Wednesday, April 9, 2014

The Fed Takes Our Money, Gives It to Banks Who Loan It Back to Us at 16%

Source: Charles Hugh Smith, Of Two Minds

We're being Fed to the sharks, every day, one morsel at a time. What a way to go....

What can we say about the Federal Reserve's policies that hasn't been said a million times? How about simplifying the two primary purposes of Fed policies? I will cover one today and the second one tomorrow. Both involve feeding the 99.5% to the financier/ Wall Street/bank sharks.

Longtime readers are familiar with Harun I.'s incisive analysis. Two of his recent commentaries can be found in Resolution #1: Let's Call Things What They Really Are in 2014 (January 15, 2014) and Doomed If We Do, Doomed If We Don't (February 12, 2014)

In the above entries, Harun explained how the Fed's money creation has leveraged a global bubble in assets. At 72-to-1 leverage, the Fed's $3.3 trillion money expansion has generated inflation as well as asset bubbles, though the Fed and its cronies deny both asset bubbles and inflation.

Inflation is the Fed's explicit, stated goal. The Fed wants prices to go up because that raises GDP (gross domestic product) and makes debt cheaper to service every year.

But alas, real income isn't keeping pace--it's declining. Median household income is down 7% since 2000, but if we strip out the top 1% households, the decline for the bottom 99% would be more than 7%. And if we strip out the top 10% households, the decline of the bottom 90% of households is much more than 7%.

Household income for the bottom 90% has been stagnant for four decades:

So the Fed is robbing the purchasing power of our money as a matter of policy. In simple terms, the Fed is stealing purchasing power and delivering the stolen wealth to the financiers and banks, who borrow money from the Fed for near-zero rates of interest.

And what do the banks do with the money the Fed stole from us? They loan it back to us at 16% (or more). Those of us who haven't just emerged from bankruptcy get offers from banks on a weekly basis: for transfers of credit card debt, new credit cards, cash advances, auto loans, home equity lines of credit, you name it.

A recent offer from a Too Big to Fail bank offered a teaser rate of 0% for a few months, after which the credit card's interest rate reverted to 16%.

This is how the Fed rebuilds the TBTF banks' insolvent balance sheets: it strips purchasing power from wage earners and savers and gives the banks free money which they loan to debt-serfs for somewhere between 5% and 24%, depending on the length of the loan and the collateral (or lack thereof).

As Harun explained, the Fed steals our wealth, transfers it to the banks who then loan our money back to us at 16%.

It almost makes you wish the Fed would just steal the money openly and give it to the banks and top .01% of financiers directly, without the sleight of hand of inflation and zero interest rate policy (ZIRP).

The Fed implicitly claims (and many foolishly believe the propaganda) to be the ultimate financial power in the Universe:

If the Fed is so powerful, why is it so cowardly and fearful that it has to cloak its theft of our money and its transfer of the wealth to the banks? What's it so afraid of? That we might wake up to the fact that we're being Fed to the sharks, every day, one morsel at a time?

Of related interest:

The Federal Reserve's Nuclear Option: A One-Way Street to Oblivion (February 5, 2014)

Want to Reduce Income/Wealth Inequality? Abolish the Engine of Inequality, the Federal Reserve (January 28, 2014)

Bankers Being Killed Could Top 100 Plus

U.S. Economy on Brink of Systemic Failure | Jim Willie

- Japanese economic collapse ahead ?1:13
- Former Bank of Japan Governor says Japan’s QE is ineffective at helping economy.** What about the Federal Reserve’s QE? ?4:40
- Russia to stop trading in U.S. dollar; petrodollar system is ending ?8:44
- How will the average American be affected by the collapse of the petrodollar system – possible hyperinflation in U.S. ?15:19
- Is it too late to prepare? ?24:56
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Japanese sales tax hike ?
**Former Bank of Japan Governor quote ?
China dumped $46.7 billion in U.S. Treasuries from Nov to Dec 2013 ?
DISCLAIMER: The financial and political opinions expressed in this interview are those of the guest and not necessarily of “Finance and Liberty” or its staff. Opinions expressed in this video do not constitute personalized investment advice and should not be relied on for making investment decisions.

We Have Been Living In Another Dotcom Bubble, And It Was Inevitable That It Was Going To Burst At Some Point

Stocks Turn Red For Year
U.S. stocks on Monday declined for a third session, pulling the S&P 500 into the red for the year, as investors shed high-profile assets that fared well in 2013 in search of better values.
Shakeout in stocks seen continuing

The shakeout in stocks is likely to continue, as investors worry there is too little proof the economy can accelerate enough to counterbalance the Fed’s reversal of its easy money policy.
CITI Bracing to Miss Profit Target…
Falling internet stocks…
Mortgage Loan Originations Lowest on Record
Black Knight’s February Mortgage Data shows Monthly Loan Originations Lowest on Record.
Key Points
  • Origination volume is the lowest on record with prepay speeds signaling more drops in refi originations
  • Monthly sales were essentially flat year over year, but traditional sales were up almost 15%
  • The government share of originations has decreased, led by a sharp drop in HARP originations
  • Credit standards have shown few signs of loosening, with very little origination activity in the lowest credit score buckets
  • Modification re-default rates for underwater borrowers about 30 percent higher than those with equity
This Jim Chanos Chart Will Convince You We’re At The Peak Of A Spectacular, Fed-Fueled Bubble
Today we published the latest installment of our quarterly MOST IMPORTANT CHARTS IN THE WORLD slidedeck, which contained contributions from some of the leading lights of the finance world — economists, analysts, investors, and others.
One contributor is famed short-seller Jim Chanos, who has been talking lately about the Sotheby’s Indicator — that is, that the famous auction house tends to peak when big bubbles peak.
Read more:
What In The World Is Happening To The Nasdaq?
All of a sudden, the Nasdaq is absolutely tanking.  On Monday, it fell more than 1 percent after dropping 3.6 percent on Thursday and Friday combined.  At this point, the Nasdaq is off to the worst start to a year that we have seen since 2008, and we all remember what happened back then.  So why is this happening?  In recent years, the Nasdaq has been ground zero for “dotcom bubble 2.0″.  The hottest stocks in the entire world are on the Nasdaq – we are talking about stocks like Yahoo, Netflix, Apple, Tesla, Google and Facebook.  Those stocks have gone to absolutely incredible heights, but now they are starting to fall.  Some are blaming insider selling, and without a doubt the “smart money” is starting to flee the stock market.  Just check out this chart.  Others are blaming low expectations for first-quarter earnings or the tapering of quantitative easing by the Federal Reserve.  But whatever is causing this decline, it is starting to get alarming.  The Nasdaq just experienced its largest three day fall since November 2011.
No stock can resist gravity forever.  What goes up must eventually come down.  This is especially true for stock prices that become grotesquely distorted.
On Wall Street, a price to earnings ratio of 20 to 25 is usually considered fairly normal.  In recent years, the price to earnings ratios for many of these “hot tech stocks” have gone way, way beyond that.  For example, posted below is a screen capture from Bloomberg TV that was featured in a recent Zero Hedge article
Zero Hedge
There is no way in the world that such valuations are justified.
We have been living in another dotcom bubble, and it was inevitable that it was going to burst at some point.
98% Of All Consumer Credit In Past Year Was Student And Car Loans
And putting this in context, in the past 12 months, a record 98% of all credit – $162 billion – has gone into non-revolving debt, i.e., student & car loans. How much has been added to credit card balances? An absolutely meaningless $4 billion, or…

Finns Eyeing the Russian Maritime Industry

(FINNBAY) – Helsinki, 7 April 2014. Finland’s national investment organisation, Finpro, calls for Finnish investors in the maritime industry to consider investing in the Russian market amid shaky Finland-Russia political relations due to the Crimea crisis.
Ship Covered by Ice
Courtesy of Heather Thorkelson
According to Enterprise Finland, Russia is in need of icebreakers and offshore technologies as they aim to increase the value of their national shipbuilding.
Also Read: Finnish Marine Industry Faces 3.5% Decrease in Sales
“Finns have expertise in Arctic technology. We also have companies that offer modular designs and cabins, moreover, we are able to work in extreme conditions,” says Ulla Lainiotunturi from Finpro in Russia.
However, investors note that the market could be too competitive for small Finnish companies as they will compete against players like ABB and the Norwegian Havyard.
Also Read: Norwegian Marine Company, Navico, Establishes Finland Office
“We have investigate many yards in Russia both private and state-owned. We selected 23 yards which can be home for Finnish companies’ products and services,” says Lainiotunturi.

The USA: Worst Government That Money Can Buy

Jeff Nielson: History tells us that when governments become excessively oppressive and/or descend into saturation corruption (like the rancid regimes of the Western bloc), that such scenarios rarely “end well” – i.e. a peaceful transition back to responsible, legitimate government. Instead, the peasants/serfs/workers are nearly always driven to a state of desperation (generally near-starvation) before they finally pull out their pitchforks and guillotines, and take back their own government.
Obviously, then, the goal of commentators such as myself and other truth-tellers today is to try to reach a large percentage of our own “peasants”, the Sheep who are currently passively lapping-up the daily fiction from our Corporate media propaganda machine, before they devolve to such a state of poverty/desperation. Then once honestly informed, the presumption is that this knowledge would then power peaceful and orderly change via the ballot box.
In turn, we have seen the response of the One Bank to such messages: my own work has been systematically censored from any/all mainstream outlets, and many other alternative “voices” have also been snuffed-out one way or another. But this is only half of the One Bank’s campaign to ensure that the peasants of the United States (in particular) are never well-informed as they head to the ballot-box each election to vote for one half or the other of its own, two-headed political hydra.

The other half of this systematic process for destroying the remnants of U.S. democracy has been to give the very-wealthy literally unlimited powers to buy the government of their choice. The first “victory” in the absolute corruption of the U.S. political process was to allow corporations (the paper fronts for the very-wealthy) to donate unlimited quantities of their dirty money, in order to buy the politicians who would serve them loyally.
This also allowed the wealthiest Oligarchs to hide behind these corporate fronts, so we couldn’t see which particular individuals were primarily responsible for the latest crop of corrupt sycophants in the U.S. Congress. However, with the corruption (and now overt fascism) of the Fourth Reich becoming more extreme by the day; the Oligarchs no longer see any need to hide.
Thus we have the “next evolution” in U.S. corruption: simply allowing individuals to directly spend as much as they want in buying the government of their choice. Supposedly, there are still limitations. Wealthy Americans can only contribute so much directly to any one particular candidate or “PAC”.
For readers outside the U.S.; a PAC is basically a corporate front created solely for the purpose of broadcasting (at maximum decibels) a particular propaganda message during an election campaign. The joke in these supposed “limitations” is two-fold. While the very-wealthy are limited in their contributions to any particular entity, there are now no aggregate “caps” of any kind on such spending. They can now create an infinite number of “PAC’s” to brainwash the electorate with their message(s) in each-and-every (so-called) election.
The other, obvious joke is that with no aggregate spending caps on corporations, either, individuals can indirectly make unlimited donations to particular candidates through simply contributing via numerous corporate fronts. A billionaire with his/her own plethora of shell corporations can funnel vast (and essentially unlimited) quantities of wealth anywhere they desire in U.S. elections by simply – and legally — utilizing all of these various, corporate tentacles.
Adding proverbial insult to injury; the corrupt U.S. judiciary rubber-stamps this political corruption as a supposed extension of “free speech”. Allowing the very wealthy to (literally) drown-out the viewpoints of the majority so that they are only exposed to the narrow, heavily-slanted agenda of these Oligarchs every election is perversely labeled by these puppet-judges as a victory for free speech.
How endemic has U.S. political corruption become, through the very-wealthy funneling oceans of their dirty money into the U.S. political process? A Reuters article provides some interesting perspective, with the title itself being nothing but a euphemistic label for U.S. political corruption:
Wealth buys less lifestyle, more power
The general theme is familiar: Corporate media propaganda telling us why it’s (supposedly) O.K. for the very-rich to keep getting richer and richer. But then it’s revealed that the very-wealthy are now devoting a smaller percentage of their rapidly increasing mountains of wealth to “conspicuous consumption”, and an ever-increasing percentage to what the Reuters writer deviously calls “investments”.
What sort of “investments”? We were already given that information in the title: buying “power” – i.e. buying the politicians (and regulators) who officially wield that power. Obviously “political power” is not some commodity that can be purchased in a supermarket or department store. “Buying power” directly and necessarily implies political corruption.

And while one branch of the Corporate media oligopoly was openly bragging about how the wealth of the wealthy in the United States is being used to buy the (corrupt) government of their choice; another branch of the Corporate media was openly describing the small cabal of (ultra-wealthy) Oligarchs who are doing most of the buying in the corruption of U.S. government, markets, and society.
The Richest Rich Are In A Class By Themselves
Sophisticated readers were already aware that the issue of wealth-inequality (and the increasing corruption which always accompanies that rising inequality) was never a simple rich-versus-poor dynamic. Or, as put in a previous commentary; it was never the “millionaires” who were the problem with respect to the parallel injustices of rising inequality and rising corruption.
Typically, writers such as myself focus their scrutiny and criticism on “the Top 1%”, but with the caveat that it is actually a minority within that top-1% who are the active conspirators. Now we have Bloomberg giving us some very precise numbers as to who are both the principal architects of this cesspool system, and (surprise! surprise!) also the principal beneficiaries of this endemic corruption.
Much like the Reuters article unashamedly boasted about what the wealthiest Oligarchs were doing with their ill-gotten fortunes (buying the government of their choice), the Bloomberg article precisely identifies this micro-class within the U.S. population which, by themselves, own the U.S. government — doing everything but giving us the names of individual Puppet-Masters.
In general terms; Bloomberg tells us that this micro-class of Oligarchs is “the Top 1% of the top-1%”, or (in other terms) they are the “top 0.01%”. More specifically; Bloomberg tells us this:
The gains have accrued almost exclusively to the top tenth of 1 Percenters. The richest 0.1 percent of the American population has rebuilt its share of the wealth back to where it was in the roaring Twenties. And the richest 0.01 percent’s share has grown even more rapidly, quadrupling since the eve of the Reagan Revolution.
16,000 families possess $6 trillion in assets – equal to the total wealth of the bottom two-thirds of American families.
This is the (real) American Mafia, and the Corporate media no longer even tries to stop it from sounding like a crime syndicate: 16,000 “families” (in a population of greater than 300,000,000) who not only have more than enough wealth to drown-out the will of the majority in every election, but they have now been provided with the legal means to do so.
In the United States of America; political corruption is not only totally legal, it’s highly organized. “Lobbyists”,the bag-men of this Mafia, literally “register” themselves with the particular state or federal government in question, and then openly go about their “business” of bribery and corruption.
Of course, as a federation of states; U.S. state governments still wield considerable power – despite all that has been usurped by the Executive Branch over the past quarter century. But the One Bank (and the other Oligarch families) haven’t forgotten about those governments:
Starting today, corporations can make unlimited contributions to Alabama candidates for state and local offices.
The end of the $500 limit on corporate campaign contributions means Alabama will become the fifth state with no cap on campaign contributions [emphasis mine]
Strict limits on campaign contributions are a fundamental and universal principle of every nation and political system which seeks to portray itself as a legitimate democracy. For every citizen within the United States who actually understands the meaning of the word “democracy”; arrogantly sweeping away any limitations on such spending sends an unequivocal message: the United States is no longer a democracy.
In each supposed “election”; pseudo-voters in the USA face the same scenario. After four years where a Corporate media oligopoly has twisted the “news” ever further and more perversely from reality so that voters are never even exposed to the real issues; these pseudo-voters are then given a choice of voting for one of two candidates – both of whom are owned by the ruling Oligarchs.
It is a two-party dictatorship, but with a propaganda Matrix so (un)scrupulously constructed and maintained that almost all of the Sheep still cling to the delusion that they live in a “democracy”. However, the worst government that money can buy is not without parallels.
Many forget that in the now-defunct Soviet Union they also had elections. The joke (to all those outside of this totalitarian regime) was that Soviet “voters” had only two candidates to choose between, both of whom belonged to the Communist Party.

The one difference between the communist dictatorship of the Soviet Union versus the fascist dictatorship of the United States today? The “16,000 families” who own-and-operate the U.S.’s (supposed) “two-party system” haven’t yet gotten around to openly declaring themselves as a single, political entity. Stay tuned.
This article is brought to you courtesy of Jeff Nielson From Bullion Bulls Canada.

Putin Sends the West a Golden Message: Central Bank of Russia Changes Logo to Golden Ruble

According to reports from Russian media, Putin appears to have sent the west a golden message in the aftermath of JPMorgan unilaterally deciding to block an official Russian wire transfer, as the Central Bank of Russia has introduced a new logo, which just happens to be a gold ruble.
Officials stated on the new logo: Golden Badge of the Russian national currency, officially adopted by the Central Bank of Russia, will symbolize a sign of stability and security of the ruble gold reserves of the country.

Gold ruble symbol appears in front of the bank “Russia”
RIA Novosti. Russian ruble symbol appears on the Sunday before the office of the joint-stock bank “Russia”, organizers said flashmob.
Action will take place at 15.00 in front of the bank in Perevedenovsky lane in the center of Moscow (near metro “Bauman”).
Golden Badge of the Russian national currency, officially adopted by the Central Bank of Russia, will symbolize a sign of stability and security of the ruble gold reserves of the country,” – say the organizers.
Thus the participants are going to express installation support to the bank “Russia”, which decided to work exclusively on the domestic market and only one currency – the national currency of the Russian Federation – Russian ruble.
U.S. authorities in response to the Crimea to the Russian Federation imposed sanctions on 20 Russians and the bank “Russia”, included in the thirty largest in the country. Consequence of the sanctions was the refusal of the international payment systems Visa and MasterCard spend Card transactions “Russia”, worsening outlook on the bank and the suspension of the rating actions. On Friday, the Bank announced that it will only work in Russia, and only with their pocketbooks.
Russian ruble symbol – the letter R with a horizontal line – was approved by the Central Bank sovdirom in December 2013.

And all this time the alternative media has been anticipating the introduction of a gold backed yuan…

NLRB plans on stopping businesses from ever moving

How soon are we going to realize that we are living in a totalitarian state? The infamous NLRB that Obama has pinned his high hopes on destroying any vestiges of a free state is back at it and wants to condemn businesses from ever moving their business. I was surprised to read at present, the Courts can already mandate a business remain in its present location. And just who is Mr. Griffin?
Richard Griffin, the new general counsel of the National Labor Relations Board, wants to give unions a veto over a unionized employer’s decision to relocate. If Griffin has his way, and he most assuredly will, some unionized businesses will be pinned in place at the discretion of their unions.
Mr. Griffin previously served as General Counsel for International Union of Operating Engineers (IUOE).  He also served on the board of directors for the AFL-CIO Lawyers Coordinating Committee, a position he held since 1994.  Since 1983, he has held a number of leadership positions with IUOE from Assistant House Counsel to Associate General Counsel. From 1985 to 1994, Mr. Griffin served as a member of the board of trustees of the IUOE’s central pension fund.
Unions can contest the employer’s decision, but they have no right to participate in it or otherwise delay it absent a court order enjoining it.

Griffin’s intent was disclosed in a memorandum he sent the agency’s regional directors ordering them not to act on cases presenting issues “of concern” to him – and there were many such issues – without receiving guidance from his office. Griffin’s guidance will be to order an employer to be prosecuted not on the basis of what the law is but on the law as Griffin would like it to be. This will give the board an opportunity to change the law.
Under current law, it is perfectly legal for a unionized employer to relocate some or all of its facilities and eliminate bargaining-unit work if the move is motivated by economic gain — not by a desire to retaliate against employees for their union activities and support. A desire to escape the consequences of unionization, particularly high labor costs, is considered an independent, innocent motivation, not an unlawful one. Big Labor loathes this law; Griffin intends to help unions nullify it.
Under longstanding NLRB law, a unionized employer is not required to bargain with the union over a relocation decision that is motivated by labor-cost savings if the employer determines that bargaining would be futile — that the union could not offer labor-cost savings that could change its decision. Unions can contest the employer’s decision, but they have no right to participate in it or otherwise delay it absent a court order enjoining it.

IMF Christine Lagarde: “IMF money does not come free” ~ After 33 tons of Ukrainian Gold stolen, NOW THEY COME TO RAPE AND PILLIAGE WITH AUSTERITY

And the Next Big Thing Is … Degrowth?

This is not doom-and-gloom for society–it is only doom-and-gloom for the current unsustainable arrangement (Plan A).
The Grand Narrative of the past few centuries goes something like this: from religious authority to secular authority, from agriculture to industrial, from rural to urban, from local to global, from periphery to center, from decentralized to centralized, from low-density energy to high-density energy (from wood to coal to oil/natural gas), from industrial to communication technology, from gold to fiat currencies, from linear to non-linear (complex/fractal), from local scarcity and high cost to global abundance, from islands of prosperity to continents of prosperity, from cash to credit, from collateral to leverage,from productive to consumerist and from sustainable to unsustainable.
Many of these linear trends are running out of oxygen or reversing. Rigid hierarchies are being disrupted by self-organizing systems, centralization is being disrupted by decentralization, lower density alternative energy is distributed rather than concentrated, commodity costs are rising globally due to demand outstripping supply and leveraged credit is destabilizing financial systems across the globe.
In the past few decades, the growth narrative has depended on “the Next Big Thing”–the new disruptive technology that drives wealth and job creation.
In the early 20th century, the next big things were plentiful, and they clustered around transport and communication: autos, highways, aircraft, radio, telephony and most recently the Internet.
The progress of technologies tends to track an S-Curve, with a slow gestation (experimentation that drives rapid evolution of innovations), a period of widespread adoption and technological leaps, and then a maturation phase in which advancements are refinements rather than leaps.
Air travel is a good example: the leap from open-cockpit aircraft of the 1910s to the long-distance comfort of the DC-3 in the 1930s was enormous, as was the leap from the prop-driven DC-3 to the greater capacity and speed of the 707 jet airliner.
But since the advent of the Boeing 727 in 1964 and the jumbo-jet 747 in 1969, very little about the passenger experience of flight has changed (or has changed for the worse): the envelope of speed is little changed, and efficiency has improved, but these are mostly invisible to the passengers.
My 1977 Honda Accord was extremely safe, reliable, powerful, efficient, comfortable, etc. Improvements in the past 37 years since have been modest in these fundamental technologies. (I actually prefer the smaller, older, less luxurious Accords.)
Once computers reached the Mac OS X/Windows XP level, improvements have been of marginal utility. The lack of blockbuster medications–and the skepticism regarding the efficacy and cost of existing blockbuster meds–raise the same question: maybe the low-hanging fruit of present technologies have all been picked.
The costs of our lifestyle continue to rise, due to financialization, cartel/fiefdom skimming, higher energy costs, bureaucratic bloat and related systemic causes. At the same time, more of our collective consumption is being funded with debt, which is another way of saying that present consumption is being paid for with future income.
For the past two centuries, each Next Big Thing magically created more wealth and more jobs. The progression has been straightforward: production moves to lower-labor cost areas or is automated/mechanized, and labor moves to providing higher-value services.
What if we’ve run out of Next Big Things that generate more jobs? What if the next big thing is Degrowth, i.e. consuming less and doing more with less? This is a problem, as the Status Quo has optimized only one pathway: higher consumption, costs and debt.Any reduction in any of these three collapses the system.
TEDx Tokyo: The “De” Generation (8 minutes) (de-ownership, de-materialism, de-corporatism)
Labor-saving software/communication technology has chewed through much of production and is now feeding ravenously on the service sector. As costs inexorably rise, enterprise has only one real way to reduce costs: reduce labor. As a result, the current Big Thing–the world-wide web–is the first technology that is not creating more jobs than it eliminates.
Many smart people retain the faith that technology always creates more jobs than it destroys, but if we look at our daily lives, I see little evidence to support this faith. Thanks to technology, sole proprietors in information/design businesses can create the same output that took multiple people just 20 years ago.
The Python That Ate Your Job (December 11, 2013)
In my view, the Status Quo has no Plan B, not just from habit and the desire of those in power to retain power; we collectively have a failure of imagination. We cannot imagine a world that consumes less, generates fewer conventional jobs and reduces debt rather than creates more debt. The only strategy left in a systemic failure of imagination is to do more of what has failed spectacularly.
A Degrowth economy is not only entirely feasible in my view, it is the only way forward. The low-hanging fruit of Next Big Things have been picked, and wearable computing (Google glasses, etc.) is simply not a global growth engine. Robotic vehicles will eradicate millions of jobs without creating any more jobs at all; manufacturing self-driving cars will add very little labor to the manufacturing process.
Wages are no longer an adequate means of distributing the surplus of an economy.But this is not doom-and-gloom for society–it is only doom-and-gloom for the current unsustainable arrangement (Plan A). Plan B is actually a better plan, though few are able to see that yet.

Dubai to global bankers: 'Expect another boom'

First big investor roadshow since 2009 debt crisis

London: Some of Dubai’s top officials told international bankers on Monday that it was gearing up for another boom and did not regret the pro-growth policies it used during the first boom. It appeared to win the endorsement of many of the bankers.
Over a dozen top Dubai officials and executives met about 100 representatives of financial powerhouses including Deutsche Bank, Nomura Holdings and Fidelity Investments for the emirate’s first big investor roadshow since the crisis.
“If Dubai had to do the same again, most likely we would follow the same approach,” Mohammad Al Shaibani, chief executive of Investment Corp of Dubai, told the audience at Deutsche Bank’s London offices.
He argued that heavy investment in Dubai between 2006 and 2008 had succeeded in setting the emirate up as a major centre for finance and trade.

“Now we are leading the region and we have a mission to position Dubai as one of the world’s main global cities. We are on the right track,” Shaibani said.
Many of the bankers expressed support for the emirate’s growth strategy on Monday.

Juergen Fitschen, co-chief executive of Deutsche Bank, said there was a danger of excessive growth: “Managing the expansion the right way and minimising potential risks will be crucial for future investments.” But he noted that Dubai’s latest investment plans, which involve spending tens of billions of dollars over the next five years on infrastructure projects and preparations to host the 2020 World Expo, would be a strong stimulus for the economy.
“Dubai is known to be a success story,” he said.
Dubai needs to restore full, healthy ties with the international financial community both to fund its growth plans and to manage heavy debt maturities coming due in the next few years, the legacy of its loan restructurings.
The International Monetary Fund estimates the emirate and state-linked entities will face $78 billion worth of debt maturing between 2014 and 2017, an amount which it has described as “challenging”.
Money is likely to be less readily available then it was before the global financial crisis, which has caused many foreign banks to become more cautious about lending.
Dubai officials and executives told the London meeting that after a slump immediately after the debt crisis, the emirate had entered a new phase of sustained growth on the back of burgeoning regional trade and financial flows.
“Dubai’s 10-year plan was to grow the economy from $38 billion in 2005 to $108 billion in 2015. We are now at a GDP of $97 billion with a growth of 5 per cent expected in 2014,” said Eisa Kazim, chairman of bourse operator Dubai Financial Market. “We are ahead of the plan.” Much of the discussion focused on the risk of another bubble forming — property consultants JLL said in a report on Monday that Dubai’s average residential property prices soared 33 per cent from a year earlier in the first quarter of this year, with prices in some areas reaching their pre-crisis peaks.
In addition to threatening another crash down the road, surging property prices could hurt Dubai’s competitiveness by raising its cost base. Hamad Bu Amim, Director-General of the Dubai Chamber of Commerce, said the increasing cost of living needed to be monitored.
But Dubai executives insisted that lessons had been learnt from the last boom, and that this time policymakers would prevent the economy and markets from overheating.

Russia’s Petro-Ruble Challenges US Dollar Hegemony. China Seeks Development of Eurasian Trade

China will re-open the old Silk Road as a new trading route linking Germany, Russia and China

 Russia has just dropped another bombshell, announcing not only the de-coupling of its trade from the dollar, but also that its hydrocarbon trade will in the future be carried out in rubles and local currencies of its trading partners – no longer in dollars – see Voice of Russia
Russia’s trade in hydrocarbons amounts to about a trillion dollars per year. Other countries, especially the BRICS and BRCIS-associates (BRICSA) may soon follow suit and join forces with Russia, abandoning the ‘petro-dollar’ as trading unit for oil and gas. This could amount to tens of trillions in loss for demand of petro-dollars per year (US GDP about 17 trillion dollars – December 2013) – leaving an important dent in the US economy would be an understatement.

Added to this is the declaration today by Russia’s Press TV – China will re-open the old Silk Road as a new trading route linking Germany, Russia and China, allowing to connect and develop new markets along the road, especially in Central Asia, where this new project will bring economic and political stability, and in Western China provinces,where “New Areas” of development will be created. The first one will be the Lanzhou New Area in China’s Northwestern Gansu Province, one of China’s poorest regions.

“During his visit to Duisburg, Chinese President Xi Jinping made a master stroke of economic diplomacy that runs directly counter to the Washington neo-conservative faction’s effort to bring a new confrontation between NATO and Russia.” (press TV, April 6, 2014)
“Using the role of Duisburg as the world’s largest inland harbor, an historic transportation hub of Europe and of Germany’s Ruhr steel industry center, he proposed that Germany and China cooperate on building a new “economic Silk Road” linking China and Europe. The implications for economic growth across Eurasia are staggering.”
Curiously, western media have so far been oblivious to both events. It seems like a desire to extending the falsehood of our western illusion and arrogance – as long as the silence will bear.
Germany, the economic driver of Europe – the world’s fourth largest economy (US$ 3.6 trillion GDP) – on the western end of the new trading axis, will be like a giant magnet, attracting other European trading partners of Germany’s to the New Silk Road. What looks like a future gain for Russia and China, also bringing about security and stability, would be a lethal loss for Washington.
In addition, the BRICS are preparing to launch a new currency – composed by a basket of their local currencies – to be used for international trading, as well as for a new reserve currency, replacing the rather worthless debt ridden dollar – a welcome feat for the world.
Along with the new BRICS(A) currency will come a new international payment settlement system, replacing the SWIFT and IBAN exchanges, thereby breaking the hegemony of the infamous privately owned currency and gold manipulator, the Bank for International Settlement (BIS) in Basle, Switzerland – also called the central bank of all central banks.
To be sure – the BIS is a privately owned for profit institution, was created in the early 1930’s, in the midst of the big economic melt-down of the 20th Century. The BIS was formed precisely for that purpose – to control the world’s monetary system, along with the also privately owned FED and the Wall Street Banksters – the epitome of private unregulated ownership.
The BIS is known to hold at least half a dozen secret meetings per year, attended by the world’s elite, deciding the fate of countries and entire populations. Their demise would be another welcome new development.
As the new trading road and monetary system will take hold, other countries and nations, so far in the claws of US dependence, will flock to the ‘new system’, gradually isolating Washington’s military industrial economy (sic) and its NATO killing machine.
This Economic Sea Change may bring the empire to its knees, without spilling a drop of blood. An area of new hope for justice and more equality, a rebirth of sovereign states, may dawn and turn the spiral of darkness into a spiral of light.
Peter Koenig is an economist and former World Bank staff. He worked extensively around the world in the fields of environment and water resources. He writes regularly for Global Research, ICH, the Voice of Russia and other internet sites. He is the author of Implosion – fiction based on facts and on 30 years of experience around the globe.


Global Wealth CONFISCATION Begins! Get Your Money OUT!

The sharp deterioration of the public finances in many countries has revived interest in a “capital levy”— a one-off tax on private wealth—as an exceptional measure to restore debt sustainability.
Exclusive: EU executive sees personal savings used to plug long-term financing gap
The Government proposes to implement a ?bail-in? regime for systemically important banks.
Poland reduces public debt through pension funds overhaul

Retiring SEC Lawyer Crucifies His Employer: "It's A Cancer" Working On Behalf Of The "Bankster Turnpike"

We wonder: why does the truth about the broken system, as witnessed and experienced by individual employees, always wait until said employee is about to depart their employer or just after? Obviously that is rhetorical. However, it is worth mentioning, because in the latest such revelation, a retiring SEC trail attorney veteran, James Kidney, who had been with the agency since 1986 and retired this month, just crucified his now former employer for doing precisely all those thing that outside critics - notably Zero Hedge - have accused the most co-opted, clueless, corrupt and criminal regulators of doing. Only he said it in a way that not even we could have phrased.
From Bloomberg:
The SEC has become “an agency that polices the broken windows on the street level and rarely goes to the penthouse floors,” Kidney said, according to a copy of his remarks obtained by Bloomberg News. “On the rare occasions when enforcement does go to the penthouse, good manners are paramount. Tough enforcement, risky enforcement, is subject to extensive negotiation and weakening.”

Kidney said his superiors were more focused on getting high-paying jobs after their government service than on bringing difficult cases. The agency’s penalties, Kidney said, have become “at most a tollbooth on the bankster turnpike.
Wow: another "erudite" former cog in the systemic wheel goes off the reservation and gets all tinfoil bloggy on us. He goes on:
In his speech, Kidney also hit the agency for using misleading statistics to showcase its enforcement efforts. The SEC should focus on the quality of its actions, rather than try to file as many as possible just to tout its record to lawmakers and the media, he said.

“It is a cancer,” Kidney said of the agency’s use of numbers. “It should be changed.”
His name was James Kidney.
Kidney said in the interview that he will always be an SEC loyalist and was trying to offer constructive criticism that could help the agency. He said he wasn’t singling out any specific cases or officials in his comments.

“I don’t think we did a very aggressive job with all the major players in the crash of ’08,” he said, noting that as a civil enforcement agency, the commission does not need to prove its cases beyond a reasonable doubt like the Justice Department does. “The SEC has a lower burden of proof and we should be pushing the envelope a bit.”
You mean, pretending to regulate the same people where SEC staffers wish to work will no longer fool most of the people all of the time? The horror... The horror.
A quick reminder on the Goldman wrist slap deal with the SEC, where Kidney was part of the initial, if not final team.
Kidney, who was part of the initial team that was building the Goldman Sachs case, pressed his bosses in the enforcement division to go higher up the chain. He later took himself off the team after being given a lesser role, according to people familiar with the matter.

In particular, the people said, Kidney argued that the commission should sue Tourre’s boss, Jonathan Egol. Kidney also wanted to bring a case against Paulson & Co. or some executives at the hedge fund, which helped pick the portfolio of securities that were underlying the Abacus vehicle and then bet against it.

The SEC ultimately decided not to sue Egol, the Paulson firm or any individuals from the hedge fund.
Yes, it was all the not even 30 year old Tourre's fault. All of it. And the person who dared to point out this criminal disdain for justice by the SEC? He was demoted by the most corrupt of all: Mary Schapiro.
The punchline - the SEC is a regulator only for optical purposes. It's true role is not to shake up the status quo.
In his retirement speech, Kidney noted that he had been “involved in a high-profile case or two” and said he had gotten a message from above not to take too many risks.

“I have had bosses, and bosses of my bosses, whose names we all know, who made little secret that they were here to punch their ticket,” Kidney said. “They mouthed serious regard for the mission of the commission, but their actions were tentative and fearful in many instances.”
Simply said: disgusting and pathetic - both the sad truth about the US market "regulator", which most were already aware of, and that an SEC employee has to wait until the day he quits to express it.
Oh, and if anyone still wants to know why the perfectly legal parasitism of HFT has turned off the retail investors for the last time, and why everyone knows the market is rigged - it is not the vacuum tubes. Nope. It is the criminals at the SEC who made it legal for 25 year old math PhDs to rig stocks in the first place, and who allowed the TBTF banks to make the marketplace into their own personal no risk, all return piggy bank. Them, and of course Congress - because when the day comes that all those idiotic trades blow up and the banks have to pay the penalty, why - they just get another taxpayer bailout, courtesy of America's democratically elected "representatives."


Johnston: How to Cheat on Your Taxes

Newsweek:  How to Cheat on Your Taxes, by David Cay Johnston (Syracuse):
There's never been a better time to cheat on your taxes. Or a better way.
As millions of Americans rush to file their tax returns on time, trying to be ever-so-careful in hopes of avoiding an audit or, far worse, prosecution, they will find it instructive, and infuriating, to learn about Jerry Curnutt.
Curnutt can show people how to cheat on their taxes and not get caught. His trick won't work if you are a wage earner, but those rich enough to invest in real estate partnerships have escaped paying billions of dollars in the past decade by using this technique.
Now Curnutt's mission in life, at age 76, is to get states and the IRS to go after these cheats. ...
[T]he tax-cheat ploy Curnutt uncovered is remarkably easy. On Form 1065, the one partnerships file, just leave Line 10 on Schedule K blank, or report a smaller figure than the real one.
Why does that one line go unnoticed when the IRS selects tax returns for audit? IRS software scans only for what it is told to look for. (Think of those Star Trek episodes in which the Enterprise scans a planet for life, detects none and then discovers life forms the scanners were not tuned to notice.)
This week, news broke that the IRS effectively fails to audit massive partnerships, like hedge funds and private equity funds, even though corporations of the same size are under constant IRS audit. A short video, "Tax Analysts Video Examines Audit-Proof Businesses," explains how partnerships escape audits.
Curnutt knows this because he is a tax detective. He retired from the Internal Revenue Service in 2000 as one of its top snoops, overseeing all investment partnerships. Using his desktop computer, Curnutt discovered a simple way to cheat that no one at the IRS had noticed. Call it Curnutt cheating.
For his brilliant sleuthing, the IRS gave Curnutt commendations and multiple cash awards, each for about $1,000. It sent him around the country to conduct 64 training sessions so IRS auditors could learn how to efficiently spot these cheats. He also trained state tax auditors from California, Indiana, New Jersey and New York.
But the IRS never put Curnutt's insights into practice and never cracked down on the cheaters, allowing them to escape paying tens of billions of dollars in federal and state taxes.
The odds for taxpayers overall, according to IRS data analyzed by Syracuse University's Transactional Records Access Clearinghouse for 2013 and 1993, per million taxpayers:

Recommended for Prosecution as Tax Cheat
Sentenced to Prison
Caught for “Curnutt Cheating” in Real Estate Partnerships
Tax Analysts:  Why It Matters That the IRS Has Trouble Auditing Partnerships, by Amy S. Elliott

ABN Amro banker deaths confirmed as family murder-suicide

Former ABN Amro banking chief Jan Peter Schmittmann, found dead at his home in Laren at the weekend, killed his wife and daughter and then hung himself, the Telegraaf says on Tuesday.
A suicide note was found at the family home in the wealthy town but further details have not been released. However, Schmittmann was known to suffer from severe depression, the paper says.
Police were called to the house at 10.30 on Saturday morning after receiving a report that ‘something was up’. They then found the bodies of Schmittmann and his wife Nelly, both 57, and their 22-year-old handicapped daughter Babette, who was 22.
Another daughter, aged 24, is a student in Amsterdam and was not at the house. Before he died, Schmittmann sent a text message to a family friend asking them to ‘take care of my daughter’, the Telegraaf says.
Schmittmann worked for ABN Amro for 26 years and was head of the bank’s Dutch operations when it was nationalised in 2008. He left with a €8m pay-off.


Dennis Gartman: ‘Scared’ and getting out of stocks for now

The recent pullback for markets, driven by momentum-stocks in the technology and biotech space, has just scared one big bull out of the markets.
Dennis Gartman, who edits the Gartman Letter, told CNBC in an interview late Monday he recently ‘got scared’ and moved his equity exposure to near zero from 100%. He said he’s sticking with gold and cash to ride out the “long-awaited and much-needed correction.”
Gartman, who earlier this month was still holding his bullish stock stance, basically got freaked out by 15 minutes on the markets Friday. In that short space of time, he said the market turned like he’d never seen it turn before. Friday was quite a day, with heavy selling of biotech and Internet stocks, pushing the Nasdaq Composite COMP +0.82% to its worst day in two months. The S&P 500 SPX +0.38% and Dow industrials DJIA +0.06% also dropped 1.3% and 1%, respectively, that day.
“Friday morning I came back from the gym, and I was very comfortable: I owned aluminum, I owned coal, I owned money-center banks. Then between 11 a.m. and 11:15 a.m. it was as if they flipped the switch. Everything changed: stocks changed, bonds changed, gold changed, currency changed — the whole world switched,” recalled Gartman.
Gartman said he won’t be buying stocks again until they get much cheaper.
He said Friday’s action was worth noting because it was a so-called outside reversal day, when both the high and the low price for the day, for a stock or index, exceeds those levels on the previous day. If there is downside follow-through, as Barron’s explained on Monday, it can also signal a market top. The Nasdaq logged a 1.2% drop on Monday, and a 4.6% fall over three sessions, to mark the worst three-day loss since November 2011.
Reversal days are common — they happen, said Gartman. However, reversal weeks are rare, and reversal months are rarer still. “It’s really, really important … we don’t get outside reversal months, where you make a new high and close below the previous month.”
Over on Twitter, there was plenty of eye-rolling going on, given that on April 1, Gartman was touting a bullish stance on stocks to CNBC.
Gartman may be missing out on a bounce, though, according to some. Milton Ezrati, market strategist and economist at Lord Abbett, told CNBC he expects earnings won’t disappoint and will “show people that the world’s not going to come to an end, just because names in social media are blowing up.”

Must Read: Fed Employees Rollout A Bold Idea To Trap The Entire Country’s Wealth


Free market economists are not going to be happy about this...
A major financial news source just published shocking details about a research report by two employees at the Federal Reserve Bank. The 36-page report applauds the use of “capital controls” in global markets.
If you’re unfamiliar with the term “capital controls,” it’s probably because we tend to avoid them in the United States in favor of a free market economy.
Capital controls are simply laws that regulate and restrict what you are allowed to do with your money by regulating the flow of cash in and out of a national economy. The laws define such things as where you can invest your cash and how you can allocate your assets.
If you take a look around the globe, you’ll see several recent example—almost always from countries experiencing a currency crisis:
  • In Cyprus...some citizens cannot withdraw or write checks for more than €300 per day from their own accounts. These controls were put in place after the Greek debt crisis of 2012 and are set to continue until year-end.
  • In controls imposed in 2008 have blockaded offshore investors from selling $7.2 billion in assets.
  • In Argentina...citizens must pay an extra tax on vacations abroad.
  • In the Ukraine...recent tensions sparked a series of capital controls. Ukrainians must wait six working days before making any type of foreign currency purchases. In addition, they cannot exchange more than the equivalent of $5,800 USD within a given time period.
You might be wondering… how are these draconian laws “a useful tool for managing financial stability” as the recent Fed paper says?
Well, the Fed research claims that capital controls would protect the U.S. dollar from the effects of rapid cash movements...
Of course, the only countries that are worried about capital controls are those deeply worried about a currency crisis.
According to Steve Hanke, a professor of applied economics at Johns Hopkins University in Baltimore, “Capital controls signal that a country is very worried about preserving its foreign exchange....That means bad things are in the wind.”
SEE ALSO: Is your state as broke as these places?
For more than 50 years, Americans have never really thought twice about the value of our currency.
But times are rapidly changing. And most Americans don’t realize that the greatest weapon in our nation’s arsenal is not our military might or our education system, but the simple fact that the U.S. dollar is the world’s “reserve currency.” As such, our money forms the basis of the global financial system. And banks around the world hold our dollars in reserve against their loans.
That’s why, for the past few decades, we have been able to print and borrow trillions of dollars, with no real negative impact.
We are the only country in the world that does not have to pay for imports in a foreign currency. We can rack up enormous debts and then print more money.
But this exorbitant privilege could soon expire, because many of the most powerful countries around the world (including China and Russia) are looking for a new world reserve currency.
And when the U.S. dollar is no longer the world’s reserve currency… when we can no longer print money and borrow absurd sums without consequence– we are in trouble.
One financial guru, Porter Stansberry, believes this currency collapse in America is actually going to happen much sooner than most people think. He says that’s how currency collapses happen… gradually… slowly… then all of a sudden. And Mr. Stansberry has an uncanny track record of predicting some of the biggest moves in the economy over the past decade. In 2006 he announced GM would go bankrupt and in 2007 he predicted Fannie Mae and Freddie Mac would also soon go bankrupt. Both of his predictions came to fruition.
WATCH: Learn more from Porter Stansberry, here.
Now Stansberry says the next big collapse could be America’s currency. And even though most Americans think this could never happen… not here…Stansberry believes new laws set to go in place on July 1st 2014 will dramatically accelerate this process.
What is this law that was secretly passed by the Obama Administration… and how will it affect you, your money, and the U.S. dollar?
Stansberry and his Baltimore-based research team have put together a free slide presentation that explains everything you need to know. Get the facts and protect yourself here.