Thursday, December 31, 2015

Happy New Year — Bail-In Passed for Europe’s Banks

The mainstream media is not extensively reporting on the “experimental” bail-in that the EU imposed on Cyrus. The bail-in, that they swore would never be applied to Europe, will officially begin in January. This new power will be in the interest of taxpayers as they will no longer be forced to pay for failed banks that were created by the childish structure of the euro that was created by lawyers who never understood the economy. But wait a minute — aren’t taxpayers the people with deposits in banks? Hm. Moving to electronic money is also about preventing bank runs. The bottom-line here is that they will just take your money to save bankers. Eliminating cash accomplishes two things: (1) they get to tax everything, and (2) you cannot withdraw money from banks.
The bail-in directive was agreed upon on January 1, 2015, and the bail-in system will take effect on January 1, 2016. So here we are, just in case you missed this one. Their website states:
Parliament and Council Presidency negotiators reached a political agreement Wednesday on the draft bank recovery and resolution directive, the first step towards setting up an EU system to deal with struggling banks. This directive will introduce the “bail-in” principle by January 2016, thereby ensuring that taxpayers will not be first in line to pay for bank failures.
The entire system of insuring banks after their collapse during the Great Depression was to restore confidence to end the hoarding and revitalize the economy. Now they have allowed bankers to do everything they did before, and they have reversed the insurance created to restore confidence in banking. They justify this by claiming taxpayers will not have to pay for the failed banks.
FDR-Fireside Chat
Over 9,000 banks failed during the Great Depression in the United States; an estimated 4,000 banks failed in 1933 alone. Roosevelt’s fifteen-minute radio address to the American people on Sunday evening, March 12, was his first Fireside Chat. He told the public that only sound banks would be licensed to reopen by the U.S. Treasury: “I can assure you that it is safer to keep your money in a reopened bank than under the mattress.”
1933 NYT Bank Holiday
1933 Detroit Money Returned to Banks
1933 40percent deposite to be paid
When the institutions reopened for business on March 13, 1933, depositors stood in line to return their hoarded cash to neighborhood banks. Within two weeks, Americans had redeposited more than half of the currency that they had withdrawn from the banks due to the collapse in confidence.
Banks failed even after the bank holiday. The process was indeed a “bail-in”. People would get whatever the scraps were worth upon the collapse of the bank. Absolutely everything the governments did to restore confidence has been reversed in Europe. Yet, they try to “stimulate” the economy with QE? Just brain-dead.

Gerald Celente: Existing home sales down 10.5% in November

Gerald Celente: Existing home sales down 10.5% in November
Existing home sales down 10.5% in November, mergers/acquisitions break 2007 peak record & the early release of this week’s Trend This Week! You won’t read this anywhere else!


Since the Bubble burst the US has accelerated its Macro-Prudential Policies of Financial Repression. PEW Research just released a study which tracks the deterioration in the confidence citizens have in their government.
We have a Crisis of Trust in America and as the charts below show, it has only accelerated with government policies of Financial Repression.
Just 19% of Americans say they “can trust the federal government always or most of the time”. 
  • That’s among the lowest levels in over 50 years.
  • The long-term erosion of public trust is mirrored by a steep decline in the belief that the government is run for the benefit of all Americans.

Less than a year ahead of the presidential election, there is widespread discontent with the federal government. A new Pew Research Center report finds deep distrust in government and considerable cynicism about politics and elected officials alike. But despite these negative assessments, majorities believe government does a good job on many issues and want it to have a major role on a wide range of policy areas.
Here are five of PEW’s key takeaways from the report:
1 The public’s trust in government remains at historic lows. Today, just 19% say they trust the federal government to do what is right always or most of the time, which is little changed from recent years. Fewer than three-in-ten Americans have expressed trust in government in every major national poll conducted since July 2007 – the longest period of low trust in government seen in more than 50 years.
While Democrats are more likely than Republicans to say they trust the government, trust remains low across partisan lines: Just 11% of Republicans and Republican-leaning independents say they trust the government, compared with 26% of Democrats and Democratic leaners. (For more on the public’s trust in government, see this interactive.)
2 As in the past, the public’s feelings about government run more toward frustration than anger. Currently, 57% are frustrated with the federal government; 22% are angry, while 18% are basically content.
Far more Republicans (32%) than Democrats (12%) say they are angry with the government. But higher shares in both parties expressed anger toward government in October 2013, during the partial government shutdown.
While anger at government has been higher among Republicans than Democrats during Barack Obama’s administration, the situation was reversed during George W. Bush’s presidency: In October 2006, 29% of Democrats said they were angry with government, compared with just 9% of Republicans.
3 Despite their widespread cynicism, most Americans give government good ratings in a number of areas. Half or more say the federal government is doing a “very good” or “somewhat good” job in 10 of the 13 governmental functions tested in the survey.
However, the federal government receives particularly low marks in two key areas: Managing the nation’s immigration system and helping people get out of poverty. Nearly seven-in-ten (68%) say the government does a very or somewhat bad job in managing the immigration system; just 28% say it is doing a good job. Ratings are nearly as negative when it comes to the federal government’s efforts to help people get out of poverty: 61% say the government is doing a bad job in this area, while 36% give it a positive assessment.
Majorities say the government should have a major role in dealing with 12 of 13 issues included in the survey.
4 Americans are harshly critical of elected officials. The public views politicians as more selfish and considerably less honest than ordinary Americans. Just 29% say that “honest” describes elected officials very or fairly well, a much smaller share than those who describe the average American as honest (69%).
Most people do say the term “intelligent” describes elected officials very or fairly well (67%). However, just as many view the typical American as intelligent. And when asked if elected officials or ordinary Americans could do a better job of solving the nation’s problems, 55% say ordinary Americans could do better.
While negative opinions of politicians are not new, the perception that elected officials don’t care about what people think is now held more widely than it has been in recent years. Today, 74% say this, compared with a narrower 55% majority who said the same in 2000.
5 Congress is not the only institution the public sees as having a negative influence on how things are going in the country today. Majorities see the national news media (65%) and the entertainment industry (56%) as having a negative impact on the country. By contrast, overwhelming majorities see small businesses (82%) and technology companies (71%) as having a positive impact.
There are substantial partisan and ideological divides in the views of several of these institutions. For example, nearly seven-in-ten liberal Democrats (69%) say colleges and universities have a positive impact on the country, compared with just less than half (48%) of conservative Republicans. Conversely, fully three-quarters of conservative Republicans say that churches and religious organizations have a positive impact on the country, while just 41% of liberal Democrats agree.
The Thompson-Reuters TRust Index of confidence in the top 50 Global Financial Institutions shows an also very worrying trend deterioration!

As we laid out in the 2013 Thesis Paper “Statism“, a Crisis of Trust has a profound impact on the economy and if left unresolved politically for a protracted period will lead to economic stagnation.
In last year’s 2015 Thesis Paper: “Fiduciary Failure” we spelled out the crippling level it has now reached in the US. It has only gotten worse and we detail in the 2016 Thesis Paper: Crisis of Trust in The Era of Uncertainty how it is now infecting the global economy.
Sign-up now for your 2016 Thesis Paper: Crisis of Trust in The Era of Uncertainty

Honey, I Shrunk the Middle Class: Perhaps 1/3 of Households Qualify

If it takes more than $126,000 to fund a qualitatively defined middle-class lifestyle, what sense does it even make to call this “middle”?

The Pew Research Center’s recent report The American Middle Class Is Losing Ground: No longer the majority and falling behind financially made a media splash, as it reported that less than 50% of adults are members of the Great American Middle Class.

My analysis suggests that by more qualitative measures, no more than a third of U.S. households qualify as middle class: claiming 49% of the nation’s households are still middle class is a gross exaggeration.

My analysis starts with the minimum fundamental lifestyle and wealth requirements of middle-class membership: In What Does It Take To Be Middle Class?, I listed these requirements:

1. Meaningful healthcare insurance ($5,000 deductible healthcare plans don’t qualify; they are simulacrum/phantom coverage).
2. Significant equity (25%+) in a home or other real estate.
3. Income/expenses that enable the household to save at least 6% of its income.
4. Significant retirement funds: 401Ks, IRAs, etc.
5. The ability to service all expenses over the medium-term if one of the primary household wage-earners lose their job.
6. Reliable vehicles for each wage-earner.
7. The household does not depend on government assistance to maintain the family lifestyle.
8. A percentage of hard assets beyond the family home that can be transferred to the next generation.
9. Surplus income to invest in children (extracurricular activities, lessons, etc.).
10. Leisure time devoted to the maintenance of physical/spiritual/mental fitness.
In other words, middle class cannot be meaningfully defined by income alone.The middle class is more than owning a home (especially if the equity is modest or dependent on the asset bubble du jour): the most fundamental qualities of the middle class are not measures of income or bling, though obviously income is necessary to provide them:

— real healthcare coverage
— wealth that can’t be destroyed by one bad break or one popped asset bubble

— the ability (and willingness) to invest in children

— the ability (and willingness) to transfer accumulated real wealth to the next generation.

Income is not an accurate proxy, as many high-income households are living paycheck to paycheck: regardless of their income, they don’t qualify as middle class by qualitative standards.

Read the Whole Article


by James Quinn 

You would think investors (muppets) would be grateful for the extended topping process of the stock market, as it has given them the opportunity to exit before the inevitable crash. As CNBC and the rest of the mainstream media spin bullish stories to keep the few remaining mom and pop investors sedated and the millions of passive working Americans invested in their 401ks, the Wall Street rigging machine siphons off billions in ill-gotten gains, while absconding with fees for worthless advice.
Does the average schmuck know the S&P 500 stood at 2,063 on November 21, 2014 and currently sits at 2,056, thirteen months later? Based on the media narrative, we are still in the midst of a raging bull market. John Hussman provides the counterpoint to this narrative with unequivocal factual evidence based upon a hundred years of stock market data and valuations. Anyone investing in today’s market should expect ZERO returns over the next ten years and a 40% to 55% plunge in the near future. And as a cherry on top, a recession has arrived.
The summary of this outlook is straightforward. I view the equity market as being in the late-stage top formation of the third financial bubble in 15 years. Based on a century of evidence relating the most historically reliable valuation measures to actual subsequent market returns, neither a market plunge of 40-55% over the completion of the current cycle, nor the expectation of zero 10-12 year S&P 500 nominal total returns, nor the likelihood of substantially negative 10-12 year real returns should be viewed as worst-case scenarios – they are all actually run-of-the-mill expectations from current extremes. Based on the joint behavior of the most reliable leading economic measures (particularly new orders plus order backlogs, minus inventories), widening credit spreads, and clearly deteriorating market internals, our economic outlook has also moved to a guarded expectation of a U.S. recession.
The Federal Reserve has encouraged the rampant speculation over the last few years with their trillions in QE gift to Wall Street banks and ZIRP, which allowed the “brilliant” 30 year old Ivy League educated high frequency traders to take the free Fed money and front run their client’s trades and generate guaranteed profits. Of course, ZIRP also forced grandmas throughout the country to acquire a taste for cat food in order to survive. But Ben and Janet are “heroes”, I’m told. What a coincidence that shortly after the QE spigot was turned off on October 29, 2014, the market has gone nowhere. The speculative juices appear to be drying up.
Because speculation tends to be indiscriminate, the most reliable measure of a robust willingness to speculate is the uniformity of market action across a broad range of individual stocks and security types. An overvalued market populated with speculators who still have the bit in their teeth will tend to hold up or advance further despite valuation extremes. Because of the Federal Reserve’s relentless and intentional encouragement of speculation in the half-cycle since 2009, even measures of overvalued, overbought, overbullish extremes – which had historically been followed almost invariably by market collapses in prior market cycles – were followed instead by further market advances.
John Hussman, inconveniently for those of a bullish ilk, notes that market internals have deteriorated rapidly, with only a few beloved, overvalued, overhyped tech stocks holding up the market. Most stocks are already in a bear market. Corporate profits are falling. PE ratios are high. Consumer spending is anemic. The jobs growth narrative is false. Real household income is at 1989 levels. Based on history, current conditions have only been seen at major tops. I’m sure this time will be different and Cramer, along with all the highly paid Wall Street shills, will be right.
Now that market internals have clearly deteriorated following overvalued, overbought, overbullish extremes, with reliable valuation measures at obscene levels and emerging economic weakness, a century of history suggests that the stock market is vulnerable to the risk of severe losses. Investors should not assume that the “support” that keeps losses relatively shallow during a drawn-out topping process will persist. There’s some truth in the old saying “the bigger the top, the steeper the drop.” Only a few points in history have seen the S&P 500 within 3% of a record high, with both overvaluation and unfavorable market internals during at least 80% of the prior 26-week period. Aside from points in recent months, the other points were major tops in 2007, 2000, 1972, 1969, and 1961.
When you talk to your relatives, neighbors and coworkers they all act like they are buy and hold long term investors. They are either lying or oblivious. Someone who is 60 years old and has accumulated a significant 401k nest egg invested in stocks can not afford a 50% haircut in their retirement portfolio. Anyone with a significant amount in the stock market will have to have balls of steel to not panic as their life savings is cut in half – AGAIN. Three times in fifteen years is pretty hard to swallow. The debt markets (junk bonds) are a flashing red warning light. To not heed the warnings of the market would be foolish. Hussman couldn’t be any clearer, just as he was in 2000 and 2007.
I really do implore investors who could not comfortably ride out a market collapse similar to 2000-2002 or 2007-2009, or who rely on their assets to finance near-term spending plans, to shift their risk exposure down to a level that could tolerate that outcome. Understand that while valuations have been hostile for years, and while overvalued, overbought, overbullish conditions have repeatedly emerged in the recent half-cycle without effect, the hinge that supported continued gains was a persistent willingness to speculate, as conveyed by uniformly favorable market internals. That support has dropped away. Ignore that key distinction at enormous risk. The market behavior we’ve observed in recent quarters is fully consistent with an extended top formation. With credit spreads predictably widening in successively larger spikes, that formation appears increasingly vulnerable to a steep vertical break of prior support.
Robert Prechter perceptively notes that investors act in a herd like manner thinking that because the herd is still invested in the market and has not sensed danger yet, it must be safe. Investors are lazing around the waterhole like unsuspecting gazelles. This herd will be running for their lives in the near future, as danger is lurking.

Still, we doubt that most speculators think about the decision to accept market exposure in such a systematic way. On that point, Robert Prechter of EWI offered a brilliant perspective last week to describe the typical behavior of speculators. He observed, “In neither case – buying or selling – is there any thought about taking on risk, rationally or otherwise. In both cases, they are unconsciously acting to reduce risk, thanks to the emotionally satisfying impulse to herd. Herds act to gain sustenance or avoid danger. Gazelles may lope together toward the water hole or dash in a herd from predators. The goal, albeit unconscious, of both types of actions is to reduce risk. Likewise, in market advances speculators herd as if trying to gain sustenance; and in market declines they herd as if trying to avoid getting killed… Subjectively, i.e. in their own minds, speculators perceive greater risk as less risk and less risk as greater risk. That is why they buy in uptrends and sell in downtrends. In the former case, they behave as if the herd is leading them to sustenance, and in the latter case they behave as if the herd is leading them away from danger. Ironically, the truth is wholly the opposite.”
If you have an ounce of common sense, ability to think critically, and appreciation for risk, you should leave the herd now before the inevitable stampede. Staying with the herd as it heads for the cliff is not an effective strategy.
At present, we observe a herd at the peak of a valuation cliff, where an increasing proportion of the herd is backing away. It’s increasingly urgent to dig in one’s hooves to keep from dashing over the edge. We can do little for those who insist on remaining in full gallop, imagining that sustenance awaits them ahead.
After experiencing two Federal Reserve induced booms and busts in the last fifteen years, you would think people would learn. But the true lesson of history is that people never learn from the lesson of history.
How did the S&P 500 trace out a total return of zero between 2000 and the end of 2011? By first losing half its value, then more than doubling, then losing more than half its value, and then doubling again. Across history, extreme valuations have invariably been followed by similar behavior – wide cyclical swings, yet only modest overall returns over the following decade.
Anyone fully invested in the stock market at this point in time is delusional and mad. If they think they can sense danger before the rest of the herd and exit once the stampede starts, they are badly mistaken. Just as they were in 2000 and 2007. Now is the time to regain your senses and stop playing in this rigged Wall Street game.
After years of Fed-induced yield-seeking speculation that has driven equity valuations to the second most extreme point of overvaluation in history (and the single most extreme point on the basis of median valuations), investors have somehow convinced themselves that this time will be different; that this time the market will maintain at a permanently high plateau. That belief is nothing new – it’s the same delusion that investors have held at speculative peaks across history, refusing to accept the familiar signs of danger until the equally familiar losses were conclusively in hand.
“Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, one by one.”
Charles Mackay, Extraordinary Popular Delusions and the Madness of Crowds
Read Hussman’s Weekly Letter

How Iceland Escaped From The One Bank

by Jeff Nielson
What have the governments of the corrupt Western bloc spent most of their time doing since the Crash of ’08? We can answer this question in three parts:
1)  Creating increasingly falsified “statistics” to fabricate the illusion that their economies were not all on the verge of an all-out economic collapse.
2)  Hacking-and-slashing every social program in sight, in order to generate the false-savings known as Austerity.
3)  Creating new funny-money and taking on new debt at an exponentially increasing rate, in order todelay collapse, since all that Austerity accomplished was to accelerate these death-spirals.
Making these points apparent to newer readers will require additional elaboration. The starting point is the Crash of ’08 itself. What caused these nations to go from being merely heavily indebted to hopelessly insolvent, overnight? That can be summed-up in a single euphemism of fraud and crime: “too big to fail”.
At the end of 2008; the West’s puppet governments succumbed to History’s ultimate act of blackmail, at the hands of History’s largest and most-rapacious crime syndicate: the One Bank. “Give us all your money, or we’ll blow up your entire financial system.” That is the real meaning of too-big-to-fail: institutionalized extortion, in perpetuity.
What was the real price-tag for this massive extortion operation? Forget the phony numbers published by our corrupt governments, and their mouthpieces in the Corporate media. The total quantum for theseextortion payments was in the $10’s of TRILLIONS. Obviously the Deadbeat Debtors of the West couldn’t raise more than a tiny fraction of that amount of blackmail-money up front. Thus most of this shake-down of (supposedly) sovereign governments came in the form of future tax-breaks and “loss guarantees”.
In the Shake-Down of ’08, our governments did not merely clean out every penny they could scrounge from our public Treasuries, and also borrowed every penny that they could. In addition, they mortgaged the future of our children and grandchildren, by pledging infinite corporate welfare for the One Bank.
Western governments had no money left to spend on their own people after committing $10’s of trillions in extortion payments to this banking crime syndicate, while also having to deal with rapidly rising interest payments (to the same crime syndicate) on all their new debts. So Western governments then pulled out their chain-saws, and attacked our social programs.
Infinite dollars in “interest payments” go to the crime syndicate; no pennies are left for the people. That is Austerity. However, so-called Austerity represents more than simply another act of economic treasonagainst Western populations, it is also the fatal, self-inflicted wound for these economies.
Austerity treason took economies which were already in a slow-motion descent toward collapse, and rapidly sped-up that suicide cycle. The evidence here is overwhelming, but can be summed-up most easily in one word: Greece.
Greece has had far greater and more-punitive amounts of Austerity treason heaped upon its victim population than any other regime in the Corrupt West. It was demanded by the economic sadists known as “the Troika”: the European Union, the European Central Bank, and the International Monetary Fund. The result? This nation was bankrupted twice within a span of five years.
Which nations are closest behind Greece in Europe’s Bankruptcy Derby? Spain and Portugal. These are the #2 and #3 nations, in terms of inflicting the greatest amounts of this suicidal Austerity on their own populations. Austerity kills. More Austerity kills faster.

Here people need to understand that it was always totally predictable that Austerity would fail. It was always totally predictable that Austerity would harm these economies more than help them. And this waspredicted (repeatedly) in previous commentaries.
How do you make any economy stronger? The key lies within one of the most fundamental principles of economics: the Marginal Propensity to Consume. This law of economics is universally accepted, because it is ½ simple arithmetic, and ½ common sense.
In elementary terms, the fastest/easiest way to make any economy stronger is to place a dollar into the hands of a member of the Poor or Middle Class. Why? Because these people will spend most of that dollar (the Middle Class), or all of that dollar (the Poor), immediately. This extra dollar of consumption then gets divided up into wages, payments to suppliers, tax revenues for the government, etc. Then additional portions of that dollar are spent and re-spent. This is known as “the multiplier effect”, and it explains why the Marginal Propensity to Consume is a universally accepted principle.
But what happens if we put a dollar into the hands of the Rich, rather than the Poor or Middle Class? By definition; the Rich person will hoard the vast majority of that dollar. As a matter of the simplest logic and arithmetic, no person can become “rich” unless/until they have spent years hoarding wealth, or they win a lottery.
Thus every time a Rich person receives a dollar, most of that dollar is hoarded and disappears from the economy. Only a few pennies of that dollar are ever circulated, and as a result the multiplier effect isvirtually nil. This is known by the economic euphemism: “trickle-down economics”. Put all the new dollars into the hands of the wealthy, and only a few pennies will ever “trickle down” to the economy.
“Trickle-down economics” has been the official policy of nearly all of the traitorous governments of the Corrupt West since the start of the new millennium, and, in the case of the U.S., it goes back at least a full generation. This policy of everything-for-the-Fat-Cats and nothing for the Little People is one of the primary reasons for the relentless decay in our standard of living, and the relentless collapse of our economies.
How do you then make these sick economies even sicker? Start taking extra dollars out of the hands of the Poor and Middle Class — Austerity. Every dollar of Austerity treason creates a Reverse Multiplier Effect: removing more and more dollars from the system, and thus starving the economy of the fuel which allows our consumer economies to survive: consumer spending.
Austerity causes the economy to get even sicker, leading to larger deficits, more borrowing, and thus even higher interest payments to the parasitic One Bank. Debt slavery. The response from these puppet governments to this vicious circle? Even more Austerity. If something fails, do much more of it.
However, one Western nation that was caught up in the original Crash of ’08 did not climb aboard this treadmill of economic suicide and blackmail: Iceland. As a result, alone among the nations of Europe, Iceland enjoys real robust economic growth. The standard of living of its population is once again rising, rather than falling – as it is throughout the rest of the Corrupt West.
How? How did one, small island nation succeed while every other Western government failed, miserably and completely? As with the economic suicide now practiced throughout the Corrupt West, Iceland’s success also traces back to the same, four words: “too big to fail.”
What happened when Iceland’s Big Banks (more tentacles of the One Bank) arrogantly demanded that the government rubber-stamp the principle-of-crime of “too big to fail” – sacrificing the System in order to save the Big Banks? Iceland’s government responded that it had a different, radical idea: it would sacrifice the Big Banks, and save the System.
Iceland’s Big Banks folded. As with all blackmailers, the One Bank responded to Iceland’s refusal to be blackmailed by immediately lashing-out, in revenge. Among other things, it attacked Iceland’s currency (i.e. manipulated it lower), yet another criminal conspiracy for which the Big Banks have now been convicted.
However, Iceland’s government stood firm, and did not cave in to the attempted extortion by this crime syndicate. It weathered the financial/economic reprisals. It proved that “too big to fail” was always nothing more than a lie and a myth, created by the banking crime syndicate. No entity within any system could ever be more important than the system itself. This was always elementary logic. Iceland has validated that logic.
Iceland refused to be blackmailed. Iceland refused to take on the extra debt (and debt slavery) that came with the blackmail. Iceland refused to touch its social programs. Iceland has the strongest economy in the Western world.
Game, set, and match.

Bank of America is trying to load up on patents for the technology behind bitcoin

by Thomas Dishaw
Banksters gangsters who haven’t did anything innovative since the ATM are loading up on patents hoping to capitalize on the future cryptocurrency trend according  to this QZ report.

Bankers may not think bitcoin will ever go fully mainstream, but they clearly believe there is value in the technology that powers such cryptocurrencies, known as blockchain.
On Dec. 17, the US Patent office published 10 blockchain-related patents filed by Bank of America in July 2014. The patents haven’t been granted yet, but the filings demonstrate the bank’s interest in using blockchain technology to revamp its backend operations, which, like other financial institutions, are largely paper-based.
The wide-ranging patents cover everything from a “cryptocurrency transaction payment system” which would let users make transactions using cryptocurrency, to risk detection, storing cryptocurrencies offline, and using the blockchain to measure fraudulent activity. (The blockchain is essentially a publicly available ledger that’s distributed to everyone within a network.)
Bank of America had no comment.
Financial institutions are quickly ramping up their research efforts around blockchain technology. Last week, IBM, JPMorgan, the London Stock Exchange, and Wells Fargo announced the Open Ledger Project, a new consortium that will focus on allowing businesses to easily build their own blockchain technology. Bank of America is a part of a consortium led by blockchain startup R3 that’s developing blockchain technology to be used in financial markets. The Aite Group estimates that banks have invested $75 million this year on blockchain tech, a figure the research firm forecasts will grow to $400 million in 2019.
Other financial institutions have been building up their blockchain-related intellectual property. Goldman Sachs filed a patent for its own cryptocurrency, SETLCoin, that would allow traders to execute and clear trades in real time.
It’s hard to speculate what Bank of America will do with these patents, if anything. But Coindesk notes these patents could be hinting at BofA working on a complete network based on blockchain.

The real-life genius from ‘The Big Short’ thinks another financial crisis is looming…

From Jessica Pressler at New York Magazine:
If The Big Short, Adam McKay’s adaptation of Michael Lewis’s book about the 2008 financial crisis, got you all worked up over the holidays, you’re probably wondering what Michael Burry, the economic soothsayer portrayed by Christian Bale who’s always just a few steps ahead of everyone else, is up to these days. In an e-mail, which readers of the book will recognize as his preferred method of communication, the real-life head of Scion Asset Management answered some of our panicked questions about the state of the financial system, his ominous-sounding water trade, and what, if anything, we can feel hopeful about.
The movie portrays all of you as kind of swashbuckling heroes in some ways, but McKay suggested to me that you were very troubled by what happened. Is that the case?
I felt I was watching a plane crash. I actually had that dream again and again. I knew what was happening, but there was nothing I, or anyone else, could do to stop it. The last day of 2007, I couldn’t come home. I was in the office till late at night, I couldn’t calm down. I wrote my wife an email and just said, “I can’t come home; it’s just too upsetting what’s happening, and I didn’t want to come home to my kids like this.” As for punishment of those responsible, borrowers were punished for their overindulgences — they lost homes and lives. Let’s not forget that. But the executives at the lenders simply got rich.
Were you surprised no one went to jail?

I am shocked that executives at some of the worst lenders were not punished for what they did. But this is the nature of these things. The ones running the machine did not get punished after the dot-com bubble either — all those VCs and dot-com executives still live in their mansions lining the 280 corridor on the San Francisco peninsula. The little guy will pay for it — the small investor, the borrower. Which is why the little guy needs to be warned to be more diligent and to be more suspicious of society’s sanctioned suits offering free money. It will always be seductive, but that’s the devil that wants your soul.
When I spoke to some of the other real-life characters fromThe Big Short, I was surprised to hear that they thought that financial reform was pretty effective and that the system was much safer. Michael Lewis disagreed. In your opinion, did the crash result in any positive changes?
Unfortunately, not many that I can see. The biggest hope I had was that we would enter a new era of personal responsibility. Instead, we doubled down on blaming others, and this is long-term tragic. Too, the crisis, incredibly, made the biggest banks bigger. And it made the Federal Reserve, an unelected body, even more powerful and therefore more relevant. The major reform legislation, Dodd-Frank, was named after two guys bought and sold by special interests, and one of them should be shouldering a good amount of blame for the crisis. Banks were forced, by the government, to save some of the worst lenders in the housing bubble, then the government turned around and pilloried the banks for the crimes of the companies they were forced to acquire. The zero interest-rate policy broke the social contract for generations of hardworking Americans who saved for retirement, only to find their savings are not nearly enough. And the interest the Federal Reserve pays on the excess reserves of lending institutions broke the money multiplier and handcuffed lending to small and midsized enterprises, where the majority of job creation and upward mobility in wages occurs. Government policies and regulations in the postcrisis era have aided the hollowing-out of middle America far more than anything the private sector has done. These changes even expanded the wealth gap by making asset owners richer at the expense of renters. Maybe there are some positive changes in there, but it seems I fail to see beyond the absurdity.
Where do we stand now, economically?
Well, we are right back at it: trying to stimulate growth through easy money. It hasn’t worked, but it’s the only tool the Fed has got. Meanwhile, the Fed’s policies widen the wealth gap, which feeds political extremism, forcing gridlock in Washington. It seems the world is headed toward negative real interest rates on a global scale. This is toxic. Interest rates are used to price risk, and so in the current environment, the risk-pricing mechanism is broken. That is not healthy for an economy. We are building up terrific stresses in the system, and any fault lines there will certainly harm the outlook.
What makes you most nervous about the future?
Debt. The idea that growth will remedy our debts is so addictive for politicians, but the citizens end up paying the price. The public sector has really stepped up as a consumer of debt. The Federal Reserve’s balance sheet is leveraged 77:1. Like I said, the absurdity, it just befuddles me.
Read the full interview (including Burry’s top idea today) right here…

Gloomy omen for 2016: Baltic Dry, a measure of shipping rates for everything from coal to ore, fell to historic low.

Gloomy omen for 2016: Baltic Dry, a measure of shipping rates for everything from coal to ore, fell to historic low.

The Confiscation of Bank Savings to “Save the Banks”: The Diabolical Bank “Bail-In” Proposal

The Crisis in Greece: Will it result in a Haircut “Bail-in” as applied in 2013 in Cyprus? 
This article was first published by Global Research in April 2013. 
*      *     *
Is the Cyprus Bank “Bail-in” a “dress rehearsal” for things to come?
Is  a “Savings Heist” in the European Union and North America envisaged which could result in the outright confiscation of bank deposits?
In Cyprus, the entire payments system has been disrupted leading to the demise of the real economy.
Pensions and wages are no longer paid. Purchasing power has collapsed.
The population is impoverished.
Small and medium sized enterprises are spearheaded into bankruptcy.
Cyprus is a country with a population of one million.
What would happen if similar ‘hair cut” procedures were to be applied in the U.S. or the European Union?
According to the Washington based Institute of International Finance (IIF) (right) which represents the consensus of the global financial establishment, “the Cyprus approach of hitting depositors and creditors when banks fail, would likely become a model for dealing with collapses elsewhere in Europe.” (Economic Times, March 27, 2013).
It should be understood that prior to the Cyprus onslaught, the confiscation of bank deposits had been contemplated in several countries. Moreover, the powerful financial actors who triggered the bank crisis in Cyprus, are also the architects of  the socially devastating austerity measures imposed in the European Union and North America.
Does Cyprus constitute a “model” or scenario?
Are there “lessons to be learned” by these powerful financial actors, to be applied elsewhere, at some later stage, in the Eurozone’s banking landscape?
According to the Institute of International Finance (IIF), “hitting depositors” could become the “new normal” of this diabolical project, serving the interests of the global financial conglomerates.
This new normal is endorsed by the IMF and the European Central Bank.  According to the IIF which constitutes the banking elites mouthpiece,  “Investors would be well advised to see the outcome of Cyprus… as a reflection of how future stresses will be handled.”  (quoted in Economic Times, March 27, 2013)
“Financial Cleansing”. Bail-ins in the US and Britain

What is at stake is a process of  “financial cleansing” whereby the “too big to fail banks” in Europe and North America (e.g. Citi, JPMorgan Chase, Goldman Sachs, et al ) displace and destroy lesser financial institutions, with a view to eventually taking over the entire “banking landscape”.
The underlying tendency at the national and global levels is towards the centralization and concentration of bank power, while leading to the dramatic slump of the real economy.
Bail ins have been envisaged in numerous countries. In New Zealand  a “haircut plan”   was envisaged as early as 1997 coinciding with Asian financial crisis.
There are provisions in both the UK and the US pertaining to the confiscation of bank deposits.  In a joint document of the Federal Deposit Insurance Corporation (FDIC) and the Bank of England, entitled Resolving Globally Active, Systemically Important, Financial Institutions, explicit  procedures were put forth whereby “the original creditors of the failed company “, meaning the depositors of  a failed bank, would be converted into “equity”. (See Ellen Brown, It Can Happen Here: The Bank Confiscation Scheme for US and UK Depositors,Global Research, March 2013)
What this means is that the money confiscated from bank accounts would be used to meet the failed bank’s financial obligations. In return, the holders of the confiscated bank deposits would become stockholders in a failed financial institution on the verge of bankruptcy.
Bank savings would be transformed overnight into an illusive concept of capital ownership. The confiscation of savings would be adopted under the disguise of  a bogus “compensation” in terms of equity.
What is envisaged is the application of  a selective process of  confiscation of bank deposits, with a view to collecting debt while also triggering the demise of “weaker” financial institutions. In the US, the procedure would bypass the provisions of the Federal Deposit Insurance Corporation (FDIC) which insures deposit holders against bank failures:
No exception is indicated for “insured deposits” in the U.S., meaning those under $250,000, the deposits we thought were protected by FDIC insurance. This can hardly be an oversight, since it is the FDIC that is issuing the directive. The FDIC is an insurance company funded by premiums paid by private banks.  The directive is called a “resolution process,” defined elsewhere as a plan that “would be triggered in the event of the failure of an insurer . . . .” The only  mention of “insured deposits” is in connection with existing UK legislation, which the FDIC-BOE directive goes on to say is inadequate, implying that it needs to be modified or overridden. (Ibid)
Because depositors are provided with a bogus compensation, they are not eligible to the FDIC deposit insurance.
Canada’s Deposit Confiscation Proposal
The most candid statement of confiscation of bank deposits as a means to “saving the banks” is formulated in a recently released document of the Canadian government entitled Jobs, Growth and Long Term Prosperity: Economic Action Plan 2013″. 
The latter was submitted to the House of Commons by Canada’s Minister of Finance Jim Flaherty on March 21 as part of a so-called “pre-budget” proposal.
A short section of the 400 report entitled “Risk Management Framework for Domestic Systemically Important Banks” identifies bail-in procedure for Canada’s chartered banks. The word confiscation is not mentioned. Financial jargon serves to obfuscate the real intent which essentially consists in stealing people’s savings.
Under the Canadian “Risk Management” project:
 The Government proposes to implement a ‘bail-in’ regime for systemically important banks.
 This regime will be designed to ensure that, in the unlikely event that a systemically important bank depletes its capital, the bank can be recapitalized and returned to viability through the very rapid conversion of certain bank liabilities into regulatory capital.”
This will reduce risks for taxpayers. The Government will consult stakeholders on how best to implement a bail-in regime in Canada.
What this signifies is that if one or more banks (or credit unions) were obliged to “systemically deplete their capital” to meet the demands of their creditors, the banks would be recapitalized through “the conversion of certain bank liabilities into regulatory capital.” 
The  “certain bank liabilities” pertains (in technical jargon) to the money they owe their customers, namely to their depositors, whose bank accounts would be confiscated in exchange for shares (equity) in a “failing” banking institution.
“This will reduce risks for taxpayers” is a nonsensical statement. What this really means is that the government will not provide funding to compensate depositors who are victims of a failed banking institution, nor will it come to rescue of the failed institution.
Instead the depositors will be obliged to give up their savings. The money confiscated will then be used by the bank to meet their liabilities contracted with major financial creditor institutions. In other words, this entire scheme is “a safety net” for too big to fail banks, a mechanism which enables them as creditors to overshadow lesser banking institutions including credit unions, while precipitating either their collapse or their takeover.
Canada’s Financial Landscape
The Risk Management Bail in initiative is of crucial significance for Canadians across the land: once it is adopted by the House of Commons as part of the budget package, the Bail-in procedures could be applied.
The Conservative government has a parliamentary majority. There is a good likelihood that the Economic Action Plan 2013″  which includes the Bail-in procedure will be adopted.
While Canada’s Risk Management Framework intimates that Canada’s banks “are at risk”, particularly those which have accumulated large debts (as a result of derivative losses), a generalised across the board application of the “Bail in” is not contemplated.
The likely scenario in the foreseeable future is that Canada’s “big five” banks, Royal Bank of Canada, TD Canada Trust, Scotiabank, Bank of Montreal and CIBC (all of which have powerful affiliates operating in the US financial landscape) will consolidate their position at the expense of  lesser (provincial level) banks and financial institutions.
The Government document intimates that the Bail-in could be used selectively “in the unlikely event that one [bank] becomes non-viable.” What this suggests is that at least one or more of  Canada’s  “lesser banks” could be the object of a bail-in. Such a procedure would inevitably lead  to a greater concentration of bank capital in Canada, to the benefit of the larger financial conglomerates.
Displacement of Provincial Level Credit Unions and Cooperative Banks
There is an important network of over 300 provincial level credit unions and cooperative banks including the powerful Desjardins network in Quebec, the Vancouver City Savings Credit Union (Vancity) and the Coastal Capital Savings in British Columbia, Servus in Alberta, Meridian in Ontario, the caisses populaires in Ontario (affiliated to Desjardins), among many others, which could be the target of selective “Bail-in” operations.
In this context, what is likely to occur is a significant weakening of provincial level cooperative financial institutions, which  have a governance relationship to their members (including representative councils) and which, in the present context, offer an alternative to the Big Five chartered banks. According to recent data, there are more than 300 credit unions and caisses populaires in Canada which are members of  the “Credit Union Central of Canada”.
New Normal: International Standards Governing the Confiscation of Bank Deposits
Canada’s Economic Action Plan 2013″  acknowledges that the proposed Bail-in framework “will be consistent with reforms in other countries and key international standards”. Namely, the proposed pattern of confiscating bank deposits as described in the Canadian government document is consistent with the model contemplated in the US and the European Union.  This model is currently a “talking point” (behind closed doors) at various international venues regrouping central bank governors and finance ministers.
The regulatory agency involved in these multilateral consultations is the Financial Stability Board (FSB) based in Basel, Switzerland and hosted by the Bank for International Settlements (BIS) (image right). The FSB  happens to be chaired by the governor of the Bank of Canada, Mark Carney, who was recently appointed by the British government to head the Bank of England starting in June 2013.
Mark Carney, as Governor of the Bank of Canada, was instrumental in shaping the provisions of the Bail-in for Canada’s chartered banks. Before his career in central banking, he was a senior executive at Goldman Sachs, which has played a behind the scenes role in the implementation of the bank bailouts and austerity measures in the EU.
The FSB’s mandate would be to coordinate the bail-in procedures, in liaison with the “national financial authorities” and “international standard setting bodies” which include the IMF and the BIS. It should come as no surprise: the deposit confiscation procedures in the UK, the US and Canada examined above are remarkably similar.
Bank “Bail-ins” vs. Bank “Bail-outs”
The bailouts are “rescue packages” whereby the government allocates a significant portion of State revenues in favor of failed financial institutions. The money is channeled from the coffers of the State to the banking conglomerates.
In the US in 2008-2009, a total of $1.45 trillion was channeled to Wall Street financial institutions as part of the Bush and Obama rescue packages.
These bailouts were considered as a De facto government expenditure category. They required the implementation of austerity measures. Together with massive hikes in military expenditure, the bailouts were financed through drastic cuts in social programs including Medicare, Medicaid and Social Security.
In contrast to the Bailout, which is funded from the public purse, the “Bail-in” requires the (in-house) confiscation of bank deposits. The bail-ins are implemented without the use of public funds. The regulatory mechanism is established by the central bank.
At the outset of Obama’s first term in January 2009, a bank bailout of the order of $750 billion was announced by Obama, which was added on to the 700 billion dollar bailout money allocated by the outgoing Bush administration under the Troubled Assets Relief Program (TARP).
The total of both programs was a staggering 1.45 trillion dollars to be financed by the US Treasury. (It should be understood that the actual amount of cash financial “aid” to the banks was significantly larger than $1.45 trillion. In addition to this amount defence allocations to fund Obama’s war economy (FY 2010) was a staggering $739 billion. Namely the bank bailouts plus defence combined ($2189 billion) eat up almost the totality of the federal revenues which in FY 2010 amounted to $2381 billion.
Concluding remarks
What is occurring is that the bank bailouts are no longer functional. At the outset of Obama’s Second term, the coffers of the state are empty. The austerity measures have reached a deadlock.
The bank bail-ins are now being contemplated instead of  the “bank bailouts”.
The lower and middle income groups which are invariably indebted will not be the main target. The appropriation of bank deposits would essentially target the upper middle and upper income groups which have significant bank deposits. The second target will be the bank accounts of small and medium sized firms.
This transition is part of the evolution of the global economic crisis and the impasse underlying the application of the austerity measures.
The purpose of the global financial actors is to wipe out competitors, consolidate and centralize bank power and exert an overriding control over the real economy, the institutions of government and the military.
Even if the bail-ins were to be regulated and applied selectively to a limited number of failing financial institutions, credit unions, etc, the announcement of a program of confiscation of deposits could potentially lead to a generalized “run on the banks”. In this context, no banking institution would be regarded as safe.
The application of Bail-in procedures involving deposit confiscation (even when applied locally or selectively) would create financial havoc. It would interrupt the payments process. Wages would no longer be paid. Purchasing power would collapse. Money for investment in plant and equipment would no longer be forthcoming. Small and medium sized businesses would be precipitated into bankruptcy.
The application of a Bail-In in the EU or North America would initiate a new phase of the global financial crisis, a deepening of the economic depression, a greater centralization of banking and finance, increased concentration of corporate power in the real economy to the detriment of regional and local level enterprises.
In turn, an entire global banking network characterized by electronic transactions (which govern deposits, withdrawals, etc), –not to mention money transactions on the stock and commodity markets– could potentially be the object of significant disruptions of a systemic nature.
The social consequences would be devastating. The real economy would plummet as a result of the collapse in the payments system.
The potential disruptions in the functioning of an integrated global monetary system could result in a a renewed global economic meltdown as well as a drop off in international commodity trade.
It is important that people across the land, in the European Union and North America, nationally and internationally, forcefully act against the diabolical ploys of their governments –acting on behalf of dominant financial interests– to implement a selective process of  bank deposit confiscation.


The Global Economic Crisis: The Great Depression of the XXI Century

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Prime Minister Dmitry Medvedev built upon President Putin's earlier suggestion and formally proposed a grand multilateral economic partnership during his trip to China.

Russia has historically been known for thinking big, so what the Prime Minister proposed is totally in line with the country's political culture. While in the Chinese city of Zhengzhou to partake in the SCO Council of Heads of Government, Medvedev ambitiously stated that:
"Russia proposes starting consultations with the Eurasian Economic Union and Shanghai Cooperation Organization, including the counties joining the alliance, and with countries of the Association of Southeast Asian Nations on the creation of an economic partnership based on the principles of equality and mutual interests."
This suggestion corresponds to what President Putin said during his 3 December Address to the Federal Assembly, when he announced that:
"I propose holding consultations, in conjunction with our colleagues from the Eurasian Economic Union, with the SCO and ASEAN members, as well as with the states that are about to join the SCO, with the view of potentially forming an economic partnership."
In the blink of an eye, and at a time when the Western mainstream media is barking about Russia's purported lack of economic opportunities and "isolation", Moscow just proposed the world's most far-reaching economic partnership and took the West completely off guard.
From Minsk to Manila
Russia's idea is very similar in concept to Charles de Gaulle's famous quip about a Europe "from Lisbon to Vladivostok". Taking into account current geopolitical realities and the fact that they're likely symptomatic of new long-term trends, Putin updated the former French leader's multipolar vision and essentially made it about a ‘Eurasia from Minsk to Manilla' instead. This reiteration represents the western-most and southeastern-most capitals of the proposed multilateral economic partnership and is an accurate way of describing the vast continental space contained within its borders. Let's review the membership of each organization that's envisioned to be party to what could eventually become a Grand Eurasian Free Trade Area (GEFTA): Eurasian Economic Union:
This nascent organization brings together the economies of Russia, Belarus, Armenia, Kazakhstan, and Kyrgyzstan and stretches over most of the former Soviet Union. While still in its infancy, its members are working hard to coordinate their common economic space and standardize related legal procedures within it. Unlike the EU to which it's often and misleadingly compared, there is no political component to the bloc and it is strictly an economic group that focuses on equitable shared interest.
Originally known as the "Shanghai Five" and created in 1996 to assist with delineating the boundaries that five former Soviet states inherited with China, it gained its present name after the 2001 inclusion of Uzbekistan. The organization is now a multi-sectoral cooperative platform for its members and has grown past the shared former Soviet-Chinese space. India and Pakistan are currently ascending into the organization, while Afghanistan, Belarus, Iran, and Mongolia have observer status
The oldest of the three organizations, it was created in 1967 in order to bring the Southeast Asian states closer together in all respects. The founding members were Indonesia, Malaysia, the Philippines, Singapore, and Thailand, but the group later incorporated Brunei in 1984, Vietnam in 1995, Laos and Myanmar in 1997, and finally Cambodia in 1999. Since its pan-regional expansion, the bloc has been one of the fastest-growing regions in the world, and its members just declared the ASEAN Economic Community (AEC) in late November in order to strengthen their integrational efforts.
Intersecting Interests
GEFTA is a very clever suggestion that seeks to benefit from the intersecting economic interests of its proposed partners. As it currently stands, here's what the macroeconomic arrangement looks like:
In Force:
China-Pakistan FTA
South Asian Association for Regional Cooperation (SAARC, a FTA stretching from Afghanistan to Bangladesh)
Eurasian Union-ASEAN FTA
Eurasian Union-China FTA
Eurasian Union-India FTA
Eurasian Union-Iran FTA
India-Iran Free FTA
The Challenges Ahead
GEFTA is a long-term vision that will probably take some time to actualize, but in the meantime, there are two primary challenges standing in the way of its full proposed implementation. These are India's suspicion of China and the US-driven TPP:
India's Issues:
It's no secret that India and China are friendly competitors, but it might be more apt to describe them as geopolitical rivals at this point. While they publicly get along well in large-scale multilateral institutions such as the AIIB, BRICS, and the SCO, they fare a lot worse when it comes to indirect bilateral relations. They have lukewarm ties in dealing with each other one-on-one, but relations are considerably colder when they indirectly deal with the other via their policies with third-party states.
For example, India and China are in a heavy competition for influence over Nepal at this very moment, despite both sides publicly denying it, and it's aggravating the security dilemma between both of them. Also, Japanese Prime Minister Shinzo Abe just paid a landmark visit to India where it was announced that Japan will help build India's first high-speed rail project, share military secrets with it and sell related equipment, and help India in the field of nuclear energy. Suffice to say, India isn't behaving too friendly towards China, and when it comes to GEFTA, New Delhi might understandably be reluctant to partner with Beijing if it sees no tangible benefit in doing so. To reference the list in the second section, India has the potential to enter into free trade relations (or is already in them) with all of GEFTA's proposed members with the exception of China, Mongolia, and Uzbekistan, and it might not see Ulaanbaatar and Tashkent as suitable economic compensation for agreeing to the multilateral deal with China. From India's perspective, its leaders might instead choose to seal a raft of bilateral trade agreements instead of a massive multisided one that includes China.
Fulfilling its role as the ultimate spoiler, the US is pushing the TPP partly because it knows that this could disrupt any independent free trade negotiations between ASEAN and its prospective Eurasian Union partners. While only a few of the group's members are officially party to this forthcoming agreement (Brunei, Malaysia, Singapore, and Vietnam), Indonesia's President Joko Widodo said in late October that his country intends to join, which if it happens, would decisively shift the bloc's economic gravity towards the US.
ASEAN has now begun an intensified process of self-integration through the AEC, and it's foreseeable that it will eventually seek to standardize its myriad FTAs. The problem arises when one considers that the TPP's ‘economic governance' precepts could seriously hinder the independent policies of some of its members and place them under the de-facto proxy control of the US and its transnational corporations. In the event that the TPP is finalized, the AEC states that are signatories to it would become institutionally loyal pro-American subjects that would have legally waived their right to a sovereign economic policy outside of Washington's purview. Considering the New Cold War geopolitical tensions between the unipolar and multipolar worlds, it's possible that the US might use its TPP influence within the AEC to find a way to revise ASEAN's existing FTA with China (and Vietnam's one with the Eurasian Union) on the grounds that they contradict one of the more than two million words absurdly contained in the TPP. The US' goal is to pry ASEAN away from all economic influences outside of the Pentagon's control (obviously including Russia and China) and entrap the burgeoning economies in an American-centric net of control.
The Verdict:
Even in the unfortunate scenario of India's non-participation in GEFTA and the US being successful in using the TPP to entice the AEC away from China and Russia, Moscow and Beijing could still shake the economic foundations of the Old World Order by deepening their bilateral trade relations, perhaps through a Eurasian Union-China FTA. India and ASEAN's multilateral cooperation in this framework would greatly assist in the economic development of a New Eurasia but they're not absolutely necessary, and Russia and China can still prevail in building an equitable Eurasian future on their own if need be.
The views expressed in this article are solely those of the author and do not necessarily reflect the official position of Sputnik.

IMF Chief Pours Cold Water On Optimistic Yellen, Says Growth "Will Be Disappointing"

Over the past six or so months, the OECD, the WTO, and the ADB have all come out with rather grim assessments of global growth and trade.
Back in September for instance, the WTO warned that the rate of growth in global trade is set to trail the expansion of the worldwide economy for the third year running. As WSJ noted at the time, “before the recent slump, the last time trade growth underperformed the rate of an economic expansion was 1985.”
“We have seen this burst of globalization, and now we’re at a point of consolidation, maybe retrenchment,” WTO chief economist Robert Koopman said. “It’s almost like the timing belt on the global growth engine is a bit off or the cylinders are not firing as they should.”
“Global growth prospects have weakened slightly and the outlook is clouded by important uncertainties,” the OECD said later in September. “Emerging economies have vulnerabilities that could be exposed by rising US interest rates and/or a sharper-than-expected slowdown in China, giving rise to financial and economic turbulence that could also exert a significant drag on advanced economies,” the organization continued.
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Finally, the ADB weighed in, noting that “softer growth prospects for the People’s Republic of China (PRC) and India, and a slow recovery in the major industrial economies, will combine to push growth in developing Asia for 2015 and 2016 below previous projections.”
Those assessments came just as the Fed adopted the “clean relent” in September and make no mistake, the outlook hasn’t changed since then. Just ask IMF chief Christine Lagarde.
In a guest article for Handelsblatt, Lagarde lays bare the risks facing global trade on the way to painting a rather depressing picture for 2016.
“Global economic growth will be disappointing next year and the outlook for the medium-term has also deteriorated,” Reuters says, recounting Lagarde’s comments. “The prospect of rising interest rates in the United States and an economic slowdown in China [are] contributing to uncertainty and a higher risk of economic vulnerability worldwide.”
Lagarde warns of the “spillover effects” from the Fed hike, including the possibility that fragile emerging markets may be shaken further at a time when myriad risk factors are already weighing on the space.
China’s transition from a smokestack, investment-led economy to a consumption and services led model as well as Fed policy normalization are “necessary” but should be executed carefully with a mind towards mitigating shocks, she continues.
Specifically, Lagarde is concerned about the nightmare scenario that occurs when EM corporates borrow heavily in dollars only to see their currencies depreciate rapidly, the so called "original sin" that's been largely avoided at the sovereign level, but not by corporates. For an example of what can happen in such instances, see Empresas ICA SAB.
As a reminder, EMEs have over $3 trillion in USD-denominated debt:

"Most highly developed economies except the USA and possibly Britain will continue to need loose monetary policy but all countries in this category should comprehensively factor spillover effects into their decision-making," she goes on to say, underscoring the fact that there are risks both to hiking and to remaining suspended in the Keynesian Twilight Zone.
Ultimately, the takeaway is the the head of the IMF, who supposedly knows about such things, has just delivered a decisively negative outlook for global growth and trade in 2016 and that assessment seems to be at odds with the FOMC. That is, Lagarde is warning on economic growth and the dangerous "spillover effects" of a Fed rate hike cycle just as Janet Yellen is using stronger economic growth as an excuse and a justification for liftoff.
Of course such "truthiness" is tantamount to heresy in today's world, so perhaps this is why Lagarde's criminal case was reopened.

Will The New Swiss Referendum Reign in the Banking Beast, or Create a New Monster?

by The Wealth Watchman
Another Shake-Up Attempt
As we head into 2016, the global financial system continues to teeter all around us. Years of virtually zero-percent interest rates in the US, along with stagnant rates the world over(accompanied by chronic unemployment), have made many do a complete rethink of what money and currency is, what it should be, and how it should be created.
These questions must be considered by any populace longing to be free, and who wish to determine their own destiny. For too long, the oligarchs in our world have called the shots, and determined those things for us, without ever asking us if that’s what we wanted. That’s why when I recently read this headline about how a European country is attempting some very serious banking & monetary reforms, I was very encouraged.

Switzerland to vote on banning banks from creating money

Swiss 4
If you think that this headline sounds like a big deal, it would be in some ways. Here’s what it would do.
Swiss Sovereign Money Initiative
The proposal that the Swiss people will be voting on(at a time yet to be determined) would seek to wrest the disastrous control that commercial banks have over creating currency, and put 100% of it in the hands of the Swiss National Bank.
The Swiss Sovereign Money Initiative’s(SSMI) reasoning for this referendum can be found at the link here, and I do encourage shield brothers to go and read it.  The SSMI’s main goals would be to:
1) End fractional reserve banking, by requiring all the private banks to keep 100% of deposits in reserve.
2) Give the Swiss National Bank total control over the creation/issuance of debt-free currency instead.
As many shield brothers know, in the modern, fractional-reserve banking system, the private banks largely control the issuance of new currency. These banks create new credit/currency out of thin air as they draw upon the customer loans in their vaults, to back new bank loans with.  They’re able to do this because they’re only required to keep a small percentage of customer deposits in their vaults, to satisfy depositor demands.  Sometimes banks carry as little as 10% of their cash deposits on hand(or even less) to backstop all their loans. In other words, this means they often loan(and thus, create) 10 times as much capital as they have in the vaults…from nothing!
It’s an utter scam, that creates a parasitical merchant class, which drains the rest of society, by causing booms and busts.  It also means the banking sector ends up being the receiver of very lopsided subsidies from the government, in order to keep it paid and propped up.
Subsidizing private banks, at the expense of a nation’s people, is one of the most wicked social ills in our world today.  It is this subsidy, this monopoly, which causes the speculative lending, the market rigging, the wars, the economic booms and crashes….and most importantly…has led to the rampant globalism(and erosion of freedom and sovereignty) we now see.
This problem has led to an extremely powerful banking class in Switzerland, where, according to the SSMI, roughly 90% of Swiss currency(which is digital), is created by those commercial Swiss banks.
90%!  This gives ridiculous power to the UBS’s, and the Credit Suisses across their landscape, to dominate everything.
This SSMI voter initiative would strip much of that power away from those private banks, by requiring them to maintain 100% deposit reserve ratios.  In other words, commercial banks could not create “deposits/credit” from thin air, but would be restricted to the deposits they have on hand from savers, or from other banks.  
Forcing banks back to a 1 to 1 ratio would certainly take the bite out of predatory lending practices, it would do much to reign in the boom/bust cycles in their economy, and it would reduce the banking class back to a manageable power and influence within their society.  Those would be huge positives.
I like the ideas of eliminating fractional reserve banking.  At the very least, commercial banks should be able to discover what the market’s tolerance of reserve ratios would be without central banks to backstop them(as Scotland’s banking system once did). However, in order to prevent a new banking cartel from emerging, a 100% reserve ratio would likely work best.
However, though there’s alot to like about this voter initiative,there’s just one big problem with the entire proposal, and you may have guessed what it is…
Out of the Frying Pan, Into the Fire
The Swiss National Bank, whom the Swiss people are now trying to give 100% control over their nation’s currency issuance to…is also a private bank!
If you remember nothing else I ever tell you, please remember that one of the greatest illusions/lies in our world today, is that:
Central banks are non-profit organizations with deep hearts, who only care about charity and the ‘greater good’ of their constituencies.
Believe me, nothing could be further from the truth!
For instance, the Federal Reserve in the United States is as “Federal” as the Federal Express(FedEx)! It is a private, for profit bank, which loans currency into existence to the US Government(who borrows it, with interest attached). This means the Federal Reserve ends up owning the government, owning the economy, owning the labor of the citizens(as collateral to repay the loans), and owning the entire political system itself.
For crying out loud…the Federal Reserve has shareholders(as does the SNB)! Most of those shareholders are….you guessed it….the largest private, commercial banks in the world!
  The Federal Reserve exists to backstop and rubberstamp whatever loathsome, criminal activities its primary banks are engaged in, and those commercial banks(in return) exist to help steer economic & monetary policy, as well as rig markets, in order to keep the monopoly power of issuing US dollars(as a public debt) firmly in the Federal Reserve’s control.
It’s a symbiotic relationship of utter toxicity, only made possible through government-enforced monopoly, war, and a massive crime spree.
The exact same is true of the Swiss National Bank(SNB)! The SNB only came into a limited existence around 1907, but(just like the Fed) didn’t receive its first mandate to create small-denominated currency notes in a serious way until roughly 1914.
Why 1914?
Because World War I was being fought, and wars of that size cannot be fought without massive debts! No government had the capital to pay for such wars up front, with cash on the barrel-head.
Thusly, the banking class stepped in to accommodate rival governments in their bid to blow up as much as possible for as long as possible.
The “Great War” was made possible by “public banks” like the Fed(created in 1913) and the SNB. Ron Paul once correctly noted:
“It is no coincidence that the century of total war coincided with the century of central banking”.
Truer words are seldom spoken. Think about it:
These central banks made the carnage possible. 
They amplified the scale in which wars could be fought.
They indebted the besieged peoples of those wars to the very same powers that enabled those wars in the first place.
If the problem of monetary issuance is a lack of ‘moral authority’, believe me, central banks have the least moral authority on earth! They’re all neck-deep in criminality and only serve the most demonic individuals in our world.
Don’t get me wrong. I want to say up front, that there’s alot to like about the SSMI plan:
I do think banks should be reigned in.
I do think that they should be literally tied to the earth, with realistic monetary restrictions, based in reality.
I do think commercial banks should be stripped of money-creating powers.
All those problems are addressed in this proposal. That’s good!
What’s not good is that the well-meaning folks at SSMI are about to strip one financial demon of currency creation powers, and hand it to another demon which is just as bad!  Of all the institutions that might be given this power, the Swiss National Bank is one of the worst you could pick!
For those who don’t believe me, lemme refresh your memory as to the recent criminal shenanigans the SNB was involved with!
Who Calls the Monetary Shots
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That picture above was advertising for the recent Swiss gold initiative that the Swiss people voted on in 2014.  It was called “Save Our Swiss Gold”(SOSG).  It was meant to address the people’s concerns over the Swiss National Bank selling Swiss gold onto the open market for years.
Until the year 2000, the Swiss Franc was partially backed by gold, roughly 20% or so, at least on paper.  That all began to change afterward though, as the Swiss National Bank began unloading quantities of gold which it considered to be “superfluous”, reducing the gold reserves behind the Swiss Franc from 20% down to 7%!
The initiative would’ve forced the gold sales by the SNB(which were only conducted to help the banking cabal suppress the price of gold) to stop, and would’ve reversed the process.  It would’ve forced the SNB to go onto the open market to buy up sufficient gold tonnage to replace the lost tonnage needed, in order to raise the gold reserve ratio back to 20%.  It would’ve also repatriated any Swiss gold held abroad by other central banks.
What’s not to like, right?  Who wouldn’t want that?
The Swiss National Bank, that’s who!  
The Swiss National Bank literally went nuclear on the proposal. They bought up TV advertising against the initiative, they trotted out all the bankers, all the writers, all the pundits, who all condemned SOSG…saying it would literally mean the end of “adaptive” monetary policy in Switzerland if the people voted yes.
The propaganda blitz worked, as the Swiss people were scared into rejecting it, with roughly 78% voting no.
In other words, the greatest opponent of returning Swiss gold to the Swiss people, and of returning Swiss monetary sovereignty to Switzerland…was the Swiss National Bank! The SNB was directly using its money-power, and its influence to overturn or sway the will of the Swiss electorate!
That in itself is highly problematic, but WHY the SNB did it is absolutely beyond the pale…
It’s now been reported that the reason why the SNB staunchly stood against the referendum, is that the SNB had a huge short position against gold in the futures market! They established that short position the moment they announced that the Swiss Franc would be “capped” or fixed to the Euro! Controlling gold was necessary if the “safe haven” Swiss Franc was going to be fixed to the much larger Euro currency pool.
The SNB knew that if they had to go out and directly buy thousands of tonnes of gold on the open market, and repatriate other gold held by other central banks(to help rig the gold price lower), its short position(it was using to RIG a world commodity market) would’ve shortly gone underwater!
It would’ve blown up their short gold position.
It would’ve severely, and instantly damaged their balance sheet.
It would’ve jeapordized the international banking scheme to rig gold(and silver), thusly jeapordizing the global debt-based ponzi lending scheme(that the SNB fully supports and participates in).
And these are the folks the Swiss people are seeking to entrust with 100%, monopoly powers, to create and control Swiss currency?
I don’t think so.
The problematic scenario for the SSMI voter referendum(in a nutshell) is that it’s trying to solve the problem of “a morally/fiscally bankrupt class of private bankers having total control over currency creation” by handing that power to another morally/fiscally bankrupt, private, criminal banking institution.
Here’s what I suggest the Swiss do.  If they insist on giving any institution the sole power to create currency:
1) Utterly abolish the SNB. It is a tainted institution, which has no moral authority to lead, even if it were totally reorganized.
2) Create a new institution for the task, which would truly be a government entity, having the power to create debt-free currency.
3) Ensure all commercial banks have ZERO shareholder ownership of that institution, and instead make EVERY Swiss citizen each an equal shareholder!(Radical, I know, right?)
4) Ensure that any and all surpluses in profit were either, a)kept in a fund for the purpose of loaning to Swiss citizens in times of need, or b) paid to Swiss citizens in a regular cash distribution.
Now THAT would be a truly revolutionary solution, akin to something like the “Bank of North Dakota” solution! While still flawed, it would be unbelievable improvement to what they’re pursuing, and what exists in Switzerland now.
  It’s good for a nation to debate who should create currency.  It’s good that they have the power to vote and decide such things.  It’s good to ensure that any future currency is created debt-free.
But, in the name of God, do not give the unbelievable power of sole currency-creation to privately-controlled central banks:
No one on earth has more blood on their hands than these people…
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