Putin Sets The Table To Leave The Dollar Behind

Rory Hall
The Daily Coin

This is twice that Russian President Putin has said on the global stage the Federal Reserve Note no longer deserves the status and privilege of “world reserve currency” that allows unlimited printing of the currency. The first time he made mention he actually said that it was a threat to Russia’s national security.

In a speech at the International Economic Forum, in St. Petersburg, Russia, “Russian Davos”, President Putin reaffirmed his position regarding the Federal Reserve Note and it’s international role. For the record, we see the abuse of the Federal Reserve and the Federal Reserve Note, U.S. dollar, in similar light as President Putin. The current status of “world reserve currency” should not be allowed in this day and time. The absolute abuse of power, excessive power granted and the ability to shackle entire nations through the use of a currency that is not even their own should have never been allowed but it is way past time for this system to be dissolved.

In a speech at a plenary session, Mr Putin accused Washington of seeking to “extend its jurisdiction to the whole world.” “But this model not only contradicts the logic of normal international communication. The main thing is, it does not serve the interests of the future.” Source

As recently we pointed out Russia has been and is, apparently readying, a gold backed cryptocurrency to use as global trade settlement. When a man steps up to the microphone and says to the world – “The main thing is, it (U.S. dollar) does not serve the interests of the future.” while at the same time announcing that Russia, along with China, are working on a global trade settlement mechanism outside the dollar, well, you would have to be some kind serious stupid to ignore those words. 

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The OTHER Debt Bubbles: How Private Sector Debt Could Trigger the Next Financial Crisis

Activist Post

The $22 trillion official national debt is a much discussed problem, even as politicians exhibit zero motivation to do anything about it. But as big an economic overhang as it is, government debt isn’t likely to trigger the next financial crisis.

Yes, servicing the growing federal debt bubble will depress GDP growth, cause the value of the dollar to drop, and raise inflation risks. But the bubble itself won’t necessarily burst – not anytime soon.

As long as politicians face no political consequences for deficit spending, and as long as the Federal Reserve keeps the Treasury bond market propped up… then many more trillions can be added to the national debt.

Meanwhile, more fragile debt bubbles exist in the private sector. Unlike government debt – which carries the implicit backing of the Fed’s unlimited printing press – debts incurred by corporations, investors, consumers, and students can default.

 

Globally, there exists $250 trillion in debt against economic assets of around $100 trillion. The notional value of all derivatives now approaches a quadrillion dollars.

It’s been called the “everything bubble”… and it could soon lead to the “everything bust.”
U.S. household debt rose to a record $13.5 trillion in the fourth quarter of 2018. Mortgages, student loans, car loans, and credit cards represent enormous burdens even during a good economy. These burdens will prove unbearable for millions of Americans in the years ahead.

For many the financial crisis is already here:

• Pending home sales have fallen on a year over year basis for 13 consecutive months.
• Farm loan delinquencies recently hit their highest level in 9 years.
• More than 7 million Americans are delinquent on their auto loan payments – an all-time record.
• Some 5.1 million people are in default on their student loans.

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The Doomsday Scenario for the Stock and Housing Bubbles

Charles Hugh-Smith
Washington's Blog

The Doomsday Scenario for the stock and housing bubbles is simple: the Fed’s magic fails. When dropping interest rates to zero and flooding the financial sector with loose money fail to ignite the economy and reflate the deflating bubbles, punters will realize the Fed’s magic only worked the first three times: three bubbles and the game is over.

So what happens when punters realize there won’t be a fourth bubble? They sell. Bids disappear because who’s dumb enough to bet (with Japan and Europe as lessons) that more liquidity and negative interest rates will magically work when zero interest rates didn’t move the needle?

Who’s foolish enough to catch the falling knife (i.e. buying plummeting assets on the way down) on the unsupported assumption that the next dose of Fed magic will reverse a bidless market?

And should the Fed start buying stocks, mortgages, housing and bonds to prop up those bidless markets, what’s the message it will be sending? Desperation.If the only buyer is the money-printing central bank, that’s pretty good evidence that your economy and markets are in free-fall.

The loss of faith in central bank magic will be gradual at first, as magical thinking dies hard. It’s oh so comforting to believe the central bank will rescue every overleveraged mal-investment and bail out every high-risk speculation, but the funny thing about the Fed’s magic is it only works in liquidity crises–in every other condition, it only makes matters worse.

Does making it cheap to borrow improve the productivity of capital investments? You must be joking. The poster child of Fed magic is corporate buybacks, which 1) create no goods 2) create no services 3) do nothing to improve real wealth creation, i.e. higher productivity and 4) burden the company with higher debt loads, inhibiting future capital investment in actual productive capacity.

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Nomi Prins: Collusion! How central bankers rigged the world

Adam Taggert
Peak Prosperity

Nomi Prins, Wall Street veteran turned financial industry reformist returns to the podcast this week to explain the findings within her new book Collusion: How Central Bankers Rigged The World. 

Nomi has put together a timeline of exactly when and how the central banks have plundered the wealth of the masses since 2008, either directly or indirectly through the loss of purchasing power of the currencies they control:

The relationship between the Central Banks, the major ones — the Fed, Europe Central Bank, Bank of Japan — all the larger Central Banks in the world and their private banks was effectively, and is effectively, kept secret. The relationships they have with each other, a lot of it is secret; so you have to really dig in to it to find out what’s really going on.

What I did was dig into the documents that I could find and create a timeline. That’s why each chapter in each region starts in 2008. It works with Mexico, Brazil, Japan, China and Europe and juxtaposes that with what the Fed was doing at that time to see how that collusive behavior wound up happening. The secret-ness is in the relationships of the banks, where that money that was fabricated by these institutions actually went, and when — or if — it’s coming back.

The ‘cheat and deceiving’ part of that definition is also apparent: people have been cheated out of their futures from the standpoint of the central banks’ strategies. So when the Feds creates cheap money, companies and banks and countries borrow more from the future because it is so cheap and easy. This deceives many people into thinking that the economy is somehow therefore being helped by this strategy, which is in acutality an emergency strategy. It’s an emergency that’s gone on now for ten years.

Yes there have been some tweaks here and there — interest rates have gone up a little bit in the United States — but all in all, rates are still pretty much 0% on average globally and quantitative easing still exists. The books of the major Central Banks are as big as they were at their heights through this last ten-year period…and they’re still growing. Just look at Europe and Japan.

Look at the stock market. The stock market is really high right now in a lot of different places. Why is it so high? Because a lot of this money went into debt which was borrowed to buy corporate stock, to buy the stock of banks, or to buy the banks themselves. That’s a major form of manipulation and deception as well.

Why is JP Morgan’s stock going up? Is it just because JP Morgan is such a great bank and so helping? Well, no. It’s because it received a lot of help from the Federal Reserve. It funneled that help into its own shares, and it has continued to pay settlements and be fined on egregious activity against its own clients, which are many because it’s the largest bank in the United States among the largest banks in the world.

There are multiple points of cheating and deception that have been enabled or that occur because of Central Banks policies. Some of those policies are secret; but a lot of them are public. You just have to piece the documents and the timelines together.

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The Dollar’s 70-Year Dominance Slowly Coming To An End

Alex Deluce
Gold Telegraph 

The US dollar hasn’t been backed by gold since 1971, but that might change soon. 

Republican Congressman Alex Mooney is proposing that the US once again place value on the dollar by backing it with physical gold. The problem is, the Federal Reserve has been printing money with the abandon of a drunken copy machine, and the 147.3 million ounces of gold being held in Ft. Knox may not be enough to cover the out-of-control fiat currency currently in circulation.

According to Alex Mooney’s bill, the dollar has decreased 30 percent in purchasing power since 2000. It has lost 96 percent of its value since 1913. On an average, the US is devalued by 50 percent every generation. 

If the gold standard were to be reinstated, control of the dollar would revert to free market forces instead of the whim of the Federal Reserve. It would mean that each dollar would have its equivalent in gold, as it did prior to 1913. At that time, the US economy grew at a robust annual rate of 4 percent compared to an average annual growth of 2 percent since 2000. 

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Why the Massive Expansion of "Money" Hasn't Trickled Down to "The Rest of Us"

Of Two Minds Blog 
Charles Hugh Smith

If you create and distribute money only in the apex of the wealth/power pyramid, it can only benefit the few rather than the many.

There are numerous debates about money: what it is, how we measure it, and so on. In recognition of these debates, I'm referring to "money" in quotes to designate that I'm using the Federal Reserve's measure of money stock (MZM).

Nowadays, "money" is often credit. We buy stuff not with currency/ cash, but with credit extended by lenders. The government pays for its programs with borrowed money as well, by selling sovereign bonds and spending the proceeds.

So to get a rough measure of the expansion of "money," we look at money stock and total credit.

There's a third measure: GDP, or gross domestic product. As money and credit expanded, did GDP go up, too? By how much?

GDP is also a flawed measure of value and activity, but once again we'll use it as the conventional measure of economic "growth."

When we glance at money, credit and GDP, we are immediately struck by the disconnect between expansion of money/credit and GDP growth. A relatively modest expansion of money stock and credit was sufficient to fuel a powerful expansion of GDP during the 1995-2000 Internet boom.

The next expansion of GDP--Housing Bubble #1--required an enormous expansion of credit and about double the growth in money stock as the Internet boom.

The current "recovery"--what I term the central bank credit bubble--has required a monumental increase in money stock and a non-trivial expansion of credit.

This is the very definition of diminishing returns: Every expansion of GDP is weaker but requires vastly greater expansions of money stock and total credit.

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A Crisis Unlike We Have Seen In Human History

Zero Hedge

Posted with permission and written by Rory Hall, The Daily Coin (CLICK FOR ORIGINAL)

I sat down with John Rubino of Dollar Collapse to discuss the current state of our economic world. In a very lively conversation, we hit some of the more pressing items of the day. John has done a fantastic job of documenting the demise of the dollar since he co-authored ”The Collapse of the Dollar” with James Turk back in 2004. John’s insights and analysis are top shelf and he should be on everyone’s list of people to follow.

How many “emergency” “secret” meetings do the central planners around the world need to have before the citizens of the respective countries begin to fully understand and take notice that something is very, very wrong? This year alone there have been several off-calendar meetings with, at least, one more now added to the docket.

The G-20 central planners have scheduled an “emergency” meeting for summer 2016. What will the topics be? Could it possibly be the fact the global economy is on the verge of total collapse? With the Baltic Dry Index, Shanghai Containerized Freight Index, not to mention commodities, all spiraling out of control to the downside, do you think there may be a reason for these people to be concerned? My guess is they could care less and are simply meeting in order to determine how the remaining wealth, in their respective countries, will be divided as the global economy continues grinding to a halt.

If one simply looks at the following line-items, it is clear for anyone to see something is about to hit the fan and it’s not anything anyone wants hitting the fan. 

• 45 million people in the U.S. on food stamps
• some estimates as high as 10 million refugees flooding into the European Union
•  non-stop wars of aggression involving NATO, Russia, Syria and several other countries
• financial crisis that began in 2008 has not been addressed and the problems that started that year have grown larger and far deeper
•  banking system in the European Union, especially Italy, is under enormous stress due to faulting/fraudulent accounting
•  Federal Reserve balance sheet at $4 TRILLION – U.S. debt at $20 TRILLION and counting
•  United Kingdom/Britain and the Brexit movement that is taking root
•  U.S. Presidential candidates, Donald Trump and Bernie Sanders, garnering global attention as the citizens of the U.S. seek alternatives to the current embedded criminal politicians.
• Japan instituting a Negative Interest Rate Policy (NIRP) for their sovereign bonds – Japan has basically been in a recession for over 20 years
•  China is manufacturer to the world and with economies slowing down or shutting down, there is no reason to manufacture products

These are just a few of the items that are currently hampering growth for individual citizens and individual Western nations. Currently, there are just too many holes that need to be filled and the central bankers are losing control and the people are losing faith in the narratives they are being fed. Once faith is lost, en masse, the show will become a lot more interesting and a lot more dangerous. 

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US debt dumped as central banks and billionaires buy gold

Hang the Bankers

Central banks have been dumping U.S. debt at an unprecedented rate.

Last year, foreign central banks sold an astonishing $225 billion in U.S. treasury bonds. And now, just a few months into 2016, the rate of selling has increased, with central banks having already sold $123 billion in bonds.

Once regarded as a safe haven, the perception of bonds has changed in recent years, with much of the blame going to our Federal Reserve and a significant loss in confidence in the central bank. Now, the trend away from U.S. debt is becoming increasingly clear. And as nations continue to sell, we may be a snowball effect of more countries following suit — because no one wants to be the last ones left holding an asset that no one wants.

What happens when there is no one there to buy the debt except for the Federal Reserve? They are the buyer of last resort. Will they start feasting on their arm to save themselves? How long can they buy their own debt for before there is nothing left to chew on?

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Market Analyst: “Nothing Is Real… All Of This is Being Played To Keep People Believing The System Is Working”

Mac Slavo
SHTFplan.com

The stock market may be hovering near all-time highs, but according to Greg Mannarino of Traders Choice that doesn’t mean the valuations are actually real:

We exist, beyond any shadow of any doubt, in an environment of absolute fakery where nothing is real… from the prices of assets to what’s occurring here with regard to the big Wall Street banks, the Federal Reserve, interest rates and everything in between.

…All of this is being played in a way to keep people believing, once again, that the system is working and will continue to work.

Full Interview with USA Watchdog:

 

President Obama has suggested that people like Greg Mannarino who are exposing the fraud for what it is are just peddling fiction. And just this week the President argued that he saved the world from a great depression and that the closing credits of the 2008 crash movie “The Big Short” were inaccurate when they claimed that nothing has been done to fundamentally curb the fraud and fix the system under his administration. But as Mannarino notes, the President and his central bank cohorts are making these statements because the system is so fragile that if the public senses even the smallest problem it could derail the entire thing:

Let’s just look at the stock market… there’s no possible way at this time that these multiples can be justified with regard to what’s occurring here with the price action of the overall market… meanwhile, the market continues to rise.
…
Nothing is real. I can’t stress this enough… and we’re going to continue to see more fakery… and manipulation and twisting of this entire system…  We now exist in an environment where the financial system as a whole has been flipped upside down just to make it function… and that’s very scary.
…
We’ve never seen anything like this in the history of the world… The Federal Reserve has never been in a situation like this… we are completely in uncharted territory where the world’s central banks have gone negative interest rates… it’s all an illusion to keep the stock market booming.
…
Every single asset now… I don’t care what asset… you want to look at currency, debt, housing, metals, the stock market… pick an asset… there’s no price discovery mechanism behind it whatsoever… it’s all fake… it’s all being distorted.
…
The system is built upon on one premise and that is confidence that it will work… if that confidence is rattled the whole thing will implode… our policy makers are well aware of this… there is collusion between central banks and their respective governments… and it will not stop until it implodes… and what I mean by implode is, correct to fair value.

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US-NATO Military Deployments, Economic Warfare, Goldman Sachs and the Next Financial Meltdown

Michel Chossoudovsky
Black Listed News

What is the relationship between war in a military theater and “economic warfare”? An act of war is invariably an economic undertaking which supports dominant corporate interests. The conduct of US-NATO military operations is carried out on behalf of powerful financial institutions. 

US led wars in the Middle East under the humanitarian mantle of the “global war on terrorism” largely serve the interests of Wall Street, the Anglo-American oil conglomerates, the so-called ‘defense contractors”, the biotech conglomerates (Monsanto et al), Big Pharma and the corporate media.

But modern warfare is by no means limited to the sphere of military and intelligence operations.

Washington not only imposes economic sanctions on countries which do not support its imperial agenda, it also fosters the outright destabilization of national economies. While the Pentagon and NATO coordinate military operations against sovereign countries, Wall Street carries out concurrent destabilizing actions on financial markets including the rigging of the oil, gold and foreign exchange markets directed against Russia and China.

It’s called “financial warfare”, it’s part of the same global agenda, it’s implemented alongside and in coordination with the Worldwide deployment of the US-NATO’s military machine.

In this regard, Obama’s “Pivot to Asia” directed against China involving the deployment of US naval forces in the South China Sea, is reinforced through concurrent destabilizing actions on the Shanghai stock exchange. The ultimate intent is to undermine –through non-military means– the national economy of the People’s Republic of China.

War and Financial Warfare

Is financial warfare coordinated with political decision-making pertaining to major military and intelligence operations?

Acts of financial warfare require intelligence;  they often require consultation and coordination at the highest levels of government. While the decision making process between the military-intelligence apparatus and the corporate financial system is by no means integrated, it nonetheless overlaps through a system of cross appointments and consultations.

Overlapping appointments

Amply documented, the mega-banking institutions on Wall Street and their related hedge funds exert their influence at the highest levels of the US government including the State Department, the Pentagon and the White House.

The system of cross-appointments together with corporate lobbying is part of this process.  National security advisers and former Pentagon officials are appointed to the World Bank,  etc.  Former prime ministers, senior government officials take on consulting positions with major banking institutions,  CIA officials are involved as advisers in key trade negotiations, etc. Conversely, Wall Street bankers are appointed to key positions in government.

In early August, Goldman Sachs appointed NATO’s former Secretary General Anders Fogh Rasmussen as a financial consultant.

Over the last five years (2009-2014), Rasmussen was actively involved in coordinating NATO’s humanitarian bombing raids in the Middle East not to mention NATO military deployments on Russia’s doorstep in Eastern Europe, the Baltic States and the Black Sea.

During his stint as Prime Minister of Denmark (2001-2009), Rasmussen was involved (under a neoliberal policy agenda) in dismantling Denmark’s welfare state alongside the privatization of state assets.
Rasmussen’s consulting advice will be used as part of Goldman’s political lobbying in the EU, namely the process of influencing political and strategic decision making.

Moreover, Goldman’s multibillion dollar investment decisions, its inside trading operations, its various speculative actions on the commodities, forex, precious metals markets, etc, require detailed inside information/ political coordination pertaining to geopolitical and military affairs.

Rasmussen joins a long list of  prominent officials and political personalities who are acting as consultants for Goldman Sachs.

Mayor of Chicago Rahm Emanuel who was Obama’s Chief of Staff, was also consultant to Goldman. His role “was to “introduce us to people”, in the words of one Goldman Sachs partner at the time.”

Peter Sutherland who was EU commissioner, trade negotiator and subsequently Director General of the World Trade Organization (WTO) was appointed in 2005 to Goldman Sachs as a non-executive Chairman. He ended his 20 year stint with Goldman in 2015.

Robert Zoellick, former president of the World Bank joined Goldman Sachs in 2013 as chairman of the bank’s board of international advisers. Zoellick had previously held several high ranking positions in the US administration. He was Deputy Secretary of State (2005–2006) under the Bush administration.

It works both ways: government officials are appointed to Goldman; in turn Goldman Sachs officials are appointed to key positions in government.  George W. Bush’s Secretary of the Treasury Henry Paulson (2006-2009) (image left) was a former Goldman Sachs chairman and CEO. He was appointed to the Treasury two years before the 2008 financial crash.

These appointments enable Goldman Sachs among other Wall Street mega banks to manipulate government policy.

It also provides them with an inroad into the corridors of the Treasury, not to mention the central banks: e.g, the notorious appointment of  a former Goldman Sachs official (and Canadian citizen) Mark Carney to the position of governor of the Bank of England. Carney previously held  the position of Governor of the Bank of Canada. He also heads the G20′s Financial Stability Board.

Mario Draghi, was vice chairman and managing director of Goldman Sachs International (2002–2005), before his appointment as Governor of the Bank of Italy (2005-2009). In 2011, he was appointed Governor of the European Central Bank (ECB).

Goldman Sachs is a Trojan Horse with its former banking officials deployed in key governmental positions.  These appointments provide Goldman Sachs with the ability to influence and oversee the conduct of macro-economic policy.

Moreover, their former officials will provide them with inside information emanating from within the governmental structure. –i.e market rigging by major financial institutions will invariably require advanced knowledge regarding actions or decisions taken  within the government and military-intelligence apparatus.

Regulating The Next Wall Street Financial Crash 

Barely acknowledged by the financial media, another notorious appointment of a Goldman official pertains to the Security and Exchanges Commission (SEC)  In May 2015, Goldman official Andrew J. “Buddy” Donohue  was appointed SEC chief of staff for Mary Jo White which enables him to “regulate Wall Street” so to speak on behalf of Wall Street.

This is a timely appointment. Financial markets including the multi-trillion trade in derivatives are in a state of disarray. They are exceedingly unstable, largely as a result of market rigging and speculative activity by powerful actors, not to mention the lack of regulatory procedures.

Goldman Sachs Inc. played a central role in the 2008 financial meltdown, with their former chairman and CEO Henry Paulson in charge of the US Treasury.

In a bitter irony, Institutional speculators  are in charge of regulating financial markets. The next financial crash, were it to occur, will be be “regulated” by the SEC with former Goldman Sachs official Andrew J. “Buddy” Donohue in the driver’s seat, acting on behalf of a handful of “too big to fail, too big to jail” financial institutions.

Let us not despair: Goldman Sachs does not control the US Treasury.  It’s in the hands of a former Citigroup official Jacob Lew -who according to expert opinion is slated to act “responsibly” in the case of a stock market crisis.

During his stint at Citigroup which preceded the 2008 financial crisis, Lew was in charge of a speculative hedge fund investment unit which consisted according to a 2010 Huffington Post Report in shorting or betting “on the housing market to collapse.”:

[Concern was expressed when he was appointed Budget Director regarding] his unit’s investments in a hedge fund that bet on the housing market to collapse — a reality suffered by millions of American homeowners.  … But in an age in which the housing collapse led to a financial upheaval that cost 8 million American jobs and plunged the nation into its deepest recession since the Great Depression, bets [coordinated by Jack Lew] that profited off the collapse may not be perceived in the best light.

It is worth noting that Treasury Secretary Jack Lew was also involved in what is best described as “legal tax evasion” through the transfer of Citigroup funds to the Cayman islands. According to the Weekly Standard (February 2013), Jack Lew:

“oversaw as many as a hundred Cayman Island investments when he worked at Citi Bank as chief operating officer of the alternative investment services unit, SEC disclosures reveal. It has previously been reported that Lew himself had been invested in a fund that was based in the Cayman Islands.  …
SEC documents ending in the year 2007 reveal that at least 90 subsidiaries of Citi were based in the Cayman Islands. A couple weeks later, in January 2008, Jack Lew took the high-ranking executive job at Citi.
Names of the Citi subsidiaries include: Asia Mortgage Finance, Azabu Credit Management Company Ltd., Alternative Investments MGR, Ltd., Asia Enterprise III Offshore L.P., Baltic Pharma Limited, BISYS Hedge Fund Director Services Limited, Brennan Limited, and many, many more.
By the end of 2008 that number of Citi subsidiaries in the Cayman Islands, which fell under the jurisdiction Lew was in charge of, jumped to 113.
In the 2012 presidential campaign, the Obama campaign called Mitt Romney’s own Cayman Island investments “bets against America.”
But only months after the election ended, Obama nominated his former chief of staff Jack Lew, who himself had similar investments and even oversaw investment funds there, to be the next treasury secretary.
When asked this morning [February 13, 2013]  at a Capitol Hill hearing about his investment in the Cayman Islands-based fund, Lew plead ignorance. He claimed today that he “actually didn’t know” the fund he invested in was housed in the Cayman Islands. Besides, he said, my “benefit was really very small.”

Financial Meltdown. Could it happen Again?

Who are the main actors?

We are dealing with a complex process of rigging and manipulation. This article has skimmed the surface focussing on selected key appointments on behalf of Wall Street’s mega banks.

Let us address the issue of so-called “fiscal responsibility”:

A speculator and tax evader (Jack Lew) is in charge of fiscal and monetary policy at the US Treasury and the regulation of major US stock markets at the Security and Exchange Commission (SEC) is in the hands of Goldman Sachs, which also means that the SEC cannot be used to indict Goldman Sachs, CitiGroup et al. on charges of inside trading and financial fraud.

If You Really Think It Matters Which Party Controls the Senate, Answer These Questions

Zero Hedge
Charles Hugh-Smith 


Please don't claim anything changes if one party or the other is in the majority. Anyone clinging to that fantasy is delusional.

If you really think it matters which political party controls the U.S. Senate, please answer these questions. Don't worry, they're not that difficult:

1. Will U.S. foreign policy in the Mideast change from being an incoherent pastiche of endless war and Imperial meddling? Please answer with a straight face. We all know the answer is that it doesn't matter who controls the Senate, Presidency or House of Representatives, nothing will change.

2. Will basic civil liberties be returned to the citizenry? You know, like the cops are no longer allowed to steal your cash when they stop you for a broken tail light and claim the cash was going to be used for a drug deal.

Or some limits on domestic spying by Central State agencies. You know, basic civil liberties as defined by the Bill of Rights and the U.S. constitution.

Don't make me laugh--you know darned well that it doesn't matter who controls the Senate, Presidency or House of Representatives, nothing will change.

3. Will the predatory, parasitic policies of the Federal Reserve that virtually everyone from the Wall Street Journal to what little remains of the authentic Left understands has greatly increased income and wealth inequality be reined in? Please don't claim either party has any will or interest in limiting the Fed's rapacious financialization. There is absolutely no evidence to support such a claim--it is pure wishful thinking.

4. Will the steaming pile of profiteering, corruption, waste, fraud and ineptitude that is Sickcare in the U.S. be truly reformed so its costs drop by 50% to match what every other developed democracy spends per person on universal healthcare? It doesn't matter if ObamaCare is repealed or not; that monstrosity was simply another layer of bureaucratic waste on an already hopelessly dysfunctional system.

If you answer "yes," please run a body scan on yourself to detect the biochips that were implanted while you voted Demopublican.

5. Will the influence of Big Money be well and truly banned from politics? If you answer yes, please pick up your tin-foil hat at the door.

6. Will the incentives in the Status Quo be reset to punish rapacious financialization and gaming the system and reward productive investment and labor? Before you answer, check out who's buttering the Senators' bread. Hint: Wall Street does not qualify as productive unless we're talking about the production of life-draining parasites. Virtually none of the vast armies of skimmers and scammers, from those pursuing bogus disability claims to lobbyist leeches, will suffer any consequence.

Moral hazard is the Status Quo's Prime Directive.

7. Will anything be done to dismantle the Neofeudal Debt-Serfdom known as student loans? You are delusional if you think either party has any interest in limiting the predation of an academic Upper Caste that came to do good and stayed to do well.

8. Will any prudent assessment be made of unaffordable weapons systems like the F-35 Lightning--$1.5 trillion and counting for aircraft that will soon be matched by drones that cost a fraction of the F-35's $200 million a piece price tag? No way--parts of those insanely costly jets are made in dozens of states, so the pork is well-distributed. Never mind the plane is lemon, built to fight the wars of the past. It's jobs, Baby--that's all that counts. Never mind the $1.5 trillion--we can always borrow another couple trillion--the Fed promised us.

Do you really think the Senate controlled by either party will ask why the F-35's price tag dropped to $120 million from $200 million? That's easy--the revised estimate left out the engine and avionics. They'll be added back in after the Senate approves open-ended funding.

If none of these key dynamics will change, you got nothing. Please don't claim anything changes if one party or the other is in the majority. Anyone clinging to that fantasy is delusional.
 

If you doubt this, please take the above quiz again.

The New York Fed Has Contracted JPMorgan to Hold Over $1.7 Trillion of its QE Bonds Despite Two Felony Counts and Serial Charges of Crimes

Wall St. On Parade

The Federal Reserve Board of Governors in Washington, D.C., which functions as the central bank of the United States, has farmed out much of its Quantitative Easing (QE) programs to the Federal Reserve Bank of New York since the financial crisis of 2008. The Federal Reserve Bank of New York has, in turn, contractually farmed out a hefty chunk of the logistics of that work to JPMorgan Chase in the last six years.

Sitting quietly on the Federal Reserve Bank of New York’s web site is a vendor agreement and other documents indicating that JPMorgan Chase holds all of the Mortgage Backed Securities (MBS) that the New York Fed has purchased under its various Quantitative Easing programs. As of last Wednesday, that figure was $1.7 trillion dollars. (The New York Fed has confirmed that JPMorgan is custodian for these assets.)

In addition to holding the MBS, JPMorgan also has a contractual agreement to exercise discretion (its own judgment) in trading the surplus cash that sits in the New York Fed’s cash account. While JPMorgan is restricted to holding collateral backed by U.S. government securities for these cash trades in Repurchase Agreements, its approved list of counter parties include global banks variously charged with rigging the international interest rate benchmark known as Libor, money laundering, aiding and abetting tax evasion, and defrauding clients.

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The Housing Echo-Bubble Is Popping

Washington's Blog


There is nothing remotely “normal” about the echo-bubble’s rise, and we can anticipate that its deflation will be equally abnormal.

Conventional wisdom on the resurgence of the housing markets takes one of two paths:

1. Housing is not in a bubble, it is merely returning to “normal”
2. Housing is bubbly in some markets, but prices will continue to rise

Here’s an alternative view: housing is in an echo-bubble that’s popping.Courtesy of the excellent Market Daily Briefing, here are some charts that make the case that the housing echo-bubble was just another Federal Reserve-induced speculative asset bubble that’s popping, like every other speculative bubble in recorded history.

First up: home prices, as measured by the Case-Shiller Price Index. Note the near-perfect symmetry of the echo-bubble: it has taken roughly the same time-span to inflate and reach a top as the first housing bubble from January 2004 to its peak 2+ years later.

The echo-bubble has topped out at about 50% of the decline from the primary bubble top to the trough in 2012.

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Buying Up the Planet: Out-of-control Central Banks on a Corporate Buying Spree

Ellen Brown
ICH

Finance is the new form of warfare – without the expense of a military overhead and an occupation against unwilling hosts. It is a competition in credit creation to buy foreign resources, real estate, public and privatized infrastructure, bonds and corporate stock ownership. Who needs an army when you can obtain the usual objective (monetary wealth and asset appropriation) simply by financial means? — Dr. Michael Hudson, Counterpunch, October 2010

June 21, 2014 "ICH" - When the US Federal Reserve bought an 80% stake in American International Group (AIG) in September 2008, the unprecedented $85 billion outlay was justified as necessary to bail out the world’s largest insurance company. Today, however, central banks are on a global corporate buying spree not to bail out bankrupt corporations but simply as an investment, to compensate for the loss of bond income due to record-low interest rates. Indeed, central banks have become some of the world’s largest stock investors.

This is a rather alarming development. Central banks have the power to create national currencies with accounting entries, and they are traditionally very secretive. We are not allowed to peer into their books. It took a major lawsuit by Reuters and a congressional investigation to get the Fed to reveal the $16-plus trillion in loans it made to bail out giant banks and corporations after 2008.

What is to stop a foreign bank from simply printing its own currency and trading it on the currency market for dollars, to be invested in the US stock market or US real estate market? What is to stop central banks from printing up money competitively, in a mad rush to own the world’s largest companies?

Apparently not much. Central banks are for the most part unregulated, even by their own governments. As the Federal Reserve observes on its website:

[The Fed] is considered an independent central bank because its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government, it does not receive funding appropriated by the Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms.

As former Federal Reserve Chairman Alan Greenspan quipped, “Quite frankly it does not matter who is president as far as the Fed is concerned. There are no other agencies that can overrule the action we take.”

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"Stress Test" Reviewed: Tim Geithner Is "A Grifter, A Petty Con Artist"

Zero Hedge

Geithner is at heart a grifter, a petty con artist with the right manners and breeding to lie at the top echelons of American finance at a moment when the government and financial services industry needed someone to be the face of their multi-trillion dollar three card monte. He’s going to make his money, now that he’s done living his life of fantastic power after his upbringing of remarkable mysterious privilege. After reading this book and documenting lie after lie after lie, I’m convinced that there’s more here than just a self-serving corrupt official. There’s an entire culture, of figures at Treasury, the Federal Reserve, in the entire Democratic Party elite structure, and in the world of journalism, a culture in which Geithner is seen as some sort of role model.

- From Matt Stoller’s fantastic article published yesterday, The Con-Artist Wing of the Democratic Party

Timothy Geithner is likely to go down in American history as one of the most dangerous, destructive cronies to have ever wielded government power. The man is so completely and totally full of shit it’s almost impossible not to notice.

The last thing I’d ever want to do in my free time is read a lengthy book filled with Geithner lies and propaganda, so I owe a large debt of gratitude to former Congressional staffer Matt Stoller for doing it for me. Stoller simply tears Geither apart limb from limb, detailing obvious lies about the financial crisis, and even more interestingly, Geithner’s bizarre bio, replete with mysterious and inexplicable promotions into positions of power.
So without further ado, here are some excerpts from this excellent article. From Vice:

The most consequential event of this young century has been the financial crisis. This is a catchall term that means three different things: an economic housing boom and bust, a financial meltdown, and a political response in which bailouts were showered upon the very institutions that were responsible for the chaos.

More than anyone else, it was then US Treasury Secretary Tim Geithner who shaped this response, and who bears praise, blame, and responsibility for the outcome. And finally, with the release of his book, Stress Test: Reflections on Financial Crises, Geithner is getting to tell his side of the bailout story.

I’ll address both of these, since they are intertwined. For as I read the book, and compared the book with what was written at the time and what was written afterwards, I noticed something odd, and perhaps too bold to say in polite company. As much as I really wanted to hear what Geithner had to say, I quickly realized that I wasn’t getting his actual side of the story. The book is full of narratives, facts, and statements that are, well, untrue, or at the very least, highly misleading. Despite its length, there are also serious omissions that suggest an intention to mislead, as well as misrepresentations of his critics’ arguments. As I went further into Geithner’s narrative, even back into his college days, I got the sense that I was seeing only a brilliantly scrubbed surface, that there were nooks and crannies hidden away. It struck me that I was reading the memoirs of an incredibly savvy and well-bred grifter, the kind that the American WASP establishment of financiers, foundation officials, and spies produces in such rich abundance. I realize this is a bold claim, because it’s an indictment not just of Geithner but also of those who worked for him at Treasury and at the Federal Reserve, as well as indictment of the Clinton-era finance team of Robert Rubin, Larry Summers, Alan Greenspan, Michael Barr, Jason Furman, and other accomplices. That’s why this review is somewhat long, as it’s an attempt to back up such a broad and sweeping claim. I will also connect it to what Geithner is doing now: working in the same kind of financial business that made Mitt Romney a near billionaire.

There are a few glaring problems with how Geithner portrays this debate. First of all, his main foil during the crisis was a fellow technocrat, former International Monetary Fund (IMF) official Simon Johnson, who actually had significant crisis-management experience parachuting into panicked countries and imposing structural reform on their bankers. Johnson became increasingly irate as he saw Geithner diverge from what Geithner himself at the US Treasury and the IMF forced on other countries: conditions. Geithner was hard on oligarchs when they were foreign, but when it was US bankers, well, then the wall of money argument triumphed. In fact, in a paper released in 2013, it was revealed that financial firms with a personal relationship with Geithner himself saw an abnormal 15% bump in share prices when Geithner’s name was floated for Treasury Secretary, and a corresponding though smaller, abnormal decline when his nomination was on the rocks due to his being caught not paying taxes by Senate investigators.

The third problem is housing. Economists Amir Sufi and Atif Mian lead the charge in arguing that the Geithner strategy failed to restart the economy because it focused on leverage at the large banks rather than leverage among households, i.e., foreclosures. The shape of the Geithner policy architecture is two-tiered: The financiers recovered; everyone else did not. And the economy, even today, sputters along at just above stall speed because of this.

But the book is more than just a set of arguments; it’s also an autobiography of a man. And while I was reading it, I kept getting the feeling I wasn’t learning the full story. I noticed oddities, a kind of set of shimmering ephemera which suggest that there was something the author was holding just out of view of the reader. 

Geithner talks about his childhood growing up abroad, with high-powered family members who had advised presidents, and a father who was a senior executive at the Ford Foundation in Southeast Asia in the 1960s and 70s. At that time, the Ford Foundation was a pivotal instrument of US foreign policy, an important vehicle for anti-Communist efforts and heavily integrated into the financial and foreign policy establishment (the head of the foundation even set up an internal committee to organize incoming requests from the CIA). Yet Geithner portrays himself as a largely apolitical and directionless kid, a sort of ordinary person in unusual circumstances, with loving parents. It was an odd way to describe growing up cocooned in the foreign-policy elite. Geithner is far too smart to not have been able to observe what was going on around him, yet he is silent in the book on how he saw power up close at a young age.

Ok, this is really important and something I touched on in my piece: Tim Geithner Admits “Too Big To Fail” Hasn’t Gone Anywhere (and that’s the way he likes it). As I note in that post, I find it beyond coincidental that Tim Geithner’s father and Barack Obama’s mother both worked at the Ford Foundation in Indonesia at the same time. 

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Charges of Lies Swirl Around Tim Geithner’s New Book, “Stress Test”

Comment: The arrogance of these shysters knows no bounds. And now they're starting to scrap with each other publicly.  This is going to happen more and more...

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Wall St. On Parade

Tim Geithner, former head of the New York Fed during the lead up to the Wall Street melt down, then Secretary of the Treasury in President Obama’s first term, is undergoing his own version of a big bank stress test: does he have the capital to survive the storm he has stirred up with his new, revisionist history book, Stress Test: Reflections on Financial Crises.

Geithner’s book has barely made it to the bookstore shelves (it’s slated for official release today) and already he’s been called a liar by R. Glenn Hubbard, Dean of the Columbia Business School; Geithner is effectively calling author Ron Suskind a liar in the book; and the book’s attack on Neil Barofsky, former Special Inspector General of the Troubled Asset Relief Program (TARP) has warranted a strong response from Barofsky where he says he doesn’t believe former Treasury Secretary Hank Paulson made the remarks that Geithner has attributed to him against Barofsky.

Politico’s MJ Lee explains the ruckus between Hubbard and Geithner. Hubbard was the head of the Council of Economic Advisers during the presidency of George W. Bush and advisor to Mitt Romney during his 2012 campaign. Geithner says in the book that Hubbard told him “Well, of course we have to raise taxes — we just can’t say that now.” Hubbard told Politico this statement “just happens to be a lie.”

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The Richest Rich Are in a Class by Themselves

Bloomberg

The rallying cry of the Occupy Movement was that the richest 1 percent of Americans is getting richer while the rest of us struggle to get by. That’s not quite right, though. The bottom nine-tenths of the 1 Percent club have about the same slice of the national wealth pie that they had a generation ago. The gains have accrued almost exclusively to the top tenth of 1 Percenters. The richest 0.1 percent of the American population has rebuilt its share of wealth back to where it was in the Roaring Twenties. And the richest 0.01 percent’s share has grown even more rapidly, quadrupling since the eve of the Reagan Revolution. 

These figures come out of a clever analysis by economists Emmanuel Saez of the University of California at Berkeley and Gabriel Zucman of the London School of Economics, who is a visiting professor at Berkeley. The Internal Revenue Service asks about income, not wealth, which is the market value of real estate, stocks, bonds, and other assets. Saez and Zucman were able to deduce wealth by exploiting IRS data going back to when the federal income tax was instituted in 1913. They figured out how much property different strata of society owned by looking at the income that was generated by that property, such as dividends and capital gains. To simplify, if a family reported $1 million in rental income one year and the market rate of return on rental properties was 10 percent, then Saez and Zucman concluded that the family must have owned property worth $10 million.

The message for strivers is that if you want to be very, very rich, start out very rich. The threshold for being in the top 0.1 percent of tax filers in 2012 was wealth of about $20 million. To be in the top 0.01 percent—that’s the 1 Percent club’s 1 Percent club—required net worth of $100 million. Of course, even $100 million is a pittance to Bill Gates, whose net worth, according to the Bloomberg Billionaires Index, is nearly 800 times that.

Previous research to measure wealth used the Federal Reserve’s Survey of Consumer Finances, which collects a very small sample of the richest Americans, and records on the federal estate tax, which covers only the dead. Saez and Zucman argue that their methodology is the best yet because the IRS data—tax evasion notwithstanding—is of high quality. It’s also annual and broken down by types of income, and it covers every family, not just a sample.

For the two economists, picking the correct rates of return for different types of assets was among the trickiest procedures. The assumed rate of return is the bridge from income, which they could observe, to assets, which they couldn’t. A strong indication that they got the rates right is that their method works for charitable foundations, for which they had publicly disclosed data on both income and assets.

Saez said by e-mail that “wealth-specific taxes become important tools to think about.” You don’t have to agree to find his and Zucman’s data useful. Writing about the findings on their blog, House of Debt, economists Atif Mian of Princeton University and Amir Sufi of the University of Chicago Booth School of Business say, “Simple measurement is often a bit boring, but it is also absolutely crucial for thinking about the overall economy.”

Russia pledges 'unlimited' intervention as emerging market sell-off continues

The Telegraph

Russia's central bank has pledged "unlimited" intervention to maintain the strength of the rouble as emerging markets continued to come under pressure from the Federal Reserve's withdrawal of stimulus.

Capital flight from emerging markets continued on Thursday after the US Federal Reserve confirmed fears it would trim another $10bn off its massive asset purchase programme. 

A closely-watched survey showing that Chinese manufacturing contracted for the first time in six months in January also exacerbated jitters in the market. 

In a statement, the Russian central bank said it would stage "unlimited" interventions in order to keep the rouble's exchange rate within its target corridor, as the currency fell to a record low against the euro and a five-year low against the US dollar. 

The bank runs a "dirty" float in which it conducts currency interventions when the rouble approaches the boundaries of a seven-rouble corridor against a currency basket made up of dollars and euros. It wants to move to a free float by the start of next year, but the rouble's 6 percent slide this year has already led Economy Minister Alexei Ulyukayev - a former central banker - to call for a delay.

Ben Bernanke, outgoing Federal Reserve chairman, on Wednesday said the US central bank would continue tapering its massive quantitative easing programme by reducing asset purchases to $65bn in February from January's $75bn. This is the second $10bn reduction in as many months

The Fed's move, although widely expected, has intensified pressure on emerging market currencies and stocks, which have been on a downward trajectory ever since Mr Bernanke first raised the prospect of a taper in May last year

The ongoing sell-off underlines the supremacy of the Fed as traders apparently dismissed efforts by emerging market central banks to stem capital flight by raising interest rates. A bumper interest rate hike in Turkey to 12pc from 7.75pc, a less-aggressive rise in South Africa and unexpected tightening in India this week have failed to ease outflows

"The pressure on these currencies has been relentless and it seems like places like South Africa, Hungary and Turkey are trying to force policymakers to bring real rates to much higher levels," said Manik Narain, emerging market strategist at UBS

"Rate hikes have been effectively rejected by the currency markets... Institutional investors have remained faithful (but) it may be that some of these positions are starting to crack.

Many economists argue that emerging markets must endure a sharp correction to adjust for increased demand in the developed economies and that lower currencies will stoke economic growth in the long term by boosting exports.

MSCI's index of emerging market stocks fell 0.8pc on Thursday to a fresh four-and-a-half month low. The Turkish lira recovered slightly on Thursday but remained near record lows against the US dollar and the South African rand hit a fresh five-year low of 11.39 against the greenback.