to persistently high food prices and the continuing economic crisis.

Though the above unfolding catastrophe should be the leading story of every major media outlet in the world, instead swine flu has trumped this potentially much greater catastrophe. World Health Organization (WHO) officials have currently assigned the worldwide risk of swine flu to a Phase 5 level indicative of an “imminent pandemic”; if starvation were considered a disease, the risk factor of this hunger catastrophe would be assigned the WHO’s highest rating of Phase 6.

Beyond the surface points I noted above, there are some truly disturbing facets of this hunger catastrophe that lie beneath the surface. Given that the WHO has labeled swine flu a pandemic with a recent figure of confirmed cases at 1,316 worldwide, it is no exaggeration to consider a hunger pandemic that currently has more than 1 billion victims a catastrophe. Though droughts, low crop yields, and the spectacularly foolish, inefficient experiment to turn food into biofuels have all significantly contributed to the imminent mass starvation problems that will soon materialize, the truth is that the easiest and most efficient way to address the hunger catastrophe is purposely being obfuscated and hidden by the world’s Central Banks and financial oligarchs. Ironically, one of the most significant components of the troubling rise in food prices, monetary inflation, is also the easiest symptom to attack and solve as opposed to other solutions that seek to raise crop yields through the increased use of biogenetically engineered seeds. In addition, though poor climate conditions have undoubtedly contributed to low crop yields in recent years, the real effect of monetary inflation on plunging food stock levels is often obscured by governments through highly inaccurate and deceptive PPI (producer price index) numbers.

Of the current 6.5 billion people in this world, 50%, or 3.25 billion, live on a daily wage of $2 that has not changed in years, despite the fact that significant erosion in the purchasing power of these $2 over the past decade. In turn, the billions of people that subsist on $2 a day spend $1 on food daily. Simple math dictates that if the price of basic diet staples in the developing world (rice, corn, wheat, etc. but specifically rice) rises to $2 or $3 a day or more, more than 3 billion people will no longer just be hungry, but will begin to die from starvation. In previous essays of mine, I have outlined a strong argument for significant inflation in our future despite the persistent campaigns to spread deflationary beliefs. If time proves my arguments to be correct, then a doubling, or even a tripling or quadrupling in the prices of basic food staples is a real and distinct threat to the mortality rates of billions of people. Given the magnitude of this moral crisis, no matter one’s stance in the debate of inflation versus deflation, it is imperative to grant consideration to the possibility of strong inflation in imminent years and its implications for 3.25 billion of our fellow citizens.

This is precisely why the moral disaster of mass global starvation that looms in our near future must first and foremost be approached as a direct symptom of the foolish and dangerously destructive monetary policies now being implemented by the US Federal Reserve, the Bank of England, the Bank of Japan, and the European Central Bank. The United Nations, in their press release, stated that mass global hunger today is attributable to rising prices, and none other than former US Federal Reserve Chairman Alan Greenspan, in a rare moment of clarity, stated in 1997 that “price increases are really the same thing as depreciation of the currency”. There is little doubt in my mind that one of the largest components of rising food prices over the next five years will be a very significant “food tax” that is directly attributable to the debasement of all major global fiat currencies. Thus, one of the most efficient and effective steps we can implement to prevent our current global hunger catastrophe from evolving into a global starvation catastrophe is to re-institute a sound monetary system in which all money is backed by gold or silver or a combination of both.

During the recent G8 Agriculture Ministers meeting in Italy, when US Agriculture Secretary Tom Vilsack used this platform to promote the business interests of the biogenetic agricultural industry, such chatter was a smokescreen designed to deflect attention away from the true culprit of this catastrophe – monetary inflation. Given Vilsack’s history of well-documented supported for bio-genetically engineered agricultural crops, including his award as Governor of the Year by the Biotechnology Industry Organization in 2001, his preferred solution to this crisis offers no surprises. Those who invest in Monsanto (NYSE:MON) now, in terms of monetary profits, will likely emerge smelling like roses a couple years down the road. Still, a larger moral question than the debate over the safety of bio-genetically engineered food or the morality of using a crisis to promote business interests must be answered – “How significant are the contributions of our unsound monetary system to the greatest potential humanitarian crisis of our lifetime?”

Given the course of monetary policies being implemented by our global Central Banks, though this is a prediction I hate to make and detest even more if it comes true, the likelihood is very strong today that hundreds of millions of people will starve to death within the next five to ten years. Though many will find this prediction outrageous, remember that many of my predictions that were considered outrageous 2-3 years ago have now come true. I write this article not for shock value, but for the simple reason that this crisis is avoidable if we begin altering our solutions to the global financial crisis today. However, a persistent refusal to acknowledge the primary role of our fraudulent monetary system in creating this worldwide financial crisis will only serve to cement this obscene prediction in future years.

Should this grim hunger catastrophe continue to progress as increasingly seems likely, growing numbers of food-inspired riots and complex national security issues caused by mass migration issues will arise that will necessitate a response from our world leaders. Should this happen, I have no doubt that our world leaders will spin the starvation catastrophe as attributable to every reason imaginable but the true culprit – our unsound monetary system. Should this problem progress, eventually millions of rural poor will migrate to urban centers, driven by a need to earn higher wages to buy increasingly more expensive food. Ironically the consequence of flooding urban areas with cheap labor in developing countries will be significant wage depression for higher income earners and the rapid deterioration of the middle class into the poor.

Historical precedent for this outcome already was already set during the post NAFTA-years in Mexico, when NAFTA policies created a mass migration of poor into urban centers and effectively destroyed the wage potential of the middle class. Thus, this hunger crisis will not only affect the survival rates of 3+ billion people, but it will also negatively impact the earning potential of billions of urban dwellers in the future as well. Hopefully, this potentially epic humanitarian and moral disaster will finally serve as the necessary blaring alarm to citizens of the world to address the equivalent moral disaster that is our fiat monetary system.

JS Kim is the President & Founder of SmartKnowledgeU, LLC, a fiercely independent investment research & consulting firm that helps clients create wealth during this ongoing global financial & monetary crisis.

More recently, at a G20 meeting in late March 2009, the IMF announced its plan to sell 403 tonnes of gold reserves to address some problems of liquidity. Even though this news was merely old news that was being recycled from the end of 2008, the prominent forum which the IMF leveraged to re-release this old statement focused the attention of neophyte gold analysts on fears of gold supplies flooding the market in the future. And just like magic, we experienced déjà vu again when gold prices plummeted lower (from $928 per fine troy the day after the announcement to a low of about $880 an ounce just one week later on April 8th). When I heard this announcement, I was at once immediately very skeptical of the IMF’s commitment to execute this plan. If the IMF truly makes good on its threat to sell 403 tonnes of gold in the future, the IMF would fail to accomplish their goal of flooding markets with gold supply and would accomplish nothing more than the transference of global wealth from Western nations to Eastern and Middle Eastern nations as I surmise that China, Russia, select OPEC nations and other nations with large trade surpluses or a desire to decrease their US dollar exposure would be more than happy to absorb the available supply. Thus, I believe that the purpose of their announcement was nothing more than a smokescreen that will never experience full execution designed to temporarily drive the price of gold down.

China’s recent revelation that it secretly increased its gold reserves by 76% over the past several years also surprises me not in the slightest as I have predicted China’s engagement in such activities for a couple of years now*. China’s revelation proves that there is little transparency in global gold markets and that the “officially” reported numbers have little relevance as they can be, and most likely will continue to grossly misrepresent the truth. As skeptical as I was about the Bank of Italy’s announcement and the IMF announcement when they occurred, I am equally skeptical of China’s announcement. Given China’s history of public comments about their grave concern regarding the stability of the US dollar and their years of engaging in secretly increasing their gold reserves, when it finally publicly reveals a new gold reserve figure, for what reason should we give this announcement credibility as being truthful?

Governments take full advantage of the fact that they can easily convince millions of unthinking people to believe something as long as they print the statement in writing and in a “credible” newspaper. Ultimately, I suspect that China’s actual gold holdings of 1,054 tonnes, up from their last reported figure of 600 tonnes, are in reality, significantly higher than this amount (as this figure still only represents a tiny 1.6% of their overall reserves). Though I can only speculate about the timing and nature of China’s recent gold revelation, I believe that China made this revelation to “test the waters” and observe the impact of their announcement on gold markets. Ultimately such a revelation, even if it does not fully disclose China’s true gold position, will significantly assist its final determination of its end target percentage of gold reserves.

Furthermore, I am confident that China has not only been secretly supplementing their gold reserves, but that they have also been very quietly adding significantly to their silver reserves, their petroleum reserves, their agricultural reserves and their reserves in base metals. Though base metals will most likely continue to experience a longer timeline to significant recovery than precious metals, they too, will eventually strongly recover in the coming years. The overwhelming majority of analysts state that China’s strategic hands are tied by its massive holdings of US dollar denominated debt and that it can’t possibly dump their massive holdings of US dollar denominated debt without hurting its own economy. This is just not true. There are plenty of means to hedge against eventual significant US dollar decline and China has already revealed its partial hand with its significant additions to its gold reserve.

Just a few days ago, I wrote an article about deflation and gold investments in which I stated, “We’re likely to see some downward pressure in the gold and silver futures markets in the very near term and specifically next Monday [Monday April 27th]“. Indeed yesterday, gold dropped in the COMEX markets by $6.80 an ounce (the ask price closed at $907.20 an ounce), though silver actually ended up closing just about even, higher by one penny an ounce. Furthermore, today, Tuesday, April 28th, I predict that the downward pressure in COMEX gold markets is likely to continue and I would not be surprised to see gold pushed below $900 an ounce at some point in intra-day trading today (author’s note – I released this article about 11 hours before COMEX markets opened in New York on Tuesday).

However, these two days of downward pressure (if another downward day materializes today as I believe to be likely) do not negate the likelihood of another strong leg higher in both gold and silver in May or June. While the gold markets were obviously buoyed at the end of last week as a result of China’s revelation, knowing that the gold markets would dip yesterday and very likely today, while also understanding that these dips do not signify a reversal in trend has nothing to do with fundamental nor technical analysis, but rather with understanding the complexities of the price suppression schemes that the US Federal Reserve and the US Treasury execute. One has to understand all the games that are played in these markets to not be misled by the massive amounts of “white noise” that exist in precious metals markets that are purposely created by the financial oligarchs that control the US Federal Reserve and her sister Central Banks. Unfortunately, the analytical world of gold is full of gold neophytes that have not put in the considerable amounts of research necessary to understand either the fundamentals of the gold market that drive its long-term behavior or the complex relationships among Central Banks’ gold reserves, currency markets, and the US Treasury that drive its short-term behavior.

In reference to the article above, the author publicly stated his belief nearly two years ago in June of 2007 that it was an erroneous assumption to believe China’s strategic options in currency markets were handcuffed by US debt. In addition, the author specifically stated his belief in China’s secret accumulation of gold reserves multiple times over the past two years through the private forum of his SmartKnowledgeU™ Platinum Membership. For years, he has instructed his clients regarding how to create wealth from gold investments and silver investments during the ongoing financial crisis.

I take great offense to Mr. Pandit’s willingness to remove all responsibility for this crisis from “each and every employee” in the financial services industry. What made America a great country in the past was each and every American citizen’s willingness to take personal responsibility for his or her mistakes instead of sloughing the blame onto someone else. What made America a great country in the past was the courageous transparency of American leaders to discuss the truth with her citizens, as painful as that truth may have been, versus the cowardice of deception to dishonorably fool the masses into believing a picture of reality that is a lie.

Today, we have a global financial system that is morally bankrupt, shrouded in secrecy and devoid of transparency. Today, we have men in the financial industry that abuse their positions of authority to plant stories in the media that distort the truth so massively that they must continue to tell more lies merely to cover up their past lies. In fact, the lies of the financial industry have become so repetitive and predictable, that one week before big US banks started to declare their earnings this season, I wrote an article here that stated Big Banks would announce surprisingly positive earning statements based upon Enron-style accounting tricks, and indeed they have.

And don’t expect any negative news when the US Treasury and the US Federal Reserve publicly announce the results of their “stress tests” on the 19 largest US banks by the end of this month. The “stress tests”, most of which have now been completed, were such a joke that even the Federal Deposit Insurance Corporation called them pointless and devoid of credibility. The “real facts” will never be told by any of the men that have led us into the crisis for they have not the courage nor the moral character to do so. The “real facts” are that this crisis was triggered not by subprime mortgages, commercial paper, financial derivatives, collapsing stock or bond markets, but by a fraudulent monetary system. A fraudulent monetary system allows for massive distortions in capital markets that would be near impossible with the implementation of a sound monetary system.

Though the US Federal Reserve has instituted this fraudulent monetary system, the biggest enablers of this fraudulent monetary system are the Big Banks. So yes, each and every employee of the financial industry must be held accountable for their role in this crisis. Ignorance is an excuse only for the weak and morally repugnant, not the honorable. For three years now, I have predicted, in writing, every major step of this crisis, months, and sometimes years before they eventually unfolded. Since 2006, I have strongly advocated gold investments and silver investments as a way to create wealth during this crisis. My predictions have been remarkably accurate for more than three years now not because I have remarkable psychic skills. I have been able to do so only because I have understood that the origin of this crisis is a fraudulent monetary system enabled through the corrupt relationships that exist among Big Banks, Central Banks, and governments.

Every Big Bank in the US creates money out of thin air through a system called the fractional reserve system. In the US, the reserve ratio requirement (RRR) is NOT 10% as most American’s believe. It is in fact, effectively zero percent, a fact that all executives at big banks do not want you to know. This means that Big Banks can effectively create $100 million of loans for every $1 million of deposits they receive if they so desired. If you and I tried to execute the same business plan with our everyday businesses, you and I would be thrown in jail for fraud within two weeks. In essence, due to the fractional reserve banking system, every single dollar we deposit in a bank is effectively being devalued from the moment it leaves our hands. Considering that it takes us a minimum of several months to many years to withdraw and spend all of our savings, the money we withdraw from banks will always have less purchasing power than the money we originally deposited with them. Of course, other factors such as the monetary decisions of other major Central Banks affect the dollar’s worth, but in essence, the above statement, even its simplicity, still holds true. Since I extensively explained how devaluation of the US dollar happens in this article, I won’t repeat myself here.

In addition to the Big Banks, the US Federal Reserve, the biggest bank of all, also prints money out of thin air. When Central Banks and participating banks create money out of thin air, they impose a punitive tax upon all of us, willing or not, that they euphemistically repackage and re-label as “inflation.” However, this is a tax that necessarily must be factored into one’s earning power every year. Let me explain. Consider if in 2006, you lived in California and earned a modest (for the state of California) $155,000 annual salary. From this figure, you had to deduct 33% for federal income tax and another approximate 10% for state & local income tax. Most Americans in this income bracket would believe that their net earnings for the year was 57% of their annual salary, or $88,350. However, most of us forget to compute one last very important calculation to determine our true net salary that year. In 2006, the true inflation rate in the US was about 10.5%. Since inflation decreases the purchasing power of your money, you must account for inflation as an “invisible tax” in your overall tax rate.

Thus, if you earned $155,000 in the state of California in 2006, your true tax was 33% + 10% + 10.5% = 53.5%. Consequently, your net earnings from your salary that year was barely over $72,000, certainly not $88,350 and certainly not $155,000. This is exactly why some years you may struggle to make ends meet even though you may be earning what you believe to be a very decent salary. Big Banks are and have been bamboozling all of us out of our hard-earned money through a fraudulent monetary system. And we have the Big Banks, and in particular, the executives at the biggest banks in America, to thank for our current monetary and financial disaster. These are the “real facts” that men like Mr. Pandit do not want you to know. So will I ever be empathetic towards financial executives at Big Banks? When these financial executives run their companies with integrity instead of dishonor, when they are aboveboard instead of deceptive regarding their contributions towards this crisis, and when they engage all American citizens in an open debate regarding solutions instead of shrouding their meetings in secrecy, I will become empathetic. Until this occurs, then no, because frankly, financial executives at Big Banks are getting a free ride right now in proportion to their level of responsibility in creating our present monetary crisis.

So here are two simple steps every American and every citizen of the world must take to end the tyranny of Big Banks. While these steps are not perfect, they will succeed in changing the financial system in America if you truly desire real change.

(1) If you work for a Big Bank, start looking for another job and quit within six months. If you did not understand how the US Federal Reserve and Big Banks are destroying America, if you’ve read this article, you can not claim ignorance as a defense anymore. If you continue to work for a Big Bank, you are silently agreeing that secrecy, deception, & moral repugnancy is okay. Quitting is not as difficult as it seems. I realized my mistake of working for a Big Bank years ago and left to start my own independent company that could truly serve the interests of my clients. If I was still working for a Big Bank today, I would still consider myself part of the problem instead of part of the solution. If you want to remain in banking and don’t want to start your own firm, obtain a new job with a community bank. You have options other than to work for a Big Bank and contribute to America’s downfall.

(2) If you have large accounts, investment, savings, mortgages, or otherwise, at a Big Bank, withdraw all your assets, close your accounts out and give all of your business to a community bank. Yes, you will lose access to more competitive rates that a Big Bank can offer. Yes, closing your accounts will be a hassle. However, the consequences of doing nothing can devastate future generations of Americans. So consider this action the greatest gift you can give your children and your grandchildren.

According to the FDIC, as of April 9, 2009, there are 8,256 FDIC-insured banks in the United States. Of these 8,000+ banks, perhaps taking action against the 20 biggest banks in America and the world is all that is necessary to bring sweeping reform and change to the US financial industry. However, if all banks enable our fraudulent monetary system, you may ask, Why the Big Banks? Here’s the answer. While it is true that all banks serve as enablers of this monetary crisis, it was specifically the Big Banks such as Goldman Sachs, Citigroup and the US Federal Reserve (as directed by Chairman and former JP Morgan director Alan Greenspan) that actively sought the repeal of the Glass Steagall Act (author’s note: For those of you unfamiliar with the Glass Steagall Act of 1933, it was an act loaded with provisions to specifically prevent the exact scenario we are suffering today). The Big Banks in the US lobbied to destroy the act and won this battle in 1999.

For those of you that understand the revolving door that exists among the US Treasury, the US Federal Reserve, JP Morgan, Goldman Sachs and Citigroup, it should be obvious to you why JP Morgan, Goldman Sachs, and Citigroup have all survived this crisis thus far. Seasoned gold and silver investors have often speculated that data seems to incriminate JP Morgan and HSBC US as the two Big Banks that consistently short the majority of gold/silver contracts in the futures markets. So to re-establish any semblance of free markets again in America, the Big Banks must be broken up. Furthermore, a transition period to a sound monetary system is necessary and it is not realistic to believe that a systemic collapse of the global banking system is necessary for change. We still need banks to operate during the transition period and thus, we should lend our support to small community banks during this time.

During a February 5, 2003 PBS Frontline interview, conducted by correspondent Hedrick Smith, Charles Geisst, a professor of finance at Manhattan College in NYC, stated, “Certainly, Citigroup [and then CEO Sandy Weill] pushed for legislation to get rid of Glass-Steagall, pass what was called HR10 at the time, which became the Financial Services Modernization Act [of 1999]… In the year previous to the Financial Services Modernization Act, the thing that overruled Glass-Steagall, Citibank spent $100 million on lobbying and public relations…They spent a small fortune, a king’s ransom, if you will, getting rid of Glass-Steagall. In fact, when thrown in with other financial firms’ lobbying, it was closer to $200 million over the short period of time.”

Of course, the only real solution to this monetary crisis is to re-instate a monetary system backed by gold and silver. However, until that time comes, the intermediate step to take is to withdraw all support from all Big Banks and re-direct your support to your local community banks. I guarantee you that if we fail to act now, we will find ourselves in a predicament two to three years from now where it will be too late to take action for your actions will no longer have an effect. We have arrived at a tipping point right now and the simple actions above can help save our country and restore it to greatness. No matter your nationality or where you live, the greatest gift you could give every citizen of this world is to take the two steps above and to ensure everyone you know also takes the above two steps.

We still have much to learn from past US Presidents John F. Kennedy and Thomas Jefferson. John F. Kennedy once stated, “The very word secrecy is repugnant in a free and open society”. Thomas Jefferson once stated, “The government is best that governs least” and “When governments fear people, there is liberty. When the people fear the government, there is tyranny.” If we consider how the statements of these great US Presidents apply to our situation today, we will realize that never has secrecy in the US financial sector been greater and transparency less; never has our government governed more; and never have government and Central Banks feared us less.

Consider the $700+ trillion derivatives markets that nobody can seem to properly explain because they are unregulated and opaque, other than the fact that a good percent of this market is destined to blow up. And who do you think invented financial derivative products like Credit Default Swaps that are wreaking so much havoc on the financial system today? The Big Banks. Consider the fact that organizations like the Gold Anti-Trust Action Committee petitioned the US Federal Reserve Board and the US Treasury in 2008 for information regarding US gold swaps, but were denied information under the grounds that the disclosure of this information “would harm certain proprietary interests.” This secrecy regarding the US gold reserves and the secrecy of our $700+ trillion derivatives market is the very secrecy that President Kennedy referred to as “repugnant in a free and open society.” This should serve as a wake up call to us all.

Today, we find ourselves in a state of inertia that is induced by a fear created only by the fact that we have been dearly misinformed about the origins of this crisis. Our ignorance, in turn, is maintained by the secrecy and massive misinformation campaigns propagated by bankers. A misinformed, ignorant populace will remain in a state of inertia but an informed populace can create powerful change. The fact that we have been in a state of inertia for decades has created this obscene situation we face today. However, just as the law of inertia states that a body at rest is likely to stay at rest, the law of acceleration states that force equals mass times acceleration. Thus if we sincerely desire change, we must also seize the personal responsibility to inform all of our friends, our neighbors, and our co-workers about our fraudulent monetary system and the steps that can be taken to dissolve it.

We can consequently then generate mass and acceleration. A body set in motion is likely to stay in motion. This is how we can defeat the Big Banks. America has been in state of inertia not because we are stupid as the Big Bankers think of us. America has been in state of inertia not because we are lazy or uninspired. It has been a long time since the world has looked to America as the shining beacon of freedom and justice, but this is our opportunity, and ours alone, to seize. I am writing this article because I believe in the intelligence, the courage, the leadership, the diversity and the resilience of all Americans. And I do believe you will act upon reading this article.

If you believe that my views need be challenged, I agree, because in any free and open society, open debate and transparency is what leads to the best solution. But whatever you do, ACT. Merely pass this article on to your neighbor to open up a discourse then, for a debate about this is better than no debate at all. Also consider this article from a former IMF economist, Simon Johnson, called “The Quiet Coup.” Please take the time to follow this link and read that article as well. For those of you that have followed my writings for quite some time, you may be surprised that I am recommending an article from a former IMF employee, but trust me, it is an article well worth reading.

Perhaps if we take the small actions I suggest, the small community banks will morph into big banking giants, and we’ll have the same problems all over again. Perhaps, but if we all mobilize and place enough pressure on Congress to pass a Glass Steagall Act II by the time we finish taking the steps above, it will not. The only thing we know for certain is that if we do nothing, we will have sentenced not only ourselves but also future generations of Americans to a very bleak future. However, if we take action now, we can guarantee one thing. We the people will serve notice to the banks that we, and not they, are in control of our inalienable rights of life, liberty and the pursuit of happiness. America’s greatness is rooted in the strength of her citizenry, not her government and certainly not her corrupt banks. As the state of New Hampshire motto goes, “Live Free or Die.”