In today’s world, economics is king. Everyone’s talking money and economy, yet none of it is actually even real.
Award winning scientist, author, environmental activist, broadcaster, and geneticist, David Suzuki, gives us the thought provoking truth about economics.
“Economics is not a science – it doesn’t even include the earth in its equations. Economics is not based in anything like the real world.”
“Money now grows faster than the real world and economics is so fundamentally disconnected from the real world that it is destructive.”
Here David Suzuki explains how conventional economics is a form of brain damage.
What is Public Banking?
Public banking is banking operated in the public interest, through institutions owned by the people through their representative governments. Public banks can exist at all levels, from local to state to national or even international. Any governmental body which can meet local banking requirements may, theoretically, create such a financial institution.
Public banking is distinguished from private banking in that its mandate begins with the public’s interest. Privately-owned banks, by contrast, have shareholders who generally seek short-term profits as their highest priority. Public banks are able to reduce taxes within their jurisdictions, because their profits are returned to the general fund of the public entity. The costs of public projects undertaken by governmental bodies are also greatly reduced, because public banks do not need to charge interest to themselves. Eliminating interest has been shown to reduce the cost of such projects, on average, by 50%.
When the public interest demands, the mission of public banks is to respond immediately, to assure the long-term prosperity of the community.
Public Banking: A Brief History
Public banking was first introduced in America by the Quakers in the original colony of Pennsylvania. Other colonial governments also established publicly-owned banks. The concept was later embraced by the State of North Dakota, the only state to currently own its own bank.
As of the spring of 2010, North Dakota was also the only state sporting a major budget surplus; it had the lowest unemployment and default rates in the country; and it had the most community banks per capita, suggesting that the presence of a state-owned bank has not only not hurt but has helped the local banks.
The BND was founded in 1919 to insure a dependable supply of affordable credit for its farmers, ranchers and businesses.
Without affordable credit, average Americans who do not have substantial wealth cannot make the investments in their families and small businesses necessary to insure a prosperous future.
The Bank of North Dakota makes low interest loans to students, existing small businesses and start-ups. It partners with private banks to provide a secondary market for mortgages and supports local governments by buying municipal bonds.
The public banking model used by the State of North Dakota is simple – the State of North Dakota is doing business as the Bank of North Dakota (BND). That means all the state’s assets are used to capitalize the BND. By law, all the state’s revenues are also deposited in the Bank. Among other advantages, this gives the BND the ability to participate in loans originated and led by private banks, which then have more flexibility to manage and expand their loan portfolios.
As a public bank, the Bank of North Dakota pays its dividend to its only shareholder – the people of the state. In the past decade, despite its small population and modest volume of economic activity, the Bank of North Dakota has returned over $300 million to the state’s general fund, helping to ensure regular annual surpluses and eliminate the need for drastic tax increases or spending cuts for vital public services.
Most states, with the exception of North Dakota, currently deposit their tax revenues (the public’s money) in private Wall Street banks, which use these deposits for their own private gain. This money could be deposited in the state’s own bank and used to fund projects and programs that benefit the public over the long term – the very same projects/programs that are currently being cut from state budgets.
The Bank of North Dakota is only one of many public banking models that have developed historically around the world. For most of the twentieth century in Australia, the publicly-owned Commonwealth Bank of Australia was not only the nation’s central bank but engaged in commercial banking, “keeping the other banks honest.” In Alberta, Canada, the publicly-owned Alberta Treasury Branches connect nearly every town in a shared credit system. Public and private banks operate effectively together in many countries, including Switzerland, Germany, India, China and Brazil.
Clearly, states and municipalities have the potential to leverage their revenues to a much greater degree than is currently practiced. The Public Banking Institute has been set up to explore and educate regarding this potential.
In the Name of the Almighty Presence of God ‘I AM’, the Holy Christ Selves of All Humanity,
We summon all great Beings, Powers, and Legions of Light concerned with the economic stability of the Nations of the Planet Earth to
COME FORTH NOW!
Beloved Archangel Michael and Lady Astrea
PURIFY ( 3X )
All financial institutions, all financial complexes, all activities concerned with the economic structure of the World. Remove the cause, core, effect, record and memory back to the very beginning of the time of all misuse of money or energy patterns of exchange.
Beloved Saint Germain and Beloved Lord Zadkiel
Penetrate and saturate all financial structures with the MOST POWERFUL ACTIVITY OF THE VIOLET FIRE ever known! ( 3X )
Beloved Lord Helios and Lady Vesta
Place all control of finances and economic systems on Earth into the hands of those who serve the Light of God and dissolve all else by the SACRED FIRE here and now and forever sustained.
The wise investment of energy and substance by all servers of Light who receive these benefits for the blessing of All Humanity.
Beloved Angel of Restoration
Restore to us now the Divine Plan for Harmonious Balance in the distribution of the Earth’s abundance and the limitless supply of the Universe.
We gratefully accept this done in DIVINE ORDER
and in accordance with GOD’S HOLY WILL
Starseed Highway is copyrighted, but you have permission to share it through any medium as long as it is offered for free, it is not altered and the proper credit line is included. Thank you. ~ Trillia Gia/Starseed Highway
Submitted by Tyler Durden on 02/23/2015
No matter how many times the big banks are caught red-handed manipulating precious metals, some failed former Deutsche Bank prop-trader (you know who you are) will take a vociferous stand based on ad hominem attacks and zero facts that no, what you see in front of you is not precious metal rigging at all but a one-off event that has nothing to do with a criminal banking syndicate hell bent on taking advantage of anyone who is naive and dumb enough to still believe in fair and efficient markets.
The last time this happened was in November when we learned that “UBS Settles Over Gold Rigging, Many More Banks To Follow“, and sure enough many more banks did follow, because in Europe, where the stench of gold market manipulation stretches far beyond merely commercial banks, and rises through the central banks, namely the BOE and ECB, culminating with the Head of Foreign Exchange & Gold at the BIS itself, all such allegations have to be promptly settled or else the discovery that the manipulation cartel in Europe involves absolutely everybody will shock and stun the world, which heretofore was led to believe that such things as gold market (not to be confused with Libor or FX) manipulation only exist in the paranoid delusions of a few tinfoil fringe-blogging lunatics.
However, as usually happens, someone always fails to read the memo that when it comes to gold-market manipulation one must i) find nothing at all incriminating if one is a paid spokesman for the entities doing the manipulation such as former CFTC-sellout Bart Chilton or ii) if one can’t cover it, then one must settle immediately or else the chain of revelations will implication everyone.
This time, that someone is the US Department of Justice, which as the WSJ just reported, is investigating at least 10 major banks for possible rigging of precious-metals markets. The DOJ is shockingly doing so “even though European regulators dropped a similar probe after finding no evidence of wrongdoing, according to people close to the inquiries.” Of course, the reason why said probe was dropped in Europe is because it would have implicated virtually the entire trading desk at the biggest and most important European bank: Deustche Bank, as well as the biggest bank in Switzerland, UBS and UK’s own Barclays, reveal a manipulation cartel rivaling even that of Libor. And once traders at the commercial banks turned sides and squealed for the prosection, well then it would be the central banks’ turn next. Which is why it was imperative to bring this investigation to a quiet end.
But not in the US.
According to the WSJ, “prosecutors in the Justice Department’s antitrust division are scrutinizing the price-setting process for gold, silver, platinum and palladium in London, while the Commodity Futures Trading Commission has opened a civil investigation, these people said. The agencies have made initial requests for information, including a subpoena from the CFTC to HSBC Holdings PLC related to precious-metals trading, the bank said in its annual report Monday.
HSBC also said the Justice Department sought documents related to the antitrust investigation in November. The two probes “are at an early stage,” the bank added, saying it is cooperating with U.S. regulators.
Who is involved in this latest gold-rigging scandal? Why everyone! … which makes it immediately obvious why the European regulator had to promptly cover up the whole affair. Under scrutiny are Bank of Nova Scotia , Barclays PLC, Credit Suisse Group AG , Deutsche Bank AG , Goldman Sachs Group Inc., J.P. Morgan Chase & Co., Société Générale SA, Standard Bank Group Ltd. and UBS AG , according to one of the people close to the investigation.
Robert Hockett, a law professor at Cornell University, said it is “not particularly surprising” that the Justice Department is plowing ahead despite the decision by European regulators. Recent scrutiny of big banks’ operations in the physical commodities markets and criticism of the Justice Department’s financial-crisis track record make it “quite understandable” that the agency would investigate allegations of precious metals price-rigging.
Last year, the FCA fined Barclays £26 million ($40.2 million) for lax controls after one of its traders allegedly manipulated the gold fix at the expense of a client.
Swiss regulator Finma settled last year allegations of foreign-currency manipulation with UBS. The regulator said it found “serious misconduct” among precious-metals traders at UBS, including “front running,” or trading ahead of, the silver-fix orders of one client. A spokeswoman for UBS, which said at the time that it “instituted significant cultural and compliance changes,” declined further comment.
You mean to say that the banks that were for decades rigging Libor… and FX… and bonds… and stocks… oh, and gold, were let go with a slap on the wrist and a promise to “change their ways” and not to do it again? Yup, that’s exactly right.
So what happens next? Well, we finally will find just how much of a banker-controlled muppet the so-called US attorney general truly is. Recall that a week ago he gave his subordinates 90 days to being cases against individuals for their role in the financial crisis.
Well here is the perfect opportunity. Should Holder let this latest mass criminal ring go without any incarecration, one can officially stick a fork in the US justice system, which is meant for everyone, but the rule-flouting bankers who can clearly get away with absolutely anything.
As for the rigging in the gold market, rigging which begins with the lowliest prop-traders at Deutsche Bank and involves every single central bank and High Frequency trading outfit and is now a proven fact, we have explained over the years and thousands of times just how to end it all, so instead of wasting readers’ time on this topic yet again, here are just two very simple solutions how to fix this one particular market:
So simple, even the most corrupt US Attorney General caveman can do it.
By JC Collins
In essence, China has been slowly buying up the Federal Reserve for some time now. If you can call it a purchase. Its more of a negotiation over assuming the liabilities of both the Federal Reserve and the U.S. Treasury.
The Federal Reserve is the largest holder of U.S. debt at $2.1 trillion. China is second at $1.3 trillion. Think of it as the United States government doing a debt consolidation of all its treasury bonds because it can no longer pay or service the debt.
China, or the BRICS countries, and/or a consortium of international interests, most likely organized through the I.M.F., will manage the U.S. debt through exchange rate increases and trade tariffs.
The reality for Americans for the next decade or more will be price increases/inflation of 30% to 50%, segmented by industry and region, until such a time that its debt, or a negotiated margin of their debt, is cleared from the books.
The post WW2 boom in the United States was funded by the exportation of the dollars inflation to what is now the emerging markets. Americans lived on the backs of other countries. Now the tables have turned. Or have been turning for many years already. This would explain outsourcing, trade agreements, immigration, favorite nation status, etc..
Why would China and other countries take on the risk of this debt? Simple, it’s economic reset or economic collapse. Its in the worlds interest to re-structure the U.S. debt to save the whole whale from beaching itself.
Rumors are circulating that the U.S. dollar will have a rate for in country use, and a separate international rate. That is because the U.S. treasury and the Federal Reserve are about to be severed from each other. The Treasury will control the in country dollar, and the “international reserve” dollar will be controlled by China and or the I.M.F. consortium of debt holders.
The U.S. in fact defaulted back in October of 2013. This has not been told to the public at large. Why would the congress insinuate that the debt ceiling is now irrelevant? The only way the debt ceiling, or debt limit,(eg. the amount the government can borrow) can become irrelevant is if the U.S. has in fact defaulted and the process of default negotiations are taking place. Think of it as the rest of the world cutting up the credit cards belonging to the United States government.
China has recently purchased the JP Morgan building in Manhattan for $725 million. One could reason that they have in fact purchased all of JP Morgan. And I’m sure it will soon be announced that China has or is in the process of purchasing other Western banks and physical assets. These banks make up the majority owners of the Federal Reserve. (edit: Big call out to Archer for catching my typo and error in the amount which the building was sold.)
The gold reserves of the west have been depleted by China. Some say there is no gold left. This is more physical assets gone from the legers of the Western banks. The system of debt based money creation of the Western world is dead. It’s over. The shift East is in the final stages of completion.
Obama’s so called “pivot east” is less about positioning assets to counter the stirring of the eastern dragon, and more to do with making those military assets easy to confiscate when the terminal day arrives. (edit: not Obama specifically, but the Federal Reserve system and the military it controls. One assumes the rhetorical is understood.)
It will happen over a weekend, as many have already predicted. The televisions will announce the largest deal in financial history between the Federal Reserve and China. They will discuss how all the worlds currencies have been revalued to reflect true production ratios and physical assets. Accounts will be balanced. War criminals will be prosecuted.
This is only a summary post to capture the broad strokes. Keep checking back as I will post a more detailed metric “oriented” essay on the thesis presented here. – JC
UPDATE: See latest blog posts:
By Michael Snyder
The idea that the Obama administration has the budget deficit under control is a complete and total lie. According to the U.S. Treasury, the federal government has officially run a deficit of 589 billion dollars for the first 11 months of fiscal year 2014. But this number is just for public consumption and it relies on accounting tricks which massively understate how much debt is actually being accumulated. If you want to know what the real budget deficit is, all you have to do is go to a U.S. Treasury website which calculates the U.S. national debt to the penny. On September 30th, 2013 the U.S. national debt was sitting at$16,738,183,526,697.32. As I write this, the U.S. national debt is sitting at $17,742,108,970,073.37. That means that the U.S. national debt has actually grown by more than a trillion dollars in less than 12 months. We continue to wildly run up debt as if there is no tomorrow, and by doing so we are destroying the future of this nation.
The chart that I have posted below shows the exponential growth of the U.S. national debt over the past several decades. Anyone that would characterize this as “under control” is lying to you…
This is the greatest government debt bubble in the history of the world, but very few people seem to have any desire to do anything about this anymore. We are literally gorging on debt, and most Americans seem to think that it is just fine and dandy.
Perhaps that it is because we have never really experienced any serious consequences for going into so much debt yet.
But when it comes to running up debt, a day of reckoning always comes eventually.
Just ask Greece.
And the absolutely insane spending policies of this administration and this Congress are hastening the day when our day of reckoning will arrive.
Consider the following facts…
-The U.S. national debt has increased by more than 7 trillion dollarssince Barack Obama has been in the White House. By the time Obama’s second term is over, we will have accumulated about as much new debt under his leadership than we did under all of the other U.S. presidents in all of U.S. history combined.
-The U.S. national debt is now more than 5000 times larger than it was when the Federal Reserve was first established in 1913.
-If the U.S. national debt was reduced to a stack of one dollar bills it would circle the earth at the equator 45 times.
-Right now, the United States already has more government debt per capita than Greece, Portugal, Italy, Ireland or Spain.
-In August, the average rate of interest on the government’s marketable debt was 2.028 percent. In January 2000, the average rate of interest on the government’s marketable debt was 6.620 percent. If we got back to that level today, we would be paying well over a trillion dollars a year just in interest on the national debt.
-At this point the U.S. government has accumulated more than 200 trillion dollars of unfunded liabilities that will need to be paid in future years. In other words, we have made more than 200 trillion dollars worth of promises that we do not have money for yet.
Thomas Jefferson once said that “the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.”
What we are doing to future generations is absolutely unconscionable. We are stealing trillions upon trillions of dollars from our children and our grandchildren, and we are willingly consigning them to a lifetime of debt slavery.
I have said this before, but it bears repeating. If future generations get the chance, they will look back and curse us for what we have done to them.
And shame on anyone that would dare to suggest that we should continue to run up more debt that future generations will be expected to repay.
But government debt is far from the only massive debt bubble that we are dealing with as a country.
40 years ago, the total amount of debt in our nation (all government debt plus all business debt plus all individual debt) was sitting at a grand total of about 2.3 trillion dollars.
Today, that total has grown to 59.4 trillion dollars.
As the chart posted below shows, our total debt bubble is now more than 25 times larger than it was just 40 years ago…
If you were to take all forms of debt in our country and divide it up equally to each person, the average family of four would oweapproximately $735,000.
This is not anywhere close to being sustainable, but most Americans don’t seem to care. They just continue to recklessly run up even more debt.
However, there are signs that we are starting to hit a wall with all of this debt.
For example, an astounding 35 percent of all Americans have debts that are so overdue that they have been referred to collection agencies.
Our nation has become an ocean of red ink from sea to shining sea, and the only way to keep the bubble from bursting is for the total amount of debt to continue to grow much faster than the overall economy is growing.
Obviously this cannot happen indefinitely, and when this house of cards comes crashing down it is going to be absolutely horrific. For much more on all of this please see my previous article entitled “The United States Of Debt: Total Debt In America Hits A New Record High Of Nearly 60 Trillion Dollars“.
The big question is how long our “bubble economy” can keep going before it finally collapses.
It has gotten to the point where even some of the biggest banks in the world are admitting that what we have been doing is completely and totally unsustainable. Just consider the following excerpt from a recent article by Joshua Krause…
Recently, strategists for Deutsche Bank released a startling study in regards to government debt. They decided to investigate whether or not the bond market is currently in a bubble. What they found was, unlike previous eras, the past 20 years has seen no lag between economic booms and busts:
It has long been our view that over the last couple of decades the global economy has rolled from bubble to bubble with excesses never fully being allowed to unravel. Instead aggressive policy responses have encouraged them to roll into new bubbles.
This has arguably kept the modern financial system as we know it a going concern. Clearly there have always been bubbles formed through history but has there been a period like the last 20 years where the bursting of one bubble has consistently led directly to the formation of the next?
Essentially, our current system has been dying a very slow death. It’s running out of steam.
Sadly, most Americans have no idea that we are living in a giant debt-fueled bubble that has a limited lifespan.
Most Americans just assume that since the politicians tell them that everything is going to be okay that they don’t need to be concerned about any of this.
But every single day our debts get even larger and our long-term financial problems get even worse.
Someday this bubble is going to burst and then all hell will break loose.
It is just a matter of time.
Michael T. Snyder is a graduate of the McIntire School of Commerce at the University of Virginia and has a law degree and an LLM from the University of Florida Law School. He is an attorney that has worked for some of the largest and most prominent law firms in Washington D.C. and who now spends his time researching and writing and trying to wake the American people up. You can follow his work on The Economic Collapse blog, End of the American Dream and The Truth Wins. His new novel entitled “The Beginning Of The End” is now available on Amazon.com.
With government intervention now becoming the only viable solution being touted for everything from individual health care and the economy to our personal safety and how we educate our children, it would only make sense that officials in Washington also figure out a way to use their power of confiscation and redistribution to equalize the income playing field.
It’s no secret that 48 million Americans require nutritional assistance just to put food on the table, or that over 100 million of us are living in or at the very edge of poverty, or that nearly one in three of us is currently without any meaningful labor.
This is a major problem, and if we stay on our current trajectory those numbers are going to continue to rise. The American people are broke, and so are the businesses that employ them, which means that we’ll continue to shed jobs, decrease wages and further impoverish an already dwindling middle class.
Enter the idea of a Universal Basic Income, to be distributed by the Federal government on a monthly basis to every adult in America.
You read that right.
It’s a proposal being floated by members of the establishment media at The Atlantic, the New York Times, and Business Insider, and based on their research, would put a decisive end to poverty and income inequality in America.
According to the “experts,” this is how it would work:
A simple idea for eliminating poverty is garnering greater attention in recent weeks: automatically have the government give every adult a basic income.
It’s exactly how it sounds. The government would mail every American over the age of 21 a check each month. That’s it. Everyone is free to do what they like with it.
Giving each working-age American a basic income equal to the poverty line would cost $2.14 trillion. For some comparison, U.S. GDP was almost $16 trillion in 2012 and the defense budget was $700 billion.
But a minimum income would also allow us to eliminate every government benefit as well. Get rid of SNAP, TANF, housing vouchers, the Earned Income tax credit and many others.
The clear [benefit] is that no American would live below the poverty line. The U.S. has been waging the War on Poverty for a generation now and still nearly 50 million Americans are below the line. This would end that war with a decisive victory.
First, the assumption being made here is that when you send every person in America a paycheck, they will then use that money to purchase food and the basic essentials they need for survival. They wouldn’t spend that money on new smart phones, or vacations, or home upgrades, or any of that stuff that drove our consumer-based society into a mountain of debt to begin with. Once the government starts doling out the checks, everyone is going to be responsible with their newly found wealth and use it on the things they really need.
Second, injecting $2.1 trillion dollars of cash into the U.S. economy on a yearly basis is only going to be positive for the consumer, right? Are we to assume that when more money is chasing the same amount of goods that the price of those goods will remain the same? That there will be no direct inflationary impact as consumers race to spend their monthly stipend on goods they couldn’t have bought before? Prices are already rising at a rate of nearly 10% a year. What do you think will happen when two trillion new dollars are introduced into the economy on an annual basis?
Third, and probably the most important aspect of all this is how, exactly, are we going to fund this?
To spread the wealth around we have one of two choices.
We can either increase taxes on working Americans to offset the payments going to those who make less than them, or we can borrow it from our creditors by raising our debt ceiling an additional $2.1 trillion on a yearly basis (on top of the existing increase requirements).
Raising taxes isn’t going to work simply because those who generate an income in this country just had their financial futures destroyed by the Patient Affordable Care Act, which promises to triple their monthly mandated health payments. They’ve got nothin’ left after mortgage, car payment, food, utilities and forced health insurance at the barrel of a gun.
Printing money, we suppose will work. For a short while, at least, until our foreign creditors realize there is absolutely no way our country can pay back the trillions of dollars we’re adding to our balance on a yearly basis.
Thus, in the end, we either go broke through taxation, rendering all of us to living on the edge of poverty or below it, or, the Federal Reserve will be forced to make up the difference by printing trillions upon trillions of dollars that will have the effect of rising prices for goods that people will no longer be able to afford, like food, electricity, and other essentials.
Both options lead to essentially the same result.
Margaret Thatcher once warned that socialism only works until you run out of other peoples’ money
We’re just about out.
Take a guess what happens next.
Author: Mac Slavo
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Former World Bank lawyer Karen Hudes says the global opinion of America is tarnished. Hudes contends, “Is the United States a credible super power? The answer to that is ‘we are neither.’ We’re not a super power and we are not credible.” Hudes goes on to warn, “The biggest game changer is something that people are just ignoring, and they ignore it at their peril, and that is the creation of a fourth credit rating agency. . . . If they do not get our act together, they will have no choice . . . We are losing our credit rating.”
Hudes, who is also a whistleblower, charges, “There is fraud and corruption from top to bottom in the financial system.” As far as global central banks are concerned (including the Fed), Hudes claims, “The central bankers have a scam going on. It’s a Ponzi scheme. The citizens of the world are paying interest on their currencies.
These currencies are not being issued by the governments; they are being issued by private bankers.” Don’t give up hope because Hudes says, “The U.S. has to come around to the rule of law. . . . and we are on track with a 95% likelihood, and that is why I think the dollar is not going to tank.” Join Greg Hunter as he goes One-on-One with whistleblower and former Senior Counsel for the World Bank, Karen Hudes.
By Prof Michel Chossudovsky
Global Research, October 16, 2013
The “shutdown” of the US government and the financial climax associated with a deadline date, leading to a possible “debt default” of the federal government is a money making undertaking for Wall Street.
A wave of speculative activity is sweeping major markets.
The uncertainty regarding the shutdown and “debt default” constitutes a golden opportunity for “institutional speculators”. Those who have reliable “inside information” regarding the complex outcome of the legislative process are slated to make billions of dollars in windfall gains.
Several overlapping political and economic agendas are unfolding. In a previous article, we examined the debt default saga in relation to the eventual privatization of important components of the federal State system.
While Wall Street exerts a decisive influence on policy and legislation pertaining to the government shutdown, these same major financial institutions also control the movement of currency markets, commodity and stock markets through large scale operations in derivative trade.
Most of the key actors in the US Congress and the Senate involved in the shutdown debate are controlled by powerful corporate lobby groups acting directly or indirectly on behalf of Wall Street. Major interests on Wall Street are not only in a position to influence the results of the Congressional process, they also have “inside information” or prior knowledge of the chronology and outcome of the government shutdown impasse.
They are slated to make billions of dollars in windfall profits in speculative activities which are “secure” assuming that they are in a position to exert their influence on relevant policy outcomes.
It should be noted, however, that there are important divisions both within the US Congress as well as within the financial establishment. The latter are marked by the confrontation and rivalry of major banking conglomerates.
These divisions will have an impact on speculative movements and counter movements in the stock, money and commodity markets. What we are dealing with is “financial warfare”. The latter is by no means limited to Wall Street, Chinese, Russian and Japanese financial institutions (among others) will also be involved in the speculative endgame.
Speculative movements based on inside information, therefore, could potentially go in different directions. What market outcomes are being sought by rival banking institutions? Having inside information on the actions of major banking competitors is an important element in the waging of major speculative operations.
The major instrument of “secure” speculative activity for these financial actors is derivative trade, with carefully formulated bets in the stock markets, major commodities –including gold and oil– as well as foreign exchange markets.
These major actors may know “where the market is going” because they are in a position to influence policies and legislation in the US Congress as well as manipulate market outcomes.
Moreover, Wall Street speculators also influence the broader public’s perception in the media, not to mention the actions of financial brokers of competing or lesser financial institutions which do not have foreknowledge or access to inside information.
These same financial actors are involved in the spread of “financial disinformation”, which often takes the form of media reports which contribute to either misleading the public or building a “consensus” among economists and financial analysts which will push markets in a particular direction.
Pointing to an inevitable decline of the US dollar, the media serves the interests of the institutional speculators in camouflaging what might happen in an environment characterized by financial manipulation and the interplay of speculative activity on a large scale.
Speculative trade routinely involves acts of deception. In recent weeks, the media has been flooded with “predictions” of various catastrophic economic events focusing on the collapse of the dollar, the development of a new reserve currency by the BRICS countries, etc.
At a recent conference hosted by the powerful Institute of International Finance (IIF), a Washington based think tank organization which represents the world’s most powerful banks and financial institutions:
“Three of the world’s most powerful bankers warned of terrible consequences if the United States defaults on its debt, with Deutsche Bank chief executive Anshu Jain claiming default would be “utterly catastrophic.”
This would be a very rapidly spreading, fatal disease, … I have no recommendations for this audience…about putting band aids on a gaping wound,” he said.
“JPMorgan Chase chief executive Jamie Dimon and Baudouin Prot, chairman of BNP Paribas, said a default would have dramatic consequences on the value of U.S. debt and the dollar, and likely would plunge the world into another recession.” (…)
Dimon and other top executives from major U.S. financial firms met with President Barack Obama and with lawmakers last week to urge them to deal with both issues.
On Saturday, Dimon said banks are already spending “huge amounts” of money preparing for the possibility of a default, which he said would threaten the global recovery after the 2007-2009 financial crisis.
Dimon also defended JPMorgan against critics who say the bank has become too big to manage. It has come under scrutiny from numerous regulators and on Friday reported its first quarterly loss since Dimon took over, due to more than $7 billion in legal expenses. (Emily Stephenson and Douwe Miedema, World top bankers warn of dire consequences if U.S. defaults | Reuters, October 12, 2013
What these “authoritative” economic assessments are intended to create is an aura of panic and economic uncertainty, pointing to the possibility of a collapse of the US dollar.
What is portrayed by the Institute of International Finance panelists (who are the leaders of the world’s largest banking conglomerates) is tantamount to an Economics 101 analysis of market adjustment, which casually excludes the known fact that markets are manipulated with the use of sophisticated derivative trading instruments. In a bitter irony, the IIF panelists are themselves involved in routinely twisting market values through derivative trade. Capitalism in the 21st century is no longer based largely on profits resulting from a real economy productive process, windfall financial gains are acquired through large scale speculative operations, without the occurrence of real economy activity. at the touch of a mouse button.
The manipulation of markets is carried out on the orders of major bank executives including the CEOs of JPMorgan Chase, Deutsche Bank and BNP Paribas.
The “too big to fail banks” are portrayed, in the words of JPMorgan Chase’s CEO Jamie Dimon’s, as the “victims” of the debt default crisis, when in fact they are the architects of economic chaos as well as the unspoken recipients of billions of dollars of stolen taxpayers’ money.
These corrupt mega banks are responsible for creating the “gaping wound” referred to by Deutsche Bank’s Anshu Jain in relaiton to the US public debt crisis.
Collapse of the Dollar?
Upward and downward movements of the US dollar in recent years have little do with normal market forces as claimed by the tenets of neoclassical economics.
Both JP Morgan Chase’s CEO Jamie Dimon and Deutsche Bank’s CEO Anshu Jain’s assertions provide a distorted understanding of the functioning of the US dollar market. The speculators want to convince us that the dollar will collapse as part of a normal market mechanism, without acknowledging that the “too big to fail” banks have the ability to trigger a decline in the US dollar which in a sense obviates the functioning of the normal market.
Wall Street has indeed the ability to “short” the greenback with a view to depressing its value. It has also has the ability through derivative trade of pushing the US dollar up. These up and down movements of the greenback are, so to speak, the “cannon feed” of financial warfare. Push the US dollar up and speculate on the upturn, push it down and speculate on the downturn.
It is impossible to assess the future movement of the US dollar by solely focusing on the interplay of “normal market” forces in response to the US public debt crisis.
While an assessment based on “normal market” forces indelibly points to structural weaknesses in the US dollar as a reserve currency, it does not follow that a weakened US dollar will necessarily decline in a forex market which is routinely subject to speculative manipulation.
Moreover, it is worth noting that the national currencies of several heavily indebted developing countries have increased in value in relation to the US dollar, largely as a result of the manipulation of the foreign exchange markets. Why would the national currencies of countries literally crippled by foreign debt go up against the US dollar?
The Institutional Speculator
JPMorgan Chase, Goldman Sachs, Bank America, Citi-Group, Deutsche Bank et al: the strategy of the institutional speculators is to sit on their “inside information” and create uncertainty through heavily biased news reports, which are in turn used by individual stock brokers to advise their individual clients on “secure investments”. And that is how people across America have lost their savings.
It should be emphasized that these major financial actors not only control the media, they also control the debt rating agencies such as Moody’s and Standard and Poor.
According to the mainstay of neoclassical economics, speculative trade reflects the “normal” movement of markets. An absurd proposition.
Since the de facto repeal of the Glass-Steagall Act and the adoption of the Financial Services Modernization Act in 1999, market manipulation tends to completely overshadow the “laws of the market”, leading to a highly unstable multi-trillion dollar derivative debt, which inevitably has a bearing on the current impasse on Capitol Hill. This understanding is now acknowledged by sectors of mainstream financial analysis.
There is no such thing as “normal market movements”. The outcome of the government shutdown on financial markets cannot be narrowly predicted by applying conventional macro-economic analysis, which excludes outright the role of market manipulation and derivative trade.
The outcome of the government shutdown on major markets does not hinge upon “normal market forces” and their impacts on prices, interest rates and exchange rates. What has to be addressed is the complex interplay of “normal market forces” with a gamut of sophisticated instruments of market manipulation. The latter consist of an interplay of large scale speculative operations undertaken by the most powerful and corrupt financial institutions, with the intent to distorting “normal” market forces.
It is worth mentioning that immediately following the adoption of the Financial Services Modernization Act in 1999, the US Congress adopted the Commodity Futures Modernization Act 2000 (CFMA) which essentially “exempted commodity futures trading from regulatory oversight.”
Four major Wall Street financial institutions account for more than 90 percent of the so-called derivative exposure: J.P. Morgan Chase, Citi-Group, Bank America, and Goldman Sachs. These major banks exert a pervasive influence on the conduct of monetary policy, including the debate within the US Congress on the debt ceiling. They are also among the World’s largest speculators.
What is the speculative endgame behind the shutdown and debt default saga?
An aura of uncertainty prevails. People across America are impoverished as a result of the curtailment of “entitlements”, mass protest and civil unrest could erupt. Homeland Security (DHS) is the process of militarizing domestic law enforcement. In a bitter irony, each and all of these economic and social events including political statements and decisions in the US Congress concerning the debt ceiling, the evaluations of the rating agencies, etc. create opportunities for the speculator.
Major speculative operations –feeding on inside information and deception– are likely take place routinely over the next few months as the fiscal and debt default crisis unfolds.
What is diabolical in this process is that major banking conglomerates will not hesitate to destabilize stock, commodity and foreign exchange markets if it serves their interests, namely as a means to appropriate speculative gains resulting from a situation of turmoil and economic crisis, with no concern for the social plight of millions of Americans.
One solution –which is unlikely to be adopted unless there is a major power shift in American politics– would be to cancel the derivative debt altogether and freeze all derivative transactions on major markets. This would certainly help to tame the speculative onslaught.
The manipulation through derivative trade of the markets for basic food staples is particularly pernicious because it potentially creates hunger. It has a direct bearing on the livelihood of millions of people.
As we recall, “the price of food and other commodities began rising precipitately [in 2006], … Millions were cast below the poverty line and food riots erupted across the developing world, from Haiti to Mozambique.”
According to Indian economist Dr. Jayati Ghosh:
“It is now quite widely acknowledged that financial speculation was the major factor behind the sharp price rise of many primary commodities , including agricultural items over the past year … Even recent research from the World Bank (Bafis and Haniotis 2010) recognizes the role played by the “financialisation of commodities” in the price surges and declines, and notes that price variability has overwhelmed price trends for important commodities.” (Quoted in Speculation in Agricultural Commodities: Driving up the Price of Food Worldwide and plunging Millions into Hunger By Edward Miller, October 05, 2011)
The artificial hikes in the price of crude oil, which are also the result of market manipulation, have a pervasive impact on costs of production and transportation Worldwide, which in turn contribute to spearheading thousands of small and medium sized enterprises into bankruptcy.
Big Oil including BP as well Goldman Sachs exert a pervasive impact on the oil and energy markets.
The global economic crisis is a carefully engineered.
The end result of financial warfare is the appropriation of money wealth through speculative trade including the confiscation of savings, the outright appropriation of real economy assets as well as the destabilization of the institutions of the Federal State through the adoption of sweeping austerity measures.
The speculative onslaught led by Wall Street is not only impoverishing the American people, the entire World population is affected.
Michel Chossudovsky is an award-winning author, Professor of Economics (emeritus) at the University of Ottawa, Founder and Director of the Centre for Research on Globalization (CRG), Montreal and Editor of the globalresearch.ca website.
He is the author of The Globalization of Poverty and The New World Order (2003) and America’s “War on Terrorism”(2005).
His most recent book is entitled Towards a World War III Scenario: The Dangers of Nuclear War (2011).
He is also a contributor to the Encyclopaedia Britannica. His writings have been published in more than twenty languages.
He can be reached at email@example.com
She may have been robbed
Are foreign-exchange benchmarks the latest to be manipulated by bankers?
Oct 12th 2013
IT HAS been a dreadful couple of years for financial benchmarks. Banks turn out to have rigged LIBOR, an interest rate used to peg contracts worth trillions. Its equivalent in the world of derivatives, ISDAfix, has also come under question. Commodities prices from crude oil to platinum have been the subject of allegations and inquiries. Now prices in global currency markets, where turnover is $5 trillion a day, are being scrutinised by authorities, who suspect bankers have tampered with those too.
Switzerland’s financial watchdog announced on October 4th that it was investigating a slew of banks it thinks have manipulated currencies. Britain and the European Union also have probes under way. None has detailed its suspicions, but concerns reportedly centre around abnormal movements ahead of a widely-used daily snapshot of exchange rates, known as the 4pm “London fix”. It represents the average of prices agreed during 60 seconds’ trading, and is used as a reference rate to execute a much larger set of currency deals. Bankers, who are big participants in the market, have huge incentives to nudge the price of a given currency pairing ahead of the fix. With billions of dollars changing hands, a difference of a fraction of a cent can add a tidy sum to the bonus pool.
If proven, the charge would amount to banks fleecing their clients. Banks know the big trades they are about to execute on others’ behalf, and are often themselves the counterparty. By moving the markets ahead of the fix, they could alter the rate to their profit and their clients’ loss. One suspected method is “banging the close”: submitting a quick succession of orders just as the benchmark is set, to distort its value. Though indicators based on real trades are meant to be harder to game than those using hypothetical figures (such as LIBOR, a daily poll of banks’ estimated borrowing rates into which respondents fed duff data), they are clearly not incorruptible.
The 4pm fix is used to calculate the value of all sorts of assets, such as the foreign holdings of mutual funds. Fiddling the rates could thus have an impact far beyond the banks and their clients. Worse, if the bankers talked to each other ahead of their trades, as regulators think they may have, collusion will be added to the charge sheet. Investigations into other fiddled benchmarks have unearthed reams of messages between traders blithely discussing their swindles.
The risk of manipulation could be vastly diminished by using a benchmark that relies on more than just 60 seconds of trading, points out Mark Taylor, dean of Warwick Business School and a former currency-fund manager. The damage to implicated banks’ reputations will be harder to fix.
BeforeItsNews October 8, 2013
This is the third time the moneylenders have tried take over the known civilized world and bankrupt it with usury. With the leverage of a Permanent War Policy, this time they’re as near as we are damned to succeeding!
Tiberius threw them out of Rome around the time of Jesus (although He gets the credit) and twelve hundred years later, Edward the First threw them out of England, lock, stock and anyone associated with them “over matters of Usury, which the moneylenders did not apply to themselves or their families and relatives”.
They are back.
“The real truth of the matter is, as you and I know, that a financial element in the larger centers has owned the government since the days of Andrew Jackson. It may be recalled that (he)… was so enraged by the tactics of bankers that he said: “You are a den of vipers. I intend to rout you out and by the Eternal God I will rout you out. If the people only understood the rank injustice of our money and banking system, there would be a revolution before morning” President Wlson, November 1933
And have been back for four hundred years this time. But this time they sit on Tiberius’ throne, on Henry’s – as our rulers. – Tom Dennen
The third attempt to bankrupt civilization after Tiberius’ Rome and Henry’s England began with the first ‘pump and dump’ demonstration on the Amsterdam stock market in 1670, a commonly sidelined phenomenon called Tulip Mania .
The ‘Tulip Mania’ demonstration was in reality the beginning of financial coup that finally allowed the moneylenders to achieve loan sharking ‘legitimacy’ among European governments who, instead of throwing them out, embraced them and colluded with them in the creation of the “Boom-Bust” Capitalist paradigm.
The rich began to get richer and the poor, poorer.
But the middle class merchants, just like in Amsterdam, amassed enough wealth to continue with ‘stock market investments’ in a system rigged to the House and were reguarly cleaned out.
The first attack by the Capitalist paradigm on European civilization was the massive theft of middle-class wealth after the the South Sea Bubble burst in 1720.
The following statement is paraphrased from “The Great Reckoning” by James Dale Davidson and William Rees-Mogg, Sidgwick & Jackson, published in 1993 as a guide for rich investors, people who could afford the million-dollar entry fee for gambles like the TED Spread.
“On average, every forty-six years, for the last four hundred years (the lifespan of Capitalism) there has been a commodity peak in the world’s stock markets, followed by a crash, followed by a depression.
* First Time: Commodity prices peaked in London, 1711.
The South Sea Bubble burst exactly nine years later in 1720.
* Second time: Producer prices peaked in London in 1763. The London stock market crashed again in 1772 (nine years later).
* Third time: Commodity prices peaked in London in 1816.The London stock market crashed in 1825 (nine years later).
* Fourth time: Wholesale prices peaked in New York in 1864. A worldwide assets crash began in May 1873 (nine years later).
*Fifth time: Then followed our beloved Great Depression in the 30s, about which much has been said, from which, little learned…
* Sixth time: Commodity prices peaked some fifty years later in Tokyo, in 1980
The Tokyo stock market crashed in 1989 (again, nine years later).
The depression following that crash is still upon us, the dot-com mini boom all that was given as the theft continues, studded with ‘double-dip’ recessionary crashes like the 2008 Sub-Prime Wall Street / US government collusion in a gigantic fraud.
It is interesting to note that each Depression was bracketed by expensive wars (paid for by the depressed population) and today’s wars are the most expensive of all, a forty-five year American Imperialist expansion.
Look around at a largely starving, unhealthy, frightened, bankrupt, war-wracked world and do the math.
History clearly details the reason why the Old Testament and every religion, philosophy, town council, and government in the world including Islam – even boarding schools ban lending money at interest.
The real world regards usury as a sin: It disrupts the workings of human society by the theft of a fellow student’s pocket money through interest or a sitting government’s tax base through property foreclosures leaving owners without the means to pay tax.
Today, all western governments are ‘servicing debt’ rather than delivering services to the people, and this is not the function of government, rather a crime against the whole of humanity.
The consequences of that crime are before you, filling every news medium and cranking up the fear in your own hearts that Iran will soon be annihilated with nuclear weapons leading to World War Three, the destruction of civilization and possibly the human race.
And yes, it’s all about the love of money, “the root of all evil.”
The last Roman Catholic Pope resigned after vowing to put an end to the continuing financial scandals in the Vatican Bank, scandals that came into the open when “The Smiling Pope was allegedly murdered less than a month into his papacy in 1985 after vowing to end the corruption in the Vatican Bank, causing huge backlash in Italy.
Today’s new Pope has made the same vow
Last, almost everyone has heard the story of the Jekyll Island decision to install a privately-owned, for-profit company, the Federal Reserve Bank as the controller of the United States’ money supply and President Wilson’s remarks shortly thereafter:
“I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is now controlled by its system of credit .We are no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and duress of a small group of dominant men.”
Wilson made that statement in 1919, just six years after the Fed took over the US money supply, inflating the currency by one percent per annum from that date: what six cents bought in 1913, took a dollar to buy twenty years ago with the prices now climbing through the roof with ‘inflation’ way above one percent for decades.
One percent of the nation’s wealth was stolen every year by a private company called “The Federal Reserve Bank” – Quantitative Easing today is simply racking that theft into catastrophic public debt, inflating the currency by printing fiat paper money… for the stolen money must be repaid!
And the last thing we need is to trust the people who caused all this to fix it, so let’s all hope that the current government shutdown stays in place and each of the independent United States picks up the burden of the future.
Of course… if you are living in a First World suburb with mown lawns and ice cream trucks tinkling down the streets…you need not worry.
You may not be aware of it, though, those trucks are aiding and abetting your obesity and general ill-health through current inefficient public sewage reclamation systems producing water that goes into the making of ice cream…
Treated water’s just a vehicle that brings you recycled pharmaceuticals that expose you to powerful neuro-toxic endocrine disruptors such as growth hormones, combined with pesticides, herbicides, fungicides and fertilizers, but don’t think about it, that’s another story
Think about IRAN!
RT October 8, 2013
The US government shutdown – a temporary ailment or a symptom of a grave disease? Are the Republicans right in their move to block Obamacare spending? Who gains from the shutdown turmoil? Do the politicians care about their citizens? Our guest comes from the very heart of the banking system: Karen Hudes was World Bank lawyer when she blew the whistle on major corruption cases in the system and was fired as a result.
By Jim Kirwan
The San Francisco Chronicle was founded in 1865
It had the largest circulation on the West Coast
And was Sold in 2000 to Hearst Communications Inc.
Amid a FrontPage series of political firestorms
Collectively-reminiscent of the criminality involved in
The Days of the Robber Barons
“The eight years in America from 1860 to 1868 had uprooted institutions that were centuries old, changed the politics of a people, transformed the social life of half the country, and wrought so profoundly upon the entire national character that the influence cannot be measured short of two or three generations.” The Gadarene progress was more rapid than Mark Twain had anticipated; it worked itself out close to the bitter end before he died thirty- seven years later.
Twain’s satire was merely a prologue; the play followed, and the main characters are all well- known names. There was Commodore Vanderbilt (who conferred that naval distinction on himself because he ran a ferryboat between Staten Island and the Battery); and Jay Gould, who built himself a mansion just up the road from the property which now houses The Foundation for Economic Education. There was Daniel Drew, and Jim Fisk, and Andrew Carnegie; there was Huntington, Stanford, Harriman, Rockefeller and Morgan. I’ve listed here ten names; add ten more if you wish, or a thousand more. The point is that these “robber barons,” as they’ve been called, were a mere handful of men whose deeds and misdeeds have been lovingly chronicled by three generations of journalists and muckrakers.
Conniving with Politicians
These extravagant characters have been represented as exemplars of unrestrained individualism at its worst, fiercely competitive, practitioners of undiluted laissez faire capitalism. They were nothing of the sort. So far were they from wanting a genuinely free market economy that they bought up senators and paid off judges in order to stifle competition. They did not want a government that would let them alone; they wanted a government they could use.
Had they been able to understand the original idea of laissez faire they would have opposed it. They were-not individualists; they did not believe in a fair field and no favor; they stacked the odds against their competitors.
The last thing Vanderbilt, Gould, Carnegie and the others wanted was open competition in a game where the best man wins. To the contrary! They connived with politicians to obtain advantages for themselves by controlling government and the law; they manipulated the public power for private gain. And the government was eager to oblige.
This was done openly, and virtually everyone knew about it. Witty commentators referred to certain politicians as the Senator from coal, or the Senator from railroads, or the Senator from steel. Observing the situation in Pennsylvania, one critic was led to remark that Standard Oil had done everything with the legislature—except refine it! Such political practices were a far cry from the vision of James Madison, who had declared that “Justice is the end of government, and justice is the end of civil society.” The Gilded Age was a throwback to the age-old practice of using political power for the economic advantage of those who hold office, and for their friends.” (1)
The Robber-Barons completed their unifying lock on this nation when transcontinental-railroads became the one-big reality. With that feat, created by immigrant and foreign slave labor: The massive and primary resource businesses in ‘America’ became semi-unified via the creation of privately-owned rails, along with the telegraph, that had suddenly unified a half-conquered nation from coast to coast.
Timber, food, steel, coal, oil and virtually all commercial goods and services became booty that could be shipped and controlled by the already criminal-banks who were tightening controls on heavy-industries. This created very aspect of the new and private-commercial march of progress. The Robber-Baron “breakthrough” turned this young-nation into a nearly-lawless place that was to become dominated by railroad power over travel, and communications, with transcontinental-shipping that was virtually unregulated!
Almost unnoticed was the re-emergence of old-world European class-slavery, child-labor, and the primitive world, that immigrants were fleeing when they came to America.
By the late 1860’s: Once again the only people who counted here were the intensely-filthy rich who became untouchable…
This stealth coup almost succeeded…
A new Gilded-Age had again been created by a few élites with an eye toward total control of the entire nation from top to bottom. These Robber-barons are the same people that are still remembered throughout the country—not as the criminals they obviously were, but as revered Americans, which they never were!
But at the time there were huge problems. The wider-society suffered so massively that eventually it was this suffering that brought an end to this primitive pre-emptive strike against humanity. The new Robber Barons of today have scrubbed much of just how the end of the Robber-Barons came about, from the web: But the fact is those original criminals were defanged and declawed across the board eventually—but they were not directly punished then which was a huge mistake Which we are repeating.
By the time Global-BANKERS had created the stock-market crash of 1929, (Just 16 years after the FED illegally stole the Treasury) it was clear that the elites and their power-grabs had to be controlled and totally shut down: If there was to ever be any chance for this country to thrive. That huge-mistake is still alive. It consisted of
Leaving the TREASONOUS-FEDERAL-RESERVE in-place!
That failure is what brought the US and people everywhere to the edge of the global-collapse scheduled to begin this month!
That’s why this time we must begin by ending the Federal Reserve, and end, by destroying the treason-loving traitors who have occupied the United States for the last one-hundred years.
Americans must stop treating politicians as law-abiding people. They are unindicted criminals, and are only free because we have failed to charge them with their crimes against the Constitution and the people of this nation. The same is true of the outlaw-state-police.
These troglodytes are not officers of any law; they are trigger-happy thugs that have killed Americans with callous disregard for the lives or property of every American which they routinely target for absolutely no reason at all.
If there were any justice in this place today—these traitor-cops would be shot on site, rather than to allow them to continue their criminal-rampage across this land from coast to coast…
No doubt people across the country will begin to find new ways to deal with these criminals for themselves: Because it is clear that neither the legal system, nor those charged with keeping their officers in check will do anything to stop this slaughter of innocent people in the name of their-false-flag-terror that has been a total lie since ~
The USI Attacked the United States of America on 911, in 2001.
9/11 Pentagon Attack – Behind the Smoke Curtain ~ Barbara Honegger ~~ ++ << EXCELLENT detailed analysis of FACTS >>
!!! W A K E U P !!!
N O W
Aug 28, 2013
People think that money is safe in the big banks because the FDIC will protect the deposits. This assumption is not based on the facts. This video will show official government documents that describe the plans for confiscating deposits when, (not if) a big bank fails. Individual, as well as public funds from municipal, university, county deposits are at serious risk. YOUR taxpayer money will disappear in the next crisis! Public officials in charge of taxpayer funds need to be aware of the dangers here. The loss of taxpayer funds and the inability to meet payrolls and obligations will certainly prompt a response that will both immediate and forceful.
This video may be useful to present to public officials to inform them of the dangers of losing public funds under their care.
Reposted with permission from:
For more information, visit the Public Banking Institute:
Former World Bank attorney Karen Hudes says she is one of a group of global whistleblowers. Hudes contends, “We’re running out of time. It’s time to tell these thugs and crooks that they’re fired.” Hudes goes on to say, “We don’t have to wait for anybody to fire the Fed or Bank for International Settlements . . . some states have already started to recognize silver and gold, the precious metals, as currency . . . there are other alternatives like Bitcoin . . . We, the consumer, can choose which currency to use, and that’s what we’re going to do in very short order.” What’s really going on in Syria? Hudes, who was Senior Counsel and worked at the World Bank for 20 years, charges, “Qatar, who has all this natural gas, wanted to run a natural gas pipeline through Syria to reach the European market. Who’s supplying the European market with gas? Russia. . . . All this business about dead babies and sarin gas is just all to keep us confused.” Hudes says this is not a fight about money but survival of the planet. “We’re dealing with whether we can continue as humanity and have an earth or whether we blow ourselves up. . . . whether we love each other enough to save the world, or we all go to hell in a hand basket,” says Hudes. Join Greg Hunter as he goes One-on-One with World Bank whistleblower Karen Hudes.
Even after seven years of writing macroeconomic analysis for the liberty movement and bearing witness to astonishing displays of financial and political stupidity by more “skeptics” than I can count, it never ceases to amaze me the amount of blind faith average Americans place in the strength of the U.S. dollar. One could explain in vast categorical detail the history of fiat currencies, the inevitable destruction caused by inflationary printing and the conundrum caused when any country decides to monetize its own debt just to stay afloat — often, to no avail.
Bank bailouts, mortgage company bailouts, Treasury bond bailouts, stock market bailouts, bailouts of foreign institutions: None of this seems to faze the gibbering bobbleheaded followers of the Federal Reserve cult. Logic and reason and wisdom bounce like whiffle balls off their thick skulls. They simply parrot one of two painfully predictable arguments:
Argument No. 1: There is no way foreign countries will ever dump the U.S. dollar because they are so dependent on American consumers to buy their export goods.
Argument No. 2: There is no way the dollar’s value will ever collapse because it is the dominant petro-currency, and the entire world needs dollars to purchase oil.
I have written literally hundreds of articles over the years dismantling the first argument, pointing out undeniable signals that include:
China’s subtle dumping of the dollar — using bilateral trade agreements with other developing nations and, more recently, major economic powers like Germany and Japan
The massive gold-buying spree undertaken by China and Russia — even in the face of extreme market manipulation by JPMorgan Chase and Co. and CME Group Inc.
The dumping of long-term U.S. Treasuries by foreign creditors in exchange for short-term Treasuries that can be liquidated at a moment’s notice.
The fact that bonds now are supported almost entirely by Fed stimulus. When the stimulus ends, America’s ability to honor foreign debts will end and faith in the dollar will crumble.
Blatant statements by the International Monetary Fund calling for the end of the dollar’s world reserve status and the institution of special drawing rights (SDRs) as a replacement.
The second argument held weight for a short time, only because the political trends in the Mideast had not yet caught up to the financial reality already underway. Today, this is quickly changing. The petrodollar’s status is dependent on a great number of factors remaining in perfect alignment, socially, politically and economically. If a single element were to fall out of place, oil markets would explode with inflation in prices, influencing the rest of the world to abandon the greenback. Here are just a few of the primary catalysts and why they are an early warning of the inevitable death of the petrodollar.
Egyptian Civil War
I was recently contacted by a reader in reference to an article I wrote concerning the likelihood of civil war in Egypt, a civil war which erupted only weeks later.
She asked why I had waited until this year to make the prediction and why I had not called for such an event after the overthrow of Hosni Mubarak, as many mainstream pundits had. The question bears merit. Why didn’t Egypt ignite with violent widespread internal conflict after Mubarak was deposed? It seemed perfectly plausible, yet the mainstream got the timing (and the reasons) horribly wrong.
My response was simple: The Mideast is being manipulated by elitist organizations towards instability, and this instability is a process. The engineered Arab Spring, I believe, is not so much about the Mideast as it is about the structure of the global economy. An energy crisis would be an effective tool in changing this structure. Collapse in the Mideast would provide perfect opportunity and cover for a grand shift in the global paradigm. However, each political step requires aid from a correct economic atmosphere, and vice versa.
If you want to identify a possible trend within a society, you have to take outside manipulation into account. You have to look at how economic events work in tandem with political events and at how these events benefit globalization as a whole. The time was not right after Mubarak’s overthrow. The mainstream media jumped the gun. If the target is the U.S. dollar and Egypt is the distraction, this year presented perfect opportunity with the now obvious failure of quantitative easing stimulus being exposed.
As the situation stands, the Egyptian military regime that overthrew Mohammed Morsi has completely cut the Muslim Brotherhood out of the political process and murdered at least 450 protesters, including prisoners already in custody.
Morsi supporters have responded by torching government buildings and shooting police personnel. But the real fighting will likely begin soon, as the current government calls for a ban on the Muslim Brotherhood itself. Simultaneously, hatred for the United States and its continued support of the Egyptian power base — regardless of who sits on the throne — is growing to a fever pitch throughout the region. This is not healthy for the life of the petrodollar in the long run.
It is important for Americans to understand when examining Egypt that this is not about taking sides. The issue here is that circumstances are nearly perfect for war and that such a war will spread and will greatly damage oil markets. The Suez Canal accounts for nearly 8 percent of the world’s ocean trade, and 4.5 million barrels of oil per day travel the corridor. Already, oil prices have surged due to the mere threat of disruption of the Suez (as I predicted). And this time, the nation is not going to recover. A drawn-out conflict is certain, given the nature of the military coup in place and the adamant opposition of the Muslim population.
Strangely, there are still some in the mainstream arguing that the Suez will “never close” because “it is too important to the Egyptian economy,” The importance of the Suez to the Egyptian government is irrelevant in the midst of all-out revolution. The Suez will close exactly because there will be no structure left to keep the canal open. In the meantime, oil prices will continue to rise and distrust of the United States will continue to fester.
Saudi Arabia Next?
The relationship between the United States and Saudi Arabia is at once symbiotic and parasitic, depending on how one looks at the situation. The very first oil exploration and extraction deal in Saudi Arabia was sought by the vast international oil cartels of Royal Dutch Shell, Near East Development Company, Anglo-Persian, etc., but eventually fell into the hands of none other than the Rockefeller’s Standard Oil Company. The dark history of Standard Oil aside, this meant that Saudi business would be handled primarily by American interests. And the Western thirst for oil, especially after World War I, would etch our relationship with the reigning monarchy in stone.
A founding member of OPEC, Saudi Arabia was one of the few primary oil-producing nations that maintained an oil pipeline that expedited processing and bypassed the Suez Canal. (The pipeline was shut down, however, in 1983). This allowed Standard Oil and the United States to tiptoe around the internal instability of Egypt, which had experienced ongoing conflict which finally culminated in the civil war of 1952. Considered puppets of the British Empire at the time, the ruling elites of Egypt were toppled by the Muslim Brotherhood, leading to the eventual demise of the British pound sterling as the top petro-currency and the world reserve. The British economy faltered and has never since returned to its former glory.
On the surface, Saudi Arabia seems to have avoided the effects of the Arab Spring climate, but all is not as it seems. The defection of Saudi Prince Khalid Bin Farhan Al-Saud has brought up startling questions as to the true state of the oil producing giant.
I believe this defection is only the beginning of Saudi Arabia’s troubles and that America’s largest oil partner is soon to witness domestic turmoil that will disrupt oil shipments around the world. America’s support for a monarchy that is so brutal to its population will only hasten the end of the dollar’s use in global oil trade, especially if these puppet regimes are toppled.
For those who doubt that Saudi Arabia is in line for social breakdown, I would ask why the nation felt it necessary to pump billions of dollars into the new Egyptian military junta.
While the country is surely being used in some cases as a proxy by the West, the Saudi government itself is fearful that success of dissenting elements will spread to its own borders. Little do they understand that this is part of the globalist game plan. Without control over Saudi petroleum, the United States loses its last influential foothold in the oil market, and there is absolutely no doubt whatsoever that the dollar will fall as the petro-currency soon after. The desperation caused by such an energy crisis will make international markets beg for a solution, which global banking cartels led by the IMF are more than happy to give.
Iranian Wild Card
The U.S. government’s outright creation of the Syrian insurgency and its funding and armament of al-Qaida agents have understandably angered numerous Mideast nations, including Iran. Iran sits on the most vital oil shipping lane in the world: the Strait of Hormuz. About 20 percent of the world’s annual oil exports are shipped through Hormuz, and the narrow inlet is incredibly easy to block using nothing but deliberately sunken freighters. In fact, this tactic is exactly what Iran has been training for in order to frustrate a U.S./Israeli invasion.
A U.S. or NATO presence on the ground or in the air above Syria, Egypt or Iran will most likely result in the closure of the Strait of Hormuz, causing sharp rises in gasoline costs that Americans cannot afford.
Russia/China Oil Deal
Finally, just as most bilateral trade deals removing the dollar as world reserve have gone ignored by the mainstream media, so has the latest sizable oil deal between Russia and China. Russia has been contracted by the Chinese to supply 25 years of petroleum, and this deal follows previously established bilateral guidelines — meaning the dollar will not be used by the Chinese to purchase this oil.
I expect that this is just the beginning of a chain reaction of oil deals shunning the dollar as the primary trade mechanism. These deals will accelerate as the Mideast sees more internal strife and as the popular distaste for the United States becomes a liability for anyone in power.
The Dollar Is A Paper Tiger
Some might argue that oil discoveries in the Midwestern U.S. could be used to counter the disruption of oil pipelines in the Middle East, and certainly, there is much untapped oil in America. However, to claim that this oil would somehow negate a crisis is naive, primarily because oil supply is not the ultimate issue; the dollar’s petro-status IS the ultimate issue. That status is dangerously reliant on the continued stability of Western friendly regimes in the East. We can produce all the oil we want within our own borders, but if the dollar loses global standing as the world reserve, we will STILL see a massive debasement of our currency’s value, we will still see collapse, and I guarantee, most of our domestic oil will end up being exported as payment to foreign creditors just to satisfy outstanding debts.
The dollar is no more invincible than any other fiat currency in history. In some ways, it is actually far weaker than any that came before. The dollar is entirely reliant on its own world reserve status in order to hold its value on the global market. As is evident, countries like China are already dumping the greenback in trade with particular nations. It is utterly foolish to assume this trend is somehow “random” rather than deliberate. Foreign countries would not be initiating the process of a dollar dump today if they did not mean to follow through with it tomorrow. All that is left is for a cover crisis to be conjured. Existing tensions in the Mideast signal a pervasive crisis, most likely an energy crisis, in the near term.
The death knell of the petro-dollar, petro-wars and nuclear contamination is Free Energy !!!