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Thursday, April 4, 2013
THOUGHT FOR THE DAY!
"We have never interfered in the internal government of a
country and have no intention of doing so, never have had any thought
of that kind." -- Ronald Reagan, 1982
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BRICS Regimes Forge New World Bank, Call for Global Currency
The New American – by Alex NewmanThe governments and dictatorships ruling over the so-called BRICS countries — Brazil, Russia, India, China, and South Africa — agreed to set up a new world bank that analysts say could further marginalize the increasingly unstable U.S. dollar, possibly helping to eventually dethrone it as the global reserve currency. Meeting in Durban, South Africa, last week at their fifth annual summit, the socialist and communist-minded BRICS regimes also announced their support for creating a new world currency and full-fledged global governance.
Other top priorities outlined in the final agreement, dubbed the “eThekwini Declaration,” include promoting global so-called “sustainable development,” which according to the United Nations entails a radical restructuring of human civilization. Also key on the list of BRICS rulers’ demands: further centralization of power in the hands of the UN, more government meddling in the economy, ramped up attacks on national sovereignty, increased power for Third World dictators on the global stage, and much more.
In February, the premier alliance of socialist political parties, known as the Socialist International, gathered in Portugal for its “Council meeting.” Following the recent Congress held in South Africa amid reports that the ruling communist-oriented regime is involved in genocide, the SI meeting adopted a declaration calling for “a new internationalism, proposing the creation of a new global set of agreements, the restructuring of the WTO to recycle trading profits from severe wage differentials toward authentic global income security, and a new IMF and global currency regime built on the multilateral synthetic ‘bancor’ system conceived by Keynes himself.”
As The New American has been reporting for years, the push for a planetary fiat currency is gaining traction as the privately owned Federal Reserve continues to destroy the dollar. Unsurprisingly, the BRICS regimes agreed with the Socialist International and other powerful forces seeking to build a global central bank with a new world currency. In the final BRICS Durban declaration, signed by all five rulers on March 27, the totalitarian-minded alliance openly called for expanding the role of the International Monetary Fund’s proto-global currency known as Special Drawing Rights.
“We support the reform and improvement of the international monetary system, with a broad based international reserve currency system providing stability and certainty,” the five regimes said in the declaration, calling for Third World dictators to have a greater say in the IMF and the emerging global monetary regime. “We welcome the discussion about the role of the [IMF’s] SDR in the existing international monetary system including the composition of SDR’s basket of currencies.”
As the U.S. central bank continues to conjure trillions of debt-based dollars into existence to bail out its cronies and various foreign banks, the fiat currency has become increasingly unstable. Without citing specific institutions or governments, the BRICS regimes questioned the so-called economic “recovery” and warned about policies in some “major economies.” The alliance also warned that central bankers in “advanced economies” — the West, in other words — have flooded the world with fiat currency, which the BRICS chiefs said may negatively affect poorer countries.
So, as The New American has documented extensively in recent years, BRICS rulers finally gave the green light to create their own global “development” bank — a potential rival to the largely discredited and widely reviled IMF and World Bank that the BRICS regimes insist will “complement” existing institutions. “Following the report from our Finance Ministers, we are satisfied that the establishment of a New Development Bank is feasible and viable,” they said in the declaration. “We have agreed to establish the New Development Bank. The initial contribution to the Bank should be substantial and sufficient for the Bank to be effective in financing.”
The move, according to experts, will also pave the way toward further marginalizing the U.S. dollar in international trade; potentially with devastating consequences for the American economy if and when the Federal Reserve’s fiat currency loses its prized position as the global reserve. On the sidelines of the summit, some of the BRICS regimes — most notably Brazil and China, which will trade up to $30 billion per year — also agreed to start swapping tens of billions in each other’s currencies, sidelining the current global reserve currency.
Some analysts tried to downplay the move. Despite having about half of the world’s population, the combined GDP of BRICS economies totals around $14 trillion dollars — about the size of the U.S. economy. However, if the U.S. dollar were to implode and lose its place as the world reserve currency, that could change quickly. Many of the BRICS’ central banks and governments have been buying gold at unprecedented rates, too, fueling speculation that some major developments may be in the pipeline.
Aside from a planetary fiat currency and central bank, the erection of a true world government was at the heart of BRICS regimes’ machinations outlined in their final agreement. “We reiterate our strong commitment to the United Nations (UN) as the foremost multilateral forum entrusted with bringing about hope, peace, order and sustainable development to the world,” the declaration states, adding that “we reaffirmed our commitment to the promotion of international law, multilateralism and the central role of the United Nations.”
Like last year, the alliance also claimed the UN has a “central role” in dealing with terrorism. Of course, non-existent “global warming,” previously “global cooling” but now known as “climate change,” should also be dealt with at the international level through binding treaties, the BRICS regimes said. Indeed, just about every problem — real and imagined — should be dealt with by the UN or at least its transnational regional proxies like the African Union, according to the five socialistic regimes.
“The UN enjoys universal membership and is at the center of global governance,” the controversial declaration continues. “We underscore our commitment to work together in the UN to continue our cooperation and strengthen multilateral approaches in international relations based on the rule of law and anchored in the Charter of the United Nations…. We are fully committed to a coordinated inter-governmental process for the elaboration of the UN development agenda.”
The new world order envisioned by the BRICS regimes, however, will look very different from the current one. “The prevailing global governance architecture is regulated by institutions which were conceived in circumstances when the international landscape in all its aspects was characterized by very different challenges and opportunities,” the five rulers agreed in their declaration, saying BRICS would be progressively developed and strengthened to play a greater role on the world stage.
The new world economic system being sought by the five rulers, governed by the UN and various international institutions, will also undergo drastic changes if the BRICS regimes and their allies get their way. “We acknowledge the important role that State Owned Companies (SOCs) play in the economy and encourage our SOCs to explore ways of cooperation, exchange of information and best practices,” the declaration states. “As the global economy is being reshaped, we are committed to exploring new models and approaches towards more equitable development and inclusive global growth.”
Ironically, the BRICS regimes — some of the most brutal autocrats on earth included — offered lip service to human rights even as their minions were fiendishly trampling all over the unalienable rights of their populations. In the declaration, the rulers “welcomed” the “World Conference on Human Rights” and “agreed to explore cooperation in the field of human rights.” Based on the UN “Human Rights” Council, which includes many of the most ruthless mass-murderers on Earth, the BRICS regimes may be doing OK. In reality, however, the regimes are some of the most barbarian governments in the world.
In China, for example, with UN assistance, the self-styled Communist Party dictatorship terrorizes its population through forced abortions to enforce its “one-child policy.” Savage persecution of Christians and political opposition, harvesting of body organs from dissidents, concentration camps for critics, mass slaughter, failed central planning, and more, have become the norm. Indeed, the Chinese Communist Party state is responsible for the deaths of over 50 million innocents — probably more, not including hundreds of millions of unborn children — making it the single worst mass-murdering entity in human history.
In South Africa, the world’s most prominent expert on genocide, Dr. Gregory Stanton of Genocide Watch, has warned that the ruling African National Congress (ANC)-South African Communist Party (SACP) regime may be linked to the ongoing slaughter of Afrikaners. The end goal, according to Genocide Watch and other reliable sources, is to establish a Marxist dictatorship while eliminating all European-descent South Africans and other potential opposition forces.
Brazilian troops wearing UN insignias, meanwhile, were recently exposed brutally evicting whole towns at gun point as part of a massive, ongoing federal land grab. While the regime tries desperately to maintain a public image as a legitimate government, critics say the ruling Workers’ Party (PT) is bent on establishing total tyranny in Brazil and throughout the broader region. More than a few analysts say Brazil is actually the headquarters of the tyrannical wave engulfing Latin America.
Of course, Russian authorities have a well-deserved reputation as ruthless gangsters who murder and pillage with impunity. The socialist-minded rulers of India, meanwhile, have been accused of involvement in Western-backed eugenics programs, not to mention keeping the country in perpetual poverty through half-baked big-government policies. Indeed, the list of human-rights abuses perpetrated by all BRICS regimes is virtually endless and the barbarity is growing on a daily basis.
Despite their largely friendly relations with Western governments, analysts have referred to the BRICS regimes as the “new communist bloc.” If their vision of global governance under the UN and so-called “human rights” were to become a reality, the world and its peoples would suffer immensely, according to critics. Without strong opposition from the West, however, the BRICS’ autocratic rulers and their allies will continue to gain prominence, and their nightmarish plans for humanity may well come to fruition.
Alex Newman, a foreign correspondent for The New American, is currently based in Europe but has lived in South Africa and Brazil. He can be reached at anewman@thenewamerican.com.
Shame of bank that paid £170million a year in bonuses: Barclays staff 'lost all sense of humility' says report
Billionaire Galleon Group Founder Arrested for Insider Trading
Raj Rajaratnam, the founder of the $7 billion Galleon Group and
portfolio manager for the Galleon Technology Funds was arrested in his
apartment last night and charged with insider trading in the stocks of
several companies, including Hilton Hotels (NYSE: HLT), Advanced Micro Devices (NYSE: AMD), Clearwire (NASDAQ: CLWR) Google (NASDAQ: GOOG) and Akamai Technologies (NASDAQ:AKAM), according to a complaint filed in Manhattan federal court today.
Prosecutors, who have been investigating the case since at least March 2008, allege that Rajaratnam, between January ’06 and July ’07, illegally obtained nonpublic information about several securities and caused Galleon Technology Funds to make improper trades on that information. As a result, Rajaratnam’s fund raked in more than $12.7 million.
A number of other individuals were named in the complaint, including an executive from Intel Corp. (NASDAQ:INTC) ; a director at global management-consulting firm McKinsey & Co. ; and a senior vice president at International Business Machines Corp (NYSE:IBM).
Rajaratnam, a Wharton MBA and a Sri Lankan Tamil by birth, was identified this year by Forbes as the 559th richest person in the world, with a net worth of $1.3 billion.
All the defendants have been arrested and will appear in the Manhattan court today.
CNBC’s David Faber broke the story.
Prosecutors, who have been investigating the case since at least March 2008, allege that Rajaratnam, between January ’06 and July ’07, illegally obtained nonpublic information about several securities and caused Galleon Technology Funds to make improper trades on that information. As a result, Rajaratnam’s fund raked in more than $12.7 million.
A number of other individuals were named in the complaint, including an executive from Intel Corp. (NASDAQ:INTC) ; a director at global management-consulting firm McKinsey & Co. ; and a senior vice president at International Business Machines Corp (NYSE:IBM).
Rajaratnam, a Wharton MBA and a Sri Lankan Tamil by birth, was identified this year by Forbes as the 559th richest person in the world, with a net worth of $1.3 billion.
All the defendants have been arrested and will appear in the Manhattan court today.
CNBC’s David Faber broke the story.
50,000,000 Americans on food stamps in US
A federal judge has approved a Californian city's petition for
bankruptcy, making Stockton the most populous American city ever to
enter bankruptcy protection.
Meanwhile new figures suggest that poverty is on the rise in America, as
the number of people receiving food stamps has soared to a record high
of almost 50 million. The number of people receiving food stamps tends
to correspond to the number of citizens living in poverty, with nearly
one in every six Americans living in poverty, according to the US Census
Bureau.
presstv
Audio: Stockman says Fed is off the deep end
David Stockman, former director of the Office of Management and
Budget, told Tom Keene on “Bloomberg Surveillance” yesterday that the
Federal Reserve is “off the deep end with this money printing, which is
dramatically distorting and deforming the financial markets.”
On Glenn Hubbard, Stockman said, “He is a brilliant guy who told Bush to cut taxes in 2001, cut taxes in 2003, oh, why you are at it, go have two unfinanced wars and don’t worry about the deficit because it doesn’t matter. This is the kind of advice Republicans are getting from the likes of Professor Hubbard, and it is no wonder that we are heading towards national bankruptcy. It has got to stop.”
Audio link here:
http://media.bloomberg.com/bb/
@BLOOMBERG SURVEILLANCE**
Stockman on why he’s so gloomy on the U.S. since every time we’ve gotten into this mess we get out of it with technological progress:
“We didn’t get out of this mess entirely with technological progress. I believe in it. I believe in the free enterprise economy, and I think it does generate productivity, growth, and wealth over time. What I am arguing in the book is that the machinery of the state has failed badly because we piled on way too much. We are out of control fiscally. It is almost a doomsday machine, I can explain. And second, the central bank is off the deep end with this money printing, which is dramatically distorting and deforming the financial markets. You can’t have capitalism without prices in the bond market, in the debt markets, in the money markets. And the fed has essentially destroyed prices. It administers everything.”
On Bill Dudley of the New York Federal Reserve Bank saying that he has confidence we can unwind all the damage we’ve done with a huge balance sheet:
“I don’t buy that because that huge balance sheet has gone nowhere. It has stayed right within the canyons of Wall Street. They have taken their balance sheet from $800 billion, which took 94 years to assemble, and in seven weeks they doubled it. They were printing money like $600 million an hour. It is now tripled, quadruple, up to $3.2 trillion.
And what happened? During that period, from September 2, ’08, excess reserves in the banking system went from nothing – $40 billion – to $1.7 trillion today. So the money is staying in the canyons of Wall Street. It funds the carry trade where you can buy anything that might have a return, a yield, a risk asset.”
On whether the Fed is going to be able to pull money out of Wall Street in an organized manner:
“Not a chance because everybody in Wall Street is basically front running the Fed. What the Fed is buying, the belly of the curve, I am buying. What the Fed is buying, short term, I’m using to fund my position. So no one really owns the treasury bonds today, it is all rented on huge repo spreads. And the minute the yields start heading up a little bit and the bond prices go down, you are going to destroy the arbitrage, the fast money is going to sell, then the slower money is going to have to sell because the fast money is selling. And where is the bid? At the bottom of the market…The Fed never gets up.”
On what the alternative is given the deflationary trap that the U.S. is caught in:
“I don’t think we are caught in a deflationary trap…Well, because you are suffering, my friend, from the recency bias. Yes, prices in Phoenix are way down, but they are still a heck of a lot higher in real terms than they were in 1995. The only thing that happened is a bubble collapsed which had to because it was an artificial bubble fueled by the Greenspan one percent interest rate policy and now the Fed is basically saying that bubbles can’t collapse, we’ll just do it again…”
On whether the Fed is trying to manage the bubble collapse:
“Well, we’re getting in deeper and deeper every time. And the ultimate consequence will be more of a train wreck. Today, at 1560 plus or minute, we are at the same point the S&P was in March 2000, 4,750 days ago. We have had two massive collapses in the interim – the dot.com $5 trillion evaporated, the Lehman meltdown $7 trillion evaporated. So it is serial bubble. They are bicycling the thing up and down. It happens in Wall Street.”
On whether he has patience that the U.S. will grind its way out and get to a better place five or ten years from now:
“No, because the ten year ago forecast said that we would have a surplus in 2012, that revenue would be $3.5 trillion, and it was $2.5 trillion. What they are using today is a rosy scenario forecast for ten years that would make the rosy scenario I did in 1981 in the Reagan administration look like an ugly duckling by comparison. They are saying that we are going to create 17 million jobs in ten years compared to two million in the last ten years, that we are going to go 14 years without a recession. It has never happened in history. Most cycles last 48 months. So when you actually do a forecast based on the last ten years, just say the performance in the last ten years, the growth rate, the business investment, job creation, you have $15 trillion to $20 trillion in deficits in front of us, not $7 trillion. We are not on a glide path going downward.”
On what Paul Krugman, Brad DeLong and others are getting wrong right now:
“They don’t see the elephant in the room called the Fed, and the other central banks buying hand over fist almost all the treasuries that are being issued. The interest rate is not two percent, that is administered, pegged, set by the fed. Ask yourself, if the Fed said we’re going fishing for six months and we are not going to be in the market, we’re gone, do you think the treasury at ten years would stay two percent? Not a chance…It would go way up. There would be a tremendous panic sell off in the bond market because it is entirely propped up. So therefore, they are disingenuous.”
On the Republican Party:
“That is the problem. We have no conservative party left. The Republicans have simply adopted Keynesianism for the prosperous classes by using the Tax Code for this stimulus, that stimulus, to help this part of the economy or that part of the economy.”
On whether he agrees with Glenn Hubbard who suggested that we need to go after entitlements on a long glide path and against the wealthy first:
“No, because we have been kicking the can for decades and decades, according to the advice of Keynesians like Hubbard. Hubbard is a complete Keynesian. He is a brilliant guy who told Bush cut taxes in 2001, cut taxes in 2003, oh, why you are at it, go have two unfinanced wars and don’t worry about the deficit because it doesn’t matter. This is the kind of advice Republicans are getting from the likes of Professor Hubbard, and it is no wonder that we are heading towards national bankruptcy. It has got to stop.”
On what would happen if we went cold turkey:
“It’s too late to go cold turkey. Nobody is going to do it, that is why we are drifting towards the wall. The deficit is much bigger than they are saying. As I indicated, with an honest economic forecast, just like we’ve had for ten years, you are looking at $15 trillion, $20 trillion. You are looking at a national debt $30 trillion.”
On whether he believes in American optimism and that we will grow and find a path through this:
“No, the optimum was in the people of Main Street, the entrepreneurs, the businessmen, the hard workers, the bus drivers, the farmers. I am attacking the elite. I am attacking the people that run Wall Street, the people inside the Beltway in Washington. I am attacking all of the Keynesian professors from both parties who have gotten us into this idea, just print enough money and we are going to get wealthier, just borrow enough money and we’re going to stimulate the economy.”
On Glenn Hubbard, Stockman said, “He is a brilliant guy who told Bush to cut taxes in 2001, cut taxes in 2003, oh, why you are at it, go have two unfinanced wars and don’t worry about the deficit because it doesn’t matter. This is the kind of advice Republicans are getting from the likes of Professor Hubbard, and it is no wonder that we are heading towards national bankruptcy. It has got to stop.”
Audio link here:
http://media.bloomberg.com/bb/
@BLOOMBERG SURVEILLANCE**
Stockman on why he’s so gloomy on the U.S. since every time we’ve gotten into this mess we get out of it with technological progress:
“We didn’t get out of this mess entirely with technological progress. I believe in it. I believe in the free enterprise economy, and I think it does generate productivity, growth, and wealth over time. What I am arguing in the book is that the machinery of the state has failed badly because we piled on way too much. We are out of control fiscally. It is almost a doomsday machine, I can explain. And second, the central bank is off the deep end with this money printing, which is dramatically distorting and deforming the financial markets. You can’t have capitalism without prices in the bond market, in the debt markets, in the money markets. And the fed has essentially destroyed prices. It administers everything.”
On Bill Dudley of the New York Federal Reserve Bank saying that he has confidence we can unwind all the damage we’ve done with a huge balance sheet:
“I don’t buy that because that huge balance sheet has gone nowhere. It has stayed right within the canyons of Wall Street. They have taken their balance sheet from $800 billion, which took 94 years to assemble, and in seven weeks they doubled it. They were printing money like $600 million an hour. It is now tripled, quadruple, up to $3.2 trillion.
And what happened? During that period, from September 2, ’08, excess reserves in the banking system went from nothing – $40 billion – to $1.7 trillion today. So the money is staying in the canyons of Wall Street. It funds the carry trade where you can buy anything that might have a return, a yield, a risk asset.”
On whether the Fed is going to be able to pull money out of Wall Street in an organized manner:
“Not a chance because everybody in Wall Street is basically front running the Fed. What the Fed is buying, the belly of the curve, I am buying. What the Fed is buying, short term, I’m using to fund my position. So no one really owns the treasury bonds today, it is all rented on huge repo spreads. And the minute the yields start heading up a little bit and the bond prices go down, you are going to destroy the arbitrage, the fast money is going to sell, then the slower money is going to have to sell because the fast money is selling. And where is the bid? At the bottom of the market…The Fed never gets up.”
On what the alternative is given the deflationary trap that the U.S. is caught in:
“I don’t think we are caught in a deflationary trap…Well, because you are suffering, my friend, from the recency bias. Yes, prices in Phoenix are way down, but they are still a heck of a lot higher in real terms than they were in 1995. The only thing that happened is a bubble collapsed which had to because it was an artificial bubble fueled by the Greenspan one percent interest rate policy and now the Fed is basically saying that bubbles can’t collapse, we’ll just do it again…”
On whether the Fed is trying to manage the bubble collapse:
“Well, we’re getting in deeper and deeper every time. And the ultimate consequence will be more of a train wreck. Today, at 1560 plus or minute, we are at the same point the S&P was in March 2000, 4,750 days ago. We have had two massive collapses in the interim – the dot.com $5 trillion evaporated, the Lehman meltdown $7 trillion evaporated. So it is serial bubble. They are bicycling the thing up and down. It happens in Wall Street.”
On whether he has patience that the U.S. will grind its way out and get to a better place five or ten years from now:
“No, because the ten year ago forecast said that we would have a surplus in 2012, that revenue would be $3.5 trillion, and it was $2.5 trillion. What they are using today is a rosy scenario forecast for ten years that would make the rosy scenario I did in 1981 in the Reagan administration look like an ugly duckling by comparison. They are saying that we are going to create 17 million jobs in ten years compared to two million in the last ten years, that we are going to go 14 years without a recession. It has never happened in history. Most cycles last 48 months. So when you actually do a forecast based on the last ten years, just say the performance in the last ten years, the growth rate, the business investment, job creation, you have $15 trillion to $20 trillion in deficits in front of us, not $7 trillion. We are not on a glide path going downward.”
On what Paul Krugman, Brad DeLong and others are getting wrong right now:
“They don’t see the elephant in the room called the Fed, and the other central banks buying hand over fist almost all the treasuries that are being issued. The interest rate is not two percent, that is administered, pegged, set by the fed. Ask yourself, if the Fed said we’re going fishing for six months and we are not going to be in the market, we’re gone, do you think the treasury at ten years would stay two percent? Not a chance…It would go way up. There would be a tremendous panic sell off in the bond market because it is entirely propped up. So therefore, they are disingenuous.”
On the Republican Party:
“That is the problem. We have no conservative party left. The Republicans have simply adopted Keynesianism for the prosperous classes by using the Tax Code for this stimulus, that stimulus, to help this part of the economy or that part of the economy.”
On whether he agrees with Glenn Hubbard who suggested that we need to go after entitlements on a long glide path and against the wealthy first:
“No, because we have been kicking the can for decades and decades, according to the advice of Keynesians like Hubbard. Hubbard is a complete Keynesian. He is a brilliant guy who told Bush cut taxes in 2001, cut taxes in 2003, oh, why you are at it, go have two unfinanced wars and don’t worry about the deficit because it doesn’t matter. This is the kind of advice Republicans are getting from the likes of Professor Hubbard, and it is no wonder that we are heading towards national bankruptcy. It has got to stop.”
On what would happen if we went cold turkey:
“It’s too late to go cold turkey. Nobody is going to do it, that is why we are drifting towards the wall. The deficit is much bigger than they are saying. As I indicated, with an honest economic forecast, just like we’ve had for ten years, you are looking at $15 trillion, $20 trillion. You are looking at a national debt $30 trillion.”
On whether he believes in American optimism and that we will grow and find a path through this:
“No, the optimum was in the people of Main Street, the entrepreneurs, the businessmen, the hard workers, the bus drivers, the farmers. I am attacking the elite. I am attacking the people that run Wall Street, the people inside the Beltway in Washington. I am attacking all of the Keynesian professors from both parties who have gotten us into this idea, just print enough money and we are going to get wealthier, just borrow enough money and we’re going to stimulate the economy.”
More Damage: Euro Tumbles as Reserve Currency
Developing World: Euro
Loses Attraction as Reserve Currency ... Countries in the developing
world are drastically reducing their euro holdings as economic
instability in Europe leads them elsewhere to stock their currency
reserves. Euro holdings are at their lowest level in a decade, according
to the International Monetary Fund. When the euro was first launched on Jan. 1, 1999, there were hopes in Europe that it might soon rival the US dollar
as the world's premier reserve currency. And initially, it seemed that
dream was not unrealistic, as countries around the world began filling
their coffers with the European common currency. ... [Now] countries are
beginning to look elsewhere for their reserve currency needs --and have
spent the last year and a half shedding euros. − Der Spiegel
Dominant Social Theme: The euro is eroding.
Free-Market Analysis: In our continued effort to explain why the shift from East to West is not entirely coincidental, we bring you this report from Der Spiegel. It continues, generally, with the dominant social theme (already identified in these pages) of Asian might, and in particular, increasing Chinese dominance via the yuan.
A continued torrent of articles and news from numerous sources charts this shift in gravity. And thus, one can conclude that all of this is necessary and unavoidable. Or maybe not ...
The formation of an alternative IMF supported by the BRICs and bilateral trade agreements to use the yuan seem to be aimed at Anglo hegemony but we think it is more complicated than that.
Those who believe that China's ascension is an inescapable evolution are not dealing with the salient fact that EU leaders are on record long ago as requiring a European crisis to generate a deeper political union.
Statements have also been made regarding how East and West need to be on a level playing field if globalist ambitions are to be satisfied. Here is more from Der Spiegel:
... The latest installment of the regular International Monetary Fund report on currency reserves held by countries around the world [shows] developing economies shed some $45 billion worth of euros in 2012 and have sold close to $90 billion worth of euros since the second quarter of 2011.
The numbers seem to indicate that the ongoing euro crisis, fueled by high sovereign debt loads in several countries belonging to the common currency union, has eroded global confidence in the euro. During the same period, US dollar holdings among developing economies have continued to rise ...
The IMF report indicates that the recent downturn in euro holdings marks a break following more than a decade of growth among developing nations. They now hold just a quarter of their foreign currency reserves in euros, a drop from 31 percent in 2009 and the lowest level in a decade, according to the Financial Times.
The euro's diminishing attraction as a reserve currency is almost certainly a function of the bloc's recent instability. Holdings in US dollars among developing nations likewise dropped in the third quarter of 2011 following the crisis over the debt ceiling and the subsequent Standard & Poor's downgrade of US debt, though the dollar quickly recovered.
We can see from this report that dollar confidence is affected, too, and the article goes on to mention that "of particular concern for the euro zone is its stagnant economy, a situation that isn't likely to improve soon, with several countries struggling due to tight austerity programs."
Note, please, the reference to austerity. This IMF "austerity" regime raises taxes and expands regulation while slashing spending for social programs – a recipe for social instability. Wherever you look when it comes to these crises – from excessive money printing to dysfunctional austerity programs – the reality is that those at the top could not generate more destabilizing solutions if they tried.
Conclusion: The question is, why? See previous articles for our answer.
Dominant Social Theme: The euro is eroding.
Free-Market Analysis: In our continued effort to explain why the shift from East to West is not entirely coincidental, we bring you this report from Der Spiegel. It continues, generally, with the dominant social theme (already identified in these pages) of Asian might, and in particular, increasing Chinese dominance via the yuan.
A continued torrent of articles and news from numerous sources charts this shift in gravity. And thus, one can conclude that all of this is necessary and unavoidable. Or maybe not ...
The formation of an alternative IMF supported by the BRICs and bilateral trade agreements to use the yuan seem to be aimed at Anglo hegemony but we think it is more complicated than that.
Those who believe that China's ascension is an inescapable evolution are not dealing with the salient fact that EU leaders are on record long ago as requiring a European crisis to generate a deeper political union.
Statements have also been made regarding how East and West need to be on a level playing field if globalist ambitions are to be satisfied. Here is more from Der Spiegel:
... The latest installment of the regular International Monetary Fund report on currency reserves held by countries around the world [shows] developing economies shed some $45 billion worth of euros in 2012 and have sold close to $90 billion worth of euros since the second quarter of 2011.
The numbers seem to indicate that the ongoing euro crisis, fueled by high sovereign debt loads in several countries belonging to the common currency union, has eroded global confidence in the euro. During the same period, US dollar holdings among developing economies have continued to rise ...
The IMF report indicates that the recent downturn in euro holdings marks a break following more than a decade of growth among developing nations. They now hold just a quarter of their foreign currency reserves in euros, a drop from 31 percent in 2009 and the lowest level in a decade, according to the Financial Times.
The euro's diminishing attraction as a reserve currency is almost certainly a function of the bloc's recent instability. Holdings in US dollars among developing nations likewise dropped in the third quarter of 2011 following the crisis over the debt ceiling and the subsequent Standard & Poor's downgrade of US debt, though the dollar quickly recovered.
We can see from this report that dollar confidence is affected, too, and the article goes on to mention that "of particular concern for the euro zone is its stagnant economy, a situation that isn't likely to improve soon, with several countries struggling due to tight austerity programs."
Note, please, the reference to austerity. This IMF "austerity" regime raises taxes and expands regulation while slashing spending for social programs – a recipe for social instability. Wherever you look when it comes to these crises – from excessive money printing to dysfunctional austerity programs – the reality is that those at the top could not generate more destabilizing solutions if they tried.
Conclusion: The question is, why? See previous articles for our answer.
The Single Chart That Should Force The Fed Out Of Business
Inflation is the Fed's 100 year legacy.
Behold the chart that, in a more just and sane world, would force Bernanke and Krugman to retire and drive the Fed out of business. Consumer prices are now 30 times higher than when the Fed was created in 1913.
Here's the truth:
ALERT: All Of The Money In Your Bank Account Could Disappear In A Single Moment
Michael Snyder
Activist Post
What would you do if you logged in to your bank account someday and it showed that you had a zero balance and your bank had no record that you ever had any money in your account? What would you do if all of the money in your bank account suddenly disappeared in a single moment? If you had not kept any paper records, which most Americans do not, it would be exceedingly difficult to prove to the bank that you actually had any money in the bank.
If you don't think that something like this could ever happen in the United States, you might want to think again. Cyber attacks against major banks in the United States are becoming more powerful and more sophisticated with each passing month. In fact, major U.S. bank websites have been offline for a total of 249 hours over the past six weeks. And just last month, thousands upon thousands of Chase customers logged into their bank accounts only to discover that their balances had all been reset to zero.
Anyone that would want to cause complete and total economic chaos in the United States could accomplish it very easily by wiping out all of our bank account records. So please do not keep all of your money in a single bank, and from now on please keep a paper copy of all of your bank account statements. At some point it is likely that one of these cyber attacks will cause permanent damage to our banking system, and you want to be protected.
The mainstream media has generally been very quiet about the massive cyber attacks against our major banks, but behind the scenes authorities are truly alarmed. They don't know how to stop these attacks, and they just keep getting more intense and more sophisticated.
Could you imagine how you would feel if you logged in to your bank account and all of your money was gone? That is exactly what happened to some Chase customers last month. The following is from a recent CNET article...
But this was most definitely not an isolated incident. That same article noted that Chase and many of our other large banks have had their websites taken down for extended periods of time lately...
Some are blaming Chinese hackers, others believe that Iran is behind the attacks, and yet others are convinced that it is the work of Islamic terrorists.
It is kind of frightening that they cannot positively identify who is behind these attacks. Whoever it is, they sure do seem to have a tremendous amount of resources and they are very sophisticated.
And in the future, it may not be hackers on the other side of the globe that are attacking our banks. In fact, if someone wanted to "recapitalize the banks", all they would have to do is wipe out all of our bank account records (including all backup records). Suddenly trillions of dollars of "unsecured liabilities" (that is what our bank accounts are) would be wiped out and the banks would suddenly be solvent again. Anyone that could not produce evidence that they actually had money in the banks would be in a lot of trouble. It would be the largest single wealth transfer in the history of the world, and it would throw the U.S. economy into utter chaos. This is a scenario that I am exploring in my new novel which will be coming out later this month.
And
of course another way that your bank account could be wiped out in a
single moment is if the government decides to "legally" steal it. We
just witnessed this happen in Cyprus. In February, the Central Bank of Cyprus swore that such a thing could never possibly happen,
but then one month later it did happen. The politicians will lie to
your face until the very day comes when they steal your money.
Sadly, a very similar thing could easily happen in the United States someday. As I wrote about yesterday, the big banks are making incredibly reckless bets with our money. When those bets go bad, our money could very well be used to cover those bets.
One way this could be accomplished is by using a practice known as "rehypothecation". It sounds complicated, but it really isn't. Basically, the banks use money that clients have entrusted to them to cover their own gambling debts. This is how rehypothecaton is defined by Investopedia...
That is what the people of Cyprus thought too.
As we just saw in Cyprus, when there is a "banking crisis" sometimes government steps in and suddenly changes all of the rules overnight even though the vast majority of the population is against it.
Hopefully you can see that no bank account will ever truly be "safe" ever again.
Your money may be safe today, and your money may be there next week, but someday it could disappear in a single moment.
And the general public is definitely starting to lose faith in the banking system. Google searches for the term "bank run" have been absolutely spiking recently. Just check out this chart which shows that searches for "bank run" are now the highest that they have ever been.
So what should we all do to protect ourselves?
As I mentioned earlier, it is important to not have all of your money in one bank, and from now on you will want to permanently keep paper copies of all of your bank account statements.
Someday you may need those statements in order to prove that you actually had money in the bank.
Our world is becoming increasingly unstable, and at some point financial disaster is going to strike.
By taking prudent precautions now, hopefully you will be able to minimize the damage to your family.
Activist Post
What would you do if you logged in to your bank account someday and it showed that you had a zero balance and your bank had no record that you ever had any money in your account? What would you do if all of the money in your bank account suddenly disappeared in a single moment? If you had not kept any paper records, which most Americans do not, it would be exceedingly difficult to prove to the bank that you actually had any money in the bank.
If you don't think that something like this could ever happen in the United States, you might want to think again. Cyber attacks against major banks in the United States are becoming more powerful and more sophisticated with each passing month. In fact, major U.S. bank websites have been offline for a total of 249 hours over the past six weeks. And just last month, thousands upon thousands of Chase customers logged into their bank accounts only to discover that their balances had all been reset to zero.
Anyone that would want to cause complete and total economic chaos in the United States could accomplish it very easily by wiping out all of our bank account records. So please do not keep all of your money in a single bank, and from now on please keep a paper copy of all of your bank account statements. At some point it is likely that one of these cyber attacks will cause permanent damage to our banking system, and you want to be protected.
The mainstream media has generally been very quiet about the massive cyber attacks against our major banks, but behind the scenes authorities are truly alarmed. They don't know how to stop these attacks, and they just keep getting more intense and more sophisticated.
Could you imagine how you would feel if you logged in to your bank account and all of your money was gone? That is exactly what happened to some Chase customers last month. The following is from a recent CNET article...
JP Morgan Chase denied this evening that it had suffered a hack that many customers claimed had suddenly reduced their checking account balances to zero.
After discovering the apparently empty accounts via the Internet or mobile devices, many Chase banking customers turned to Twitter to express their frustration and show screen shots of zero balances. Other users were greeted with messages that their bank account balances were unavailable.
But this was most definitely not an isolated incident. That same article noted that Chase and many of our other large banks have had their websites taken down for extended periods of time lately...
Customers' suspicions about a possible security breach are natural, with the zero balances appearing less than a week after a massive distributed-denial-of-service attack rendered Chase's Web sites useless for many hours. Customers trying to use the site's tools were instead greeted with a note that the site was "temporarily down."
Hackers have ratcheted up their assaults on financial institutions in recent months, using DDoS attacks to take down Wells Fargo, Bank of America, Chase, Citigroup, HSBC, and others.In fact, as I mentioned above, major U.S. bank websites have been offline for an astounding 249 hours over the last six weeks alone. The attacks just keep getting larger and bank officials are becoming very alarmed about the power of these cyber attacks. The following is from an article that was posted on CNBC this week...
Major U.S. bank websites have been offline a total of 249 hours in the past six weeks, perhaps the clearest indication yet that American companies are prime targets in an unrelenting, global cyber conflict.
The heavier-than-usual outages are the result of a remarkable, sustained attack that began seven months ago and repeatedly knocks banks offline for hours at a time, frustrating consumers and bank security professionals alike.
"Literally, these banks are just in war rooms, sitting at controls trying to stop (the attacks)," said Avivah Litan, a bank security analyst with Gartner Group, a consulting firm. "The frightening thing is (the attackers) are not using as much resources as they have on call. The attacks could be bigger."So who is behind these attacks?
Some are blaming Chinese hackers, others believe that Iran is behind the attacks, and yet others are convinced that it is the work of Islamic terrorists.
It is kind of frightening that they cannot positively identify who is behind these attacks. Whoever it is, they sure do seem to have a tremendous amount of resources and they are very sophisticated.
And in the future, it may not be hackers on the other side of the globe that are attacking our banks. In fact, if someone wanted to "recapitalize the banks", all they would have to do is wipe out all of our bank account records (including all backup records). Suddenly trillions of dollars of "unsecured liabilities" (that is what our bank accounts are) would be wiped out and the banks would suddenly be solvent again. Anyone that could not produce evidence that they actually had money in the banks would be in a lot of trouble. It would be the largest single wealth transfer in the history of the world, and it would throw the U.S. economy into utter chaos. This is a scenario that I am exploring in my new novel which will be coming out later this month.
And
of course another way that your bank account could be wiped out in a
single moment is if the government decides to "legally" steal it. We
just witnessed this happen in Cyprus. In February, the Central Bank of Cyprus swore that such a thing could never possibly happen,
but then one month later it did happen. The politicians will lie to
your face until the very day comes when they steal your money.Sadly, a very similar thing could easily happen in the United States someday. As I wrote about yesterday, the big banks are making incredibly reckless bets with our money. When those bets go bad, our money could very well be used to cover those bets.
One way this could be accomplished is by using a practice known as "rehypothecation". It sounds complicated, but it really isn't. Basically, the banks use money that clients have entrusted to them to cover their own gambling debts. This is how rehypothecaton is defined by Investopedia...
The practice by banks and brokers of using, for their own purposes, assets that have been posted as collateral by their clients.An excellent article by Jeff Nielson detailed how this could result in the big banks grabbing our money when their trillions of dollars of reckless bets go bad...
1) Our banking regulators knowingly allow financial institutions to engage in recklessly misleading (if not outright fraudulent) contracts with their clients, through the use of complex “small print” in their account contracts with clients.
2) The three largest U.S. “banks” by deposit (JP Morgan, Bank of America, Citigroup) have made bets in their own rigged casino, which total well in excess of $100 trillion, an amount which completely dwarfs their total, combined deposits (and assets).
3) A large portion of those bets occur in the $60+ trillion credit default swap market. Pay-outs in these markets can (and do) exceed 300 times the amount of the original bet. It is bets in this market which “blew up” AIG, requiring more than $150 billion in immediate government aid.
4) Following the Crash of ’08; these same banks mooched a package of hand-outs, tax-breaks and “guarantees” (i.e. future hand-outs) from the Bush regime in excess of $15 trillion, the last time their gambling debts went bad on them – and all of these banks have been allowed to dramatically increase the total amount of their gambling since then.
5) It would take only a minor change in the gambling contracts in which these bankers engage to allow their creditors to seize funds out of ordinary bank accounts.
6) The existing language for the bank accounts of these U.S. banks is possibly already so vague (and prejudicial to clients) that it would allow these banks to reinterpret the terms of these bank accounts – and allow rehypothecation to be used to rob the holders of ordinary bank accounts, people who themselves make no “bets” in markets whatsoever. Alternately, customers could be blitzed with an offer for “new and improved” bank accounts, where terms allowing rehypothecation are slipped into the contract, with the banks knowing that the “regulators” will do nothing to warn account-holders of the gigantic risk they are taking.But we are all covered by deposit insurance, right?
That is what the people of Cyprus thought too.
As we just saw in Cyprus, when there is a "banking crisis" sometimes government steps in and suddenly changes all of the rules overnight even though the vast majority of the population is against it.
Hopefully you can see that no bank account will ever truly be "safe" ever again.
Your money may be safe today, and your money may be there next week, but someday it could disappear in a single moment.
And the general public is definitely starting to lose faith in the banking system. Google searches for the term "bank run" have been absolutely spiking recently. Just check out this chart which shows that searches for "bank run" are now the highest that they have ever been.
So what should we all do to protect ourselves?
As I mentioned earlier, it is important to not have all of your money in one bank, and from now on you will want to permanently keep paper copies of all of your bank account statements.
Someday you may need those statements in order to prove that you actually had money in the bank.
Our world is becoming increasingly unstable, and at some point financial disaster is going to strike.
By taking prudent precautions now, hopefully you will be able to minimize the damage to your family.
Wall Street Hogs Still Running Wild
Wall Street is a beast.
And proud of it! In fact, a pair of animals are the stock market's longtime symbols: One is a snorting bull, representing surging stock prices; the other is a bear, representing a down market devouring stock value.
But I recently received a letter from a creative fellow named Charles saying that we need a third animal to depict the true nature of the Wall Street beast: a hog. Not just a little piggy, writes Charles — but a HOG, a really big one.
Yes! And we could name it "Jamie." Jamie Dimon — I mean the multimillionaire, silver-haired, golden-tongued CEO of JPMorgan Chase, America's biggest bank.
For years, Dimon has wallowed in the warm glow of America's financial, political and media limelight, hailed as a paragon of sound management and banker ethics. He's been publicly lauded by President Obama, celebrated by The New York Times and courted by leaders of both parties.
But, suddenly last summer, a big "oink" erupted from Chase, and Jamie's inner hoggishness was revealed. It started when one of Chase's investment arms went awry and lost $2 billion. At first, Dimon haughtily dismissed this as "a tempest in a teapot." But the loss of investors' money soon grew to a staggering $6 billion dollars. Criminal probes began, investors squirmed, media coverage grew testy, and then came the revelation that took all the glitter off of Dimon.
On March 14, a U.S. Senate committee issued a scathing 300-page report documenting that the loss was not a mere "trade blunder" by Chase underlings, but the product of a systemic corporate culture of recklessness, greed and deception. An internal email from Jamie himself, with the words "I approve," traced the stench all the way to the top. Not only did Dimon know what was going on, he enabled it.
JPMorgan's mess stems from the same dangerous combo that rocked America's financial system in 2007 and crashed our economy: ethical rot in executive suites, sycophantic politicians and reporters and willfully blind regulators. Meanwhile, Jamie is still Boss Hog at the giant bank and still drawing millions of dollars in annual pay and perks.
Also, only one week after the Senate report
came out, he was even given a media award for best 2012 performance by a
CEO facing a corporate crisis. E-I-E-I-O!
For a better performance on containing banker narcissism, our
lawmakers might look to Europe. I know that it's considered un-American
to like anything those "namby-pamby" European nations do, but still:
Let's hear it for the Swiss!
In a March 3 referendum, the mild-mannered, pacifist-minded Swiss people rose up and hammered their corporate executives who've been grabbing rip-off pay packages, despite having made massive financial messes.
Two-thirds of voters emphatically shouted "yes" to a maverick ballot proposal requiring that shareholders be given the binding say on executive pay. Violators of the new rules would sacrifice up to six years of salary and face three years in jail. That's hardly namby-pamby.
Indeed, America's lawmakers and regulators are the ones who've been squishy-soft on banksterism. Jamie is not the only one being coddled — none of the Wall Street titans whose greed wrecked our economy have even been pursued by the law, much less put in jail.
It's no surprise, then, that those bankers have gone right back to scamming — and gleefully enriching themselves. Hardly a week goes by without another revelation of big-bank fraud, yet the banks simply pay an inconsequential fine and the culprits skate free.
Forget about too-big-to-fail, banks have become "too big to jail." Our nation's top prosecutor, Attorney General Eric Holder, recently conceded that finagling financial giants are being given a pass: "It does become difficult for us to prosecute them," he told a Senate subcommittee, "when we are hit with indications that if we do prosecute — if we do bring a criminal charge — it will have a negative impact on the national economy."
Meanwhile, just four giants — Bank of America, Goldman Sachs, Morgan Stanley and Wells Fargo — put nearly $20 million into last year's elections, mostly to back Republicans promising to weaken the few feeble restraints we now have on banker thievery. With such Keystone Kops overseeing them, why would any Wall Streeter even think of going straight? Nothing will change until officials gut it up, go after lawless bankers and bust up the banks that are too big to exist.
To find out more about Jim Hightower, and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate webpage at www.creators.com.
COPYRIGHT 2013 CREATORS.COM
And proud of it! In fact, a pair of animals are the stock market's longtime symbols: One is a snorting bull, representing surging stock prices; the other is a bear, representing a down market devouring stock value.
But I recently received a letter from a creative fellow named Charles saying that we need a third animal to depict the true nature of the Wall Street beast: a hog. Not just a little piggy, writes Charles — but a HOG, a really big one.
Yes! And we could name it "Jamie." Jamie Dimon — I mean the multimillionaire, silver-haired, golden-tongued CEO of JPMorgan Chase, America's biggest bank.
For years, Dimon has wallowed in the warm glow of America's financial, political and media limelight, hailed as a paragon of sound management and banker ethics. He's been publicly lauded by President Obama, celebrated by The New York Times and courted by leaders of both parties.
But, suddenly last summer, a big "oink" erupted from Chase, and Jamie's inner hoggishness was revealed. It started when one of Chase's investment arms went awry and lost $2 billion. At first, Dimon haughtily dismissed this as "a tempest in a teapot." But the loss of investors' money soon grew to a staggering $6 billion dollars. Criminal probes began, investors squirmed, media coverage grew testy, and then came the revelation that took all the glitter off of Dimon.
On March 14, a U.S. Senate committee issued a scathing 300-page report documenting that the loss was not a mere "trade blunder" by Chase underlings, but the product of a systemic corporate culture of recklessness, greed and deception. An internal email from Jamie himself, with the words "I approve," traced the stench all the way to the top. Not only did Dimon know what was going on, he enabled it.
JPMorgan's mess stems from the same dangerous combo that rocked America's financial system in 2007 and crashed our economy: ethical rot in executive suites, sycophantic politicians and reporters and willfully blind regulators. Meanwhile, Jamie is still Boss Hog at the giant bank and still drawing millions of dollars in annual pay and perks.
In a March 3 referendum, the mild-mannered, pacifist-minded Swiss people rose up and hammered their corporate executives who've been grabbing rip-off pay packages, despite having made massive financial messes.
Two-thirds of voters emphatically shouted "yes" to a maverick ballot proposal requiring that shareholders be given the binding say on executive pay. Violators of the new rules would sacrifice up to six years of salary and face three years in jail. That's hardly namby-pamby.
Indeed, America's lawmakers and regulators are the ones who've been squishy-soft on banksterism. Jamie is not the only one being coddled — none of the Wall Street titans whose greed wrecked our economy have even been pursued by the law, much less put in jail.
It's no surprise, then, that those bankers have gone right back to scamming — and gleefully enriching themselves. Hardly a week goes by without another revelation of big-bank fraud, yet the banks simply pay an inconsequential fine and the culprits skate free.
Forget about too-big-to-fail, banks have become "too big to jail." Our nation's top prosecutor, Attorney General Eric Holder, recently conceded that finagling financial giants are being given a pass: "It does become difficult for us to prosecute them," he told a Senate subcommittee, "when we are hit with indications that if we do prosecute — if we do bring a criminal charge — it will have a negative impact on the national economy."
Meanwhile, just four giants — Bank of America, Goldman Sachs, Morgan Stanley and Wells Fargo — put nearly $20 million into last year's elections, mostly to back Republicans promising to weaken the few feeble restraints we now have on banker thievery. With such Keystone Kops overseeing them, why would any Wall Streeter even think of going straight? Nothing will change until officials gut it up, go after lawless bankers and bust up the banks that are too big to exist.
To find out more about Jim Hightower, and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate webpage at www.creators.com.
COPYRIGHT 2013 CREATORS.COM
As mad as hell! Fury as judges nix ‘no-fault’ Wall Street deals
They’re like stealth bombers.
A growing number of federal judges have had about as much as they can take with Wall Street firms paying hefty fines to settle probes into serious wrongdoing — without admitting any guilt or any executive taking the fall.
So at least four judges, in New York and Washington, are not going to take it any more.
The mostly quiet attack by these judges on a long-standing business practice could mushroom into one of the most serious threats to bad corporate culture in many years.
The pushback against the “neither admit nor deny guilt” settlements comes as many Americans grow frustrated that few executives have been held personally accountable for toxic mortgages, betting against the client and insider-trading practices.
The latest example of judicial frustration came this week when
Manhattan federal judge Sidney Stein raised concerns about a $590
million settlement agreed to by Citigroup to settle charges it deceived
shareholders about its toxic mortgage holdings.
The shareholder suit named former CEO Chuck Prince and senior adviser Robert Rubin — but only the bank and not the executives paid out to settle the case.
“Does the absence of any payments from the individual defendants render the settlement unfair to class members who still hold the Citigroup stock they purchased during the class period?” the judge asked in a memo announcing a hearing to discuss the terms of the controversial deal.
“In the cases where there’s really egregious behavior, I think to let these people off scot-free is just wrong,” said Lynn Turner, with the $37 billion Colorado Public Employees’ Retirement Association.
Just last month, Manhattan federal judge Victor Marrero questioned a record $602 million settlement the Securities and Exchange Commission hashed out with hedge-fund giant SAC Capital over allegations of insider trading.
In it, SAC neither admitted nor denied guilt.
“It seems counterintuitive and incongruous to settle a case for $600 million that might cost $1 million to litigate,” Marrero said. “How believable is it to the public, the claim that they did nothing wrong?”
In December, Washington, DC, Judge Richard Leon refused to approve a $10 million deal between the SEC and IBM over bribery allegations.
At the time, Leon said he was among “a growing number of district judges who are increasingly concerned” about weak settlement policies.
The first judge to kick up a storm was Manhattan federal Judge Jed Rakoff in 2011. He rejected the SEC’s $285 million pact with Citigroup over the sale of soured mortgage-backed securities.
Rakoff said the deal, which allowed Citi to “neither admit nor deny wrongdoing,” came at “the expense, not only of the shareholders, but also of the truth.”
The SEC has appealed and has defended the practice as necessary to free up scarce resources. A decision, which could push companies to admit guilt or nudge them to trial, is expected in the next several months.
A growing number of federal judges have had about as much as they can take with Wall Street firms paying hefty fines to settle probes into serious wrongdoing — without admitting any guilt or any executive taking the fall.
So at least four judges, in New York and Washington, are not going to take it any more.
The mostly quiet attack by these judges on a long-standing business practice could mushroom into one of the most serious threats to bad corporate culture in many years.
The pushback against the “neither admit nor deny guilt” settlements comes as many Americans grow frustrated that few executives have been held personally accountable for toxic mortgages, betting against the client and insider-trading practices.
The shareholder suit named former CEO Chuck Prince and senior adviser Robert Rubin — but only the bank and not the executives paid out to settle the case.
“Does the absence of any payments from the individual defendants render the settlement unfair to class members who still hold the Citigroup stock they purchased during the class period?” the judge asked in a memo announcing a hearing to discuss the terms of the controversial deal.
“In the cases where there’s really egregious behavior, I think to let these people off scot-free is just wrong,” said Lynn Turner, with the $37 billion Colorado Public Employees’ Retirement Association.
Just last month, Manhattan federal judge Victor Marrero questioned a record $602 million settlement the Securities and Exchange Commission hashed out with hedge-fund giant SAC Capital over allegations of insider trading.
In it, SAC neither admitted nor denied guilt.
“It seems counterintuitive and incongruous to settle a case for $600 million that might cost $1 million to litigate,” Marrero said. “How believable is it to the public, the claim that they did nothing wrong?”
In December, Washington, DC, Judge Richard Leon refused to approve a $10 million deal between the SEC and IBM over bribery allegations.
At the time, Leon said he was among “a growing number of district judges who are increasingly concerned” about weak settlement policies.
The first judge to kick up a storm was Manhattan federal Judge Jed Rakoff in 2011. He rejected the SEC’s $285 million pact with Citigroup over the sale of soured mortgage-backed securities.
Rakoff said the deal, which allowed Citi to “neither admit nor deny wrongdoing,” came at “the expense, not only of the shareholders, but also of the truth.”
The SEC has appealed and has defended the practice as necessary to free up scarce resources. A decision, which could push companies to admit guilt or nudge them to trial, is expected in the next several months.
Fannie Mae Posts Record $17B Profit, Still Owes Taxpayers $80 Billion
Fannie Mae Posts Record $17B Profit, Still Owes Taxpayers $80 Billion
Uncle Sam's morphine drip pays off for Fannie.
Fed mouthpiece, WSJ reporter Jon Hilsenrath on Fannie's massive debt to taxpayers despite record profits. This is the first profit in 6 years for Fannie Mae, which lost $16.5 billion last year alone, and who along with Freddie has borrowed $187 billion from taxpayers since 2008.
So far, Fannie has paid back $36 billion of the $116 billion on its solo tab.
Housing monopoly leads to massive profits.
---
Numbers are here...
Biggest Quarter in Fannie's History
(Reuters) - Mortgage finance company Fannie Mae posted a record $7.6 billion in quarterly earnings, but it refrained from booking a tax-related gain that would have allowed the bailed-out company to repay as much as $59 billion to the government.
The U.S.-controlled company said it expects to be profitable in the future. Profits would allow it to record gains on billions of dollars worth of assets it had written down. That would help Fannie Mae repay roughly $117 billion it owes the U.S. Treasury for a taxpayer rescue during the financial crisis.
But Fannie Mae executives told reporters on a conference call that the company concluded it could not be sure enough of the timing of future profits to record that gain. If Fannie Mae had taken the gain, it would have reduced the company's eligibility to borrow cheaply from the Treasury. This could have forced the company to pay more to borrow in the market.
---
This is the better clip:
Will Fannie earnings affect housing reform?
The prospect of steady profits at Fannie Mae and Freddie Mac is complicating legislative efforts to shrink the federal role in securitizing home loans.
Further reading:
Fannie Mae record profit: How long until it pays back bailout?
Fannie Mae and fuzzy math
Obama pushes banks to make home loans to people with weaker credit - Wash Post
The Obama administration is engaged in a broad push to make more home loans available to people with weaker credit, an effort that officials say will help power the economic recovery but that skeptics say could open the door to the risky lending that caused the housing crash in the first place.
The Dutch Tulip Bubble of 1637
As much as the tulip is associated with Holland, it is not native there. Rather it was introduced in 1593 by a botanist named Carolus Clusius, who brought it from Constantinople. He planted a small garden, intending to research the plant for medicinal purposes. Had Clusius's neighbors been morally upright, the tulip might still be a rare exotic in the gardening world. Instead they broke into his garden and stole some of his bulbs in order to make some quick money, and in the process started the Dutch bulb trade.
Over the next several decades tulips became a fad among the rich of Holland, and prices began to mount. Soon even ordinary bulbs were selling for extraordinary prices, and the actually rare bulbs were astronomical. A single Viceroy tulip bulb would sell for 2500 florins a value roughly equivalent to $1,250 in current American dollars, while a rarer Semper Augustus bulb could easily go for twice that. One particularly amusing exchange showed the goods traded for one bulb – the lengthy list includes among other things: a bed, a complete suit of clothes, and a thousand pounds of cheese. At the height of the mania, in what seems a complete loss of sanity, the bulbs were deemed too valuable to risk planting by their (formerly) wealthy purchasers, and it became popular to display the plain ungrown bulbs. In at least one instance the plan for safety backfired when a visiting sailor mistook a tulip bulb for an onion, and proceeded to eat it for breakfast.
The height of the bubble was reached in the winter of 1636-37. Tulip traders were making (and losing) fortunes regularly. A good trader could earn up to 60,000 florins in a month-- approximately $61,710 adjusted to current U.S. dollars. With profits like those to be had, nothing local governments could do stopped the frenzy of trading. Then one day in Haarlem a buyer failed to show up and pay for his bulb purchase. The ensuing panic spread across Holland, and within days tulip bulbs were worth only a hundredth of their former prices. The tulip bubble had burst.
Looking back through time it’s easy to laugh at the foolish Dutch, paying such prices for simple tulip bulbs, but an economic bubble was nothing new even then. We’re still doing the same sorts of things today. Human beings have always been prone to want things that are difficult to get, especially if everyone else seems to be doing it. Nutty behavior becomes commonplace when enough people are following along. It’s only afterwards that we stand back and shake our heads and wonder what came over us.
Kim Jong Un is not crazy
The U.S. Navy is moving a
sea-based radar platform, like the one seen in this 2006 file photo,
closer to the North Korean coast in order to monitor that country's
military moves, including possible new missile launches, a Defense
Department official said Monday, April 1.
HIDE CAPTION
U.S., South Korea make military moves
Editor's note: Stephan
Haggard is professor at the School of International Relations and
Pacific Studies at the University of California, San Diego. He is the
co-author of "Famine in North Korea" (2008) and "Witness to
Transformation: Refugee Insights into North Korea" (2011) and co-editor
with Marcus Noland of a blog about North Korea.
(CNN) -- March brought us a series of what pundits like to call "provocations" by North Korea. On closer inspection, Pyongyang has opted for rhetoric over actual military actions.
While Kim Jong Un's
pursuit of nuclear and missile capability remains worrisome, escalating
signals of resolve could suggest nervousness as much as strength.
So, is the regime in trouble?
Stephan Haggard
The first round of
saber-rattling came as the U.N. Security Council deliberated on a new
sanctions resolution after North Korea's satellite launch in December
and its third nuclear test in February. The Supreme Command of the
Korean People's Army, the Ministry of Foreign Affairs and a party organ
dealing with North-South relations began putting out public statements
in an effort to chip away at the institutions of the armistice, such as
military hot lines and the stationing of a North Korean military mission
in Panmunjom.
North Korea ultimately
"withdrew" from the armistice, but it had done so before and it is not
clear what its recent statements actually mean. The armistice is not a
peace treaty, but merely a cease fire. The armistice is stable not
because of verbal commitments but because of the deterrent capability of
both sides.
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Is anything really different as a result of this "re-withdrawal"? It doesn't seem like it.
Equally unfortunate was
North Korea's decision to renege on a number of North-South agreements,
such as a North-South agreement on the denuclearization of the
peninsula. But Pyongyang's pursuit of nuclear weapons had made this and a
number of other agreements moot in any case.
North Korea's bluster had
little if any effect on the U.N. debate. If anything, its threats may
have been counterproductive. Although the resolution was portrayed as
the result of a U.S.-South Korean cabal, China also signed on and the
resolution was passed unanimously.
Mack: Kim Jong Un 'an immature brat'
North Korea's advantage explained
South Korea returns rhetorical fire
North Korea military 'ready to fight'
The measure opens the
door for tighter financial sanctions, and there is some preliminary
evidence that Beijing may be cooperating in tightening economic
exchanges with the country.
The next round of
statements came as North Korea and the United States and South Korea
entered an annual military training cycle. These periods are always
fraught with tension, as Pyongyang denounces the routine exercises as
provocative.
As the country
effectively mobilizes, the North Korean press is filled with pictures of
Kim Jong Un directing the troops in exercises, some of which were
reportedly manipulated with Photoshop to increase their effect.
As a result of these exercises, there is some background of what might be called "ritualized escalation" at work.
But North Korea did
possibly make one major misstep in arguing that it might undertake a
pre-emptive nuclear strike. Announcing an intention to pre-empt is
dangerous because even small tactical movements can be misinterpreted.
Needless to say, such statements have to be taken seriously, and, if
anything, the United States and South Korea may have over-reacted by
such a public display of force.
In particular, the U.S.
announced a major new ballistic missile defense initiative, training
runs by B52 and B2 bombers, and an updated U.S.-ROK Combined
Counter-Provocation Plan. In the last few days, the U.S. was again quite
public about its deployment of jet fighters to the peninsula as well.
There is a larger game
at work here that probably centers on the difficult-to-read domestic
politics of North Korea. It is by no means assured that Kim Jong Un has
fully consolidated his authority. By ramping up rhetoric, but exercising
restraint with respect to actual military actions, the regime can count
on the fact that the United States and South Korea are not going to
take the first step either.
The result is that North
Korea's exercises and threats of retaliation have been successful in
deterring attack, even though none was coming. The regime can claim some
sort of victory in staring down American threats in its two big
political meetings this week, the timing of which suggest that some of
the rhetoric has been driven by domestic politics.
North Korea's nuclear
and missile programs constitute problems that the five parties in the
region—China, Japan, South Korea, Russia and the United States—need to
address through concerted action. But overheated rhetoric, however
disconcerting, is not the same as an intention to attack. Coolly
maintaining our deterrent and not over-reacting to hyperbole is the
proper course of action. With luck, the leadership will pivot away from
nuclear posturing toward economic reform, the main thing that the people
of North Korea really need.
Editor's note: Due
to an editing error, an earlier version of this essay said North Korea
instead of the U.S. announced new military initiatives.
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Obama administration pushes banks to make home loans to people with weaker credit
Washington Post – by Zachary A. GoldfarbOfficials are also encouraging lenders to use more subjective judgment in determining whether to offer a loan and are seeking to make it easier for people who owe more than their properties are worth to refinance at today’s low interest rates, among other steps.
Obama pledged in his State of the Union address to do more to make sure more Americans can enjoy the benefits of the housing recovery, but critics say encouraging banks to lend as broadly as the administration hopes will sow the seeds of another housing disaster and endanger taxpayer dollars.
“If that were to come to pass, that would open the floodgates to highly excessive risk and would send us right back on the same path we were just trying to recover from,” said Ed Pinto, a resident fellow at the American Enterprise Institute and former top executive at mortgage giant Fannie Mae.
Administration officials say they are looking only to allay unnecessary hesitation among banks and encourage safe lending to borrowers who have the financial wherewithal to pay.
“There’s always a tension that you have to take seriously between providing clarity and rules of the road and not giving any opportunity to restart the kind of irresponsible lending that we saw in the mid-2000s,” said a senior administration official who was not authorized to speak on the record.
The administration’s efforts come in the midst of a housing market that has been surging for the past year but that has been delivering most of the benefits to established homeowners with high credit scores or to investors who have been behind a significant number of new purchases.
“If you were going to tell people in low-income and moderate-income communities and communities of color there was a housing recovery, they would look at you as if you had two heads,” said John Taylor, president of the National Community Reinvestment Coalition, a nonprofit housing organization. “It is very difficult for people of low and moderate incomes to refinance or buy homes.”
“I think the ability of newly formed households, which are more likely to have lower incomes or weaker credit scores, to access the mortgage market will make a big difference in the shape of the recovery,” Duke said last month. “Economic improvement will cause household formation to increase, but if credit is hard to get, these will be rental rather than owner-occupied households.”
Deciding which borrowers get loans might seem like something that should be left up to the private market. But since the financial crisis in 2008, the government has shaped most of the housing market, insuring between 80 percent and 90 percent of all new loans, according to the industry publication Inside Mortgage Finance. It has done so primarily through the Federal Housing Administration, which is part of the executive branch, and taxpayer-backed mortgage giants Fannie Mae and Freddie Mac, run by an independent regulator.
The FHA historically has been dedicated to making homeownership affordable for people of moderate means. Under FHA terms, a borrower can get a home loan with a credit score as low as 500 or a down payment as small as 3.5 percent. If borrowers with FHA loans default on their payments, taxpayers are on the line — a guarantee that should provide confidence to banks to lend.
But banks are largely rejecting the lower end of the scale, and the average credit score on FHA loans has stood at about 700. After years of intensifying investigations into wrongdoing in mortgage lending, banks are concerned that they will be held responsible if borrowers cannot pay. Under some circumstances, the FHA can retract its insurance or take other legal action to penalize banks when loans default.
“The financial risk of just one mistake has just become so high that lenders are playing it very, very safe, and many qualified borrowers are paying the price,” said David Stevens, Obama’s former FHA commissioner and now the chief executive of the Mortgage Bankers Association.
The FHA, in coordination with the White House, is working to develop new policies to make clear to banks that they will not lose their guarantees or face other legal action if loans that conform to the program’s standards later default. Officials hope the FHA’s actions will then spur Fannie and Freddie to do the same.
The effort requires sign-on by the Justice Department and the inspector general of Department of Housing and Urban Development, agencies that investigate wrongdoing in mortgage lending.
“We need to align as much as possible with IG and the DOJ moving forward,” FHA Commissioner Carol Galante said. The HUD inspector general and Justice Department declined to comment.
The effort to provide more certainty to banks is just one of several policies the administration is undertaking. The FHA is also urging lenders to take what officials call “compensating factors” into account and use more subjective judgment when deciding whether to make a loan — such as looking at a borrower’s overall savings.
“My view is that there are lots of creditworthy borrowers that are below 720 or 700 — all the way down the credit-score spectrum,” Galante said. “It’s important you look at the totality of that borrower’s ability to pay.”
Romney Called Tesla a “Loser” In the 2012 Presidential Debates. About That…
Six months after Mitt Romney called electric auto company Tesla a "loser," Tesla is posting profits, expects to pay back the Dept. of Energy five years ahead of schedule, and won Motor Trend's Car of the Year.
Six months after Mitt Romney called electric auto company Tesla Motors a “loser” investment for the Obama administration, Tesla has announced it will post its first ever profit in the Q1 2013 and expects to pay back its Department of Energy loan 5 years ahead of schedule, by the end of 2017. Meanwhile, Tesla’s Model S was unanimously voted Motor Trend’s Car of the Year in November 2012.
.
Wasn’t there some other contest that happened in November of 2012? I feel like there was.
.
If we’re going to talk about picking
losers, though, let’s talk about picking Tesla as your “gotcha” zinger
during the presidential debates. If you’re going to call someone a
“loser,” maybe don’t choose Tesla, which has nearly every demographic in
the entire United States rooting for it. Let’s review:
- Environmentalists: Don’t like 10,000 barrels of crude oil running down the streets of your cul-de-sac? An electric car may be for you.
- Car fans: Sadly, the rumor that Tesla would be racing in Nascar was just an April Fool’s joke, but its Roadster model has already won a four-car drag race against a Lotus Exige, a Porsche GT3, and a Porsche Carrera GT (video below). Surely the Nascar Dad demo can get behind that.
- Geeks: Tesla’s Chairman and CEO is Elon Musk, who is also the founder of PayPal and the CEO and chief designer of the Space Exploration Technologies Corporation (SpaceX). In case that’s not enough geek cred for you, Musk is even fluent in the Geek dialect, telling the press after Mitt Romney’s “loser” comment and subsequent loss in the presidential election, “In retrospect, he was right about the object of that statement, but not the subject.” (Translation for those of you who do not speak awkwardese: “Who’s the loser now, motherfucker?”)
- People who like awesome things: See, e.g., photo above, video of drag race below.
Constitutional Silver Dimes Will Disappear First
What is the best form of silver to invest in and the answer is clearly Constitutional Silver.
The most divisible, most recognizable and for the moment lowest premiums.
USDollar: Ring-Fenced & Checkmate
An
unstoppable sequence of events has been put into motion finally. The
pressure has been building for months. Some themes are plainly evident,
except to those who wear rose colored glasses in the US Dome of
Perception. The USTreasury Bond will be brought home to the US and
British banks, where it will choke its bankers, then be devalued for
survival reasons, after a painful isolation. The Chinese and Russians
will conspire to finance the Eurasian Trade Zone corridor foundation
with USTBonds, held in reserve, put to usage. The British will play a
very unusual role, selling out the United States in order to be squires
to the Eastern Duo. The process has begun; it cannot be stopped. The
events are already being grossly misinterpreted and minimized in the US
press, where devoted lapdogs, artistic swindlers, and creative writers
prevail. The Paradigm Shift eastward is showing its next face, with a
truly massive trade zone for cooperation and reduced cost overhead as
the giant foundation. The Untied States for all of its past hegemony and
devious manipulations and vicious attacks, will be excluded. The
British will assist in the exclusion in order to avoid the Third World
themselves. The following blueprint is the result of years of planning,
with steady information and hints and confirmations by at least two Hat
Trick Letter sources. The sunset of the USDollar has a blueprint. As a
personal embroidery, let me state that this article is the most
important the Jackass has ever written. Let it be taken seriously for
its grave somber message.
EURASIAN TRADE ZONE
The
crowning blow is the financial centerpiece to the trade zone, which
draws upon the critical mass bulk of the BRICS nations as nucleus.
Together Brazil, Russia, India, China, and South Africa have begun to
form an alliance built upon trade and economic development, forged by
investment in infrastructure and its construction. Include Iran and
Indonesia to welcome the new BRIIICS nations for a larger Eastern
representation. The arterial system of the trade zone will be energy
supply, the life blood of commerce. The Eurasian Trade Zone is being
formed, with an energy foundation. Important bilateral pacts were made
concrete in the last week. Supply of crude oil, natural gas, including
LNG, will come from a vast system of pipelines from Russia to Central
Europe and from Russia to China. Completed pipelines will flow. Other
pipelines will be completed. Crucial pacts have been made final, with
more to come. Additional important pipelines along the periphery will be
completed also, like the Iran-Pakistan Pipeline, despite the USGovt
obstruction and intimidation. New LNG ports will be constructed.
Logistics for rail traffic will be agreed upon, for commodity supply.
Many features of the trade zone will be worked out, like reduced
tariffs, like border inspection methods, like payment systems including
barter, like environmental concerns, like regional cooperation.
BRICS DEVELOPMENT BANK
Consider
the BRICS Development Bank. It is so much more than a fund to build
railroads in remote African locations, as the delusional US press
reports. It will form the giant credit line for countless projects upon
which trade will be conducted, often called infrastructure, but so much
more. It will gradually reveal itself to provide a second function, a
core bank for trade payments outside the USDollar sphere. Steps are
being made, extremely important steps, that will shape the next chapter.
The United States will not play a role. With a trade zone and financial
payment structure, the USDollar is to be rendered an outsider looking
in, soon to be deemed obsolete. The many emerging nations are coming of
age, flexing their muscles, banding together. Their critical mass in
trade volume, in industrial output, and in product development,
including patent registration, are impressive. In the last two years,
they have demonstrated that the G-20 Meeting of finance ministers has
totally eclipsed the G-7 Meeting that had dominated for two decades.
They are making the next critical step in creating a bank, a global bank
whose role will grow and expand. It will operate under the golden glow.
EXCLUSION OF UNITED STATES
The
many years of abusive control of the FOREX currency markets,
intervention in the sovereign bond markets, manipulation in the
important commodity markets, devious propaganda in the communications
networks, with support role played by the aggressive USMilitary and
nefarious activity by its security agencies have guaranteed exclusion of
the United States. The unspeakable abuse of the US$ credit card will
end, as the global reserve currency is dismissed from its throne. The US
leader crew, led by fascist bankers, can print money and counterfeit
bonds all they wish, but the currency will be required to submit to
grand devaluation if they wish to purchase supplies for the massively
lopsided and imbalanced USEconomy, the greatest travesty in marketplace
history. While the Keystone Pipeline is corrupted by the USGovt with
hidden beneficiaries such as Halliburton and Burlington Northern,
essentially divvying up the gangrenous paunch of the exhausted bloated
American torso, the vast pipelines of the European and Asian continents
are merging. They will not include the Americans, whose pathetic gambit
fell on its face, the Trans-Pacific Partnership pushed by the Obama
Admin. It actually attempted to form a trade zone with Asia, on
condition that the lead nations Japan and South Korea excluded China.
How incredibly moronic and amateurish! What a pathetic return on the
dime for votes for this leader in the new police state.
BRITISH BROKER ROLE & INTRIGUE
The
British have an historical knack to remain on top of the bank center
heap. Earlier this year, when they announced the launch of a Chinese
Yuan Swap Facility in London City, they stepped on the New York neck.
Never in a million years would South Manhattan serve as the site of a
Yuan Swap functionary post, not during a trade war that has a secret hot
military war element being played out in Southern African near the horn
(see Djibouti). The embattled British Petroleum will retain a 19.75%
stake in Rosneft, which is to acquire the significant BP-TBK energy firm
in Russia. Both Bank of America and Citigroup are brokering a $55
billion deal that will enable Rosneft to become the world's largest oil
company. Several hidden messages are laden within the blockbuster global
changing deal by Rosneft. By dissecting the flow, it is clear the BP
executive staff is selling out, since not paying dividends. The
collateral for the deal toward the loans will come from USTreasury
Bonds. The Anglo-American bank complex will in effect be forced to
swallow its own high volume of toxic paper. The tainted BP oil giant
still reels from the tarnish of the Gulf of Mexico incident. Worse, BP
is finally pushed out following its dubious role in the Yeltsin years of
Russia. That difficult transition period in the 1990 decade saw a
failed attempt by the Western Oil Giants to control Russia and its vast
energy wealth. Putin from the KGB said no, and it did not happen on his
watch. He assumed the Kremlin top post. Witness a potentially crucial
London role in helping the Eurasian Trade Zone, perhaps buying favor to
avoid the Third World. The broad exclusion of the United States
guarantees a Third World flavor and stench for the North American core,
with a Mad Max overtone and a Dachau closet.
DEVIOUS CYPRUS HIDDEN ANGLE
A
piece of the financing for the Rosneft deal came from GazpromBank,
which operates out of Cyprus. China has posted $30 billion in USTBonds
as collateral within the massive deal, in return for ample future crude
oil supply. Since Russia will receive a steady flow of payments from
China from diverse energy pipeline supply, in the form of USTBond fund
flow, the big debt to the London banks will be paid off by USTBonds. The
payoff will be in the same terms of the huge collateral. Conclude that
the Eurasian Trade Zone will have an energy pipeline and delivery system
with loaded supply whose foundation is built upon USTBonds, sent back
to the Anglo-American bankers to digest. The USTBonds are going home to
die. As Lenin said, the rope to hang themselves will be bought by the
capitalists. As footnote, some important toes were stepped on in Cyprus.
Expect more entries to the morgue. The event opened the door to
dangerous games of brinksmanship.
The
timing of the Cyprus bank account tax and confiscation is curious,
exactly when the extremely significant summit meeting took place between
Russian President Putin and Chinese President Xi Jinping, where several
big pacts were signed. One is left to wonder if the Cyprus fire was lit
by the Europeans in order to attempt to disrupt the Moscow Energy
Summit with heavy smoke. It bears repeating. The summit received almost
zero Western press coverage, even though its details outline a sunset of
the USDollar. Maybe because its details outline a sunset of the
USDollar. The Jackass is left to wonder if the next important energy
pact with the Eurasian Leader Duo (Russia & China) will involve
Saudi Arabia, with a whiff of sunset for the Petro-Dollar defacto
standard. Cyprus might indeed have been all about trying to save the
Petro-Dollar, more than the European banks. Perhaps the Moscow Summit
dictated the Cyprus timetable. The Italian elections to depose Monti,
Spanish high level corruption and bankruptcies, and the French backtrack
on massive spending cuts, these three nations point to urgency in
disaster control. The bank account tax was thrust forward, unmasking the
fascist bankers.
USDOLLAR HEGEMONY ENDING
The
alternative system to conducting trade outside the USDollar system has
had formative stages since the Lehman Brothers and Fannie Mae collapse.
The Eastern trade leaders have been very busy quietly constructing a new
system, with almost zero press coverage. They prefer to work in the
background. Recent events indicate they have chosen the formal public
stages and forums with wider visibility, starting with the February G-20
Meeting in Moscow. The true agenda for G-20 finance ministers was to
hatch finally the USDollar alternative. The
sleepy West appears not to be paying much attention. The initiatives to
construct alternative platforms were given a major thrust in the last
year since the Iran sanctions led by the USGovt banker and their
henchmen in London. For the last 20 years at least, trade has followed
banking. Nations of the world have been coerced for three decades into
holding USGovt debt securities in order to make payment in trade, most
notably in crude oil. With the Grand Arab Recycling accord struck by the
1970 decade leaders, the Petro-Dollar was born in return for a
fantastic higher oil price. The oil-rich Arab royalty supported the
USDollar by recycling trade surplus into USTreasury Bonds. The
conventional practice dictated that global banking systems be dominated
by USTBonds in reserves, serving as the banking foundation of debt.
New
chapter to turn. The ongoing endless QE to Infinity has hastened
Eastern trade leaders. The near 0% return from USTBond yields has
motivated them to seek alternatives. They are horrified by the
debasement of their hard-earned reserves, filled to the gills with
USTBonds of shrinking value and low yield. The new trade settlement
system based in Gold finance will turn the tables, as once more trade is
to dictate banking. The combination of central bank hyper monetary
inflation, big US bank fraud, security agency $100 bill counterfeit, and
rampant criminality in the US financial system has motivated the
Eastern nations to act. They have acted. The clear outcome is that the
Western banking system will topple, since the East will be shoving the
USTBonds back to Anglo-American shores for cemetery treatment. Trade
should always dictate banking. The major trade partners no longer want
US$-based trade settlement. Watch for the crowning blow in the Saudi
response soon, since they always follow the winners.
THE CENTERPIECE PLAN
The
new BRICS development bank will surely be supplied with USTreasury
Bonds at first. The primary seeding is obvious. The emerging nations
have collected huge reserves from successful trade over the last decade,
primarily held in USTBonds. They do not wish to hold them, since
undermined and debased by their own steward at the US Federal Reserve.
The big Eastern nations have committed $100 billion for the fund, whose
liquidity lies in USTBonds. On a gradual ramp, the USTBonds will be
converted to Gold bars for the core bank asset in the development fund.
Some of the 6000 metric tons of Gold bullion removed from London banks
by the Eastern entities from March to July 2012 might find their way
into the BRICS Fund core. The initial role of funding critical important
projects like pipelines, communication networks, railroads, shipping
ports, ships & trucks, perhaps even energy transfer ports, will
become clear. The more overarching role of forming a (Eastern) global
core central bank clearing house for payment transactions will be its
second dual role. The emerging nations have had their fill of the
USDollar control mechanisms with the SWIFT bank structure, the Intl
Monetary Fund steering committee, and others. Finally, Gold Trade Notes
would be used in trade settlement. Witness the new Eastern Fed for trade
settlement in Gold bullion. Better to call it the BRICS Development
Fund, since a major Trojan Horse for excreting USTBonds through its
rectum, the London Boyz busily catching it.
The
Gold core will facilitate the purchase of Gold Trade Notes much like
the common letters of credit used widely in commerce nowadays. Like the
Eurasian Russian-Chinese energy foundation, the development fund will be
built on the back of USTBonds in toxic discharge. In the process,
expect extreme hardball, shoving the toxic USTBonds back into US and
British banks, as collateral for huge loans, as funds for repayment of
huge loans, as funds to purchase Gold. In the process, the COMEX with
LBMA appendage will be drained of its Gold, a future default assured.
The Western gold marts will be unmasked as corrupt dens of empty
inventory shelves. What comes is a BRICS Development Fund which will
serve as a quasi global gold central bank for the expressed purpose of
facilitating trade settlement in Gold. This is hardly just a fund to
finance African rail projects.
THE CHECKMATE
A checkmate is in progress. It has four important elements.
1) The
established Eurasian Trade Zone joins the massive Asian continent with a
significant portion of the European continent, where three quarters of
the world population resides. The trade zone has no visible presence or
participation by either the United States or United Kingdom.
2) The
BRICS Development Fund will control a giant sum of $100 billion. It
will eclipse the role of the Intl Monetary Fund. The fund will
facilitate numerous infrastructure projects. However, its other feature
will be the shocker, as its core is transformed into Gold bullion. The
conversion of USTBonds to Gold will nail the coffin in the isolated
USDollar, a topic of Jackass scribbles for the last full year.
3) The
flow of USTBonds will be from China to London, for financing the
foundation of the Eurasian Trade Zone on its energy backbone with brisk
energy flow. The collateral for large loans is to be USTBonds, as is
repayment for loans to be USTBonds.
4) The
transition from Yuan-based trade settlement via the numerous Swap
Facilities in barter trade with key nations, toward Gold trade
settlement via the BRICS fund that will feature a gold core, will launch
the new Gold Trade Standard. It will not be a banker dominated currency
type of Gold Standard. It will instead be a trade settlement Gold
Standard that bypasses the hegemony of the Anglo-American banking
system, the SWIFT rules, the FOREX gaming, and the IMF/World Bank
harlots that harbor insects.
ZINGERS AS COFFIN NAILS
Many
are the big signals and signposts with deep meaning. They line the path
to the Third World. They are many, diverse, and unmistakable in
importance. The gradual discard of the USDollar as global reserve
currency, the gradual discard of the USTreasury Bond as primary banking
system reserve asset, these events are in progress with a speed not seen
in past months or past years, not since 2008. The level of intrigue
matches the level of deception. Cyprus is not a one-off event, an
isolated insignificant beer fart. It is a flash point event. The tipping
point events could be bank runs across Southern Europe extending to
Britain and the United States, including Canada. Numerous potential
tipping point events can be identified, each powerful and ominous for
the US Fascists in power. The USDollar is coming home to be buried and
devalued. The USTBond is coming home to be buried and downgraded. The
ring fence has been clearly laid out. The checkmate with the Eurasian
Trade Zone and BRICS Fund is evident for the trained analyst eye. The
devaluation will cause severe price inflation and supply shortages for
the USEconomy. The end game has never been more clear. Follow the
numerous highly important factors at work, each of which could produce a
tipping point event. The dominos are aligned and ready. Inside the US
Dome of Perception, they are less visible, yet still at work for extreme
consequences. Some severe disorder comes this way. Expect some quantum
leaps upward in the Gold price and Silver price, each controlled by
unprecedented criminal activity in the financial markets.
- The BRICS Development Fund is the main event, to build a railway to a dark place for the United States, ring fenced for its toxic USDollar. Gone will be the corrupted motivated tools like the IMF and World Bank, with even Western central banks of lesser importance. The BRICS Fund could be the Trojan Horse (much like ObamaCare) that permits a vast conduit to be built, a seemingly innocuous let permitted entrance through the door, which permits USTBonds to be dumped like the trash.
- The upcoming Gold purchases by the BRICS Fund might be coordinated with the Shanghai Metals Exchange, to exploit the artificial low London Gold price. A COMEX bust can be foreseen.
- The BRICS should be careful about the new undersea global communication cable system. In 2007, foul play resulted in the Iranian cable being cut, the result of cooperative action by the USGovt and the little ally on the Southern Med that looks northwest to Italy.
- The tipping nation is Germany, which has had its fill supporting the slower wasteful debt-ridden Southern European nations. After cutting the cord, they will embrace the Eurasian Trade Zone. Evidence is the numerous heavy rail facilities that begin in Russia and end in Germany for commodity supply. There are two Germanys, one with old corrupt ties to the West, another with traditional reliable ties to the East. The Western camp is given light by the press, while the Eastern camp works behind closed doors shaping the next chapter.
- The Eastern Alliance (often discussed in past Hat Trick Letters) is slowly coming into view. The Russian and Chinese corridor will serve as the commercial foundation. The BRICS Development Fund will serve as the backbone. When Germany joins in more overt manner, the Alliance will be clear on the geopolitical stage. Then comes the Saudis to join, complete with protectorate role already offered by the Eastern Duo giants, who together will announce the end to the Petro-Dollar defacto standard.
- The political rebellion movement inside Germany is slowly coming into view. They wish to return to the D-Mark currency and to discard the Euro, an experiment in disaster, waste, fraud, and ruin. The movement is gaining traction. Discussion of the Nordic Euro (aka Teutonic Euro) has been heard on an increasing basis among its tribal cousins. Germany will side with Russia & China, and join the next chapter, after shedding its PIIGS pen trash.
- Both Russia and China purchase all their domestic gold mining output. If truth be told, their gold reserves are multiples higher than the official data indicates. Neither nation has any desire to cooperate with such critical disclosure, much like national trade secrets. Both nations are ready for the next chapter, with a few years of preparation in new modern systems, platforms, wiring, and gold held in reserve as core wealth.
- The ABN Amro news of halted gold delivery speaks volumes to the absent inventory linked to the corrupted London gold market. They have no Gold in inventory. They control the Gold price with paper leverage and suppressive techniques. This news halt out of the Netherlands should be viewed in context of the Germans, Dutch, and Austrians demanding their gold in repatriation. London has none. What gold bullion they do obtain comes from urgent shipments from the Roman Catacombs and the Basel hills of Switzerland.
- The nations across the entire West have citizens deeply worried about their savings wealth stored in the banks. They are beginning to realize their accounts are legally considered as bank liabilities subject to heavy loss upon bank failures. They will begin to remove the money from bank accounts in droves, but with capital controls imposed.
- The Cyprus bank account tax is the latest ignored shock wave warning to the West. It is described as a small tax to assure bank solvency, but it is a vicious transfer from sovereign source to depositor private source in funded bailouts. It is confiscation. The 2005 Bankruptcy Law in the US gave away the plan, with savings deposits subordinated under derivatives. The MF-Global episode has not resulted in much learned. It was the first test ride of the subordination rules in the new law. The Jackass warned in early 2012 of an MF-Global event for bank accounts and stock accounts. The event is coming very soon, but the public is very sleepy distracted and dulled.
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