12. Financial tsunami created to stabilize the dollar (12/16/08)

On 7/4, I wrote "556. Petro-dollar, the cause of Iran war (7/4/08)". I think it touches the core. From 7/5 to 7/8, the oil price dropped for four days from $145 to $136 a barrel. It goes downwards since. It's a cover up reaction to my revelation. The inside group doesn't want people to know its Achilles' heel - the Petro Dollar. It doesn't want people to connect the Iraq war to Petro dollar.

At the same time, a financial plan created to keep dollar from collapse - develop a financial tsunami to lock the dollar in US bond. It starts from the plunge of mortgage giant - Fannie Mae and Freddie Mac.

I keep the financial news from paper. I review it recently and found the symptom to sink Fannie and Freddie first emerged on 7/11. One week after my 7/4 article.

In my record, the last news about Fannie Mae before 7/4 was on 5/17. It said that the biggest real estate financier Funnie Mae declared that on 6/1, it would have a new rule to drop the mortgage down payment to 5%, in some area even to 3%. It means Fannie Mae was still full of confidence. One year after sub-prime crisis, to low the standard of the loan meant she had financial foundation.

It was a blank for June. Then came the July. A series of negative news of Fannie and Freddie were out after 7/11. The article of 7/11 was: "Fannie, Freddie shares plunge on speculation", "Federal officials consider a bailout" (by David S. Hilzenrath and Jeffrey H. Birnbaum, Washington Post) What a sudden turn around. Just two months ago Fannie was so confident to save the real estate industry, now it suddenly would go bankruptcy. It was a pre-psychological propaganda preparation.

The August Iran war plot went soured. The financial tsunami plot had to be carried out. But August remained comparatively quiet. No negative news about Funnie and Freddie at that time. Why? I think the inside group, which is also a big financial group, need time to sell their investment - foreign investment, stock, real estates - when the price was still high, before others joined the escape.

Then the tsunami came. 9/7, government puts Funnie and Freddie into conservatorship. 9/14, Investment bank Leman Brothers declared bankruptcy. Stock market collapsed. Financial firm, pension fund suffered a great loss. They also have to sell the investment to collect money to deal with the cash out of panick customers. Now nothing is safe except cash - even big name such like Merril Lynch, AIG, GM are in danger, what property could you believe? People leave stock market, foreign market, real estate market and follow the experts' instruction - Cash is king.

Large amout of treasure were changed into cash and were driven into US treasury bond, locked there. The phenomenon is the interest of short term treasury note is almost zero, the interest rate of 30 years US bond is only 2.9%. So the oil price can drop to under $50/barrel. All speculating money go and hide under the safe heaven - US bond.

Financial crisis stabilizes the dollar (include excessive Petro dollar), drives them into US bond to avoid a tsunami. It becomes a big ballon. Once the ballon breaks off. What will take place? Inflation, soaring oil price, high interest, collapse dollar - that's another armagedon.