Economic pressures

[Danny B]

Greece eyes last central bank funds to avert IMF default - Telegraph

Then, there is the question of NATO in Greece AND a deal with Russia.
"The Western security system would the face turmoil in the Balkans. It would have to deal with an embittered state - hostile to Nato, and willing to play the Russian card - along an arc of instability stretching from Ukraine, though the Levant, to North Africa. That is why US President Barack Obama has intervened, pleading with Chancellor Merkel to avert the worst. The stakes are too high for finance ministers. "
Humiliated Greece eyes Byzantine pivot as crisis deepens - Telegraph an arc of instability stretching from Ukraine, though the Levant, to North Africa. That is why US President Barack Obama has intervened, pleading with Chancellor Merkel to avert the worst. The stakes are too high for finance ministers. "

LEAP 2020 in the GEAB report says that the end of march will be a very important time. Europe is trying to throw out the old system. Obviously, America is trying to throw Europe into war to continue the old system.
NATO, QE, Siriza, the Ukraine, Israel: Highways towards « tomorrow’s world » on the horizon | GEAB
America has sent 10 A-10 thunderbolts to Germany, conducted exercises 100 yards from the Russian border and is sending 600 paratroopers in to Ukraine. It is stirring up other States like Poland to try to get a war going. If the Europeans can't get their act together VERY soon, America may very well get very desperate and pull off some kind of false flag to get the party started.

[Danny B]

France, next at bat

" manufacturing output in France contracted at a faster rate than Greece"
French factory decline even worse than Greece - Telegraph

[Danny B]

Work til you drop

Social Security was originally conceived as a tool to support widows and orphans. It wasn't really meant to take care of old people. That was the province of the nuclear family. SS supplementalnon-negotiable IOUs from Treasury. They can't be exchanged at any other agency.

http://www.zerohedge.com/news/2015-03-02/retirement-end-rope

Proff. Kotlikoff said that unfunded GOV liabilities amount to $ 212 trillion. Assuming that GOV somehow managed to create hyperinflation, there might be some way for GOV to meet the numerical demands of retirees for support but, There would be no wealth attached to the numbers.

Somebody is going to go bust as a result in the economic slowdown. The Pension Benefit Guarantee Corporation guarantees many thousands of pension plans that cover about 44 million Americans. Pension Benefit Guaranty Corp - PBGC Protects America's Pensions
It is a GOV agency. Like the FDIC, it has minimal funding.
In the nuclear family, Granny could spend her last days rocking away on the porch. She would eventually catch pneumonia and that would be the end.
Nursing homes and Medicare are a much more expensive story.
Too many people have no savings and plan to survive on the supplemental income from SS.

Congress allows the banks to sweep all accounts every night and invest the resting money. Originally, you had to agree to have your account swept. Not any more. There is a good chance that bank accounts are as empty as the Social Security fund.

[Ruphus]

I've been Duped!

I have come to realize just today that my 401k is a suckers bet.

Put all your extra earnings you can scrape together and send it to be gambled with at Wall Street. But if you think it's time to get out of the gamble, too bad. You are locked into the fall/fail/crash/dip. Your savings are gone, but don't worry it will get back to the hay day and beyond, then it will crash again, probably worst than before. You are still are locked in of course. You really aren't making anything off your 401k. But those speculators that are "free playing" the market CAN dump their stocks and my retirement fund is buying them up. They are taking my savings when the market crashes and I can only watch it fall. I can take it out of the 401k with a 45% penalty (loss) on the dollar.... I'm soooo pissed .

WTF? Why haven't I seen this before now?

Geez I'm stupid.

[Danny B]

No cash to be found

Ruphus, don't feel like the Lone Ranger;
Wall Street Has Its Eyes on Millennials' $30 Trillion Inheritance - Bloomberg Business

During the 2008 crash, the banks had NO liquidity except for all the drug money that they were laundering. Apparently, that is the case here and now,,, again.

Because there is ZERO liquidity for any of those investments. None. Zero. Zip.
Because the only thing worse than a market with collapsing valuations is a market with no valuations and no liquidity. If stock in a company is worth what somebody will pay for it, what is the stock of a company worth when there is no place to sell it ?

http://www.zerohedge.com/news/2015-03-04/mark-cuban-warns-bubble-far-worse-tech-bubble-2000

Yup, that is what the "H" is in HFT. High frequency trading.
EXPLOSIVE Breaking News : Black Swan 2 Looms Tonight | Alternative

As Alfred E. Neuman always said, What? me worry?
Alfred E. Neuman QuotesLord Rothschild Warns Investors of ?Most Dangerous Geopolitical Situation Since WWII? | Alternative

[Danny B]

CONJURING: The Alchemy of Synthetic Finance & Global Governance
The article has a couple of good vids embedded. It goes off on a different theme that; the net and social media is a teaching tool for AI.

[Danny B]

Too much oil,,, not enough money

Well, oil is back in the news. The West is debt saturated and has cut back on it's consumption of oil. This set off a crash that drove crude down, way down. It is slowly climbing back up BUT, there is still too little demand. This has led to storage problems. Storage dearth may drive oil prices to $30 - MarketWatch“Default Monday”: Oil & Gas Companies Face Their Creditors | Wolf Street503 Service Unavailable
Think of that; Oil sells for $ 30 a barrel,,, the banks kick in an extra $60--$70 for every barrel.

[Danny B]

Ingo Bischof, the role of the central bank

I'm posting another comment from Ingo Bischof. The guy really knows the "nuts and bolts" of financial history. The comment is written about a post from The Daily Bell regarding transparency at the central bank.
The Daily Bell - More Central Bank Transparency Is Inevitable

[Danny B]

Second comment from Ingo

Danny B
What will take down the Fed is its manipulation by the Wall Street Money-Center Banks.
Warren Leads Charge Against the Federal Reserve & Wall Street Banker’s Days R Numbered? | Armstrong Economics

Ingo Bischoff

"Ironically, in 1910, Senator Aldrich met with Frank Vanderlip of National City Bank (Citibank), Henry Davison of Morgan Bank, and Paul Warburg of the Kuhn, Loeb Investment House secretly at Jekyll Island, a resort island off the coast of Georgia, to discuss and formulate banking reform, including plans for a form of central banking that would accomplish the role of J.P. Morgan played during the Panic of 1907. So Citibank (now Citigroup) has been at the center of the game from the beginning."

The Panic of 1907 was just another depression in a line of recessions and depressions since the end of the Civil War. Though the 1907 Panic was an extra serious economic depression, all these periodic recessions and depressions had their origin in the misuse of "idle" currency (currency which should have been held out of circulation required under RBD banking procedures).

J.P. Morgan, the undisputed leader in banking circles at the turn of the 20th Century, arranged to save the banking system in 1907. Unlike the picture painted of J.P. Morgan as a ruthless, greedy banker only out for himself, the reality was that J.P. Morgan died not nearly as wealthy as everyone assumed. He tried to get bankers to tow the line for the good of the country. He succeeded partially, but the job proved to be as difficult as herding a bunch of cats.

The people gathered at Jekyll Island wanted to listen to Paul Warburg who advocated the institution of "liquidity creation" in the banking system, an idea which the German central banking system had implemented. It amounted to providing "liquidity" in the banking system by selling government gold bonds in secondary markets. (IOW circumventing the RBD requirements for redeemable currency).

At Jekyll Island, the Republican leader of the U.S. Senate, Senator Nelson Aldridge from Rhode Island was asked to explore the possibility of passing legislation to create a "central bank" under the auspices of the big New York banks with exclusive authorization to create a national currency which also would provide "liquidity", when needed. The states would have none of such exclusive franchise.
The battle in Congress over the legislation sought by the big NY banks raged for some time, until the power in the U.S. Senate shifted and the Democrats took over Being unable to push trough legislation favorable to the big NY banks, Senator Aldridge suggested to the NY banks that they support the Progressive Movement of the early 1900s in their demands for the ratification of the 16th and 17th Amendments.

In the meantime, the Congress debated the franchise for the creation of a "national currency". The Congress decided that instead of an exclusive franchise to a central bank run by the big NY banks, the franchise should be extended to twelve regional, separate, private reserve banking associations, and making them subject to oversight by a congressionally constituted Board of Directors.

While Senator Aldridge and his allies in the U.S. Senate could no longer pass legislation after 1911, they could hold up the states' legislative version of a national reserve banking system made up of twelve regional reserve banks until the 16th and 17th Amendments were ratified in early 1913. Subsequently, the states' version of reserve banking legislation entitled "Federal Reserve Act" passed Congress in late 1913. It was signed into law by Woodrow Wilson on Christmas eve 1913.

Why were the NY bankers interested in the ratification of the 16th and 17th Amendments....??? It becomes clear in hind sight. Without the Income Tax Amendment, the selling of government bonds in secondary markets would not have been possible. With the ratification of the 17th Amendment, the big bankers insured themselves against the interference of their central banking scheme by the states. Popular elections of U.S. Senators gave them the opportunity to "buy" U.S. Senators. Nothing has changed to this date.

Following the turmoil of the Great War (WW I) in 1918, the Federal Reserve Bank of New York, one of the twelve new, regional, separate, private banking association formed under the FRA of 1913 started to inject "liquidity" into the banking system by engaging in the illegal sale of U.S. government gold bonds (all U.S. government bond at that time were "gold bonds") in secondary markets. The FRB NY kept doing this until the late 1920s when in 1929 the bubble created by the illegal open market operations collapsed with the stock market crash.

The American people became suspicious of the value of their Federal Reserve Notes and wanted to redeem them as promised on their face. By the early 1930s, banks were no longer able or willing to redeem. Despite his promises to the contrary, FDR nationalized the gold savings of the American people in 1933. He also prohibited Americans from holding gold in the future. This relieved the banks from facing endless law suits of fraud for failure to redeem. With the National Banking Acts of 1933 and 1935, the Congress totally changed the original provisions of the FRA of 1913 which created a system of private, regional reserve banks, but it kept the name "Federal Reserve System", ostensibly to fool the public.
With the NBA of 1935, the twelve regional, separate, private reserve bank associations were nationalized as regional Federal Reserve District banks, and against credit, their gold reserves were transferred to the vaults of the new federal government central bank agency, aka "The Federal Reserve" with headquarters in Washington, DC.

So much for history.....

I don't think Elizabeth Warren has the slightest idea about what the modification of Section 14 of the original 1913 FRA with the NBA of 1933 did to the U.S. monetary system. Furthermore, I don't think Senator Warren has the slightest idea about the consequences that followed from the ratification of the 17th Amendment.

Firstly, Section 14 of the original FRA was modified to include authorization for the monetization of sovereign debt.

Secondly, the 1935 NBA dissolved the Board of Directors as the congressional oversight body of the Federal Reserve System, in favor of a governing body for a federal government central bank, with the name of Board of Governors of the Federal Reserve, together with the establishment of a Federal Open Market Committee to set "prime" interest rates.

Thirdly, it is the President of the United States who nominates members to the Board of Governors, but by law the nominees must come from the banking profession.

Fourthly, it is the U.S. Senate which confirms the nominees, but thanks to the ratification of the 17th Amendment, at least 50% of the U.S. Senate, regardless of party affiliation, is beholden to the bankers. It is those bankers with their campaign contributions who see to it that at least 50% of U.S. Senators are "bought".

Then, I bet that Elizabeth Warren has not the slightest idea about our present monetary system. I don't think she understands that we don't have a monetary currency since 1971. What we have since 1971 is a monetized debt currency. IOW, all we are passing around are debt obligations. Nothing, but simple IOUs.......

I don't think that Senator Warren has the slightest idea that the debt currency is created through government deficit spending turned into U.S. government debt obligation, which are then sold in secondary markets to bring irredeemable currency into circulation. The U.S. government debt instruments sold in secondary markets necessitates the payment of interest by the tax payers. Unless the interest is paid promptly and not instead rolled over year after year, the interest due and not paid incurs an interest expense with exponential dimensions which will destroy the currency all together, unless that practice is stopped before a certain point. Sadly, that point has passed in 2008. Now, unless the "legal tender" protection is removed forthwith from the irredeemable Federal Reserve Note currency to allow the restoration of redeemable currency, the economic outlook for this country is down right abysmal.
...and then again, maybe Senator Warren is knows all this, and she is devious enough to go forward with her antics to give the federal government central bank and the central bankers cover. We have seen a similar scenario in Russia in 1905 and later in 1917......

Watch, if she gets campaign contributions from the central bankers, we'll know what's what.....

[Danny B]

FED funds interest rates

There is much yammering from the FED about raising interest rates. It's all BS, of course.
The Federal funds rate FOLLOWS the market. It does not lead. CAPEX is crashed, The Baltic is crashed. International capital flows have crashed. Productive GDP has crashed. Investment drives the rise in interest rates. If CAPEX and consumption are crashed, what is going to drive interest rates? Answer,,, NOTHING. After previous recessions, investment drove interest. NOW, http://www.zerohedge.com/sites/defau.../fredgraph.png
Want a closer look? http://www.zerohedge.com/sites/defau...redgraph-2.png

http://www.zerohedge.com/news/2015-03-07/one-chart-negates-every-fed-speech-or-fomc-minutes

Interest rates are at a 3,000 year low and debt is at an all time high. Debt and GDP are diverging ever further apart. The mega-pea-brains keep thinking this is a liquidity problem. It is an insolvency problem.
Then, there is the ever-present spectre of interest rate swaps At one time, they amounted to $ 441 trillion,,, give or take a $ trillion here and a $ trillion there.

[Danny B]

London Gold Pool,,, LBMA

In 1961, several States formed the London Gold Pool This was an attempt to control gold, and therefore, currency.
The London Gold Pool - 1961 to 1968 :: The Market Oracle :: Financial Markets Analysis & Forecasting Free Website
By 1968, the pool had crashed because of too much currency printing. Neither GOV nor banks want any store-of-value outside of their control.
Fast-forward to today and we have the London Bullion Market Association The LBMA makes all the rules. It heavily promotes electronic gold to keep investors and savers from buying physical gold. The major electronic trading fund ETF is called GLD. The custodian for GLD is HSBC.. Hong Kong and Shanghai Bank of China.
It was just announced that HSBC is closing ALL 7 of their gold vaults in London.
Andrew Maguire – Who Smashed Gold Today And Why As HSBC Shocks Clients By Closing All London Gold Vaults! | King World News

There is a problem though.
"Within a few weeks this will change the way gold is traded as we witness large migrations of unallocated LBMA position holders unwind from high counterparty risk unallocated positions and then allocate into secure vaulted kilobar accounts outside of the LBMA bullion banking system. "
The Bullion banks admitted that they sell every ounce of gold 100 times. These holders of UNallocated accounts don't even have a (fictitious) bar number to call their own. When they try to ship their? gold to a physical-only vault, 99% of them are going to be quite upset.
This article is VERY tongue-in-cheek talking about counterparty risk. There is NO counterparty fro non-existent gold.

[Danny B]

Greece, the lynchpin of Europe and NATO

The West is very close to WW III. The Germans are horrified at the bellicose demands of the neo cons. A full-on collapse of the world economy would be a better state than WW III. The MAJOR hub of physical gold trading is the Shanghai gold exchange. The rug was just pulled out of the gold market by the Hong Kong and Shanghai7 Terrifying Warnings That The Greek Disaster Is Now Set To Catapult The World Into A Global Meltdown | King World News

[Ruphus]

devaluation vs inflation

I am having trouble understanding the difference between devaluation of a currency and inflation. When some of the writers in various links talk about it they appear to be two different things but are they not the same?

[Danny B]

Currency devaluation and inflation

Ruphus, there is a lot of sloppy writing everywhere. Communication is very important. My Dodge does not have motor mounts. It has engine mounts.
Decimate, tinker's dam, moot point, et al. People are uneducated or just sloppy.
Inflation is properly defined as an increase in the currency supply. This definition has been modified as; an increase in the supply of currency and credit. The whole idea is hard to nail down because, our currency is now a debt note. When money was gold, it was an asset by itself. Therefore, credit was debt,, the opposite. Since currency and credit are both debt, how can one call them an asset? As GOV inflates the currency, it is creating greater debt. This debt only has value if the underlying productive economy can create the goods and services to be redeemed by the debt notes.

Walter Burien shows GOV as having $ trillions stashed away. CAFR1 Home Page
What would happen if the various holders of all these debt notes tried to redeem them for goods and services? The money supply has been inflated for decades. Now, it can only be saved,,,, it can't be spent. The 1% may have all the nominal wealth but, what can they do with it? Historically, great wealth imbalance has always destroyed an economy.
As we slide towards a global mean wage, the uber-wealthy hold an ever-increasing pile of debt notes that can't be paid off from the fruits of labor.
Treasury bonds are being repaid by the printing press. After the productive economy crashed, the FIRE economy held itself up with the printing press. This can only be temporary.
Devaluation of a currency and inflation are generally closely connected. Much depends on where the new currency goes. Is it locked up in bonds? Does it flow into wages. Does it stay internal? Does it move to other States? America exported most of it's inflation and has very little internally. Japan has high inflation but, most of it has circulated internally. Is the inflation eaten up by taxes? Japan: 43% of tax revenue spent to cover interest on debt
There are a lot of variables.
Edit; There is another possibility to take into account. Often, currency inflation causes price inflation. More money chasing the same amount of goods. Suppose that GOV prints more money but, It does NOT chase goods? Suppose that these dollars go under mattresses around the world. Most $ 100 bills are outside America. Being the reserve currency allowed America to send cash and bonds around the world without causing domestic inflation. This exported our inflation.
When gold was money, GOV had to pay miners for their gold. There was no profit from minting money. Now that it costs just a few cents for a paper note, GOV gains the difference between cost and (assigned) value. This is called seigniorage.
Seigniorage - Wikipedia, the free encyclopedia
The unbacked paper-money business is quite lucrative.
The FED printed $ trillions that it gave to the banks to hold. Then, it paid interest on those $ trillions because the banking business was bust. Those $ trillions were not chasing goods. Part of them moved into the commodities markets and caused temporary price inflation. The cure for high prices is ,,, high prices. Commodity prices crashed because they eventually rely on consumption. About $ 9 trillion moved into emerging markets and brought them price inflation. Now, there is a shortage of dollars to service those dollar loans.
The FED printed a lot of currency. It caused minimal price inflation in America because we were already debt saturated AND our wages were falling. Every time that a price went up, falling consumption reflected the price rise.
There was a lag of time between price inflation and price crash.

Much of the wet ink money flowed into the stock market. The time lag is much longer in the stock market because assets are not connected to consumption as firmly as commodities. As asset prices go up, the price-to-earnings ratio goes down unless consumption rises drastically.
Most of the current action in stocks is buybacks. This bumps up the price of outstanding shares and creates bigger bonuses. The market staggers along without earnings.
We exported a LOT of our inflated currency supply when people demanded it for a store of value. The world has financed our wars against them. They are quite tired of this and bringing it to an end.
23 Countries Now Abandoning US Dollar | Truth And Action

[Ruphus]

Ok point taken.

CAFR will take a while to digest, interesting info there I see.

"Much depends on where the new currency goes."..." Does it move to other States?"

What do you think of the Euro QE starting up at the point that US interest rates increase?

I also don't understand how a country can "inflate their debt away" as I have read many, many places. Can you also write about that please?

I would think that contracts between countries would have inflation language built in.