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Not the “Death of the Dollar” but “Death of the Euro?”
Not the “Death of the Dollar” but “Death of the Euro?”
The rise of the Chinese yuan as an international currency is not only unstoppable but is advancing in leaps and bounds, according to SWIFT. It comes at the expense of other currencies, though it’s not triggering the long-awaited “death of the dollar.” On the contrary. Yet the euro has stumbled into the line of fire.
SWIFT is in a position to know. The member-owned organization, based in Belgium, provides among other things a network that enables financial institutions around the globe to send and receive information about financial transactions in a standardized environment. It also cooperates with various intelligence and law enforcement agencies around the world, including the US Treasury, the CIA, and others. The NSA is likely to get what it wants without asking.
In its latest RMB Tracker, SWIFT is relentlessly effusive about the rise of the yuan. In August, global payments in renminbi rose once again, achieving another milestone: it edged out the yen to become the fourth largest payments currency with a share of, well, 2.8% of global payments – “reflecting RMB’s huge potential and staggering momentum as a major currency,” the report gushes.
That’s not exactly a lot, compared to China’s economic power in the global markets. When China sneezes, as it just did, the world catches pneumonia. But it’s a big leap forward: In August 2012, the yuan was in 12th position, with a minuscule share of 0.8%.
In the Asia-Pacific region, the yuan is already the most actively used currency for intra-regional payments with China and Hong Kong, having edged out the yen this year.
Becoming a major global currency is one of the preconditions for becoming a reserve currency held by central banks as part of their foreign exchange reserves baskets. But the yuan isn’t in those baskets yet.
…click on the above link to read the rest of the article…
Who Runs the Fed?
Who Runs the Fed?
The 2008 financial crisis challenged many orthodox assumptions in finance and economics, including the proper role and accountability of central banks. The U.S. Federal Reserve, commonly known as the Fed, is the world’s most powerful central bank.
One major source of Federal Reserve power is its role as “lender of last resort,” lending directly to commercial banks through its so-called discount lending window. Traditionally, only commercial banks had access to the Fed’s discount lending since non-bank financial institutions were not subject to the same reserve and capital requirements as those imposed on banks. The other major source of the Fed’s power is its ability to purchase short-term Treasury securities. These restrictions on Fed lending and asset purchases helped support the central bank’s political independence from Congress and the White House by ensuring that Fed policy was socially neutral and did not favor particular sections of financial markets or particular private constituencies. But as the Federal Reserve’s lending and asset purchase powers expanded in unprecedented ways in 2008, these traditional restrictions were swept aside, exposing the flaws of central bank independence.
The Fed is also able to create money—U.S. dollars, also known as Federal Reserve notes—which means there is virtually no limit to the amount of money it can lend and no limit to the volume of assets it can purchase without adding to public-sector borrowing or deficits. During the 2008–2009 financial crisis, the Fed extended more than $16 trillion in low interest loans to all kinds of financial institutions in distress, including borrowers who traditionally lacked access to its discount window such as hedge funds and foreign commercial banks and central banks. Also, beginning in 2008, the Fed launched several asset purchase programs, known as “quantitative easing” (or QE), to purchase more than $3.5 trillion in U.S. Treasury securities and mortgage-backed securities (MBS).
…click on the above link to read the rest of the article…
Ron Paul Stunned That George Soros Seeks To “Expand War In Ukraine”
Ron Paul Stunned That George Soros Seeks To “Expand War In Ukraine”
Earlier this week, using hacked and leaked documents and pdfs created by, among others, George Soros’ most recent wife who is less than half his age, we showed something fascinating: the puppetmaster behind the entire Ukraine conflict may be none other than George Soros himself. To wit:
Just days after George Soros warned that World War 3 was imminent unless Washington backed down to China on IMF currency basket inclusion, the hacker collective CyberBerkut has exposed the billionaire as the real puppet-master behind the scenes in Ukraine. In 3 stunning documents, allegedly hacked from email correspondence between the hedge fund manager and Ukraine President Poroshenko, Soros lays out “A short and medium term comprehensive strategy for the new Ukraine,” expresses his confidence that the US should provide Ukraine with lethal military assistance, “with same level of sophistication in defense weapons to match the level of opposing force,” and finally explained Poroshenko’s “first priority must be to regain control of financial markets,” which he assures the President could be helped by The Fed adding “I am ready to call Jack Lew of the US Treasury to sound him out about the swap agreement.”
Needless to say, there was absolutely no mention of any of this in the broader media. However, despite the limited distribution of this very fascinating story which casts a vastly different light on the Ukraine conflict than one shone by the mainstream, it did catch the attention of one person: Ron Paul.
In the following clip Ron Paul looks at the stunning implications of Soros’ involvement behind the scenes in Ukraine, how he may be pulling the strings in this most critical proxy war between East and West, and what he stands to gain.
…click on the above link to view the video…
Systemic Corruption Has Destroyed America
Systemic Corruption Has Destroyed America
Preface: It’s been less than a month since we last posted on this topic … but, sadly, we’ve got many more examples.
The Cop Is On the Take
Government corruption has become rampant:
- Senior SEC employees spent up to 8 hours a day surfing porn sites instead of cracking down on financial crimes
- Nuclear Regulatory Commission workers watch porn instead of cracking down on unsafe conditions at nuclear plants
- An EPA employee who downloaded 7,000 porn files, then spent 2-6 hours each workdaywatching porn. He’s been doing it for years … but the EPA never fired him. Another EPA employee harassed 16 women co-workers … and then was promoted to a higher-paying jobwith more responsibility, where he harassed more women
- NSA spies pass around homemade sexual videos and pictures they’ve collected from spying on the American people
- NSA employees have also been caught using their mass surveillance powers to spy on love interests, such as girlfriends, obsessions or former wives … and to eavesdrop on American soldiers’ intimate conversations with their wives back home. And see this (“routinely shared salacious or tantalizing phone calls that had been intercepted” … “‘Hey, check this out … there’s good phone sex’”)
- An employee of the Transportation Security Administration admitted that TSA agents share – and laugh at – nude scans of passengers. Another TSA employee says that screeners make excuses so they can grope and fondle travelers that they’re attracted to (maybe that’s why the TSA failed to find mock explosives or banned weapons going through checkpoints in 95% of trials)
- Investigators from the Treasury’s Office of the Inspector General found that some of the regulator’s employees surfed erotic websites, hired prostitutes and accepted gifts from bank executives … instead of actually working to help the economy
…click on the above link to read the rest of the article…
Free Financial Markets Are A Hoax
Free Financial Markets Are A Hoax
There are no free financial markets in America, or for that matter anywhere in the Western word, and few, if any, free markets of any other kind. The financial markets are rigged by the big banks, the Federal Reserve, and the Treasury in the interests of the profits of the few big banks and the dollar’s exchange value, which is the basis of US power.
There is a contradiction between a strong currency on one hand and on the other hand massive money creation in order to sustain zero and negative interest rates on the massive debt levels. This inconsistency is revealed by rising gold and silver prices.
When gold hit $1,900 an ounce in 2011 the Federal Reserve realized that the precious metal market was going to limit its ability to provide enough liquidity to keep the thoughtlessly deregulated financial system afloat. The rapid deterioration of the dollar in terms of gold and silver would sooner or later spill over into the exchange value of the dollar in currency markets. Something had to be done to drive down and to cap the gold price.
The Fed’s solution was to take advantage of the fact that the prices of gold and silver are determined in the futures market where paper contracts representing gold and silver are traded, and not in markets where the physical metal is actually purchased by people who take possession of it. The Fed realized that uncovered short sales provided enormous leverage over the prices of the metals and that it would be profitable for the bullion banks, such as JPMorgan, Scotia, and HSBC, to short the market heavily and then cover their shorts at lower prices produced by selling as a result of triggering stop-loss orders and margin calls.
…click on the above link to read the rest of the article…
“Another Crisis Is Coming”: Jamie Dimon Warns Of The Next Market Crash
“Another Crisis Is Coming”: Jamie Dimon Warns Of The Next Market Crash
Last October’s Treasury flash crash — which Gregg Berman will tell you wasn’t the fault of HFT and which will likely repeat at some point or another thanks to the fact that Fed purchases have reduced market depth — may no longer be a once every three billion year occurrence as statistics would dictate, Jamie Dimon observes, in his latest letter to JPM shareholders, before suggesting that the event “should make you question statistics.” Amusingly, Dimon seems to confuse cause and effect a bit, as it’s really not the fault of “statistics” per se, but rather the fault of shifting market dynamics (and by “dynamics” we mean increased manipulation and never-before-seen distortions and dislocations) that have rendered the old statistical models obsolete. But at least Dimon sees the event, and recent similar shakeups in FX markets for what they are: “warning shots across the bow.” Here’s Dimon:
Recent activity in the Treasury markets and the currency markets is a warning shot across the bowTreasury markets were quite turbulent in the spring and summer of 2013, when the Fed hinted that it soon would slow its asset purchases. Then on one day, October 15, 2014, Treasury securities moved 40 basis points, statistically 7 to 8 standard deviations – an unprecedented move – an event that is supposed to happen only once in every 3 billion years or so (the Treasury market has only been around for 200 years or so – of course, this should make you question statistics to begin with).Some currencies recently have had similar large moves. Importantly, Treasuries and major country currencies are considered the most standardized and liquid financial instruments in the world.
…click on the above link to read the rest of the article…
Forget The $1 Trillion Platinum Coin–Here’s the $10 Trillion Stone Coin
Forget The $1 Trillion Platinum Coin–Here’s the $10 Trillion Stone Coin
The point I’m making with the $10 trillion stone coin is that if money is a social contrivance, then it should be distributed to those creating goods and services.
You’ve probably heard of the $1 trillion platinum coin proposal: the basic idea is the U.S. Mint issues a $1 trillion platinum coin, and returns the difference between the cost of minting the coin (trivial) and the face value attributed to the coin ($1 trillion) to the United States Treasury General Fund.
This difference is known asseigniorage. The federal government could then spend the $1 trillion without having to borrow the money by selling Treasury bonds–the usual mechanism for funding federal deficit spending.
The idea was originally proposed as a way of avoiding more federal borrowing: rather than borrow another $1 trillion to fund federal spending, the Treasury would be handed $1 trillion in freshly created cash as seigniorage proceeds from the $1 trillion coin.
Is the idea legal? Some scholars say yes, others are doubtful.
The point of the $1 trillion platinum coin is to create money out of nothing and do so outside the Federal Reserve, which creates money out of nothing but balances that debit by buying Treasury bonds, which are booked as an asset.
…click on the above link to read the rest of the article…
Second Thoughts On US Official Gold Reserves Audits
Second Thoughts On US Official Gold Reserves Audits
What is not often covered in the media or blogosphere are the audits of the US official gold reserves stored at the US Mint, which is the custodian for 95 % (7716 tonnes) of the stash – nowadays also referred to as custodial deep storage, and at the Federal Reserve Bank Of New York that safeguards the remaining 5 % (418 tonnes). The lawful owner of the US official gold reserves is the US Treasury. Part one covered the most recent records I could find published by the US government, in this post we’ll examine more historical records and approach this matter from a more critical angle. Because of the amount of information I found this post is split in multiple parts.
What Is A Gold Audit?
From Wikipedia:
Auditing is defined as a systematic and independent examination of data, statements, records, operations and performances (financial or otherwise) of an enterprise for a stated purpose. In any auditing the auditor perceives and recognizes the propositions before him for examination, collects evidence, evaluates the same and on this basis formulates his judgment, which is communicated through his audit report.
Due to constraints, an audit seeks to provide only reasonable assurance that the statements are free from material error. Hence, statistical sampling is often adopted in audits.
To be sure, I’ve asked several bullion dealers about how their audits are being conducted. They all agreed an audit involves three parties: the owner of the gold, the custodian and an external (independent) auditor. The external auditor examines the gold, compares its findings with the statements of the custodian and then reports on the accuracy of the statements of the custodian to the owner of the gold. An example of an audit report by such an external auditor can be found here.
…click on the above link to read the rest of the article…
Occupied by Wall Street – The Latest TARP Taxpayer Screw-Job is Revealed
Occupied by Wall Street – The Latest TARP Taxpayer Screw-Job is Revealed
The Treasury-created market has benefited a few savvy investors, while saddling taxpayers with a loss. Three private funds, which the report didn’t name, have won almost half the shares available at auction, often netting either a profit on paper or on the resale, according to the special inspector general for the Troubled Asset Relief Program. The Treasury, which has held 185 auctions to date, said it has raised about $3 billion on TARP investments that were originally valued at $3.8 billion, for a loss of $800 million at the auctions.
The Treasury “set up this market where investors could come in quickly and flip and profit,” said Christy Romero, TARP’s special inspector general, in an interview.
– From the Wall Street Journal article: Hedge Funds, Private Equity Win Big at TARP Auctions
One story that I’ve told several times on this site has to do with the day TARP passed. How I got into work extremely early and starting irately yelling about how TARP represented the end of America as we knew it. There weren’t many people on the trading floor at the time, but my boss was there and he told me to take a “walk around the block.” I politely declined, but continued to seethe at my desk.
It’s almost shocking to see the horrific transformation that has occurred in the subsequent six years. It’s so bad, that many people now take things that would’ve been considered unconscionable just a few years ago as part of the “new normal.” There will be a horrible price to pay for this perspective.
The latest scam unveiled by the Wall Street Journal is just the latest example of how and why all the income during the oligarch recovery has gone to, well, oligarchs.
…click on the above link to read the rest of the article…
The Keynesian End Game Crystalizes In Japan’s Monetary Madness | David Stockman’s Contra Corner
The Keynesian End Game Crystalizes In Japan’s Monetary Madness | David Stockman’s Contra Corner.
If the BOJ’s mad money printers were treated as monetary pariahs by the rest of the world, it would at least imply that a modicum of sanity remains on the planet. But just the opposite is the case. Establishment institutions like the IMF, the US treasury and the other major central banks urge them on, while the Keynesian arson squad led by Professor Krugman actually faults Japan for being too tepid with its “stimulus”.
Now comes several new data points that absolutely confirm Japan is a financial mad house—-even as its policy model is embraced by mainstream officials and analysts peering from a distance. Front and center is the newly reported fact from the Cabinet Office that Japan’s household savings rate plunged to minus 1.3% in the most recent fiscal year, thereby entering negative territory for the first time since records were started in 1955.
Indeed, Japan had been heralded as a nation of savers only a generation ago. During the era before it’s plunge into bubble finance in the late 1980s, households routinely saved 15-25% of income. But after nearly three decades of Keynesian policies, Japan has now stumbled into an insuperable demographic/financial trap; and one that is unusually transparent and rigidly delineated, to boot.
