Protect Yourself From The Credit Crunch

This article was first published here on 15 December 2008.

When the US unveiled its “Bailout” plans in October and it emerged that at least $700 billion was to be created, borrowed by the US Government from its creators, the Federal Reserve, and pumped into the US economy, many commentators forecast that because of this the US dollar would plummet on the foreign exchanges.

But they failed to take into account the fact that nearly every other country would follow the Americans in inflating their own currency as well, to try and spend their way out of the financial crisis. The result has been that many currencies have been devalued even more than the US dollar, which as a result has come out of the mess so far quite well.

The full effects of the madness of the October “bailout” will take another few months to filter through into the economy at large, both in the US and in other western countries. When it does, inflation, which has been artificially kept in check on account of endless “sales” and “special offers” from the retail sector, itself desperate to stimulate sales and fend off financial disaster, will take off with a vengeance.

This will make worse an already dire situation for millions of people struggling to survive in the face of rising business failures, redundancies and house repossessions.

How can we protect ourselves from the disaster now unfolding?

We’re all in different situations so only general comments are possible. Stay away from debt as far as possible. That applies to any time, not just this traumatic period. Assess your financial situation realistically and if necessary cut your expenditure on luxuries in order to balance your budget.

If you have medium to long term savings then consider putting them into gold. Real gold, and not just gold certificates (which can be manipulated in the same way as currencies). Currencies can be printed and thereby expanded at will. This decreases the value of savings. Gold cannot be printed. As weak governments borrow and borrow to try to fend off the financial collapse, gold is bound to increase in value.

It’s now very easy to buy gold. You can easily find out how by searching on the internet.

And don’t forget to download the classic guide to High Finance, “Promise To Pay”, by Dr R. McNair Wilson, free of charge from our Home Page. For an excellent article revealing the background of the Credit Crunch, take a look at this while it’s still archived by the Times’ web site -

Spread the word.

Philip Gegan






The Credit Crunch – More Of What You Need To Know

This article was first posted on this blog on 17th October 2008.

One of the things I find most amazing about the Credit Crunch is how surprised most commentators, who ought to know better, are at how things are turning out.

Did they really think that the credit bubble of the last sixteen years was going to carry on and on for ever? Here in the UK, for example, we have had a situation for many years where much of the national wealth has consisted of the inflated value of houses and other buildings.

We’ve lost so much of our manufacturing industry, owing to multi-national companies transferring their factories to the far east and other places where wages are at rock bottom, that the so-called “service” industries now account for over 80 per cent of employment.

In a country where most of us are in effect taking in each other’s washing for a living, is it any wonder that most of our wealth is simply what’s left of our country after the banking system has finished with it? In other words, things that just can’t be shipped out of the country, such as buildings?

That explains why, over the last 40 or 50 years, mortgage lending has assumed such a large part of our economy. It’s simply the banking system going for what is left - bricks and mortar. It doesn’t matter to them that bricks and mortar are people’s homes, their businesses, their farms and factories. To the banking system it’s just security for their fictitious loans, to ensure they make their multi-billion pound profits for not actually contributing anything to the national wealth.

Now in the UK, as in the USA and other countries, many of the banks who have been gorging themselves off the backs of the working population have come unstuck. They have sucked so much life-blood out of the economy that there’s hardly any left. This is just the latest in a long line of financial crises, going back centuries. It’s part of the system. As soon as enough people just cannot continue paying tribute to the money lenders, the money lenders themselves (or SOME of them - see below) suddenly find themselves in trouble and start howling for help.

It’s always the case that when they are making large, unwarranted profits, well, that’s nobody’s business but their own. But when they’re suddenly caught out and have to chalk up losses, well, somebody, please help! Namely the Government, courtesy of the tax payers, the very people these banks have been taking a free ride from for years.

The whole system is a racket of the worst possible kind, where the victims are just ordinary folk, struggling to make a living and bring up a family.

It is the mission of this blog and the web site that hosts it to reveal this fraud to as many people as possible. The home page of covers the subject very briefly, but I recommend our first publication, Promise To Pay, written as far back as 1934 by Dr R. McNair Wilson, which explains the whole system lucidly, and at the same time very entertainingly. This, too, is available from the main page of our web site.

The only other thing I want to mention today is that there are SOME banks and finance houses that are immune from the financial crisis. I haven’t seen anywhere that the House of Rothschild is in trouble. If this banking crisis is anything like those of earlier times then the big players in this unsavoury business will take the opportunity of getting rid of as many of the smaller players as they can to pave the way for even larger profits and greater power for themselves in the future.

That’s why we really need to root out the cancer that is the debt-based syphilitic system we’ve had to endure for too long now. And replace it with sound money issued solely by each national government accountable to the people.

Spread the word!

What You Need To Know About The Credit Crunch

Note: This article was first published on this blog on 19th March 2008.

It's frightening, especially when your savings or pension is at stake.
A number of big name banks and financial institutions, pillars of
fortitude and strength, are suddenly being shaken to their
foundations. Already here in the UK we've had Northern Rock go under
and now in the U.S. Bear Stearns has gone the same way. What's
happening, and how can we protect ourselves and our savings?

This article will attempt to answer that question and cover the
underlying and immediate causes of the crisis.

The Underlying Cause

The Federal Reserve Act of 1913 set up the Federal Reserve System as
the financial institution that controls US financial policy. It's
privately owned by foreign banking interests and lends the people and
government of the United States their own money, repayable at interest
on demand. That's why we have a debt-based economy.

The money we use as our means of exchange isn't real money and never
has been. It's only "promise to pay" money. That means it's only as
good as the private banking consortium that owns the Federal Reserve.
And they are bankers engaged in enriching themselves. They do this in
many ways.

One of those ways is by lending many times the amount of real money
(gold and silver deposits) that they actually have, and collecting
interest on all of it. Sometimes they lend just a little too much of
what they don't really own, and a panic ensues. This has happened
regularly throughout US history - 1884, 1890, 1893, 1907, 1929-33,
1987, and now, to name just a few.

Another way they make their money is by trading in options and
derivatives. This is separated from gambling by only a fine line, and
when things go wrong, as they invariably do sooner or later for a
gambler, they will seek to deflect the losses away from themselves on
to everyone else. This brings us to the immediate cause of the present

The Immediate Cause

This time the trouble started in the "sub prime" market. Many of the
smaller banks lent money as home loans to people who couldn't raise a
loan in the regular financial markets owing to adverse credit history
or simply not having a sufficient income to cover the amount they
needed to borrow. In a large percentage of such cases it wasn't a
question of "if" they defaulted, it was "when".

With the rapid inflation of house prices that took place in recent
years, this problem became extremely widespread. Many loans were
placed by corrupt brokers who simply lied on the application forms
that their clients were earning more than they actually were. At the
same time, many loans were fixed at an artificially low rate for a
limited time, creating a financial time bomb due to detonate when the
fixed rate period expired and the borrower suddenly had to pay a
larger repayment each month, which in many cases was just not

Meanwhile many of the smaller lenders were becoming aware of the
dangers just around the corner, and bundled up many of these "sub-
prime" mortgages, the good with the bad, and offered them as packages
to larger banks anxious to get in on the act of profiting from the
house price boom.

The more risky loans were supposed to be counter balanced by the fact
that the safer loans carried a by now higher rate of interest,
ensuring a profit for the purchasers of these packages. This practice
was only made possible by the fact that banks can lend far more money
than they actually have deposited with them - up to ten times the
amount is the rule of thumb. It's called "fractional reserve". Or
"fraud" where I come from. It's perfectly legal, though. You see, the
bankers and their lawyers wrote the laws.

You may ask why there's a problem, bearing in mind that these loans
are secured on the borrower's house in each case. Therefore, surely,
if the borrower defaults the bank, or whoever now owns the equity,
simply repossesses, sells the house and recovers the money owed,

Well, no. Many of the loans were made on the basis of highly inflated
property valuations in the first place. And in the second place, as we
all know, house prices have tanked in recent months. It's a vicious
circle, with house prices falling and making matters worse, and the
worsening credit crisis in turn causing yet further falls in property
values as buyers dry up and banks become reluctant to lend for fear of
over extending themselves.

As cash flow worsens, more and more financial institutions are finding
themselves in trouble. As of mid March 2008 it's only Bear Stearns
that has gone under. Soon there will be a whole lot more, I'm afraid.
What we are witnessing may well be the unraveling of the whole
financial system of the west. The only beneficiaries will be those
huge institutions that own the Federal Reserve. They will be able to
consolidate their power over the world economy.

But what of us? The ordinary folk of the United States, Canada and
most European countries, and the other industrialised countries of the
world. How can we protect ourselves from what is happening?

Well, it's not the objective of this article to give financial advice,
but it would seem prudent at the present time to divest our money, as
far as possible, from anything to do with mainstream financial
institutions, and to place it into the only assets which seem likely
to come through unscathed. And in this writer's humble opinion they
are gold, silver, oil and water - real, tangible assets that can't be
created out of nothing, manipulated and then withdrawn from

Philip Gegan