Category Archives: Banking

Deglobalization And The End Of Trust-Based Money Set The Stage For National Bitcoin Adoption, by Ansel Lindner

Posted on December 7, 2022 | 1 comment

Trust-based money means money that has nothing going for it other than social custom and legal tender laws lead to its acceptance. The only thing behind it is promises from people who repeatedly lie to us—central bankers and politician. Bitcoin is a whole new ball game. From Ansel Lindner at bitcoinmagazine.com:

This is an opinion editorial by Ansel Lindner, a bitcoin and financial markets researcher and the host of the “Bitcoin & Markets” and “Fed Watch” podcasts.

Two forces have dominated the globe economically and politically for the last 75 years: globalization and trust-based money. However, the time for both of these forces has passed, and their waning will bring about a great reset of the global order.

But this is not the global, Marxist kind of Great Reset promoted by Klaus Schwab and those who attend Davos. This is an emergent, market-driven reset characterized by a multipolar world and a new monetary system.

Globalization Is Ending

The first reaction I usually get to my claim that the age of hyper-globalization is ending is flippant disbelief. People have so completely integrated the environment of the dying global order into their economic understanding that they cannot fathom a world where the cost-to-benefit analysis of globalization is different. Even after COVID-19 exposed the fragility of complex supply chains, like when the U.S. very nearly ran out of surgical masks and basic medications or when the world struggled to source semiconductors, people have yet to realize the shift that is happening.

Is it that hard to imagine that the businessmen who designed such fragile, overcomplicated production processes didn’t properly weigh the risks?

All that is needed to break globalization is for risk-adjusted costs to change a few percentage points and outweigh the benefits. The pennies saved by outsourcing numerous tasks to numerous jurisdictions will no longer outweigh the possibility of complete collapse of supply chains.

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Necessary Illusions – Even the narrative of the EU as a geo-strategic player has now burst, by Alasdair Crooke

Posted on December 6, 2022 | Leave a comment

The EU’s downhill roll accelerates. From Alasdair Crooke at strategic-culture.org:

Europe is destined to become an economic backwater. It has ‘lost’ Russia — and soon China. And is finding it has lost its standing in the world, too, Alastair Crooke writes.

Something odd is afoot in Europe. Britain recently has been ‘regime washed’, with a strongly pro-EU Finance Minister (Hunt) paving the passage to an election-free premiership by ‘globalist’ Rishi Sunak. Why so? Well, to impose swingeing cuts to public services, to normalise immigration running at 500,000 per annum and to raise taxes to the highest levels since the 1940s. And to open channels about a new relationship deal with Brussels.

A British Tory Party is content to do that? Slash social support and hike taxes into an already existent worldwide recession? On the face of it, it doesn’t seem to make sense. Shades of Greece 2008? Greek austerity for Britain — are we missing something? Is this setting the scene for the Remainer Establishment to point to an economy in crisis (blamed on Brexit failure), and to say there is no alternative (TINA) but a return to the EU in some form, (British ‘cap in hand’, and with head bowed)?

Simply put, forces behind the scenes seem to want the UK to resume its former role as US plenipotentiary inside Brussels — pushing the US primacy agenda (as Europe sinks into self-doubt).

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An Invisible Prison Has Been Built Just for You, by Dr. Joseph Mercola

Posted on December 5, 2022 | 1 comment

The technology for the digital Panopticon is being rolled out. From Dr. Joseph Mercola at theburningplatform.com:

Story at-a-glance

  • An international vaccine passport, digital identity, a social credit system and a central bank digital currency (CBDC) form a digital control system that will lock down the population in perpetuity
  • Facial recognition is an essential part of the control structure, as it’s the “password” to your digital identity
  • By the end of 2022, there will be 1 billion data collecting surveillance cameras in the world, all connected to the internet and artificial intelligence (AI). Cameras and audio recording devices in cell phones, automobiles and smart appliances also collect and share data
  • All these data are then used to give each person an individual score, based on their behavior, expression and interaction with the world. Ultimately, your social credit score, will dictate what you can and cannot do, what you can buy and where you can go
  • Artificial intelligence (AI) is an absolutely crucial component, without which the control system cannot work. The easiest way to push against this system is to starve AI of data by refusing to use technologies that collect and share your personal data

In the video above, Maria Zeee with ZeeeMedia interviews computer scientist Aman Jabbi about the coming international vaccine passport, digital identity, the social credit system being built in the West, and central bank digital currency (CBDC).

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Posted in Banking, Business, Currencies, Economy, Government, Media, Politics, Privacy, Science, Surveillance, Technology, Tyranny

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The Bubble Economy’s Credit-Asset Death Spiral, by Charles Hugh Smith

Posted on December 5, 2022 | Leave a comment

It was a lot more fun on the way up than it will be on the way down. From Charles Hugh Smith at oftwominds.com:

Who believed that central banks’ financial perpetual motion machine was anything more than trickery designed to generate phantom wealth?

Central banks seem to have perfected the ideal financial perpetual motion machine: as credit expands, money pours into risk assets, which shoot higher under the pressure of expanding demand for assets that yield either hefty returns (junk bonds) or hefty capital gains as the soaring assets suck in more capital chasing returns.

As assets soar in value, they serve as collateral for more credit. Higher valuations = more collateral to borrow against. This open spigot of additional credit sluices capital right back into the assets that are climbing in value, pushing them higher–which then creates even more collateral to support even more credit.

This self-reinforcing feedback of expanding credit feeding expanding valuations feeding expanding collateral which then feeds expanding credit has no apparent end. Modest houses once worth $100,000 are now worth $1,000,000, and nobody’s complaining except those priced out of the infinite spiral of prices and credit.

For those priced out of traditional assets, there’s NFTs, meme stocks and short-duration options. The credit-asset bubble-economy casino has a gaming table for everyone’s budget and desire to “make it big” via speculation, since the traditional ladders to middle-class security have all been splintered.

This financial perpetual motion machine distorts traditional incentives. Why bother renting a house bought for speculative gains? Renters are problematic, better to just let it sit empty and rack up huge capital gains.

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In The End The $ Goes To Zero And The US Defaults, by Egon von Greyerz

Posted on December 4, 2022 | Leave a comment

That’s where this train is headed. From Egon von Greyerz at goldswitzerland.com:

With US and Global debt exploding prior to both assets and debt imploding, let us look at the disastrous consequences for the US and the world.

Debt explosion leading to the currency becoming worthless has happened in history for as long as there has been some form of money whether we talk about 3rd century Rome, 18th century France or 20th century Weimar Republic and many many more.

So here we are again, another monetary era and another guaranteed collapse as von Mises said:

“There is no means of avoiding the final collapse
of a boom brought about by credit expansion”

This disastrous borrowed prosperity, with ZERO ability to repay the surging debt,  will lead to one of the three consequences below:

1. THE US$ GOES TO ZERO

2. A US DEFAULT

3. BOTH OF THE ABOVE

The most likely outcome is number 3 in my view. The dollar will go to ZERO and the US will default. The same will happen to most countries.

I outline the consequences for the world at the end of his article.

Many people say that the US can never default. That is of course absolute nonsense.

If a country prints worthless debt that nobody will buy in a currency that no one wants to hold, the country has definitely defaulted whatever spin they put on it.

In the next few years, not just US but all sovereign debt will only have one buyer which is the country that issues the debt. And every time a sovereign state buys its own debt, it has to issue more worthless debt that nobody will touch with a barge pole.

Printing more money to pay for previous sins has never worked and never will.

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The Lost World of the Barbarous Relic, by George F. Smith

Posted on December 4, 2022 | Leave a comment

It’s hard for a country to wage war if its government is on the gold standard. From George F. Smith at lewrockwell.com:

It’s one of the greatest ironies of history that gold detractors refer to the metal as the barbarous relic, when in fact the abandonment of gold has put civilization as we know it at risk of extinction.

The gold coin standard that had served Western economies so brilliantly throughout most of the 19th century hit a brick wall in 1914 and was never able to recover, so the story goes.  Europe turned from prosperity to destruction, or more precisely, to the prosperity of a few and destruction of others, as the Great War got underway.  The gold coin standard had to be ditched for such a prodigious undertaking.

If gold was money, and wars cost money, how was this even possible?

First, people had been in the habit of using money substitutes instead of money itself – paper bank notes instead of the gold coins for which they could be redeemed on demand.  People found it more convenient to carry paper around in their pockets than gold coins.  Over time the paper itself came to be regarded as money, with the gold it represented a clunky inconvenience from the old days.

Second, banks had been in the habit of issuing more bank notes and deposits than they had gold in their vaults and would on occasion arouse the suspicion of the public that the notes were making promises the banks couldn’t keep.  The courts sided with the banks and allowed them to suspend note redemption while otherwise staying in business, thus strengthening the government/bank alliance.  Since the deposits really belonged to the banks once they were deposited — said the courts — bankers could not be accused of embezzlement.  The occasional bank runs that erupted were interpreted as a self-fulfilling prophecy.  If people lining up to pull their money out believed their banks were insolvent, the banks soon would be.  Most people had no idea their banks were loaning out most of their deposits.  They didn’t know fractional reserve banking, a form of counterfeiting, was the norm.

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Winter in Central Europe and for the dollar, by Alasdair Macleod

Posted on December 3, 2022 | Leave a comment

Economic realities may drive the West to the bargaining table with Russia on Ukraine. From Alasdair Macleod at goldmoney.com:

In this article I examine the current state of the fight for hegemonic control between America on the one side, and Russia and China on the other. It is being fought on two fronts. Ukraine, the one in plain sight, is about to endure a winter without power and adequate food potentially leading to a humanitarian crisis.

The other front is financial with America facing a coordinated attack by Russia and China on its dollar hegemony. The Russians are planning a replacement trade settlement currency, which if it succeeds, could unleash a flood of foreign-owned dollars onto the foreign exchanges.

We have no way of knowing how advanced this plan is, but the indications point perhaps to a gold-based digital currency. Moscow establishing a new gold exchange, Asian central banks accumulating additional gold reserves, and Saudi Arabia seeking non-dollar payments for oil sales are all circumstantial evidence.

As well as these plans, there has been an underlying shift away from a long-term everything financial bubble, with the prospect of higher interest rate levels in time. The reasons for foreign ownership of fiat dollars are diminishing, and a successful new Asian trade currency will only add to the dollar’s woes.

Could this pressure compel America de-escalate Ukraine and sanctions against Russia? The argument to do so has become compelling. It is also a way to lower energy prices, giving central banks needed room for interest rate manoeuvre. 

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Banking Elites Are Using Crypto Bloodbath And FTX Fraud To Justify CBDCs, by Tyler Durden

Posted on December 1, 2022 | Leave a comment

Scandal has always been a good excuse for new laws, regulations, and other restrictions on liberty. From Tyler Durden at zerohedge.com:

Central bankers and international corporate financiers have long been pretending to hate the very concept of cryptocurrencies like Bitcoin and Etherium while at the same time investing heavily in blockchain technologies and infrastructure.  The purpose of the ruse is not clear, but more than likely it was an attempt at mass reverse psychology – “We don’t like crypto and digital currencies because we supposedly have no control over them; free market proponents should embrace them blindly because that is how you will beat us.”

In the meantime, while major banking firms are investing billions into various blockchain products, central banks and global institutions like the BIS and IMF have been developing their own systems.  In fact, the BIS notes with enthusiasm that around 90% of central banks around the world are already in the process of adopting CBDCs. 

But why would anyone want to use government and establishment bank controlled cryptocurrencies when they have access to Bitcoin and dozens of other coins that are supposedly independent?  Why trade freedom for more centralization?

First, existing cryptocurrencies are not as free as many people believe, with ample government tracking of blockchain transactions in place for years, the notion of the completely anonymous crypto user is a bit of a fantasy, and the idea that a product such as Bitcoin is going to “bring down” the central banks is becoming less realistic by the year. 

Second, the crypto market is highly unstable in part because it is still very limited.  While crypto use in America is higher than most other countries with around 12% of people using it as an investment (not as a currency), the rest of the world is mostly uninterested with an estimated global footprint of around 4%.  Of that 4% only a handful of people actually own the majority of the market; these people are known as “whales” and they have the ability to tip the market up or down with little effort.  

This happens in many other trade commodities and paper currencies also.  The point is, crypto is not immune to manipulation.   

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Slouching Toward Fascism, by Andrew P. Napolitano

Posted on December 1, 2022 | Leave a comment

The government and its private sector partners can get many of your computerized records without a warrant. From Andrew P. Napolitano at lewrockwell.com:

Fascism is a governmental system in which the means of economic production and delivery of services are privately owned but government-controlled. Throughout history — before even getting to its racism and wars — fascism has led to the glorification of the state and the destruction of personal liberty. It is happening here.

During the past few months, we have learned that the major credit card companies have begun to record transactions at gun shops so as to enable the feds to learn the identity of patrons. These are lawful gun shops selling lawful products to lawful purchasers. The credit card records do not reflect precisely what was purchased — it might have been $2,000 for a gun safe or for gun safety lessons — but they do record the purchase amount and the contact information of the purchaser.

The problem here comes about when the FBI and Bureau of Alcohol, Tobacco, Firearms and Explosives come calling with their so-called National Security Letters in order to find out who is purchasing what. The George W. Bush-championed Patriot Act of 2001 — the most horrific congressional assault on personal liberty since the Alien and Sedition Acts of 1798 criminalized dissent — permits federal agents to bypass the search warrant requirement of the Fourth Amendment when they want private records that are in the hands of a custodian.

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The Bank-Run Phenomenon, by Jacob G. Hornberger

Posted on November 30, 2022 | Leave a comment

A prediction: within the next three years we’ll see substantial bank runs in the U.S. and other countries. From Jacob G. Hornberger at fff.org:

One of the most fascinating phenomena in financial crises is that of bank runs. That’s when panicked depositors rush to their bank to withdraw their money because they’re convinced that the bank is going broke. Everyone tries to withdraw his money before that happens. If the bank does finally go under, the people who failed to withdraw their money are left with a bank that has no money to return to them.

That’s what the FDIC is all about. It insures everyone’s deposits up to a limit of $250,000. The limit used to be $100,000 but U.S. officials, for whatever reason, wanted to make depositors feel even more secure about keeping their money in the bank.

The idea is that people don’t have to worry about losing their money if their bank goes under because the federal government will use taxpayer money to reimburse them. Thus, knowing that their money is “insured” by the government, people have less incentive to rush to the bank to withdraw their money in the event of a potential bank failure.

Of course, one problem with the FDIC insurance is that it enables weaker banks to continue operating, which could make the problem much worse in the future. Without the FDIC, weak banks would go under sooner because people, sensing a problem, would rush to withdraw their money.

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