I have reported on www.alancurrie.com in the past that central bank “Quantitative easing” policy since 2009 has only caused the financial system to become more fragile and the intended purpose of injecting financial liquidity into “main street” has not worked. Because all the money went into Wall Street and Big Banks making the .1% financial elite wealthier.
This is why we have not seen “obvious” inflation or Hyper Inflation because the money did not end up into your pocket, but into the super rich. There has however been huge increases in the average house price in last 10 years and elite assets like paintings, luxury yachts, luxury houses, cars and collectables.
For example a 1962 Ferrari 250 sold for $48.4 Million USD, 1 bottle or rare Scotch Whisky sold for 1.2 million pounds, and Leonardo da Vinci’s Salvator Mundi sold in Christie’s for $450.3-million in NYC. The inequity between the rich, middle class and less advantaged has now become a gapping chasm.
Coming up to Christmas holidays the JetStar employees are on strike asking for a 13% wage increase. You might think that’s excessive until you realise that the JetStar crew get paid $41 per hour but the CEO of Qantas Alan Joyce (Qantas the owner of Jetstar) gets paid $9000 per hour! The Jetstar CEO is only willing to accept a 3% wage increase, however the real cost of living is much higher.
Our financial system has become more un-fair, fragile and much of the blame has to rest with Central Banks, easy credit and deep and systemic corruption in our banking system.
Two interesting facts are that 3 versions of a central banks in USA were rejected by the the founding fathers and US Presidents. Today only two countries remain in the world without central banks controlled by the Rothschild dynasty.
After listening to a new book ” Treasure Islands – Tax Havens and the men who stole the world” I have come to realise that most of the worlds global finances flow through international offshore tax havens. The size of the financial flows are incalculable because of all the secrecy and the fact that global banks and governments are involved.
The Australian Government has recently proposed a $10,000 AUD cash ban legislation to supposedly stop the black economy, however the very accounting firms who have suggested this legislation also help financial institutions and corporations to “legally” avoid tax via these offshore jurisdictions.
On 2nd Dec MP Bob Katter introduced legislation into the house “Australian Bank Government Audit Bill” it is worth reading Mr Katter short intro to the bill. This is one short quote “Ernst & Young gave a clean bill of health to Lehman Brothers in July 2008, two months before its bankruptcy precipitated the global banking crash. The New York Attorney-General accused Ernst & Young of helping Lehman Brothers engage in a massive accounting fraud.“
The Bank of International Settlements BIS in Switzerland has been warning for some time about the fragility of the banking system. The latest BIS Dec 2019 report says “FX trading returned to its long-term upward trend, rising to $6.6 trillion per day in April 2019. Interest rate derivatives trading departed sharply from its previous trend, soaring to $6.5 trillion.”
Warren Buffet once said “In our view, however, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.”
The encouraging sign in all this mess is that the average person is learning the truth of what has been happening and is starting to look for ways to do something about the problem. The global elite are worried and continue to push forward, but my hope is that Freedom will prevail. Our “Trump” card (pun intended) is that the creator and defender of Truth, Justice and Freedom will defend anyone who wants to fight for these principles.
It should also be no surprise Boris will implement Brexit on 31 October, the last date agreed between Mrs May’s government and the EU. Johnson was elected by Conservative constituency members to do just that. His cabinet appointees are fully supportive, including ex-Remainers (that’s politics!) and he has appointed an aggressive rottweiler, Dominic Cummings, as his Brexit enforcer. Already, his influence over Brexit strategy can be detected. There are no compromises to be had, a point which slower minds in the commentariat find difficult to comprehend and accept.
It is likely there will be an agreement on the way forward after Brexit, which could involve a transition period, but nothing like that agreed with Mrs May. If, as seems unlikely, the EU digs its heels in, the UK will walk away. That is the message being given by the new administration.
The establishment media are still wrong-footed on Brexit. The BBC, and others, have been too idle to analyse properly, taking their information from biased pro-remain sources and politicians who are out of the loop. They are still doing it. Disinformation is substituted for truth.
The EU, disinformed by Remainers including a chorus of past ministers and prime ministers, has relied on the divisions within Parliament to put Britain into a political and economic stasis. Their repeated utterances (there will be no new negotiation, the withdrawal agreement stands etc.) reflect the continuation of the EU’s established position. That is likely to change, because the EU will find it is forced to accept the dangers to its own position.
There is a crucial difference between the new cabinet and its predecessor. In Johnson, as well as ministers such as Rees-Mogg, Raab, Javid and Gove there appears to be an understanding of and commitment to free markets, unlike anything we have seen since Margaret Thatcher. Obviously, the strength of that commitment is yet to be tested.
The new reality and the dismissal of the old socialising compromisers should swing Parliament behind the instructions given to it by the electorate in the Brexit referendum. An advertising campaign to prepare everyone for Brexit without a deal starts now. The strategy is not to go to Brussels (UK-US is being negotiated first) but only when Brussels comes to its senses will a dialog commence. Facing a lost cause, Remainers are likely to melt like midsummer hailstones, and the euro-nuts, like Dominic Grieve, will sink into obscurity.
The electoral consequences are appalling for the Labour Party. By changing from its conditional support for implementing the Brexit referendum to demanding a second one with the intention of overturning the first, they have almost guaranteed that in a general election they will face a wipe-out. This is important, because it means that they have no incentive to table a vote of no confidence in Johnson’s government. They have already gambled and lost.
Because of Labour’s bad call it looks like Boris’s government will get its way and is here to stay, not only through Brexit, but beyond. The EU will have to get used to it. The Europeans have lost control over the negotiations and seem unlikely to get more than a pittance of the £39bn settlement agreed with Mrs May. When Boris refers to our friends in Europe, he actually means our adversaries. When he refers to his preference for a deal against no deal, he means a deal only on his government’s terms. Already, trade negotiations are commencing with America, existing EU trade agreements with other significant nations will be simply novated, and the whole of the Commonwealth, including populous India are ready to sign up.
This is the new reality and Dominic Cummings’s task is to ensure all government departments are firmly on message. There is bound to be a little drift from this black and white, but the process of political destruction now moves from London to Brussels. Having made such a fuss of it, the Irish border is a non-issue. The UK has no need to put in a border. With lower UK tariffs, ownership of the problem is fully transferred to the EU and the Irish government.
Assuming the Treasury has already made provisions for it, Boris needs the £39bn promised by Mrs May to the EU to be reallocated to a mixture of the health service, education, law enforcement and tax cuts. Then there’s that infamous £350m per week, which was on the side of the Brexit bus. That was gross of the Thatcher rebate, so the actual figure is closer to £275m per week, and there was an amount within that spent in the UK under the EU’s sole direction. That left £181m in 2016, sent to Brussels for the privilege of EU membership, or £9.4bn per annum. How much of that can be diverted for funding government spending depends on the new government’s tariff policies. There is no doubt that from a purely economic point of view they should be removed in their entirety.
By not paying the planned £39bn divorce settlement and gaining the £9.4bn net annual payments to the EU, Johnson has some wriggle room when it comes to funding his spending plans and tax cuts. Without it, he will have to rely on inflationary financing, and hopefully there are enough wise heads in the cabinet to dissuade him from going down that road. Therefore, if only because of the money, the odds strongly favour a hardball approach on Brexit negotiations instead of compromise.
The EU’s problems are mounting
There is likely to be an important consequence, and that is a Johnson Brexit could trigger a mounting financial and ultimately political crisis in the European Union.
A study last year by Germany’s Halle Institute estimated a no-deal Brexit would cost 12,000 jobs in the UK, and 422,000 jobs in the other 27 EU members, of which 100,000 are in Germany and 50,000 in France.[i] Yesterday, Ireland’s central bank forecast a loss of up to 100,000 jobs in the medium term in Ireland alone, on a no-deal. Clearly, the EU’s negotiators risk losing the wholehearted support of its two largest post-Brexit paymasters and others. But for Brussels, giving in on Brexit encourages rebellion from disaffected populations in other member states. Rather like the Soviets ruling Eastern Europe in the late eighties, the Brussels establishment finds itself struggling to keep its non-democratic political model intact.
It is increasingly likely Brussels will find events are spinning out of its control. For the UK, this introduces collateral damage, necessitating even more urgent separation from the EU. In a paper published at end-June, Bob Lyddon points out that a Eurozone financial crisis (which is becoming increasingly likely, as argued below) could cause the UK’s contingent liability as an EU member to be as much as €441bn. “This derives from the near-criminal irresponsibility by the UK’s negotiators”.[ii]
Whatever the numbers, there can be no doubt that this is an extremely serious issue. Furthermore, in the event of a financial and systemic crisis in the Eurozone, the UK will face its own crisis, if only because of cross-liabilities through the two banking systems. And the cyclical economic downturn that always follows the failure of a period of credit expansion is coming up on the inside rail very rapidly.
The EU economy is left badly unbalanced, with Germany dominating production and exports. Other populous member states, notably in the Club Med and France, are in a financial mess. They have relied on Germany’s production to provide for their unproductive profligacy. Her production output is now contracting.
Germany has been hit by three adverse developments at the same time. There is President Trump’s tariff war against China, which has undermined Germany’s largest growing markets at the eastern end of the Silk Road, and the threat he will deploy similar tactics against Germany. There is EU environmental legislation, which is making Germany’s motor production obsolete and forcing manufacturers to put a time-limit on existing production while investing enormous sums in electric technology. The damage this has done extends down the whole production chain, undermining the Mittelstand.
Then there is the crisis in Germany’s major banks, most publicly seen in Deutsche Bank because of longtail liabilities from its investment banking division. But all German banks, as well as those throughout the EU, face a lethal combination of margin compression from negative interest rates and a legacy of an expensive branch network when customers are migrating to online banking. The slump in German production now provides an additional threat to their loan books.
In the background, there is the turn in the global credit cycle from its expansionary phase into a periodic contraction, usually resulting in a credit crisis. To understand the transition from credit expansion to a tendency for it to contract is to recognise that the expansion of credit as a means of stimulating an economy depends on tricking economic actors into believing prospects are improving. When the evidence mounts that they are not, monetary stimulation fails, and credit begins to contract. Despite the ECB maintaining negative interest rates, despite the ability of highly-rated companies to raise finance at zero or even negative rates, and despite the ECB’s offer to pay companies to borrow (which is what deeper negative rates amount to) economic actors are now aware that it is all deception.
This is why Germany now has all the appearances of being in the early stages of a deepening economic slump, and there is nothing monetary policy can do about it. Brexit will simply add to these problems, not just for manufacturers, but for their bankers as well, as the Halle Institute report implies.
It is increasingly difficult to see how with escalating budget deficits in member governments Brussels can afford to continue with its head-in-the-sand approach to trade negotiations with Britain. The eurocrats naturally retreat into more protectionism when they see the system threatened. But asking Germany, France, the Netherlands, Austria, Finland, Sweden and Denmark for more money when their tax revenues are slumping is unlikely to cut much ice.
The new Johnson team will know some of this. There may be a temptation to make a portion of the £39bn, promised by Mrs May, available to Brussels to alleviate their pain in return for a quick deal. This goes against the new hard attitude of the Johnson government, exemplified by the presence of Dominic Cummings. But we shall see how this one pans out.
The UK economy Post-Brexit
Meanwhile, as economist Patrick Minford recently pointed out, a US-UK trade deal could lower prices of goods in the UK by as much as 20%, being the effect of EU tariff protection against global competition, raising prices above the world price level by that amount. [iii] Minford estimates a UK-US trade deal would lead to an overall gain to UK GDP of between four and eight per cent, a markedly different outcome from the project fear propaganda of the old establishment. And in the event of No Deal with the EU, the UK Treasury will receive up to £13bn in tariffs from EU importers, assuming no reduction in EU imports. Obviously, there will be substitution of EU goods for goods from the US and elsewhere, once trade agreements are in place, so this will be a maximum revenue figure.
The point is No Deal is not the disaster promised by the May establishment and its business lobbyists. It is a disaster for the remaining EU. Exiting the EU offers the Johnson government a good start, a clean sheet. Any compromise with the EU on trade and money detracts from this benefit.
It is an opportunity for Britain to reset the approach to political economy, which is our next topic. For attention-deficit politicians, there are two important factors to understand that are central to formulating post-Brexit policy: the reason why trade imbalances arise, and therefore how trade and economic policies should be constructed, and the destructive effects of inflationary financing.
How trade imbalances arise
It is vital to understand the source of trade imbalances, so that the mistake made by President Trump, which is driving the world into a Smoot-Hawley-style 1930s slump, is not repeated by Britain. The common error is to believe that the exchange rate sets trade surpluses and deficits. It therefore follows, the argument goes, that artificially raising the price of imported goods by imposing tariffs achieves the same effect.
The simplest explanation to understand why this is wrong is to start with a theoretical sound money example before progressing to the current fiat money environment. When gold was money and if unbacked currency and credit were not available, imports could only be paid for in gold or fully-backed gold substitutes. The same is true of exports. An individual borrowing to buy an imported good has to source gold or a fully-backed gold substitute, so the provider of money has to defer consumption, which includes that of imported goods. And unless the people in a nation collectively adjust the amount of gold in circulation, imports will always balance exports.
Compare this with nations trading with each other using unbacked state-issued currencies. These are issued at will by central banks as new money and by commercial banks in the form of bank credit. Therefore, anyone can buy an imported good without having to have the money, so long as a bank advances the credit.
Money and Credit expanded out of thin air replaces the need for imports to be paid for by exports. Now that all countries work their currencies the same way, the trade balance becomes a relative matter. Other things being equal, the country which expands its money and credit the greatest ends up with the largest trade deficit, and the one that expands the least the largest trade surplus.
But national statistics are designed to reflect money spent on consumption (GDP) separating out money spent on capital items. A nation whose population has a savings habit will spend less on imported consumer goods than a nation with a lower tendency to save. This is why Japan’s monetary expansion has not fuelled a trade deficit in consumer goods. In other nations, such as the US and UK, where personal savings are now minimal, credit expansion leads to chronic trade deficits.
The expansion of fiat money to bridge the gap between tax revenue and government spending similarly leads to a rise in imports, because the expansion of money and credit, when they are not saved by the consumers who ultimately benefit, always ends up fuelling consumer imports, often as a second or third order event. This gives rise to the twin deficit phenomenon commonly observed in both the UK and US, where consumer savings are virtually non-existent.
The destruction arising from inflationary financing
The Keynesian policy of stimulating an economy through a temporary budget deficit relied on deceiving economic actors into thinking there was more demand in the economy than existed. Like all confidence tricks, it eventually fails. Governments end up with perpetual budget deficits, which trend larger with every unresolved credit cycle.
Expanding money and credit as a means of funding government spending through the creation of debt has now become central to state finances everywhere, including the UK. The advantage for governments is very few people understand that this form of finance transfers wealth from the producers in an economy to the state. But the government is eating its own seed-corn by impoverishing its tax base, which if continued leads inexorably towards the destruction of its currency.
Any politician who claims to be a free-marketeer is not one unless sound money, devoid of inflationary financing, is embraced. Taking into account the importance of sound money and the reasons trade imbalances arise, a Johnson government that understands these issues will be equipped to fashion economic and monetary policy for the future. It is not enough to merely pay lip service to the necessary objectives, but to grasp the economic theory behind them, so that socialist and neo-Keynesian claptrap can be fully exposed in reasoned debate.
These are two objectives to strive towards, and will necessarily take time, because changes in government policy must steer the electorate along with it. They should be pinned up as mission statements on the notice boards in Downing Street. That being accepted, the following supporting policies must be implemented to re-orientate the ship of state towards economic success:
Tax policy. Tax cuts should be broadly financed by reductions in government spending, not through increasing the budget deficit in the hope that the economic stimulus will generate higher taxes. Welfare must only support people in genuine need, not those with just a sense of entitlement.
Government spending. Means must be found to reduce the proportion of government spending in the economy as a whole, to reduce the burden on the productive private sector. A financial and economic crisis requires departmental spending to be slashed, not just future planned increases cut, as was the case under Gordon Brown in 2009.
Encouragement to save. Taxes should be removed from savings and capital gains. Inheritance tax must be abolished. This is to allow people to accumulate personal wealth and to reduce the need for the state to provide.
Trade. Trade agreements with other nations should be viewed as a first step towards wholly free trade. By exploiting the comparative advantage of allowing people to buy what they want from providers of goods and services irrespective of location, capital resources will naturally be redeployed towards their more efficient use. This is why understanding that trade imbalances do not arise from currency differentials is so important.
Monetary policy. Steps must be taken to restrict the Bank of England from manipulating the economy through monetary policy. Targeting inflation and employment must be abandoned, and markets allowed to set interest rates. Credit expansion should be curtailed by ensuring that UK banks and branches of foreign banks operate to stricter capital rules. Goal-seeking stress-testing must end. In the longer-term, banks should lose the protection of limited liability, which has allowed bankers to make rash lending decisions without bearing the ultimate cost.
Gold. The Treasury must replenish the nation’s gold reserves. The risk of a global currency crisis is increasing by the day, and foreign currency reserves will need to be reallocated at least in line with those of other major nations.
Brexit is an opportunity to reset economic, monetary and trade policies. The implications of getting rid of the EU millstone go far beyond the leaving date of 31 October. Assuming a Johnson government has a good grasp of why free trade benefits the economy and why trade imbalances exist, combined with the courage to steer Britain towards the long-term prosperity offered by free markets, it will derive its future power from a strong economy instead of merely claiming it based on the past.
Bank of International Settlements ( The central Bank of central Banks) report recently said this:
“A 0% risk weight will apply to (i) cash owned and held at the bank or in transit; and (ii) gold bullion held at the bank or held in another bank on an allocated basis, to the extent the gold bullion assets are backed by gold bullion liabilities. ” BIS on Basel III
Previously Gold Bullion had a 50% risk weighting meaning if a bank held 100 million dollars in Gold Bullion in their vault they could only show $50 million in gold assets on their balance sheet.
This will now encourage banks and central banks to own and store much more gold bullion. The Perth mint reported recently that they have seen a doubling of central bank purchasing last year from their supplies.
There is an accepted practice that investors should have about 5-10% of their investment portfolio in precious metals like gold and silver. But recently Silver Doctors podcast it was reported by Jeffrey Christian and the CPM Group that number is quite higher.
In late 2016, Jeff and his firm re-ran those numbers in a backtest from about 1968 to late 2016. What they found was if you took a portfolio of 50% S&P and 50% T-bills and you added gold to it in 5% increments, the optimal gold allocation was actually about 27% to 30% gold depending on whether you used T-bills or T-bonds respectively.
On that same podcast it was reported by Jeff that gold producers are now holding back on about 20% of their annual production in order to start storing the bullion they mine in anticipation that the pricing will go up.
In Australia Gold has gone up on average over 20-30 years about 10% per year. The moment Gold passes $1360 USD then it will have broken a very important trading trend line and most are expecting Gold to enter another long term upward trend.
This was a FBI investigation! CNBC says “13-year J.P. Morgan veteran, said that he learned how to manipulate prices from more senior traders and that his supervisors at the firm knew of his actions”
“As part of his plea, Edmonds admitted that from approximately 2009 through 2015, he conspired with other precious metals traders at the Bank to manipulate the markets for gold, silver, platinum and palladium futures contracts traded on the New York Mercantile Exchange Inc. (NYMEX) and Commodity Exchange Inc. (COMEX), which are commodities exchanges operated by CME Group Inc.”
On the 7th December 2014 the Australian Treasury Department released the “Financial System Report”.
It is a 320 page document that covers many aspects of the Australian financial system and the objective according to the report was to:
“…examine how the financial system could be positioned to best meet Australia’s evolving needs and support Australia’s economic growth. Recommendations will be made that foster an efficient, competitive and flexible financial system, consistent with financial stability, prudence, public confidence and capacity to meet the needs of users.”
The word “Bail in” is used 15 times in the document – but is seems to indicate that the report is not proposing “Bail in” for depositors and reminds the reader that depositors are covered by insurance up to $250,000.
“The Inquiry strongly supports continuing the current Australian framework in which deposits are protected through an explicit guarantee under the FCS, supported by depositor preference. The Inquiry specifically does not recommend the bail-in of deposits” Page 146
It has become clear in the last few years that the western media is controlled and owned by globalist leaders who have a hidden agenda.
The truth about what is really happening in Syria and the world is opposite to what we hear on the nightly news. Sadly we are all subject to well crafted propaganda designed to promote the agenda of the ruling class.
Is that conspiracy theory? After doing extensive research on the global financial system and the philosophies of many of the leading economic and political institutions in the world since the 2008 GFC- I have come to realize that the TRUTH has been hidden on purpose.
These three video’s will give you a little glimpse of what is happening. Maybe when the Snowdon feature film is released we will learn a little more? Read more on these issues at this website. Alan
Why Everything You Hear About Aleppo Is Wrong- Vanessa Beeley
I am hearing that there could be another serious financial correction coming before during October 2016.
Harry Dent in his Sept 2015 book called “What to do when the Bubble Pops” has some concerning and informative research. Plus many Youtube stories and now more main stream outlets are saying there is a serious correction or worse coming soon . It does concern me that so many are now using alarming news reports and headlines in order to try to sell their newsletters/books and seminars.
There some important facts and trends appearing – these are the facts:
According to Harry Dent the world is facing some serious ageing demographics (Baby Boomers) that will cause major downturns in many industries – and this is one major reason causing the economic concerns globally.
Alan Greenspan has recently come out sounding a warning about the ageing baby boomer trend and that Governments especially in the US are not focusing on the issue, which according to Greenspan – if its not addressed will cause serious economic problems.
APRA – Australia financial regulator has released a report sounding a warning that Australian Banks are at serious risk because of the high private debt levels in average families who have mortgages. The private debt levels are higher than back in 2008, so if another GFC hits jobs then there will be a quick and significant level of mortgage defaults that might bring down a few major banks.
The China stock market is currently down 42% from its past highs, and the Chinese slow down has already been hurting Australian Industry and could have more serious effects in Australia – especially if China continues to slow. Dent believes China will have a major ongoing downward corrections because of all the Malinvestment.
Retired US Congressman Ron Paul – is warning the world that the US Government is getting ready to confiscate large portions of it’s citizens assets, in particular the 7 Tillion Dollars of private super/retirement funds in order to prop up the Government and the Banking system.
China and other BRIC’s countries have been buying up large amounts of gold with the possible plan to establish a new reserve currency – The Chinese Yuan Renminbi will be added to the United Nations/IMF- SDR (Special Drawing Rights) currency on October 1st 2016.
All G20 nations are committed to giving their banking system the ability to legally “Bail in” or recapitalize the failing banks with the savings of their depositors.
The counties that need close attention right now are bond markets in Spain and Italy as they are the next canary in the mine.
Oxfam UK released a report in Jan 2016 about what has been happening in the world economy as it relates to financial inequality. I am not a socialist but when you hear that “62 people own as much as the poorest half of the world’s population” and 1% of the world’s population owns more 99% of the worlds wealth you realize we have a real problem!
Is it any wonder that Donald Trump is getting so much support from the common man. It’s because the average wage earner and small business owner is waking up that the system is rigged and that a very small % of wealthy elite – eg 62 people are getting control of the world and the peoples governments in every nation.
When this happened in France in 1789 the people revolted in the French Revolution. Now it looks like its a global phenomenon.
When not one top banking executive has been jailed because of all the corruption exposed during the 2007-8 GFC – it is now obvious that not only are the big banks do big to fail they are now do big to prosecute!
If there is another GFC the Banks now have legal authority to take depositors money (Bail in) to recapitalize their balance sheets.
Its time we move away from what seems a like a Death Economy towards a Life economy. A Preferred Economy that is gives back hope of a better future for all.
If you want to check out the Oxfam report click here www.oxfam.org
“Apart from the fairly seismic changes this would herald in this massive market it would have even larger potential effects. The end game for the dollar is when it is no longer the sole or preponderant reserve currency. At the moment the US can carry a mind boggling amount of debt and find buyers for more. But once countries no longer need dollars for buying oil and gas then something will happen to the world’s appetite for US debt and the world’s opinion of how much debt the US can sustain”. Source www.golemxiv.co.uk
These two men are well known for their out spoken position on the mistakes global leaders are making, that may well crash the financial system. They believe that centralized banking is what is causing the problems in our global economies.
David Stockman will take you back to before world war 1 and explain what has happened and how history could have been very different if a few people made a few different decisions. We would have been living in a very prosperous world for ALL people and not just a select few.
David Stockman Talks Historical Dominoes
He is a former Congressman from Michigan, former Director of the Office of Management and Budget under President Ronald Reagan, and former partner at The Blackstone Group. Stockman is the author of The Triumph of Politics: Why the Reagan Revolution Failed (1986) and 2013’s The Great Deformation: The Corruption of Capitalism in America. On the show today we discussed how some of his work traces “historical dominoes.” It was fascinating to learn how certain events in history led to others and so on, until we wind up with thus and so… For example: how did the creation of the Fed in 1913 lead to the 2008 crisis? What was the chain of events?
Gerald Celente is an American trend forecaster, publisher of the Trends Journal, business consultant and author who makes predictions about the global financial markets and other events of historical importance.
Gerald can get a little excited in his interviews and this one is no exception – but don’t let that detract – the interviewer gets him back on track and he has some profound things to share including this desire to stay in USA and fight for the freedom of the country through a new initiative called http://occupypeace.us/ It seems like a new Revolution is beginning!
Chris Martenson is the founder of Peak Prosperity – you can find his podcast on iTunes. He is an expert on Global Economics and the real state of the financial system.
He has a practical and well-balanced approach on what might happen and how best to prepare your personal financial situation and how to help your community.
He is not a doomsday prophet, but a sound financial manager who sees what’s happening and attempts to help you navigate through the confusion.
He has prepared a 20 part audio-visual educational series that will explain why the world is in a serious financial and social predicament and how you canbestprepare to navigate these storms that are coming.
This series is brought to you by Anglo Far-East a company that specialises in gold purchase and storage (mainly in Switzerland) Idon’treceive any commission in providing this series to you but like Chris and AFE, I am concerned that we are all well informed and prepared for what is coming to every person on the face of this earth.
The USA has been running the world financial system since the establishment of the IMF -(International Monetary Fund) and the World Bank which was created after the Bretton Woods agreement in 1945. See Bretton Woods System in Wikipedia
The USA tried to stop its allies from signing the AII agreement but on June 27th 2015 – 57 Counties including Australia signed the agreement.see pictures
Larry Summers the former US Treasury Secretary said “This past month may be remembered as the moment the United States lost its role as the underwriter of the global economic system” Bloomberg April 6th see what Larry says on www.larrysummers.com
So after the 1st October 2015 we might see a significant shift in the value of the US dollar as it will NO LONGER be the world’s reserve currency.
It might be gradual decline or dramatic- no one really knows.
Special Request for PRAYER for Greece! 30 June 2015 – Capital controls imposed, Banks closed, Gas stations empty! Report by George Markakis ICCC member.
Evi and I landed in Athens Airport on Sunday 28 June shortly before midnight, from a week of ministry away in Hungary. We found very long lines of people in front of ATMs waiting to withdraw money, empty gas stations, and everyone speaking of the country being on the brink of financial collapse. The news said that in one day more than 1 Billion Euro was withdrawn from the Banks through the ATMs as people are afraid that the Bank Accounts will freeze and the deposits may be confiscated.
The head-on collision with Eurozone’s bosses is at hand, and the Greek Government announced the Banks will be closed and Referendum will take place on July 5 for the people to decide on the country’s future. Whether the country stays in the Euro, or, returns to the national currency of Drachmae, the future looks currently grim without any visible prospects of the economy picking up “to save the day” in the face of so much unemployment.
In the face of this current situation, there is an urgent need for prayer like never before. Would you please take at least a few moments to pray for Greece? There is a great need for the Lord’s intervention so that justice may be established. The need to pray for the NOW situation (Mon. 29 June 2015) in Greece is not only because a whole country is confronted by grave dangers, exposing at least 3 generations to lifelong risks and devastation.
The current situation may result in unprecedented effects for the entire Eurozone, as this is not merely a national crisis – it is all about who holds the power over all Europeans, and who controls what happens in each country.
The financial institutions have already exerted powers that eliminate the national constitution, supersede the authority of elected national Governments, and totally disregard all common sense and principles of how economic measures serve the good of the nations and the common good.
Their demands are not really aiming at ensuring the repayment of the debt, because their measures guarantee failure to repay. Their real aim is to usurp authority over the national Government. Greece is a testing ground and beginning of what they want to gradually accomplish over all the European citizens.
What is behind the minds and methods of otherwise human leaders, is the power of Mammon who wants to exert control and manipulate the common people.
That is why our PRAYERS are NEEDED, as in 1 Timothy 2; our prayers have the power to establish God’s Justice in the Political institutions of the European Union.
The Greek Government might force a major shift in the global financial system on Monday 11th May.
For those who have been watching the financial system will know that China and others in the BRICS nations ( Brazil, Russia, India China and South Africa) have decided to setup a new World Bank in opposition to the IMF- International Monetary Fund which is controlled by USA and Europe.
“The present, inequitable IMF-World Bank system is collapsing under the burden of hundreds of trillions of dollars of unpayable global debts and derivatives obligations, including the Australian banking system’s derivatives exposure of more than $27 trillion. This is the legacy of decades of reckless financial speculation unleashed by IMF-enforced deregulation, and is the driver of the world’s present strategic tensions which have increased the threat of a thermonuclear world war.
Through such new financial institutions as the $100 billion New Development Bank, the $100 billion Asian Infrastructure Investment Bank (AIIB), the $40 billion Silk Road Development Fund, the $20 billion Maritime Silk Road Fund, and the planned Shanghai Cooperation Organization (SCO) bank, the BRICS nations will direct massive investment in much-needed physical infrastructure projects on which all nations can collaborate, forging a basis for lasting global peace and economic prosperity.” Source :Citizens Electoral Council
On Monday the Greek Government will meet the EU Bankers to discuss the Greek debt issue, if this meeting goes bad then we could see Greece leave the EU totally and it would then default on its debt. That could in a worse case scenario cause a domino effect with other nations causing a systemic failure of the global banking system.
The Australian Banking System is not immune to these developments and are not as financially sound as we all think! Australian Net foreign debt has risen since 2008 by over 44 per cent, from just under $600 billion to over $865 billion, $639 billion of it in the private sector.
But 3/4 of One Trillion dollars of debt is nothing compared to 27 Trillion dollars worth of Australian Bank derivative exposure!
This graph shows the Debt Vs Capitalization of the Australian Banks in 2011-12 – now in 2015 the situation is 10 Trillion dollars worse in only 3 years! Only the Yellow are bank Assets! Green are our funds which is a liability to the Bank and Red is derivative liabilities.
What happened in 2008-9 our dollar dropped from .98c to USD to only .60c and the world came to the brink of global financial meltdown according the the CEO of ANZ Bank. Now since Nov 2014 the G20 nations are quietly setting up the Bail in laws that will legally allow the Banks to confiscate their depositors funds and force their customers ( you and me) to accept Bank shares under the guise of we are “Too Big to Fail”! We have allot of good people who work in the banking system and they are not deliberately seeking to crash the system – but after learning about the history of global banking over the last 300 years it has become clear that there are a small group of people who seem to control to entire system. These people do seem like they want to own the world and the reason why is actually found in the bible.
Do you want to understand the history behind this monumental swindle and how the global financial system really works? Then can I encourage you to read or listen to via www.audible.com – The Creature from Jekyll Island by G Edward Griffin. After this book you will never look at the banking system the same way and it is a must for any serious student of history.
Do you know what Fiat Currency is? You used it every day!
The technical definition is “paper that the government has declared to be legal tender that is NOT not backed by a physical commodity” ie Gold.
This paper (or in the case of Australian money its polypropylene polymer) that we all use- as if it has intrinsic value, (which it doesn’t) it only has value because other people will exchange it for a commodity or service of REAL value like food, petrol, air plane ticket, pay taxes and bills. It only has value while we have confidence that others will accept it as payment for what we really want and use.
There is about 167 official national currencies circulating around the world, even though there is 196 countries in the world – 19 counties use other nations currencies.
No one really knows how much of this “Paper” currency is floating around the world but in 2010 it was thought to be close to $55 Trillion US dollars – ($13 Trillion was in USD currency as at June 2013)
According to a study of 775 fiat currencies by DollarDaze.org, there is no historical precedence for a fiat currency succeeding. Twenty percent failed through hyperinflation, 21% were destroyed by war, 12% destroyed by independence, 24% were monetarily reformed, and 23% are still in circulation approaching one of the other outcomes.
Founded in 1694, the British Pound Sterling is the oldest fiat currency in existence. At a ripe old age of 321 years it must be considered a highly successful fiat currency. However the only reason why it has existed so long is because it was often pegged and exchangeable for gold and silver. A British pound coin was originally weighed as one troy pound of sterling silver! This is why it is still called Pound Sterling – but there is nothing sterling about it now, because in March 2015 it will cost you 164 pounds to buy 1 pound of silver!
So now it’s worth is less than 1/164 or 1.6% of its original value. Therefore the most successful long standing currency in existence has lost 98.4% of its value.
US Gold Backing
Only 56 years ago in 1971 the US dollar was fully exchangeable for Gold Bullion, which was the requirement of the agreement made at Bretton Woods during the post 2ww global financial reconstruction. In 1971 it cost $1.8 USD to buy 1 ounce of silver and $ 40 USD to buy 1 ounce of gold. In March 2015 it costs $1289 USD to buy 1 ounce of Gold and $17 USD to buy an ounce of silver.
What happened in 1971 – every economics follower would tell you it was the year Nixon took the US Dollar totally off the gold standard and refused to honor the agreement to redeem US dollars for gold. That was the beginning of a massive growth in inflation, the sign the US and the west was beginning a steady decline in living standards and purchasing power.
Today there is about 120,000-140,000 metric tons of gold above ground in the world and about 2270 tons of gold is mined out of the ground each year. Interesting China No 1 and Australia No 2 are the two top gold producers today.
The US Gold Reserve is supposed to be just over 8,000 tonnes – which is about 6% of the total gold ever mined. It is worth about $200 billion, or 1.8% of the US national debt. Total US Debt (State and Federal) by end of 2015 is expected to grow to appox $22 Trillion.
This means that roughly 4.46% of US dollars in circulation are ‘backed’ by gold, the rest backed by false promises and goodwill.
Simply put, the price of gold would have to rise 20-25 times in order for the US and British governments’ gold assets to match the supply of money in circulation.
History has a message for us: No fiat currency has lasted forever. Eventually, they all fail.
In one of my earlier blog posts in October 2013 I reported on International plans by Governments to setup laws to allow Banks to confiscate depositors funds in case of another GFC.
Instead of Governments Bailing Out the Banks – depositors will be those at risk in future if there is another financial meltdown that is called “Bail IN”
It is now looking like the latest G20 meeting in Brisbane has now allowed the Australian Government to make legal this confiscation by agreeing at G20 to legislate Bail IN laws.
Here are a few facts that might amaze you!
The Department of the Treasury’s submission to the Financial System Inquiry 3 April 2014
Bail-in “158. Part of the G20’s policy response to the problem of ‘too big to fail’ is to reduce themoral hazard and fiscal costs through a bail-in regime, which includes a framework forloss absorbency. Bail-in involves allowing the Government to write down the value ofbank debt or converting debt securities into equity when the bank fails.
159. In theory, a credible bail-in regime would directly address the moral hazard and efficiency issues caused by too big to fail.
163. ….A bail-in policy would generate efficiency gains by ensuring thatlenders rather than taxpayers met the cost arising from the failure of a bank to meet its obligations.”
In this case the lenders are the depositors – you and me!
Reserve Bank of Australia Speech by Glenn Stevens RBA Governor to the Federal Reserve Bank of San Francisco’s Symposium on Asian Banking and Finance San Francisco – 10 June 2014
“Addressing the problem of ‘too big to fail’ entities, a key area of work this year is to put forward a proposal for ‘gone-concern loss-absorbing capacity’, or ‘GLAC’, for global systemically important banks ………….Such entities are sufficiently large and interconnected that an uncontrolled failure could easily cause systemic disruption.
Therefore, it is argued that further loss-absorbing capacity is needed, to be called on at the point of non‑viability, so as to allow vital functions to continue and non-critical operations to be wound down in a controlled way. This limits adverse spillovers to the system and the economy. Generally, this loss-absorbing capacity is to come from a ‘bail-in’ of certain classes of private creditors, so as to avoid calling on the public purse for a ‘bail-out.”
25/10/2014 Bank of England targets end of bank bail-out era – Daily Telegraph
“Global regulators are expected to make further progress towards locking in the “bail-in” regime at next month’s G20 summit in Brisbane,….The new regime comes into place from January 2015.”
Strengthening APRA’s Crisis Management Powers Paper- (APRA is Australian Prudential Regulation Authority) 2012
“Financial Stability Board Key Attributes set out the types of resolution powers that jurisdictions should have available for dealing with financial institution distress. These include the need for robust statutory powers to: … suspend or cancel financial obligations…facilitate bail-in.”
“On November 16 2014, leaders of the G20 Group of Nations – the 20 largest economies – made an important decision. The world’s megabanks now have official permission to pledge depositor accounts as collateral to make leveraged derivative bets. And if they lose a bet, the counterparty to the contract has first dibs on your money. The governments of these 20 countries are now supposed to put these arrangements into law……..Thus, when you deposit money in a bank now, you’re taking the same risk as someone buying a stock”
“The G20 has also officially declared that derivatives – the toxic contracts Warren Buffett calls “financial weapons of mass destruction” – are secured debts. Since your bank deposits are now only unsecured debt that the bank has pledged to a secured creditor, guess who gets your money if the bet goes the wrong way for the bank- not you!”
December 16, 2014 | Greg Hunter Report
“Theoretically, we are protected by deposit insurance up to $250,000 in the U.S. and 100,000 euros in Europe. The FDIC fund has $46 billion, the last time I looked, to cover $4.5 trillion worth of deposits.
There is also $280 trillion worth of derivatives that the five biggest banks in the U.S. are exposed to, and under the bankruptcy reform act of 2005, derivatives go first. So, they are basically exempt from these new rules. They just snatch the collateral. So, if you had a big derivatives bust that brought down JP Morgan or Bank of America, there is no way there is going to be collateral left for the FDIC or for the secured depositors.”
I don’t know if anyone has politely pointed out to the politicians that Taxpayers are ALSO Depositors! So what they are really saying is that the Government of the day does not want to be blamed by the voters when the next GFC hits. But we all know that its the politicians who are allowing these bankers (who have no morals) to get away with theft on a grand scale!
So there might be some interesting times ahead – lets pray for Gods wisdom and understanding as we walk through these days coming. Alan
We went on a bond-buying spree that was supposed to help Main Street. Instead, it was a feast for Wall Street.
By Andrew Huszar- Ex FED employee responsible for Wall Street QE – FED purchases.
Nov. 11, 2013
I can only say: I’m sorry, America. As a former Federal Reserve official, I was responsible for executing the centerpiece program of the Fed’s first plunge into the bond-buying experiment known as quantitative easing. The central bank continues to spin QE as a tool for helping Main Street. But I’ve come to recognize the program for what it really is: the greatest backdoor Wall Street bailout of all time.
Five years ago this month, on Black Friday, the Fed launched an unprecedented shopping spree. By that point in the financial crisis, Congress had already passed legislation, the Troubled Asset Relief Program, to halt the U.S. banking system’s free fall. Beyond Wall Street, though, the economic pain was still soaring. In the last three months of 2008 alone, almost two million Americans would lose their jobs.
The Fed said it wanted to help—through a new program of massive bond purchases. There were secondary goals, but Chairman Ben Bernanke made clear that the Fed’s central motivation was to “affect credit conditions for households and businesses”: to drive down the cost of credit so that more Americans hurting from the tanking economy could use it to weather the downturn. For this reason, he originally called the initiative “credit easing.”
My part of the story began a few months later. Having been at the Fed for seven years, until early 2008, I was working on Wall Street in spring 2009 when I got an unexpected phone call. Would I come back to work on the Fed’s trading floor? The job: managing what was at the heart of QE’s bond-buying spree—a wild attempt to buy $1.25 trillion in mortgage bonds in 12 months. Incredibly, the Fed was calling to ask if I wanted to quarterback the largest economic stimulus in U.S. history.
This was a dream job, but I hesitated. And it wasn’t just nervousness about taking on such responsibility. I had left the Fed out of frustration, having witnessed the institution deferring more and more to Wall Street. Independence is at the heart of any central bank’s credibility, and I had come to believe that the Fed’s independence was eroding. Senior Fed officials, though, were publicly acknowledging mistakes and several of those officials emphasized to me how committed they were to a major Wall Street revamp. I could also see that they desperately needed reinforcements. I took a leap of faith.
In its almost 100-year history, the Fed had never bought one mortgage bond. Now my program was buying so many each day through active, unscripted trading that we constantly risked driving bond prices too high and crashing global confidence in key financial markets. We were working feverishly to preserve the impression that the Fed knew what it was doing.
It wasn’t long before my old doubts resurfaced. Despite the Fed’s rhetoric, my program wasn’t helping to make credit any more accessible for the average American. The banks were only issuing fewer and fewer loans. More insidiously, whatever credit they were extending wasn’t getting much cheaper. QE may have been driving down the wholesale cost for banks to make loans, but Wall Street was pocketing most of the extra cash.
From the trenches, several other Fed managers also began voicing the concern that QE wasn’t working as planned. Our warnings fell on deaf ears. In the past, Fed leaders—even if they ultimately erred—would have worried obsessively about the costs versus the benefits of any major initiative. Now the only obsession seemed to be with the newest survey of financial-market expectations or the latest in-person feedback from Wall Street’s leading bankers and hedge-fund managers. Sorry, U.S. taxpayer.
Trading for the first round of QE ended on March 31, 2010. The final results confirmed that, while there had been only trivial relief for Main Street, the U.S. central bank’s bond purchases had been an absolute coup for Wall Street. The banks hadn’t just benefited from the lower cost of making loans. They’d also enjoyed huge capital gains on the rising values of their securities holdings and fat commissions from brokering most of the Fed’s QE transactions. Wall Street had experienced its most profitable year ever in 2009, and 2010 was starting off in much the same way.
You’d think the Fed would have finally stopped to question the wisdom of QE. Think again. Only a few months later—after a 14% drop in the U.S. stock market and renewed weakening in the banking sector—the Fed announced a new round of bond buying: QE2. Germany’s finance minister, Wolfgang Schäuble, immediately called the decision “clueless.”
That was when I realized the Fed had lost any remaining ability to think independently from Wall Street. Demoralized, I returned to the private sector.
Where are we today? The Fed keeps buying roughly $85 billion in bonds a month, chronically delaying so much as a minor QE taper. Over five years, its bond purchases have come to more than $4 trillion. Amazingly, in a supposedly free-market nation, QE has become the largest financial-markets intervention by any government in world history
And the impact? Even by the Fed’s sunniest calculations, aggressive QE over five years has generated only a few percentage points of U.S. growth. By contrast, experts outside the Fed, such as Mohammed El Erian at the Pimco investment firm, suggest that the Fed may have created and spent over $4 trillion for a total return of as little as 0.25% of GDP (i.e., a mere $40 billion bump in U.S. economic output). Both of those estimates indicate that QE isn’t really working.
Unless you’re Wall Street. Having racked up hundreds of billions of dollars in opaque Fed subsidies, U.S. banks have seen their collective stock price triple since March 2009. The biggest ones have only become more of a cartel: 0.2% of them now control more than 70% of the U.S. bank assets.
As for the rest of America, good luck. Because QE was relentlessly pumping money into the financial markets during the past five years, it killed the urgency for Washington to confront a real crisis: that of a structurally unsound U.S. economy. Yes, those financial markets have rallied spectacularly, breathing much-needed life back into 401(k)s, but for how long? Experts like Larry Fink at the BlackRock investment firm are suggesting that conditions are again “bubble-like.” Meanwhile, the country remains overly dependent on Wall Street to drive economic growth.
Even when acknowledging QE’s shortcomings, Chairman Bernanke argues that some action by the Fed is better than none (a position that his likely successor, Fed Vice Chairwoman Janet Yellen, also embraces). The implication is that the Fed is dutifully compensating for the rest of Washington’s dysfunction. But the Fed is at the center of that dysfunction. Case in point: It has allowed QE to become Wall Street’s new “too big to fail” policy.
Mr. Huszar, a senior fellow at Rutgers Business School, is a former Morgan Stanley managing director. In 2009-10, he managed the Federal Reserve’s $1.25 trillion agency mortgage-backed security purchase program.
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