Impatient shareholders are calling on the world’s top firms to start
spending some of the eye-popping $2.8 trillion in cash built up since
the financial crisis, as analysts warn that their thriftiness could be
holding back global growth.
The combined war chests held by companies including Apple, Google and
Samsung — roughly equivalent to the size of France’s economy — has
swelled since the 2008 global downturn hammered stock markets and saw
nervous firms pinching their pennies as they waited out the storm.
But even as markets bounced back and business confidence recovered, the cash piles kept growing.
That has prompted a drumbeat of calls for firms to start spending
more on share buybacks or boosting dividends, building new factories, or
acquiring rival firms.
Among those targeted was Toyota, which last month announced a plan to
start buying back $3.5 billion worth of its shares after its annual
investor meeting in June.
The move by the world’s largest automaker would be the first time in
five years it has embarked on a buyback, which tends to boost a
company’s stock and signals growing confidence among management.
“Since Toyota has said it would scale down its investment over the
next three years, share buybacks are one of the practical options that a
cash-rich company can take,” said Yusuke Miura, analyst at Tokai Tokyo
Research Center in Japan.
Toyota is far from alone.
Together, Apple, Microsoft and Google have over $300 billion in cash,
while US non-financial firms held a record $1.64 trillion in all —
double the amount back in 2007, according to a report last month by
ratings agency Moody’s.
While major US firms have also increased their debt in recent years,
the cash buildup has generated criticism from investors and critics who
say some of America’s best-known firms are hoarding money overseas — and
out of the hands of the taxman.
But “Moody’s expects businesses to remain cautious over the next
year, with spending on capital investments, dividends, acquisitions and
share buybacks going up only slightly,” it said.
- Cash ‘rethink’ -
Earlier this year, US activist investor Carl Icahn said Apple was
“doing a disservice to shareholders”, despite the iPhone maker agreeing
to a plan that would return some $100 billion to investors including $60
billion in share buybacks.
The billionaire has since said he would no longer press Apple — whose
cash holdings are larger than Hungary’s economy — after a proxy
advisory firm recommended against his proposal.
“Companies have been well served during the financial crisis by being
fiscally prudent,” said a January report by consultancy Deloitte, which
pegged the liquid holdings of the world’s top 1,000 firms at about $2.8
trillion.
But it added that “this could hamper their progress in times of
recovery. Companies now need to rethink their cash strategy to create
growth opportunities”.
Mark Carney, current head of the Bank of England, was more blunt in a
2012 speech as he derided unused corporate cash as “dead money”.
“If companies can’t figure out what to do with it, then they should
give it to shareholders and they’ll figure it out,” Carney, then
governor of the Bank of Canada, was quoted as saying.
It is a feeling shared by some investors in technology giant Samsung,
which has built up over $50 billion in cash, the largest pile among
South Korean firms.
Read More @ Source
Thursday, April 17, 2014
Banks rip-off: £3bn overdrafts bill to be probed - it can be cheaper to take out payday loan
BBC
More than a third of the money banks make from current accounts comes from interest and charges when customers go overdrawn
Watchdogs are to investigate the £3billion-a-year banks rake in from rip-off overdraft rates.
More than a third of the money banks make from current accounts comes from interest and charges when customers go overdrawn.
Research shows going over the limit can work out more expensive than borrowing from payday lenders.
Now the Financial Conduct Authority is to investigate the market to get a better deal for customers.
Britons were £9.34billion overdrawn at the end of January, figures from the Bank of England show. And nearly half the 61 million current accounts in the UK have an overdraft facility – allowing customers to go into the red.
Figures from industry expert Moneyfacts show rates on authorised overdrafts have risen from an average 12.2% in 2012 to 13.83%, although rates on unauthorised lending have fallen.
Research by consumer group Which? showed it can cost up to £30 to go £100 overdrawn for a month, within an agreed limit, and up to £100 without permission. That compares with up to £37 for borrowing £100 for a month with some payday lenders.
FCA research found many people don’t realise how much overdrafts can cost. Others do not see an overdraft as borrowing and quickly become accustomed to having one. A previous study by the Office of Fair Trading suggested 10% of current account customers are permanently or usually overdrawn.
The FCA said banks may be tempted to raise overdraft limits to make money from interest and charges.
Christopher Woolard, from the FCA, said: “With overdrafts bolted on to more than 30 million current accounts, we want to make sure it is working well for consumers.”
Moneyfacts said: “There is a mix of percentage charges and fees, making it impossible to compare one account with another. This is not a new problem; it is a problem that has only just come to the fore.”
Watchdogs are to investigate the £3billion-a-year banks rake in from rip-off overdraft rates.
More than a third of the money banks make from current accounts comes from interest and charges when customers go overdrawn.
Research shows going over the limit can work out more expensive than borrowing from payday lenders.
Now the Financial Conduct Authority is to investigate the market to get a better deal for customers.
Britons were £9.34billion overdrawn at the end of January, figures from the Bank of England show. And nearly half the 61 million current accounts in the UK have an overdraft facility – allowing customers to go into the red.
Figures from industry expert Moneyfacts show rates on authorised overdrafts have risen from an average 12.2% in 2012 to 13.83%, although rates on unauthorised lending have fallen.
Research by consumer group Which? showed it can cost up to £30 to go £100 overdrawn for a month, within an agreed limit, and up to £100 without permission. That compares with up to £37 for borrowing £100 for a month with some payday lenders.
FCA research found many people don’t realise how much overdrafts can cost. Others do not see an overdraft as borrowing and quickly become accustomed to having one. A previous study by the Office of Fair Trading suggested 10% of current account customers are permanently or usually overdrawn.
The FCA said banks may be tempted to raise overdraft limits to make money from interest and charges.
Christopher Woolard, from the FCA, said: “With overdrafts bolted on to more than 30 million current accounts, we want to make sure it is working well for consumers.”
Moneyfacts said: “There is a mix of percentage charges and fees, making it impossible to compare one account with another. This is not a new problem; it is a problem that has only just come to the fore.”
Mega oil field discovered in southern Russia
A new oil field with roughly 300 million tons of oil and 90 billion cubic meters of gas has been discovered in the Astrakhan region of Russia.
“The field’s reserves are unprecedented, this discovery confirms the high potential of the Astrakhan region in terms of these major discoveries,” Sergey Donskoy, Russia’s Natural Resources Minister said on Wednesday.
The field, called “Velikoe” (The Great) was discovered by the AFB Oil and Gas Company, which will likely seek out larger partners to develop it.
Two likely candidates are Rosneft, Russia’s state-owned and largest producer, and Lukoil, the country’s second biggest producer.
"According to experts, given the lack of large land deposits, project participation will likely come from all major industry players. The most probable partners are Rosneft and Lukoil, which already have projects in neighboring regions,” Uralsib Capital analyst Aleksey Kokin told mail.ru.
Kokin estimates the deposits could be worth nearly $1 billion.
Rosneft has projects in the neighboring Vanqor oil field, which has a capacity of 140 million tons.
The last major land hydrocarbon deposit discovery was the Vanqor field in 1988, which has over 500 million tons of oil in estimated reserves.
Another Astrakhan region field is Lukoil’s Filanovsky field, which has more than 150 million tons of recoverable oil in the Caspian Sea.
In 2012, the company opened the neighboring Tambov field, also located in the Astrakhan oil field, which is the world’s fifth largest.
Nonprofit's Exemption Was Granted Despite Record Fine, Big Political Spending
Nonprofit's Exemption Was Granted Despite Record Fine, Big Political Spending
A
conservative nonprofit that paid a record-setting fine in California
for its part in a campaign finance scheme might never have sought formal
recognition as a tax-exempt group had it not been demanded by a key
architect of the money-shuffling operation.The exemption -- the official imprimatur that gives a group status as a "social welfare" organization and lets it keep its donors identities out of public view -- was granted to Americans for Responsible Leadership on Oct. 22, 2013 after lengthy exchanges between its representatives and the IRS, according to documents obtained by OpenSecrets Blog.
The approval came even though by then -- about 13 months after the group put in its request -- IRS officials knew of ARL's involvement in a complicated effort by conservative groups to put big money into two California ballot initiative battles. In fact, in November 2012, ARL had reached a settlement with the state's Fair Political Practices Commission admitting it was not the true source of millions it had poured into the fights. "At $11 million, this is the largest contribution ever disclosed as campaign money laundering in California history," the FPPC said in a release on Nov. 5, 2012.
But for much of the time the IRS was weighing ARL's application, the agency itself was the focus of several investigations of the enhanced scrutiny it had given to applications from certain groups seeking exempt status -- the preponderance of which were conservative
In Many Cities, Rent Is Rising Out of Reach of Middle Class
In Many Cities, Rent Is Rising Out of Reach of Middle Class
Photo
Christine Menedis tours a condominium in
Miami Beach that rents for $7,000 a month. In Miami, average rents
consume 43 percent of the typical household income, up from a historical
average of just over a quarter. Credit Angel Valentin for The New York Times
MIAMI
— For rent and utilities to be considered affordable, they are supposed
to take up no more than 30 percent of a household’s income. But that
goal is increasingly unattainable for middle-income families as a
tightening market pushes up rents ever faster, outrunning modest rises
in pay.
The strain is not limited to the usual high-cost cities like New York and San Francisco. An analysis for The New York Times by Zillow,
the real estate website, found 90 cities where the median rent — not
including utilities — was more than 30 percent of the median gross
income.
In
Chicago, rent as a percentage of income has risen to 31 percent, from a
historical average of 21 percent. In New Orleans, it has more than
doubled, to 35 percent from 14 percent. Zillow calculated the historical average using data from 1985 to 2000.
Divergence = Failure ~ Falling Money Velocity & Rising Money Supply
Sometimes pictures are far more effective in communicating an
important point. They are extremely effective in undermining respect and
confidence, when in the cartoon format. A sequence of graphics struck
the cognitive circuits recently. Long explanations will not serve well.
The US Federal Reserve has been printing money since 2011 to cover
USGovt debt securities in a frenetic manner. They have lost control.
They call it stimulus, when it is actually the opposite. It does assist
the speculators with nearly zero cost money to borrow, but one must be a
club member to win loan grants. The Quantitative Easing programs are
deceptive. When the program was initially announced, the Jackass claimed
it would be part of an endless sequence. With QE1 and QE2 and Operation
Twist and QE3, following the failed trial balloon called Taper Talk, it
is quite clear to anyone with an active brain stem and absent rose
colored glasses that the USFed is caught in a trap called QE to
Infinity. It is not stimulative. Instead, the uncontrollable bond
monetization causes capital destruction. It causes economic degradation.
It causes lost jobs and vanished income. It is a gigantic wet blanket
to smother and destroy the USEconomy slowly, amidst unending propaganda.
QE is the device that will result in Systemic Failure, which is already
flashing signals of its arrival.
MONEY VELOCITY IS PLUMMETING
Money Velocity continues to fall rapidly in both the USEconomy and that of Canada, reaching 50-year lows in the Untied States. The indication is failure in monetary policy, as hyper inflation has killed capital on an extensive basis. The capital destruction is in its fourth year, probably having reached critical mass. Compared and contrasted with fast rising money supply, the systemic failure is obvious to conclude. The exception is to morons, Wall Street junkies, Big Bank criminal elite, and USGovt hacks. The fast decline in Money Velocity means that it is not moving in the body economic. The reason is simple. The blood system is contaminated with the USDollar, a toxic currency with no backing in a hard asset. The new money is toxic currency under phenomenal debasement by its own steward, the USFed itself. They redouble their harmful policy instead of abandoning it.
The Money Velocity picture is not pretty. The declining rate has broken lows set 50 years ago. Technically, the velocity of money is the frequency at which one unit of currency is used to purchase domestically produced goods and services within a given time period, like an inventory cycle time. In other words, it is the number of times one dollar is spent to buy goods and services per unit of time. If the velocity of money is increasing, then more transactions are occurring between individuals in an economy. The result would be that growth (as measured in GDP) should be rising. With falling velocity of money, then fewer transactions are occurring and a recession is indicated. Such is the present case in astonishing rapid deterioration. Consumers and business are holding firm their money rather than investing it, as they see poor prospects. New capital formation is not occurring inside the USEconomy, or pitifully little. Debts are being dissolved, usually in default. It should be noted that the velocity of money has also been falling in the EU and Japan. The entire global economy is in recession, the pathogenesis shared.
DESTRUCTION OF CAPITAL
The claim that the QE bond monetization is stimulus is pure propaganda, and could not be further from the truth. The claim disguises the nature of the hidden Wall Street bailout, which is to cover their worthless mortgage bonds, and to cover all manner of derivatives, in addition to the obvious coverage of USTreasury Bond sales. Nobody wants the USGovt bonds anymore, except for Belgium operating as hidey hole on behalf of the Euro Central Bank, and for Japan operating as the usual lackey servant. The claim of stimulus is 180 degrees wrong. The bond monetization is pure unsterilized monetary inflation, free money shoved into the system without offset. To be sure, Bernanke had a machine to produce money at no cost, except that like with acid it ruins capital. The result is pure inflation, and extreme motivation for the entire world to take on hedge positions with energy, metals, farmland, and more in order to protect themselves from the ruin of money. The effect is felt as a rising cost structure, felt across the world, and thus shrinking profit margins for the entire global business sector.
As businesses realize the lost profitability, they shut down and retire their capital. They turn idle their factor machinery, their design workstations, their office computers, their transportation vehicles, their company buildings and offices. The destruction of capital is the ugliest dirty secret behind the official New Normal of central bank monetary policy. They are killing the system, so as to avoid liquidating the big banks. By refusing to take the proper capitalism path in liquidating failed corporate structures, they have instead chosen to kill capital, force income engines to the sidelines, generate capital formation in other nations (like the East & Asia), and destroy the USEconomy. The US and West has forgotten capitalism and embraced socialism with a fascist twist.
EXPLOSIVE MONETARY GROWTH
Contrast the declining Money Velocity with fast rising Money Supply growth (presented in March). The conclusion is both galloping economic recession and systemic failure, hardly a reward. Yet it continues without interruption, only the promise of interruption. The systemic failure and breakdown is upon us, the evidence stacking up, the message no longer escapable. The two charts back to back make the point convincingly. New money is wrecking the financial structures and economic systems by destroying capital. The USFed balance sheet is well over $3 trillion, and continues to grow. The new money is going largely in a hidden Wall Street bailout of their bonds and derivatives. The USFed is a grand liar, as their QE volume is growing, not tapering. They are using proxies and back doors, in addition to airborne dirigibles like the Interest Rate Swap contract. Like with the Hindenburg, the floating monsters will explode someday. The growth in money supply is frightening and alarming, evidence of the wrecked capital and wrecked system. Many have called the Jackass a lunatic and alarmist, but they seem incapable to explain the fast rise in monetary base, yet fast decline in money velocity. Monetary policy is a failure. The fiat paper money is toxic. The big banks are insolvent. The global franchise system of central banks should be shut down, except they control the governments, control the finance ministries, control the central banks, control the regulators, and control the militaries.
CRITICAL MASS IS LOST
It is very confusing that money velocity is falling fast, yet central banks are creating new money very rapidly. Imagine a Ferrari or Lamborghini race car spinning its gears, burning its engine out, running out of oil, making no movement. It aint working, started by Alan Greenspan, amplified by Benjamin Bernanke, and to be continued by Janet Yellen. They are stuck with failed monetary policy, and cannot alter the destructive course. The Jackass has maintained that a critical error was committed by granting China the Most Favored Nation status for trade. It was actually a fatal error. The industrial investment is taking place in Asia, led by China. Wall Street and the USGovt leadership at the time, under President Clinton and Robert Rubin, betrayed the nation. They leased gold from the Chinese, in order to perpetuate the fiat paper USDollar regime. They deployed the lunatic Rubin Doctrine, to wreck next year for a few more tomorrows. In doing so, the Chinese benefited from $23 billion in foreign direct investment in the space of a mere two to three years. But the blowback was fatal. The USEconomy lost its industrial critical mass, and has inadequate traction from monetary policy in accommodation. It still has some industry, but not enough. The ultra-low interest rate makes borrowing costs low, but grotesquely inadequate new capital formation has taken place in the USEconomy. It is being done in Asia. Worse, the new industrial parks are springing up across the US landscape, operated by Chinese industrial masters. The QE is not stimulating the USEconomy because 1) the US lacks critical mass industrially, 2) the regulator burden and corporate tax burden and ObamaCare burden are too great, and 3) the nation is too busy with court cases against the big banks and waging war against fabricated enemies. This is Game Over !!!
As David Chapman points out, “It all seems counter-intuitive that the velocity of money should be falling even as the ECB, the Fed, the BOJ, and the Bank of Canada have been maintaining low interest rates for years in order to encourage borrowing and keep the cost of money low. The central banks have also pumped billions of dollars into the economy through QE and other stimulative measures. The result has been an explosion in the monetary base, a sharp rise in M1 but lower growth for M2 and sluggish M3. The economies are weighed down with debt, banks are reluctant to lend, consumers and corporations are unwilling to borrow. The money instead has been used for speculation, primarily going into risk assets such as the stock market. Corporations instead of investing in new plants and investment are sitting on cash hoards or buying back their own shares. Both are non-productive.”
CANADA ECHOING SAME
The Jackass howls in laughter at the claim that Canada is different, an independent nation, a refuge of wiser leadership, the Great White North with more integrity. What nonsense! Canada is in the US pocket, and has been for a very long time. The arguments that Canada is different or better or free from gold corruption are truly baseless and stupid. The big Canadian banks short gold with Wall Street banks, and have been doing so for a long time. See the Scotia Mocatta alliance with JPMorgan in recent months. The Canadian Govt efficiently vacated all their gold in the 1980 and 1990 decades. It was probably stolen in part by Mulroney, just like as Bush & Clinton & Rubin stole the US gold. See the hidden brisk activity at Barrick Gold, where the ex-prime minister sat on the Board of Directors. Pay close attention to the Evergreen gold contracts by Barrick, which never force under contract the delivery of gold, only the sale under dubious specious contracts. Then the big Canadian banks are deeply committed in the Wall Street and London derivative entanglements, just like the big US banks. All their big banks are hollow reeds, just like in the Untied States. Lastly, the Canadian stock exchanges engage in rampant naked shorting of the mining stocks, not by those who wish to preserve the fiat currency system, but rather by the investment banks that fund the capital requirements for the mining firms themselves. They sell more shares than granted on finance deals. The most disturbing gold factor from Canada in the last year has been the collusion of Scotia Mocatta with JPMorgan in the provision of gold bullion. They have been offered some special deal for the future, but that future will include a charred landscape and devils as warlords. Scotia Mocatta is in Satan’s service at the Wall Street altar. The old formula still holds: CANADA = UNITED STATES / 10 (just like always). The Jackass expects an extreme conflict very soon, as Canada is far more a Chinese commercial colony than the Untied States. My expectation is that Toronto, Ottawa, and Vancouver will soon begin marching to a different drummer out of Beijing, Shanghai, and Hong Kong. A big hat tip to David Chapman for his recent article (CLICK HERE) on the Money Velocity subject, where the graphic was obtained.
ENTER THE BLACK HOLE
Bernanke was correct. The cost of newly printed electronic money is zero. But he left out the other half of the statement, since he is a lousy economist. The value of the newly printed electronic money is zero. Due to his pathetic education, Bernanke overlooked or fails to comprehend the effect of hyper monetary inflation. Endless spigots of new fiat money are not the salvation of a system, but rather a cornucopia of new capital formation can lift the system in an effective legitimate manner. The unchecked inflation results in the destruction of capital, the wreckage of income producing engines, the extreme ruin of jobs. The new money goes down a drain. The curvature to the drain is defined by toxic bonds even as the inflection is marked by harmful derivatives. The stubborn behavior of the central bank franchise system operations, their deep collusion, their phony patches to the bond structures, their self-dealing $23 trillion in near zero interest loans to themselves, their waged war to protect the King Dollar regime, it is all destructive. Sooner or later the people and madding crowds will awaken, surely very late in the end game.
GOLD STANDARD PROTECTION, SOLUTION, FUTURE
The protection is with Gold & Silver bars & coins. The solution is not more bond purchases, broader monetization programs, more liberalized bank reserve rules, or suspended accounting rules. The solution is liquidation of the big dead zombie banks, and a return to the Gold Standard. It will be put in place. It will be installed. It will arrive with a vast new structure of legitimacy. It will include barter systems and decentralized mechanisms. It will include new Letters of Credit based in Gold Trade Notes. But the East led by Russia, China, and followed by India, Japan, and South Korea will be the promoters, installers, and architects of the new strong stable equitable Gold Standard system that the Untied States dreads and fears. The West will continue its rapacious confiscation of wealth and its vicious devotion to war until the platform they stand on built of USD ceramic tiles and USTBond cables and SWIFT pylons collapses. The return of the Gold Standard will relieve the global economy of the burden and wreckage of central bank ruinous and criminal actions. The damage will be extensive. The survivors will be owners of Gold & Silver. The rest will become debt slaves in a nasty fascist state.
THE HAT TRICK LETTER PROFITS IN THE CURRENT CRISIS.
home: Golden Jackass website
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Jim Willie CB, editor of the “HAT TRICK LETTER”
Use the above link to subscribe to the paid research reports, which include coverage of critically important factors at work during the ongoing panicky attempt to sustain an unsustainable system burdened by numerous imbalances aggravated by global village forces. The historically unprecedented ongoing collapse has been created by compromised central bankers and inept economic advisors, whose interference has irreversibly altered and damaged the world financial system, urgently pushed after the removed anchor of money to gold. Analysis features Gold, Crude Oil, USDollar, Treasury bonds, and inter-market dynamics with the US Economy and US Federal Reserve monetary policy.
MONEY VELOCITY IS PLUMMETING
Money Velocity continues to fall rapidly in both the USEconomy and that of Canada, reaching 50-year lows in the Untied States. The indication is failure in monetary policy, as hyper inflation has killed capital on an extensive basis. The capital destruction is in its fourth year, probably having reached critical mass. Compared and contrasted with fast rising money supply, the systemic failure is obvious to conclude. The exception is to morons, Wall Street junkies, Big Bank criminal elite, and USGovt hacks. The fast decline in Money Velocity means that it is not moving in the body economic. The reason is simple. The blood system is contaminated with the USDollar, a toxic currency with no backing in a hard asset. The new money is toxic currency under phenomenal debasement by its own steward, the USFed itself. They redouble their harmful policy instead of abandoning it.
The Money Velocity picture is not pretty. The declining rate has broken lows set 50 years ago. Technically, the velocity of money is the frequency at which one unit of currency is used to purchase domestically produced goods and services within a given time period, like an inventory cycle time. In other words, it is the number of times one dollar is spent to buy goods and services per unit of time. If the velocity of money is increasing, then more transactions are occurring between individuals in an economy. The result would be that growth (as measured in GDP) should be rising. With falling velocity of money, then fewer transactions are occurring and a recession is indicated. Such is the present case in astonishing rapid deterioration. Consumers and business are holding firm their money rather than investing it, as they see poor prospects. New capital formation is not occurring inside the USEconomy, or pitifully little. Debts are being dissolved, usually in default. It should be noted that the velocity of money has also been falling in the EU and Japan. The entire global economy is in recession, the pathogenesis shared.
DESTRUCTION OF CAPITAL
The claim that the QE bond monetization is stimulus is pure propaganda, and could not be further from the truth. The claim disguises the nature of the hidden Wall Street bailout, which is to cover their worthless mortgage bonds, and to cover all manner of derivatives, in addition to the obvious coverage of USTreasury Bond sales. Nobody wants the USGovt bonds anymore, except for Belgium operating as hidey hole on behalf of the Euro Central Bank, and for Japan operating as the usual lackey servant. The claim of stimulus is 180 degrees wrong. The bond monetization is pure unsterilized monetary inflation, free money shoved into the system without offset. To be sure, Bernanke had a machine to produce money at no cost, except that like with acid it ruins capital. The result is pure inflation, and extreme motivation for the entire world to take on hedge positions with energy, metals, farmland, and more in order to protect themselves from the ruin of money. The effect is felt as a rising cost structure, felt across the world, and thus shrinking profit margins for the entire global business sector.
As businesses realize the lost profitability, they shut down and retire their capital. They turn idle their factor machinery, their design workstations, their office computers, their transportation vehicles, their company buildings and offices. The destruction of capital is the ugliest dirty secret behind the official New Normal of central bank monetary policy. They are killing the system, so as to avoid liquidating the big banks. By refusing to take the proper capitalism path in liquidating failed corporate structures, they have instead chosen to kill capital, force income engines to the sidelines, generate capital formation in other nations (like the East & Asia), and destroy the USEconomy. The US and West has forgotten capitalism and embraced socialism with a fascist twist.
EXPLOSIVE MONETARY GROWTH
Contrast the declining Money Velocity with fast rising Money Supply growth (presented in March). The conclusion is both galloping economic recession and systemic failure, hardly a reward. Yet it continues without interruption, only the promise of interruption. The systemic failure and breakdown is upon us, the evidence stacking up, the message no longer escapable. The two charts back to back make the point convincingly. New money is wrecking the financial structures and economic systems by destroying capital. The USFed balance sheet is well over $3 trillion, and continues to grow. The new money is going largely in a hidden Wall Street bailout of their bonds and derivatives. The USFed is a grand liar, as their QE volume is growing, not tapering. They are using proxies and back doors, in addition to airborne dirigibles like the Interest Rate Swap contract. Like with the Hindenburg, the floating monsters will explode someday. The growth in money supply is frightening and alarming, evidence of the wrecked capital and wrecked system. Many have called the Jackass a lunatic and alarmist, but they seem incapable to explain the fast rise in monetary base, yet fast decline in money velocity. Monetary policy is a failure. The fiat paper money is toxic. The big banks are insolvent. The global franchise system of central banks should be shut down, except they control the governments, control the finance ministries, control the central banks, control the regulators, and control the militaries.
CRITICAL MASS IS LOST
It is very confusing that money velocity is falling fast, yet central banks are creating new money very rapidly. Imagine a Ferrari or Lamborghini race car spinning its gears, burning its engine out, running out of oil, making no movement. It aint working, started by Alan Greenspan, amplified by Benjamin Bernanke, and to be continued by Janet Yellen. They are stuck with failed monetary policy, and cannot alter the destructive course. The Jackass has maintained that a critical error was committed by granting China the Most Favored Nation status for trade. It was actually a fatal error. The industrial investment is taking place in Asia, led by China. Wall Street and the USGovt leadership at the time, under President Clinton and Robert Rubin, betrayed the nation. They leased gold from the Chinese, in order to perpetuate the fiat paper USDollar regime. They deployed the lunatic Rubin Doctrine, to wreck next year for a few more tomorrows. In doing so, the Chinese benefited from $23 billion in foreign direct investment in the space of a mere two to three years. But the blowback was fatal. The USEconomy lost its industrial critical mass, and has inadequate traction from monetary policy in accommodation. It still has some industry, but not enough. The ultra-low interest rate makes borrowing costs low, but grotesquely inadequate new capital formation has taken place in the USEconomy. It is being done in Asia. Worse, the new industrial parks are springing up across the US landscape, operated by Chinese industrial masters. The QE is not stimulating the USEconomy because 1) the US lacks critical mass industrially, 2) the regulator burden and corporate tax burden and ObamaCare burden are too great, and 3) the nation is too busy with court cases against the big banks and waging war against fabricated enemies. This is Game Over !!!
As David Chapman points out, “It all seems counter-intuitive that the velocity of money should be falling even as the ECB, the Fed, the BOJ, and the Bank of Canada have been maintaining low interest rates for years in order to encourage borrowing and keep the cost of money low. The central banks have also pumped billions of dollars into the economy through QE and other stimulative measures. The result has been an explosion in the monetary base, a sharp rise in M1 but lower growth for M2 and sluggish M3. The economies are weighed down with debt, banks are reluctant to lend, consumers and corporations are unwilling to borrow. The money instead has been used for speculation, primarily going into risk assets such as the stock market. Corporations instead of investing in new plants and investment are sitting on cash hoards or buying back their own shares. Both are non-productive.”
CANADA ECHOING SAME
The Jackass howls in laughter at the claim that Canada is different, an independent nation, a refuge of wiser leadership, the Great White North with more integrity. What nonsense! Canada is in the US pocket, and has been for a very long time. The arguments that Canada is different or better or free from gold corruption are truly baseless and stupid. The big Canadian banks short gold with Wall Street banks, and have been doing so for a long time. See the Scotia Mocatta alliance with JPMorgan in recent months. The Canadian Govt efficiently vacated all their gold in the 1980 and 1990 decades. It was probably stolen in part by Mulroney, just like as Bush & Clinton & Rubin stole the US gold. See the hidden brisk activity at Barrick Gold, where the ex-prime minister sat on the Board of Directors. Pay close attention to the Evergreen gold contracts by Barrick, which never force under contract the delivery of gold, only the sale under dubious specious contracts. Then the big Canadian banks are deeply committed in the Wall Street and London derivative entanglements, just like the big US banks. All their big banks are hollow reeds, just like in the Untied States. Lastly, the Canadian stock exchanges engage in rampant naked shorting of the mining stocks, not by those who wish to preserve the fiat currency system, but rather by the investment banks that fund the capital requirements for the mining firms themselves. They sell more shares than granted on finance deals. The most disturbing gold factor from Canada in the last year has been the collusion of Scotia Mocatta with JPMorgan in the provision of gold bullion. They have been offered some special deal for the future, but that future will include a charred landscape and devils as warlords. Scotia Mocatta is in Satan’s service at the Wall Street altar. The old formula still holds: CANADA = UNITED STATES / 10 (just like always). The Jackass expects an extreme conflict very soon, as Canada is far more a Chinese commercial colony than the Untied States. My expectation is that Toronto, Ottawa, and Vancouver will soon begin marching to a different drummer out of Beijing, Shanghai, and Hong Kong. A big hat tip to David Chapman for his recent article (CLICK HERE) on the Money Velocity subject, where the graphic was obtained.
ENTER THE BLACK HOLE
Bernanke was correct. The cost of newly printed electronic money is zero. But he left out the other half of the statement, since he is a lousy economist. The value of the newly printed electronic money is zero. Due to his pathetic education, Bernanke overlooked or fails to comprehend the effect of hyper monetary inflation. Endless spigots of new fiat money are not the salvation of a system, but rather a cornucopia of new capital formation can lift the system in an effective legitimate manner. The unchecked inflation results in the destruction of capital, the wreckage of income producing engines, the extreme ruin of jobs. The new money goes down a drain. The curvature to the drain is defined by toxic bonds even as the inflection is marked by harmful derivatives. The stubborn behavior of the central bank franchise system operations, their deep collusion, their phony patches to the bond structures, their self-dealing $23 trillion in near zero interest loans to themselves, their waged war to protect the King Dollar regime, it is all destructive. Sooner or later the people and madding crowds will awaken, surely very late in the end game.
GOLD STANDARD PROTECTION, SOLUTION, FUTURE
The protection is with Gold & Silver bars & coins. The solution is not more bond purchases, broader monetization programs, more liberalized bank reserve rules, or suspended accounting rules. The solution is liquidation of the big dead zombie banks, and a return to the Gold Standard. It will be put in place. It will be installed. It will arrive with a vast new structure of legitimacy. It will include barter systems and decentralized mechanisms. It will include new Letters of Credit based in Gold Trade Notes. But the East led by Russia, China, and followed by India, Japan, and South Korea will be the promoters, installers, and architects of the new strong stable equitable Gold Standard system that the Untied States dreads and fears. The West will continue its rapacious confiscation of wealth and its vicious devotion to war until the platform they stand on built of USD ceramic tiles and USTBond cables and SWIFT pylons collapses. The return of the Gold Standard will relieve the global economy of the burden and wreckage of central bank ruinous and criminal actions. The damage will be extensive. The survivors will be owners of Gold & Silver. The rest will become debt slaves in a nasty fascist state.
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Jim Willie CB, editor of the “HAT TRICK LETTER”
Use the above link to subscribe to the paid research reports, which include coverage of critically important factors at work during the ongoing panicky attempt to sustain an unsustainable system burdened by numerous imbalances aggravated by global village forces. The historically unprecedented ongoing collapse has been created by compromised central bankers and inept economic advisors, whose interference has irreversibly altered and damaged the world financial system, urgently pushed after the removed anchor of money to gold. Analysis features Gold, Crude Oil, USDollar, Treasury bonds, and inter-market dynamics with the US Economy and US Federal Reserve monetary policy.
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