Category Archives: banking

April Fools: In the New Age of Deception, Coronavirus has Hastened the Old Collectivism, by Doug “Uncola” Lynn

The official reaction to the coronavirus outbreak from government and media is so insane it must be concealing a hidden agenda. From Doug “Uncola” Lynn at theburningplatform.com:

“…..but the plan insidiously advances.”

ordo ab chao

They are banned from churches and public spaces. They can’t hold hands to pray. LOL!

The Devil

At the very end of last year, I wrote a New Year’s piece entitled “America is Over But You Knew That Already”, whereby various “cracks and water in the nation’s foundation” were explored.  In that article, I said:  “winter is finally here” along with these words:

 Exactly how and when America’s foundational stones will shatter in the coming months is anyone’s guess, but do know this:  When Progressive Democrats, and an activist mainstream media, stage a third-world impeachment trial of a U.S. President while reverently citing the words of the nation’s long-dead founders who were, by their own definition, privileged white males and racist slave owners – the end is nigh.

In a later article, six reasons were explored as to why the COVID-19 virus failed “the sniff test” along with the coincidental timing that marked the rise of the virus:

[the first COVID-19 death outside of China] was one day before the Iowa Caucuses were held (2-3-2020) where the results were massaged to raise Mayor Pete over Bernie and bump Biden to the bare minimum viability.

It was also two days before the Diamond Princess cruise ship was quarantined in Japan … and three days before Trump was acquitted in the Senate.

The World Health Organization (WHO) declared the 2019-nCoV outbreak a global health emergency on January 30, 2020 when China’s death count was 213.  How did they know? Regardless, the next day, President Trump declared the outbreak a public health emergency and restricted travel from China even as the Director of the National Institute of Allergy and Infectious Diseases, Dr. Anthony Fauci, cited “8,000 deaths in the U.S. this season” from influenza.

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Coronavirus: Ten Things to Think About, by Justin Pavoni

Any actual thinking, as opposed to feeling or reacting, about coronavirus is to be encouraged. From Justin Pavoni at ronpaulinstitute.org:

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1. All of this can be solved by following the voluntary principle: If you are worried then stay home. If you are willing to assume the risk then go to work. Going to work means you may interact with people and thus get sick. It’s a risk. The other people at work took on this risk of their own choosing too. Life is full of risks. Not going to work has its own obvious risks associated with it. Let people choose their own paths based on their own risk tolerance and voluntary choices. Don’t impose your view via government force on those of us that peacefully disagree with you.

2. There have been 23,000 US deaths so far this year due to flu, 3,000 from coronavirus. Worldwide stats are roughly in parallel. Legitimate population samples and common sense show that the virus has infected way more people than reported by the immoral news organizations that make money off this hysteria. It is highly likely that REAL death rates are closer to .05 percent rather than the oft-emphasized 3 percent.

3. Social Distancing makes people distrust one another. People that are afraid of each other are easier to control. We just had a house fire and while nobody will shake my hand because they’re afraid to death of coronavirus, they’ll happily walk around in the burned down home without a respirator. Of course the burned down house is far more likely to be an immediate and serious health threat. Anyone else see a problem here?

4. I have already seen certain local governments posting websites for all of us to tell on each other for congregating in groups. My wife has had skeptical posts removed from Facebook. Sounds a lot like the secret police to me.

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Day of Shame: US House Approves $2 Trillion Everything Bailout on a Voice Vote, by David Stockman

When historians look back, they may well pinpoint the $2 trillion bill and the Federal Reserve actions in response to the coronavirus outbreak as the inflection point when the US’s slide into bankruptcy accelerated. From David Stockman at davidstockmanscontracorner.com, via lewrockwell.com:

Did we say it’s getting stupid crazy down there in the Imperial City?

Well, we probably have….ad infinitum. And we are doing so again but not merely owing to today’s abomination in the once and former Peoples’ House, which thinks so little of its oath to defend the constitution and the rights of current and future taxpayers that it approved the $2 trillion Everything Bailout without even a roll call vote.

Then again, like the late night TV pitchman says – wait, there’s more!

Consider the chart below, which surely the Fed heads have not. To wit, it took the Fed 85 years after its doors opened in 1914 to print enough money to fund a $600 billion balance sheet.

It wasn’t exactly the Ohio State offense – three yards and a cloud of dust – which accomplished this. But it was pretty close – even including Greenspan’s first years at the helm. Between the famous Treasury Accord in 1951, under which the Fed was liberated from Treasury-ordered yield pegging, and 1999, its balance sheet grew at a modest 5.2% per annum.

And, by your way, the Fed’s relative stinginess with the printing press was a great big no nevermind. Real GDP grew at 3.4% per annum over that near half-century period, and real median family income more than doubled from $35,000 to $74,000.

We are pondering the number “$600 billion” today because its capsulizes the insanity loose in the Imperial City. What took 95 years to accomplish in the purportedly benighted 20th century, has now taken just five days!

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Estimates About the Collapse of Share Buybacks Emerge, by Wolf Richter

Corporate share buybacks support stock prices, and the value of executive stock options, often with borrowed money, and its all legal! This shell game may be coming to an end. From Wolf Richter at wolfstreet.com:

“The leveraged share buyback game has ended, which also means an end to the phony earnings growth.”

HSBC and Goldman Sachs have now both come out with estimates about the extent of the collapse of share buybacks. So far into this crash, over 50 companies have suspended share buybacks, accounting for $190 billion in cash that is not flowing into the stock market, representing over a quarter of total share buybacks in 2019.

HSBC estimates that over the next two quarters, share buybacks in the US could be cut by $300 billion, meaning $300 billion in “lost inflows” into the stock market.

And more cuts are coming. A note by Goldman Sachs analysts, reported by Bloomberg, added: “Reduced cash flows and select restrictions mandated as part of the Phase 3 fiscal legislation suggest more suspensions are likely.”

And slashing share buybacks would have an impact on stocks, the Goldman analysts said: “Higher volatility and lower equity valuations are among the likely consequences of reduced buybacks.”

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Will Coronavirus End the Fed? by Ron Paul

We can only hope coronavirus ends the Fed. From Ron Paul at ronpaulinstitute.org:

September 17, 2019 was a significant day in American economic history. On that day, the New York Federal Reserve began emergency cash infusions into the repurchasing (repo) market. This is the market banks use to make short-term loans to each other. The New York Fed acted after interest rates in the repo market rose to almost 10 percent, well above the Fed’s target rate.

The New York Fed claimed its intervention was a temporary measure, but it has not stopped pumping money into the repo market since September. Also, the Federal Reserve has been expanding its balance sheet since September. Investment advisor Michael Pento called the balance sheet expansion quantitative easing (QE) “on steroids.”

I mention these interventions to show that the Fed was taking extraordinary measures to prop up the economy months before anyone in China showed the first symptoms of coronavirus.

Now the Fed is using the historic stock market downturn and the (hopefully) temporary closure of businesses in the coronavirus panic to dramatically increase its interventions in the economy. Not only has the Fed increased the amount it is pumping into the repo market, it is purchasing unlimited amounts of Treasury securities and mortgage-backed securities. This was welcome news to Congress and the president, as it came as they were working on setting up trillions of dollars in spending in coronavirus aid/economic stimulus bills.

This month the Fed announced it would start purchasing municipal bonds, thus ensuring the state and local government debt bubble will keep growing for a few more months.

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P For Pandemic, by Jim Quinn

P is for pandemic and O is for Orwellian. From Jim Quinn at theburningplatform.com:

“People should not be afraid of their governments. Governments should be afraid of their people.” – Alan Moore – V for Vendetta

Coronavirus is close to becoming a pandemic, WHO warns - The ...

“Authority, when first detecting chaos at its heels, will entertain the vilest schemes to save its orderly facade.” – Alan Moore – V for Vendetta

I wrote an article called V for Vendetta – 2011 just over nine years ago on the day after the Tucson shooting where congresswoman Gabrielle Giffords and eighteen others were shot by a psychologically disturbed lunatic, with six dying. At the time, I thought of the scene from the V for Vendetta movie where someone did something stupid and all hell broke loose. I expected a similar result from this act, but those in control of our society were successfully able to put a cork in the bottle, preserving their façade of order.

We learned shortly thereafter, through the patriotic efforts of Edward Snowden and Julian Assange, how the government was using the vilest of schemes to surveil every American through their abuse of the Patriot Act. The government has become and enemy of the people.

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The Solvency Problem, by Doug Noland

Central banking—socialized credit—has blown up history’s biggest credit bubble, not capitalism. Now that the bubble is popping, its is crucial that the blame is correctly assigned. From Doug Noland at creditbubblebulletin.blogspot.com:

Being an analyst of Credit and Bubbles over the past few decades has come with its share of challenges. Greater challenges await. I expect to dedicate the rest of my life to defending Capitalism. One of the great tragedies from the failure of this multi-decade monetary experiment will be the loss of faith in free market Capitalism – along with our institutions more generally.

Somehow, we must convince younger generations that the culprit was unsound finance. And it’s absolutely fixable. Deeply flawed, experimental central banking was fundamental to dysfunctional markets and resulting deep financial and economic structural impairment. The Scourge of Inflationism. If we just start learning from mistakes, we can get this ship headed in the right direction.

Over the years, I’ve argued for “rules-based” central banking that would sharply limit the Federal Reserve’s role both in the markets and real economy. The flaw in “discretionary” central banking was identified generations ago: One mistake leads invariably to only bigger blunders.

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