David Collum: We're Headed for a Showdown

In the Big Rock Candy Mountains,
The jails are made of tin.
And you can walk right out again,
As soon as you are in.

-- Harry McClintock, Big Rock Candy Mountain (1928)

Fresh from releasing his exhaustive and excellent Year In Review last week, Dave Collum sits down with Chris to discuss the key developments of 2012 in detail.

One area they focus on in particular is how 2012 appears to be the year when consequences died for criminal acts by the powerful and connected. MF Global, HSBC,  LIBOR-gate -- the lesson from these broad-daylight scandals seems to be that, IF you're punished, the worst you'll experience is a fine that's a mere fraction of the profits earned from your crime:

Dave Collum:  Corzine is a particularly problematic case, because Corzine, while being investigated, was bundling funds for Obama, and Obama's Justice Department was in a terrible conflict. They should have shut down the bundling at the very least for the optics. They did not. In the end they dropped the charges against Corzine. They never gave immunity to his second in command. If you get immunity, you not only cannot be charged but you are forced to testify. You cannot plead the fifth. If they had taken the second in command and said you have immunity, now spill your guts, Corzine would be in jail now, I think. That is my guess. We certainly would know what happened. They do not want Corzine. He is too connected. 

Chris Martenson:  This is an interesting sort of theme, that if you are connected enough some sort of a story is made up. What just came out recently was this whole story around HSBC. They got caught laundering billions and billions of dollars for drug cartels. You and I know that as a private citizen, if you are just driving down the road and you get pulled over and you have cash in your car, no matter how much you can prove it is yours the police can still seize it and hold it. They can force you to prove that it is not illegal. Even in some cases that is not sufficient, with some test cases we have out there. HSBC gets absolutely nailed. The Justice Department swoops and declines to press any criminal charges because I believe the quote is “They worried that it might prove to be systemically bad for the bank to have any sort of charges laid against them.” What is going on here?

Dave Collum:  It is funny. I had to wrap my Year in Review at some point. As you know, I had to get it in a little earlier this year than we anticipated. On that particular point, I stated, that at the point I uploaded it to you, that it is said that HSBC could be charged as much as 1.5 billion. That is peanuts for the kind of crime they committed. There could also be criminal charges. In the review I said yes, there could be, but there will not be. About two days later they said that there would be no criminal charges.

I think HSBC actually inherited the BCCI (Bank of Credit and Commerce International) clientele. I said that somewhat facetiously, but not totally. The BCCI collapsed in the 1990s. That released an awful lot of dark clients, CIA and various intelligence agencies, the drug cartels, you name it. Anyone who wanted to do nefarious things with the banking system was there. It was a huge bank. They went belly up. They went somewhere. I think they went to HSBC. Now they got caught.

Chris Martenson:  That could be. The thing that is mysterious to me is that every so often they will trot out pictures of cash and say they found $25 million. As you and I know, the actual global drug trade is over one trillion dollars. Ninety-nine percent of that gets laundered back through the banking systems somehow. The idea that this is vaporized, difficult to track, or unknown is ridiculous to me. When finally something does happen where somebody gets caught – HSBC in this case – the idea that no criminal charges are coming is another sort of statement. It is the same statement.

The reason I am connecting this right here is that while Jon Corzine is doing things for very politically powerful people – in this case you mentioned the bundling of funds for Obama – HSBC also must have had some very powerful clientele within that roster of things. The next thing you know, there are no charges that get filed. I understand this is kind of how the world works a little bit. It is so pervasive, so in-your-face, and so outrageous that I feel this growing gap between what you and I as citizens are expected to comply with on a yearly basis under penalties that are fairly swift and certain if we fail to, and what the institutions seem to be able to get away with. My perception, and maybe I am getting cranky in my older age, is that this seems wider than it has ever been to me.

Dave Collum:  It has gotten so blatant that they do not seem to feel the need to hide it. I think if the BCCI scandal broke now that nothing would happen. There is a great example. They got caught doing all of these things that HSBC got caught doing. That bank imploded because the curtain got pulled back too far. They could not put the scandal away. I think a lot of the things in the past that caused trouble would no longer cause trouble now. There is no penalty. They are temporary regulators or something. They are just waiting for their job on Wall Street. They have gotten no one. They have convicted no one of anything that I can tell. I know of no instance.

Chris Martenson:  I think the one story they have managed to get away with, and they used it again with HSBC, is the too big to fail. That is their story. If we somehow collapsed HSBC, this would be systemically awful. We are in such perilous times right now that we cannot afford to even test that theory out. Therefore we cannot press criminal charges because somehow holding a few people responsible at a giant institution like HSBC would cause it to collapse or something. I am not quite clear on what the story line is. It does not really hold water to me. It looks more like excuse-making than a solid rationale by any decent measure.

Dave Collum:  They almost do not even say that now. I am not even hearing that. I am just hearing that it goes away. They have even stopped making fake excuses. It just goes away. They said we cannot get Corzine and we cannot get HSBC. We cannot get these guys. They do not give an explanation. This is some form of Stockholm syndrome, where you start enabling your captors. I think at some point this all comes to a head. I think these guys should be careful. They have decided that the rule of law is not important. If that is the case, then they might suffer the consequences of no rule of law. I think we are heading for a problem. We are going to have a showdown at some point, or we are heading for a much more closed society and more corrupt society. 

Beyond this, Chris and Dave discuss resource depletion, the box the Fed is in, and the future price direction of stocks, bonds, gold and the dollar.

Click the play button below to listen to Chris' interview with David Collum (54m:37s):

This is a companion discussion topic for the original entry at https://peakprosperity.com/david-collum-were-headed-for-a-showdown/

Two charts Folks, and I ask, what more do you need to understand. One the most important resourse and the other Money.


They are the only two charts on my office wall so I NEVER forget what the truth is.

Terrific Podcast


The single best thing I am getting out of these podcasts is that they serve to reinforce my beliefs and give me confidence to continue on this path even when others might disagree with my thinking. Many of us who buy into this storyline are often viewed as being fearful or negative in our thinking. Most people just do not want to hear this message. It is not always easy being the lone contrarian in the room.
So thanks for the constant reinforcement that we are indeed on the right track. I will continue preparing with confidence that I am both awake and aware, enabling me to make better decisions.


It is often the simple points that are the most profound.  Two nuggets for me;
1)  Our money is already worthless.  I have been making this point for at least two years now… and I can tell that David feels it exactly the same way I do.  When the bankers tell you that they don't want your money…that capital can now be created effortlessly within their system and that your savings are not needed (have no yield)… then the game is already over.  Sure, you can still buy stuff with your money, for now… but the writing is on the wall… the dollar is worthless.  Once you realize this, there is no turning back… you will relentlessly pursue the aquisition of real assets and invest in yourself and your own resiliency.   

2)  The next crisis will be different than 2007-2008 in that Bonds are already at or near the zero bound.  This is a very interesting point that David brings up…simple, yet profound. There is scant little room for buffering effects from bond funds next time the stock market dives… a little maybe, but not much.  My own personal belief is that the realization that bonds as a safe haven are over will be the real catalyst for the parabolic phase of PM's that lie ahead.                    

It sure would be nice to have 20 or 25 times annual salary saved up before retiring, but that isn't a realistic goal for most people. Is that going to mitigate all foreseen and unforeseen problems in retirement? A few unfortunate incidents could wipe out that nest egg quickly or make it irrelevant.

What options are available for those who started too late in life to amass such a fortune? Could you give some insights to those of us with 2, 5, or 10 times current annual expenses saved up and not enough years left to increase it substantially?


By the way, as others have noted, these podcasts are wonderful! Thanks for tirelessly providing these.

Again, another superb piece of information from David Collum and Chris.

The following was one of the priceless gems:

"Berkshire Hathaway at $120,000 a share flash-crashed to $1. It does not even make it to CNBC because they are too busy sniffing around Warren Buffett for nuggets of wisdom from this guy who is the biggest stock jobber I have ever seen. Buffett drives me completely nuts. He is a total insider. He trades on inside information. At the same time he has got this little-old-man thing. He is like the Mafia Don walking around in his bathrobe looking innocuous. He drives me crazy."

Yes!!!  Thank you, David!  Glad to know I'm not alone.  As a former Berkshire Hathaway share holder and as one who has been blessed with an ability to sniff out phonies from miles away, I've felt this way for years.  It's only been in recent years though that Buffet has revealed his true colors.  In fact, he's outright blatant with it now.  Anyone who believes his line of bull any more is hopelessly gullible.


This transcript makes me think of pivotal times in history ... times when, for those with eyes to see and ears to hear, everything changes.  The passage of the Federal Reserve Act and the implementation of the federal income tax in 1913 (the latter of which was implemented by progressives and look, my, how it has grown), the Bretton Woods Agreement in 1944, and Nixon closing the gold "window" in 1971 are monetary events that are well known to most of us here.  In my earlier life time, the assassination of JFK and the Vietnam War were other pivot events when there was a massive change in the sociological and psychological orientation of the US.  More recently, 9/11 heralded an epic change in the politics of this country.  On a more subtle level, two other even more recent events stand out for me.  The first was the US Congress completely ignoring the wishes of its constituents who were, by a margin of 100:1, against the bail-outs of the big banks.  To me, it was the culmination of the death of a representative form of government in this country.  The second was the failure to prosecute Jon Corzine for his egregious crimes.  To me, it was the death of the rule of law in this country, as it applies to the connected elite.  This particular article simply reinforced that perception on my part.

At this time, it strikes me as extremely unlikely that there will be any near term change in the graft and corruption in this country simply because THERE ARE NO CONSEQUENCES!  Regulation and law enforcement, as it applies to the power elite, will simply be a sham with an occasional non-compliant or lower level financial and/or political figure being thrown under the bus as a human sacrifice to satisfy the public's perception that "something needs to be done about this".  Regulation and enforcement, as it applies to the average, law abiding, middle class citizen, however, will become increasing harsh and repressive.  Ditto for many middle sized businesses.  Witness Hobby Lobby bracing for a $1.3 million a day fine beginning January 1 for noncompliance with the Patient Protection and Affordable Care Act.  Seems a bit harsh to me.  Corzine can steal over a billion dollars and walk, with no civil or criminal consequences, but Hobby Lobby tries to exercise its constitutional right to religious freedom and is catching it in the neck.  The contrast is bizarre ... and frightening at the same time.

One can look at Weimar Republic Germany and wonder how the Germans ever let their country be taken over by the Nazis, a political minority.  Study how Hindenburg was maneuvered and manipulated by General Kurt von Schleicher, for example, and see if you don't see parallels to what is occurring in our country.  Most have the assumption that our leadership is trying to "fix" our problems.  But when I would analyze what Obama (or Bush, for that matter) was doing and especially, what they were influenced by their advisors and behind-the-scenes forces to do, their actions seem insane.  And these actions were and are insane, IF their intentions were to improve circumstances.  But these people are not insane.  On the contrary, they are highly intelligent and politically astute at a diabolical level.  So let's apply paradoxical thinking here to gain some insight.  If you were purposely trying to take down the country (and the West) economically but wanted it to appear as if you were attempting the opposite, what would you do?  I'd do EXACTLY what has been done.  Then, their seemingly nonsensical actions become perfectly logical and rational.  Read "Tragedy and Hope" by Carroll Quigly and other related books and understand the "level the playing field" doctrine and it all becomes very clear.

Also, note how virtually every aspect of our society is becoming increasingly chaotic, how nothing stays the same, how there is no certainty, how nothing can be relied upon or trusted for sure any more, how every bastion of stability and security and constancy in our society is being eroded and disassembled.  There are enormous advantages to chaos when one has the capital and the power and is seeking to consolidate and concentrate that power and control even more.  Banned topics prevent full discussion of the negative spiritual power of chaos but from a more practical and tangible perspective, wars are the classic example of the advantage of chaos to a power elite (such as when transnational banking interests lend money to both sides in a conflict).  Chaos also provides the destabilizing influence that enables more ready implemention of  behaviors, doctrines, and laws amenable to a diabolical power elite's interests.  Pretty soon a population becomes so numbed by the whirlwind of change and irrationality that their sensibilities are deadened and they let changes wash over them that they would have strongly resisted before, simply because they just want to be left alone, shut out all the negativity, and just "lie back, close their eyes, and think of England". 

I fear that recent events related to the Second Amendment will initiate another key pivotal event that will close the final door to freedom.  Unfortunately, we are past the point where writing your Congressman or attending a political rally will make any difference.  Note how the massive Tea Party rally in Washington, DC was marginalized by the media to a non-event and how the rapidly spreading fire of Occupy Wall Street movement burned itself out to ashes.  And the recent removal/retirements of Generals Petraeus, Ham, and Allen and Admiral Gaouette and a few select others seems a strange coincidence, to say the least.  A prime tenet of warfare involving decapitation of leadership of insurgents (or potential insurgents) comes to mind.  The number of options left is shrinking and frighteningly small.  And I don't see the will in the general population to initiate any of those options. 


ao, hogwash.

Too extreme for me but hey, free country. Right? Well isn't it?

Greenpeace is not radical enough for you? Really? Funny ao.

I really like your really BIG script that you write with as if your message isn't loud enough. Hahahaha.

[Moderator message: This tone is not proper when addressing another user.]

You're a stitch and your message so important because we must prepare for anything and everything for sure.

Goldtraderseller in my inbox! Anyone else? Will these type advertisements be the norm?    




…and who takes the hit when Debt gets destroyed.
Next, it is a use it all energy "PLAN". We must get off Oil exclusively and use everything with a "PLAN". In conjunction to this we need to get as much physical Gold and Silver that we are comfortable with. I am not holding 100% in these metals because it just won't be necessary are my thoughts. I do have approx. 20% of my wealth in these metals however. My wife will keep her job and the medical field will be a terrific hedge against a future that is uncertain but not yet determined. NOT YET DETERMINED to make a stronger point and to steal ao script for effect.

To think as ao does is to already admit defeat. He is certainly not a realist in my world, he is just someone who gets his 15 minutes of fame here at PP. We all due in fairness. 

He is colorful however, and he does seem to be educated but a little paranoid are my conclusions.

Hey, that's OK, people here actually believe everything he says. If so, why are you preparing at all? In the scenario ao presumes, we will have no control so confiscation of everything we have will be a cinch. Better then to eat everything in your pantry and build the fat layers as at least you can live on that for a bit.



What you're saying here really doesn't make any sense.  Can you explain?

"The Partnership for Civil Justice Fund, in a groundbreaking scoop that should once more shame major US media outlets (why are nonprofits now some of the only entities in America left breaking major civil liberties news?), filed this request. The document – reproduced here in an easily searchable format – shows a terrifying network of coordinated DHS, FBI, police, regional fusion center, and private-sector activity so completely merged into one another that the monstrous whole is, in fact, one entity: in some cases, bearing a single name, the Domestic Security Alliance Council. And it reveals this merged entity to have one centrally planned, locally executed mission. The documents, in short, show the cops and DHS working for and with banks to target, arrest, and politically disable peaceful American citizens."
I second the thoughts you put forth here. The government has truly become a frighteningly powerful machine.
Those that do show the will you mention will be violently dealt with as a warning to others that may think of exercising their rights and opinions. Why do you think the Federal Government(DHS) has been so open to arming local police?

As I've said previously, I wish I could return to your level of naivete.  I've spent 34 years interacting with people in my work in one of the most populated areas of the country and one of the least populated.  I've also interacted with people and taught people in the same capacity in 40 different states.  I've had had medically confidential conversations with people from all walks of life, from top business leaders to government internal auditors to people in the various intelligence agencies to people working in black-ops.  They've told me things that they haven't even told their spouses. 
Frankly Bob, you don't have a clue and you don't know what you don't know.  I'll be polite and leave it at that.
And as far as the medical field, I'm in it.  And those who are in it with any kind of brains see the handwriting on the wall and it isn't good.  You can whistle all you want to make yourself feel safe walking through the dark and scarey woods but when the wolf pops up, the whistling isn't going to do you any good.  You have to get real and see what is there.  Self delusion is a bigger enemy than anything external.  And you've already been defeated unless you wake up. 
And please stop putting words in my mouth.  What you say I'm saying is not what I'm saying but I understand that it's easy for you to get confused and fall back on simplistic assumptions.

To a large degree we each judge the world based upon our individual circumstances. Someone who is employed, has a strong supportive family, a little extra disposable income and feels safe might find hope and optimism easy to come by. Conversly, if a person is unemployed, or hates their job, has money troubles, very little support and feels insecure the world will seem very scary and difficult. We also never know what goes on at home in a persons private life which affects their view of the world. During the period I took care of dying family members I would meet people I knew in the grocery store, smile and chat and they had no clue to what I was going home to. Different perspectives are good, I personally am glad to regularly get a dose of optimism as our attituide determines the quality of our life.
My 2 cents
AK Granny

[quote=MarkM]Those that do show the will you mention will be violently dealt with as a warning to others that may think of exercising their rights and opinions. Why do you think the Federal Government(DHS) has been so open to arming local police?
I couldn't agree more Mark.  When DHS buys 1.6 billion rounds of ammo (much of it .40 S&W for domestic LE use rather than military use), bullet resistant checkpoint booths, assorted acoustic and directed energy crowd control devices, armored cars for obscure small towns, drones for domestic use (30,000 of them, in fact, with current discussion about arming some of them), etc, one is given pause.  Of course, Bob probably thinks it's for providing extra security at Tigers games, lol.

To ao, Mark and all those that are trying to share with us what is really going on and how bad thing are and are going to get… A lot of us do understand, we get it. Yes the government of today is nothing like it used to be, we do live in unpredictable and scary times. The point is we can chose to live in fear or chose to have a positive influence on the world we touch. I refer you to Victor Frankles book, I believe he was a Dr., he survived A Nazi concentration camp, and addresses why some people survive and some don’t.
Waking up and being afraid won’t make the world better. Spreading fear won’t help, however improving the world at a grass roots level will.
AK Granny

…then again:http://www.youtube.com/watch?v=rmCpOKtN8ME

[quote=AkGrannyWGrit]To a large degree we each judge the world based upon our individual circumstances. Someone who is employed, has a strong supportive family, a little extra disposable income and feels safe might find hope and optimism easy to come by. Conversly, if a person is unemployed, or hates their job, has money troubles, very little support and feels insecure the world will seem very scary and difficult. We also never know what goes on at home in a persons private life which affects their view of the world. During the period I took care of dying family members I would meet people I knew in the grocery store, smile and chat and they had no clue to what I was going home to. Different perspectives are good, I personally am glad to regularly get a dose of optimism as our attituide determines the quality of our life. My 2 cents AK Granny[/quote]AKGranny,
Optimism is good when it's reality based.  When it's not, it becomes self delusion.  Personally, I'm very secure in my employment with an excellent career and a 6 figure income, I have a wonderful wife and kids and good friends, I've invested wisely and am financially secure, I live in a community that is close and supportive (voted in many polls as one of the best places to live in the country) and is preparing for the future, I'm in excellent health and have an excellent fitness level, I'm well prepared in the area of security, and, as anyone who knows me will tell you, I don't scare easily and I'm not intimidated easily.  I live in two worlds though.  There's the world that's planning a trip with my son to hear Ben Bernanke talk at University of Michigan, a trip with him to the car show in Detroit, a business trip to learn some new skills, a family trip to Europe in the spring, and I'm looking forward to playtime at the lake when the warm weather comes again.  And then there's the world that sees what is happening in this country.  The first world brings me joy but the second world causes me considerable concern.  I don't let one overwhelm the other but I always keep them both clearly in sight.  The key is balance.     

No Bob.  The doomed is your perspective of my perspective, not my perspective.  


It is becomming increasing obvious with each new article and pod cast that we really need to start over locally from scratch. I have known for a long time that things would eventually come to this and that can create a kind of complacency.  The steady stream of information really helps to keep up the motivation level when you have been at something for a long time.  Some times I feel like I can't listen any more.  At the same time it is critical  that we be aware of what is going on.  Its like watching a slow motion train wreck, you want to turn away but you just can't.  The problem is, while we may not all be on the train, we are all close enough that we can get hit by pieces of the wreckage and we have to know which way to move.
My heart felt thanks Chris for keeping the information coming.  It saves a lot of time doing the research on our own so that we can focus our efforts doing the foundational community rebuilding that needs to be done.

My new years resolution is to try and spend more time on the resilient life side of the site, and double the efforts on the home front.  God Bless and happy New Years to you all.  Thanks again Chris  and Adam for all of your hard work.

ao, honestly, give it a rest. Such a person of mystery, and for one who has balance you have NOT shown any but for the dark side of every darn thing.My gosh man you are trppin' me out. You sound like an experiment, like Bourne or some such hollywood script.
Hey, maybe we'll bump into each others at the auto show but they'll have Fords there you know. You wouldn't want to be hypocritical.
Be good Folks