Category Archives: banking

The Sisyphean Folly of Printing Press Money, by MN Gordon

Central bankers believe that every economic ill can be cured with their fiat debt instruments, and if the ill isn’t cured, throw more fiat debt at it. From MN Gordon at economicprism.com:

Something remarkable happened on Tuesday.  The Dow Jones Industrial Average (DJIA) broke the 30,000 point barrier for the first time ever.  President Trump commemorated the feat by calling the number “sacred.”

Some Americans were especially grateful as they said their Thanksgiving Day grace.  These generally include wealthy owners of stocks and other financial assets.  Forty years of inflationary monetary policies have elevated their prosperity to holiness.

The remaining Americans, through no fault of their own, missed out on these sanctified blessings.  Perhaps they’ll get some leftover table scraps for Christmas.  These, indeed, are the questions being asked.

Will Washington make this a Merry Christmas for cash strapped Americans?  Will the Treasury send out a second round of $1,200 stimulus checks for the yuletide?  Will Congress be Ebenezer Scrooge or Mr. Fezziwig?

These are important questions as 2020 approaches its twilight.  And this is the season of giving.  After months of rolling lockdowns ordered by state and local governments Americans need relief.  Moreover, they must first receive from Uncle Sam so they can give to their fellow kindreds.

This was a recent finding of a Franklin Templeton-Gallup survey.  Specifically, the survey found that 16 percent of Americans plan to spend more on holiday gifts this year.  But with another $1,200 stimulus check, 22 percent of Americans say they will spend more this holiday season.

Somehow, Christmas spending has become dependent on government stimulus checks.  But, remember, government stimulus is dependent on printing press money.  And printing press money is dependent on the dollar retaining some semblance of value.

Thus, herein lies the sacred folly.  The more that printing press money’s emitted, the more value the dollar loses.  We’ll have more on what this means for you and your wealth in just a moment.  But first some context…

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Global Inflation watch, by Alasdair Macleod

Currency debasement is inflation, and governments and central banks are debasing their currencies with abandon. From Alasdair Macleod at goldmoney.com:

his article posits that fiat currencies are on the path to hyperinflation and looks at the evidence in the prices of financial assets and commodities. So far, gold has notably underperformed, which indicates that the early signals of hyperinflation are confined to the cryptocurrencies, whose participants broadly understand fiat debasement, to equities reflecting the desire not to maintain cash and deposit balances, and in international trade, where commodity prices of all stripes have risen in price.

Given that the early warnings of hyperinflation of money supply are here, the article then looks at the qualities required of a sound money to replace fiat currencies.

Introduction

Figure 1 shows how prices have moved from the Friday before the Fed’s announcement on 23 March that it would go all-in on its support for the US economy with unlimited quantitative easing. It amounted to a commitment to hyperinflate the money supply if needed. Before the Fed cut its funds rate to zero on 16 March nearly all these prices were falling.


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Since late-March every category has seen increases in prices. Sector and specialist analysts will always claim that there are identifiable reasons why prices for an individual category or commodity have risen. But the fact is that with the exception of the dollar and the other fiat currencies listed in the table all prices have risen. This cannot happen without the dollar and these currencies losing purchasing power.

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America’s Economy Cannot Survive Another Lockdown, And The Cult Of The Reset Knows It, by Brandon Smith

Muster the liberty lovers; the globalists want total control. From Brandon Smith at alt-market.us:

This article was written by Brandon Smith and originally published at Birch Gold Group

The U.S. economy has been on the verge of collapse for at least a decade, ever since the crash of 2008 and the subsequent explosion in fiat stimulus from the Federal Reserve. While the mainstream media has always claimed that central bankers “saved” us from another Great Depression, what they actually did was set us up for a far worse scenario — a stagflationary implosion of our society.

Here is the primary problem: By injecting trillions of bailout dollars into the system, the Federal Reserve prevented the economy from going through its natural purging cycle. This cycle would have been painful for many, but survivable, and it would have removed large amounts of excess debt, parasitic corporations that produce little or nothing of use, as well as numerous toxic assets with no legitimate value. For a real free market to function, weak or corrupt elements must be allowed to fail and die. Instead, central banks around the world and most prominently the Fed kept all of those destructive elements on life support.

This has created what amounts to a “zombie economy:” a system that needs constant outside support (stimulus) in order to continue moving forward. In the process of keeping zombie corporations and other parts of the body alive, healthy parts of the economy, like the small business sector, get devoured.

The zombie economy is, however, highly fragile. All it takes is one or two major shocks to bring it down, and the moment this happens the whole facade will disintegrate, leaving the public in panic and disarray. This is what is happening right now in 2020, and it will get much worse in 2021.

Bailouts encourage and reward unhealthy financial behavior, and this is why national debt, corporate debt and consumer debt have recently hit historic highs. When every pillar of the economy is encumbered with the weight of debt, any instability has the possibility of bringing all those pillars down at once. The Federal Reserve turned the U.S. into an economic time bomb, and the Fed is itself more like a suicide bomber than some kind of fiscal savior.

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Taxpayers Face $435 Billion in Student-Loan Losses, Already Baked in: Leaked Education-Department Study, by Wolf Richter

If they’re admitting to $435 billion in losses you know they’re a lot bigger. From Wolf Richter at wolfstreet.com:

Most of the losses come from established income-based repayment programs that include debt forgiveness at the end. No one has ever put a number to it until now.

In 2009, the US government entered the business of reckless, no-matter-what lending to students, even to older students with subprime credit ratings and to students at iffy for-profit colleges with dubious degree programs. And then tuition soared, and student housing went upscale and became a global asset class with its own commercial mortgage-backed securities (CMBS) that are now experiencing record delinquency rates. And Apple and textbook publishers and everyone began feeding at the big trough, with students just being the conduit for this money. Student-loan balances on the government’s financial statement skyrocketed from $147 billion in 2009 to $1.37 trillion at the beginning of 2020, despite the 11% decline in student enrollment since 2011.

Taxpayers face a loss of $435 billion on the $1.37 trillion in student loans on the government’s financial statement at the beginning of this year, even if no additional loans are issued going forward, according to an internal study by the Department of Education, reported by the Wall Street Journal which reviewed the documents. Most of the losses would come from the already established income-based repayment programs and the debt forgiveness at the end of their term.

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The Fox Guarding The Hen House Is Stealing Your Nest Egg, by Dennis Miller

Bank regulation is a joke; the banks essentially regulate themselves. From Dennis Miller at theburningplatform.com:

 

 

Fox and Hen House Concept: The system is designed to allow the fox, (also known as the Federal Reserve) to enable the banks to make risky bets.I recently interviewed Chuck Butler about JP Morgan’s recent admission to five felony counts and $1 billion fine. I asked, “When Is It Going To End?”

Right after finishing the interview, ZeroHedge reported:

“Goldman Sachs is reportedly on the cusp of settling one of the biggest criminal cases involving a Wall Street bank since the financial crisis: According to a Bloomberg News report…the Vampire Squid has reached a tentative agreement with the DoJ to pay more than $2 billion in penalties…– and – here’s the key bit – allows the bank to avoid all criminal penalties.

…. Tim Leissner, formerly the bank’s top man in Southeast Asia…reportedly told authorities about the endemic “culture of corruption” at play within the bank.”

Wall Street on Parade (WSOP) confirmed, adding:

“The U.S. Department of Justice is being played like a fiddle at a tractor meet. …. Twice, in a period of just three weeks…the Justice Department (announced) settlements of landmark criminal cases against two of the largest banks on Wall Street….

To prevent the possibility that a reporter…might ask the Justice Department why it was giving JPMorgan Chase a Deferred Prosecution Agreement when these were the fourth and fifth criminal counts it has brought against JPMorgan Chase in the past six years, (it has admitted guilt to all of the charges) the Justice Department simply skipped its usual procedure and did not hold a press conference announcing the charges.”

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Is There Really A China Economic Miracle? by Daniel Lacalle

There are so many holes and lies in China’s economic statistics that they bely the vaunted economic miracle. Also, it should not be forgotten that much of China’s growth, like so-called growth in much of the rest of the world, is bought on credit. From Daniel Lacalle at hedgeye.com:

 

Is There Really A China Economic Miracle? - 11 16 2020 11 21 49 AM

The year 2020 will be an extremely tough year for the European economy. Added to an unprecedented drop is a strong impact in the fourth quarter due to the new lockdowns. 

Morgan Stanley estimates that the eurozone’s GDP will fall by 2.2% in the fourth quarter, a 7% drop in the full year 2020. In addition, the investment bank lowers the outlook for 2021 with a rebound of only 5% in the average of the euro area, delaying the recovery of 2019 GDP to 2023.

The “jobless recovery” is even more worrying. The apparently spectacular rebound data for the third quarter resulted in zero job creation. Unemployment in the eurozone in September stood at 8.3% and in Spain at 16.5%, not counting the millions of furloughed jobs in Europe.

In this environment, the United States’ recovery seems much stronger. GDP recovered in the third quarter to just 3.5% below 2019 levels. Unemployment has fallen to 6.9% in October but remains well above the record employment levels of 2019.   

However, the data from China is apparently spectacular. The manufacturing and services index already show an enviable expansion. GDP for the first three quarters is already growing at 0.7% after an expansion of 4.9% in the third quarter. Urban unemployment in China is 5.4% after shooting to a paltry 6%. What is behind the Chinese miracle compared to the poor eurozone?

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A Biden Presidency Would Be A Dream Scenario For Our Corporate Overlords, by Michael Snyder

Corporations donated millions to the Democrats and they’ll get the expected payoff. From Michael Snyder at themostimportantnews.com:

One of the biggest reasons why the elite hate Donald Trump so much is because they can’t control him. But if Joe Biden ends up in the White House, that won’t be a problem. Our corporate overlords know exactly what they are getting with Biden, and that is why they backed him so strongly during the campaign. In fact, if our corporate overlords could create a perfect president from scratch, they would end up with someone that looks very similar to Joe Biden.

Let me explain what I mean. One thing that the elite value in any politician is weakness, and today Joe Biden is very weak. At one time he had a little bit more of a backbone, but at this point he has deteriorated very badly and his physical, mental and emotional weaknesses are apparent to everyone.

But a president can’t afford to be weak, because pressure is put on the White House from a thousand different directions on a daily basis. Any sign of weakness from a president is like blood in the water, and the political sharks are going to be all over him.

Ultimately, Biden will be exceptionally easy for the elite to manipulate because of how weak he has become, but the downside for the elite is that Biden may not last that long in the White House because of how rapidly he is physically and mentally falling apart.

If our corporate overlords were creating a perfect president from scratch, they would also want someone that owes them favors, and Joe Biden owes them big time.

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When Is It Going To End? by Dennis Miller

For the big banks, particularly JP MorganChase, criminal fines are just a cost of doing business, not a reason to change criminal business practices. From Dennis Miller at theburningplatform.com:

No, I’m not talking about the political hatred dividing our country. My concern is something deeper. If it doesn’t end, the political divide will grow worse.

Wall Street On Parade (WSOP) reports JPMorgan Chase is caught once again:

“…. JPMorgan Chase, the largest bank in the United States, has admitted to an unprecedented five criminal felony counts since 2014 and put on criminal probation three times. …. (That’s five felonies more than the bank pleaded guilty to in its prior 100 years of existence. Translation: this is not normal even on Wall Street.)”

This time they were fined $920 million for price manipulation in the metals market. WSOP tells us:

“That brings to more than $37 billion the total that JPMorgan Chase has paid to settle allegations of fraud and ripping off Americans since the financial crash of 2008.

…. To be charged with two more felony counts in the same year your three-year probation ends is the strongest proof that Wall Street has become a fraud monetization system where deferred prosecution agreements and fines are simply the cost of doing business on Wall Street. (Emphasis mine)

The deal is so sweet…it notes that “an independent compliance monitor was unnecessary” despite also revealing that the bank “did not voluntarily and timely disclose to the Fraud Section and the Office the conduct described in the Statement of Facts.” It was required to do that under its prior probation agreement that ended in January of this year.”

Bottom line, five felony counts, billions in fines, no one goes to jail; and the justice department decides, “an independent compliance monitor was unnecessary.”

It’s not just JPM. In 2017 Reuters reports: “Banks paid $321 billion in fines since financial crisis”.

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A New World Monetary Order Is Coming, by Stefan Gleason

The envisioned monetary order will be, like the whole coronavirus and climate change scams, just another means by which the Davos Crowd will rule the world. At least that’s how the Davos Crowd imagines things. From Stefan Gleason at activistpost.com:

The global coronavirus pandemic has accelerated several troubling trends already in force. Among them are exponential debt growth, rising dependency on government, and scaled-up central bank interventions into markets and the economy.

Central bankers now appear poised to embark on their biggest power play ever.

Federal Reserve Chairman Jerome Powell, in coordination with the European Central Bank and International Monetary Fund (IMF), is preparing to roll out central bank digital currencies.

The globalist IMF recently called for a new “Bretton Woods Moment” to address the loss of trillions of dollars in global economic output due to the coronavirus.

In the aftermath of World War II, the original Bretton Woods agreement established a world monetary order with the U.S. dollar as the reserve currency.

Importantly, the dollar was to be pegged to the price of gold. Foreign governments and central banks could also redeem their dollar reserves in gold, and they started doing so in earnest in the 1960s and early 1970s.

In 1971, President Richard Nixon closed the gold window, effectively ushering in a new world monetary order based solely on the full faith and credit of the United States. An inflation crisis followed a few years later.

In response, the Federal Reserve took the painful step of jacking up interest rates to defend its wilting Federal Reserve Note and tame rising prices.

Fast forward to 2020, and the Fed has assumed for itself novel policy mandates that are a precursor to a new monetary system.

But the monetary masters aren’t contemplating a return to sound money. Rather, they’re planning for even more debt, more inflation, and picking of winners and losers in the economy.

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What the Great Reset Architects Don’t Want You To Understand About Economics, by Matthew Ehret

Innovation, not debt, is what propels an economy. The coming debt-fueled collapse will be wrongly blamed on the coronavirus. From Matthew Ehret at thesaker.is:

It shouldn’t come as a surprise that the Vice President of the World Bank Carmen Reinhardt recently warned on October 15 that a new financial disaster looms ominously over the horizon with a vast sovereign default and a corporate debt default. Just in the past 6 months of bailouts unleashed by the blowout of the system induced by the Coronavirus lockdown, Reinhardt noted that the U.S. Federal Reserve created $3.4 Trillion out of thin air while it took 40 years to create $14 Trillion. Meanwhile panicking economists are screaming in tandem that banks across Trans Atlantic must unleash ever more hyperinflationary quantitative easing which threatens to turn our money into toilet paper while at the same time acquiescing to infinite lockdowns in response to a disease which has the fatality levels of a common flu.

The fact of the oncoming collapse itself should not be a surprise- especially when one is reminded of the $1.5 quadrillion of derivatives which has taken over a world economy which generates a mere $80 trillion/year in measurable goods and trade. These nebulous bets on insurance on bets on collateralized debts known as derivatives didn’t even exist a few decades ago, and the fact is that no matter what the Federal Reserve and European Central Bank have attempted to do to stop a new rupture of this overextended casino bubble of an economy in recent months, nothing has worked. Zero to negative percent interest rates haven’t worked, opening overnight repo loans of $100 billion/night to failing banks hasn’t worked- nor has $4.5 trillion of bailout unleashed since March 2020. No matter what these financial wizards try to do, things just keep getting worse. Rather than acknowledge what is actually happening, scapegoats have been selected to shift the blame away from reality to the point that the current crisis is actually being blamed on the Coronavirus!

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