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Governments to Control What You Are Allowed to Buy

People are unaware that this drive of central banks to replace paper money with cryptocurrency is far more than they will ever comprehend as an end goal. Aside from the fact that governments could then impose a negative interest rate effectively confiscating money from your account in ADDITION to taxation, they are moving to do what many in the religious right see as the prophecy of the anti-Christ where you will not be able to buy or sell without his permission.

Indeed, the government can restrict what you will even be allowed to buy. They will control every aspect of your life beyond what the most demonized vision of the future might hold. These ideas will create resistance which will also be rooted in religion. Will you accept the number of the beast, or resist their commands? This is not something anyone would have dared to think that a representative form of government would have even talked about.

Bank of England Now 2nd Central Bank to Taper, After Canada, but Denies Tapering is “Tapering,” also Following Canada

Bank of England Now 2nd Central Bank to Taper, After Canada, but Denies Tapering is “Tapering,” also Following Canada

The Big Taper starts one central bank at a time. But you gotta keep the markets from swooning with a bit of welcome delusion.

The Bank of England’s Monetary Policy Committee (MPC) today announced that it voted unanimously to maintain its policy rate at 0.1%. But in terms of its asset purchases, it took the trail the Bank of Canada blazed last November and then widened in April: tapering.

The BoE announced that the blistering pace of its asset purchases would be “slowed somewhat”  – tapering the bond purchases from £4.4 billion a week to £3.4 billion a week – but that this tapering was an “operational decision” that “should not be interpreted as a change in the stance of monetary policy.”

This “is not a tapering decision,” emphasized BoE governor Andrew Bailey during the press conference. The reason this tapering is not “a tapering decision,” he said, is because the BoE left its target for the final level of QE assets unchanged.

Unlike the Fed, the BoE doesn’t have an open-ended QE, but had set a target of bringing its holdings of UK government bonds to £875 billion and its holdings of corporate bonds to £20 billion, for a combined target of £895 billion. And at the meeting, the BoE didn’t change these “fixed amounts,” as Bailey put it.

Obviously, denying that tapering is tapering was designed to mollify the markets with a welcome dose of delusion, and it worked: the UK’s stock index FTSE 100 rose 0.5% for the day.

However, when the members voted on maintaining the target of £895 billion, it wasn’t unanimous, with eight members voting for maintaining it, and one member, outgoing chief economist Andy Haldane, voting to lower it by £50 billion, to £845 billion.

…click on the above link to read the rest of the article…

 

Dangers Of Programmable Money Explained 

Dangers Of Programmable Money Explained 

Dominic Frisby with Money, Markets & Other Matters talks about the war on cash and central bank digital currency, known as CBDC. He questions if CBDCs are “the final step into the brave new world – Orwellian great reset dystopia – we seem to be heading towards” or are they “the onramp to the Bitcoin motorway.” He said the answer is “both.” 

Frisby points out the biggest issue with CBDCs is that digital money is “programmable,” which means the issuer, such as the Federal Reserve or the Bank of England, can build specific rules into it. He said cash grants users freedom and power.

Programmable money, such as CBDCs, means the user has even less control over their money. Frisby said almost any kind of rule could be coded into CBDCs. He provides an example of China mulling over the idea of expiry dates for its digital money. This means those holding the programmable money have to spend the money by a specific time or it disappears from their account.

For those who aren’t familiar with Chuck Palahniuk’s 2018 “Adjustment Day” book, a similar concept of expiring money was detailed. Palahniuk is also the writer behind “Flight Club.”

Back to Frisby, who said issuers could manipulate money velocity by changing expiry dates. He said the money could be programmed to work only in certain areas or jurisdictions. He then warned:

“Every transaction ever made will be visible to the all-seeing government.” 

Governments will know your whereabouts and habits at all times simply by tracking your use of funds through the CBDC payment system. This can already be done, to some extent, by tracking credit card transactions, but the CBDC system will make state surveillance more pervasive.

CBDCs also allow the government to have direct access to a person’s wallet to remove taxes and other fines. 

…click on the above link to read the rest of the article…

BoE Keeps Policy Unchanged, Tells Banks To Start Preparing For Negative Rates “If Necessary” But Sees Spike In Inflation

BoE Keeps Policy Unchanged, Tells Banks To Start Preparing For Negative Rates “If Necessary” But Sees Spike In Inflation

The Bank of England kept its stimulus program unchanged on Thursday. The BoE maintained its Bank Rate at 0.1% and left the size of its total asset purchase programme at 895 billion pounds in a unanimous decision, as expected.

Growth and Inflation

On QE, the BOE said that “if needed, there was scope for the Bank of England to re-evaluate the existing technical parameters of the gilt purchase programme” but that is unlikely since the BOE’s growth forecast was far stronger than previously:

  • UK GDP is expected to have risen a little in 2020 Q4 to a level around 8% lower than in 2019 Q4.
  • This is materially stronger than expected in the November Report.
  • While the scale and breadth of the Covid restrictions in place at present mean that they are expected to affect activity more than those in 2020 Q4, their impact is not expected to be as severe as in 2020 Q2, during the United Kingdom’s first lockdown.
  • GDP is expected to fall by around 4% in 2021 Q1, in contrast to expectations of a rise in the November Report.
  • Global GDP growth slowed in 2020 Q4, as a rise in Covid cases and consequent restrictions to contain the spread of the virus weighed on economic activity. Since the MPC’s previous meeting, financial markets have remained resilient.

The BOE also said that CPI inflation was expected to rise quite sharply towards the 2% target in the spring, as the reduction in VAT for certain services comes to an end and given developments in energy prices. In the MPC’s central projection, conditioned on the market path for interest rates, CPI inflation is projected to be close to 2% over the second and third years of the forecast period.

…click on the above link to read the rest of the article…

What Horrified Fund Managers, Banks & UK’s Pension Minister Said About the Bank of England’s Sudden “We Don’t Rule Out” Negative Interest Rates

What Horrified Fund Managers, Banks & UK’s Pension Minister Said About the Bank of England’s Sudden “We Don’t Rule Out” Negative Interest Rates

“The stimulus the country urgently needs is not experimental and dangerous monetary policy.”

Andrew Bailey, the recently appointed governor of the Bank of England (BoE), is considering going where no other BoE governor has ever gone in the central bank’s 325-year history: into negative interest rate territory. On May 20, Bailey told British MPs that the BoE is refusing to rule out cutting the benchmark interest rate below zero in response to the virus crisis.

“We do not rule things out as a matter of principle. That would be a foolish thing to do,” Bailey told MPs. “But that doesn’t mean we rule things in either.”

That statement came just six days after Bailey had told FT readers that negative interest rates are “not something we are currently planning for or contemplating.” Since then, Bailey says he has “changed [his] position a bit.”

Bailey, who replaced Mark Carney as BoE governor just two months ago, is not the only senior BoE official who’s apparently warming to the idea of foisting negative interest rates on the British economy.

So, too, has the central bank’s chief economist Andrew Haldane, who last week said: “The economy is weaker than a year ago and we are now at the effective lower bound, so in that sense it’s something we’ll need to look at – are looking at – with somewhat greater immediacy. How could we not be?”

In the wake of the virus crisis, the Bank of England has already slashed interest rates by 0.65 basis points to 0.1%, its lowest level ever. It has also revved up its swap lines with the Federal Reserve and other central banks, offered billions of pounds of fresh liquidity support to banks, and expanded its QE program by £100 billion to £745 billion and extended what it buys to include corporate bonds.

…click on the above link to read the rest of the article…

The Bank of England’s Governor Fears a Liquidity Trap

The Bank of England’s Governor Fears a Liquidity Trap

The global economy is heading towards a “liquidity trap” that could undermine central banks’ efforts to avoid a future recession according to Mark Carney, governor of the Bank of England. In a wide-ranging interview with the Financial Times (January 8, 2020), the outgoing governor warned that central banks were running out of ammunition to combat a downturn:

If there were to be a deeper downturn, more than a conventional recession, then it’s not clear that monetary policy would have sufficient space.

He is of the view that aggressive monetary and fiscal policies will be required to lift the aggregate demand.

What Is a Liquidity Trap?

In the popular framework that originates from the writings of John Maynard Keynes, economic activity is presented in terms of a circular flow of money. Spending by one individual becomes part of the earnings of another individual, and spending by another individual becomes part of the first individual’s earnings.

Recessions, according to Keynes, are a response to the fact that consumers — for some psychological reasons — have decided to cut down on their expenditure and raise their savings.

For instance, if for some reason people become less confident about the future, they will cut back their outlays and hoard more money. When an individual spends less, this will supposedly worsen the situation of some other individual, who in turn will cut their spending. A vicious cycle sets in. The decline in people’s confidence causes them to spend less and to hoard more money. This lowers economic activity further, causing people to hoard even more, etc.

Following this logic, in order to prevent a recession from getting out of hand, the central bank must lift the growth rate of the money supply and aggressively lower interest rates. Once consumers have more money in their pockets, their confidence will increase, and they will start spending again, reestablishing the circular flow of money, so it is held.

…click on the above link to read the rest of the article…

Central Bankers Are Quietly Freaking Out About How To Fight The Next Recession

Central Bankers Are Quietly Freaking Out About How To Fight The Next Recession 

Mark Carney warns about the limits of central bank policy.
Mark Carney, governor of the Bank of England (BOE), listens at the annual Mansion House dinner in … [+]2018 BLOOMBERG FINANCE LP

The world’s top central bank officials are rightly concerned that politicians in rich economies missed one key lesson of the last recession: Interest rate cuts can help to moderate a downturn, but aggressive fiscal policy is key to a healthy recovery. 

It was a pro-austerity stance both in the United States, and even more saliently in the euro zone, that arguably prolonged the period of high unemployment and low wage growth that plagued most of the decade-long recovery from the 2007-2009 U.S. Great Recession. 

Outgoing Bank of England Governor Mark Carney told the Financial Times this week that central banks are running low on fuel. “If there were to be a deeper downturn, [that requires] more stimulus than a conventional recession, then it’s not clear that monetary policy would have sufficient space,” he said.Today In: Money

“It’s generally true that there’s much less ammunition for all the major central banks than they previously had and I’m of the opinion that this situation will persist for some time.”  

That echoed the sentiment of Christine Lagarde, who recently took over the European Central Bank. She’s telling budget-shy European politicians (especially in Germany) to get to work

Now, a new paper from Fed board economist Michael Kiley points to similar alarm among U.S. central bankers about their ability to fight future slumps. 

Drawing up two basic assumptions of what a downturn might look like, Kiley finds that “a recession may result in near-zero interest rates at long maturities, bringing U.S. experience closer to that seen in Europe and Japan.”

This, says Kiley, “could imply limits on the ability of monetary policy to support a recovery.”

…click on the above link to read the rest of the article…

Do Banks Require Savings to Accommodate Demand for Lending?

DO BANKS REQUIRE SAVINGS TO ACCOMMODATE DEMAND FOR LENDING?

There is an emerging view held by many commentators that it is banks and not the central bank that are key for the expansion of money. This way of thinking is promoted these days by the followers of the post Keynesian school of economics (PK).[1] In a research paper by the Bank of England’s Zoltan Jakab and Michael Kurnhof, they suggest that

In the intermediation of loanable funds model of banking, banks accept deposits of pre-existing real resources from savers and then lend them to borrowers. In the real world, banks provide financing through money creation. That is they create deposits of new money through lending, and in doing so are mainly constrained by profitability and solvency considerations.[2]

It seems that for the researchers at the Bank of England and PK followers the key for money creation is demand for loans, which is accommodated by banks increasing lending. In this framework, banks do not have to be concerned with the means of lending, all that is necessary here that there is a demand for loans, which banks are going to accommodate i.e. demand creates supply.

According to the Bank of England researchers,

In the real world, the key function of banks is the provision of financing, or the creation of new monetary purchasing power through loans, for a single agent that is both borrower and depositor. The bank therefore creates its own funding, deposits, in the act of lending, in a transaction that involves no intermediation whatsoever. Third parties are only involved in that the borrower/depositor needs to be sure that others will accept his new deposit in payment for goods, services or assets. This is never in question, because bank deposits are any modern economy’s dominant medium of exchange.[3]

 …click on the above link to read the rest of the article…

Will the Bank of England join the loose money bandwagon?

Will the Bank of England join the loose money bandwagon?

As the year of the 325th anniversary of the Bank of England’s foundation, and as the month of one of the Bank’s more important rate-setting decisions since 2008, September provides a congruous occasion on which to reflect on the history of the BoE and consider what the future holds for it. Founded in 1694 as a private bank to the government, it was in 1998 that the BoE was granted independence from the government in setting monetary policy. Now the UK faces perhaps its greatest political uncertainty in a generation, it is worth asking the question: to what extent will this independence continue? 

We have already seen the effect of populist leaders on central banks that are ostensibly independent. The obvious case is that of the US, but there are other examples to be found of central banks facing political pressure to keep monetary policy easy, from Turkish President Erdogan’s sacking of the then central bank governor, to the ECB’s reaction to persistently low growth in Europe. Even if Trump doesn’t control the Fed directly, he certainly controls the market, which in turn has forced the hand of the central bank and led to the Fed cutting rates with the economy in expansion. And with ever more monetary sweets to choose from in the jar, which politician could resist raiding the cupboard and giving their economy a sugar high of rate cuts, QE and lending? 

Pressure on the Fed is likely only to increase as the 2020 elections approach: if President Trump is able to engineer further cuts, and then get the markets soaring with a trade deal and promises of tax cuts just in time for elections, we might begin to agree he is – in his words – “a very stable genius”.

In Unprecedented, Shocking Proposal, BOE’s Mark Carney Urges Replacing Dollar With Libra-Like Reserve Currency

In Unprecedented, Shocking Proposal, BOE’s Mark Carney Urges Replacing Dollar With Libra-Like Reserve Currency

After Jerome Powell’s neutral-to-slightly-dovish-but-mostly-boring speech on Friday morning, investors could be forgiven for suspecting that this year’s Fed-sponsored gathering in Jackson Hole might be disappointingly dull (especially with all that’s going on in Trump’s twitter feed, the escalating trade war and escalating geopolitical unrest).

Then along came former Goldman banker and current (outgoing) BOE governor, Mark Carney, who in his lunchtime address laid out a shocking, radical proposal – perhaps the most stunning thing to ever be unveiled at Jackson Hole – urging to replace the US Dollar with a “Libra-like” reserve currency in a dramatic revamp of the global monetary, financial and economic order.

While it was unclear if Carney was focusing on Libra as the new reserve currency, or simply was hoping to find something against which the dollar could be devalued, the proposal was clearly shocking as it suggests that the central bank quiet acceptance of cryptocurrencies (especially in Japan) has been what many have speculated all along: a “currency” against which fiat money can be devalued in hopes of sparking fiat hyperinflation that inflates away record amounts of fiat debt.

Of course, such a new system would bring about the end of US hegemony, and effectively end the dollar-based global financial system, dramatically scaling back the US’s influence in the global economy, and making rising powers like China and Russia critical players an increasingly multipolar world…. especially if they propose a gold-backed dollar alternative to the world. That this would quickly emerge as the new reserve currency – together with whatever stablecoin/crypto central bankers deign to be the dollar’s replacement – goes without saying.

 …click on the above link to read the rest of the article…

$1.6 Trillion Fund Spots A New, Ticking Time Bomb In The Market

$1.6 Trillion Fund Spots A New, Ticking Time Bomb In The Market

First it was the shocking junk bond fiasco at Third Avenue which led to a premature end for the asset manager, then the three largest UK property funds suddenly froze over $12 billion in assets in the aftermath of the Brexit vote; two years later the Swiss multi-billion fund manager GAM blocked redemptions, followed by iconic UK investor Neil Woodford also suddenly gating investors despite representations of solid returns and liquid assets, and most recently the ill-named, Nataxis-owned H20 Asset Management decided to freeze redemptions.

By this point, a pattern had emerged, one which Bank of England Governor Mark Carney described best when he said last month that investment funds that promise to allow customers to withdraw their money on a daily basis are “built on a lie.” 

And now, the chief investment officer of Europe’s biggest independent asset manager agrees with him, because while for much of 2019 the biggest risk bogeymen were corporate credit, leveraged loans, and trillions in negative yielding debt, gradually consensus is emerging that investment funds may be the basis for the next liquidity crisis.

“There is no point denying we are faced with a looming liquidity mismatch problem,” said Pascal Blanque, who oversees more than 1.4 trillion euros ($1.6 trillion) as the CIO of Amundi SA, according to Bloomberg’s Mark Gilbert who in a Bloomberg View piece writes that Blanque told him that the prospect of melting liquidity is one of “various things keeping me awake at night.”

Continuing the discussion of illiquid institutions, Blanque said that market making, where firms generate prices at which they are willing to either buy or sell financial products, is effectively “a public good” (or “public bad”, if it is being done by HFTs who disappear at the first sign of volatility, and them having to take on real positional risk).

 …click on the above link to read the rest of the article…

Markets are being Lulled into a False Sense of Accommodation

Markets are being Lulled into a False Sense of Accommodation

Those who take an interest in the actions of central banks will know that the advent of Brexit and Donald Trump’s presidency has seen the direction of monetary policy gradually change in both the UK and the U.S.

Since the EU referendum, the Bank of England have raised interest rates twice, after initially cutting them and implementing a new round of quantitative easing in the aftermath of the vote. The first rate hike in November 2017 came over a decade since the bank last increased rates in July 2007.

A month after Donald Trump was confirmed as the 45th American president, the Federal Reserve raised rates for only the second time in nine and a half years. Since Trump’s inauguration, they have gone on to hike a further seven times, and over the course of eighteen months (starting late 2017) the Fed have rolled off over $600 billion in assets from its balance sheet.

As the Fed continue to roll off assets until their balance sheet ‘normalisation‘ programme ends in September, the sentiment amongst traders is that the central bank will soon begin a course of rate cuts in order to stave off the threat of a recession as the prospect of a full blown trade conflict with China and other nation states gathers momentum.

A similar sentiment can be found in the UK over Brexit. With the British economy stagnant and manufacturing and construction sectors in decline, there exists an expectation that the Bank of England will ultimately reverse course if an economic downturn takes hold.

 …click on the above link to read the rest of the article…

Store Gold Bullion In Safest Ways – Learning from Tragic Venezuela Today

Store Gold Bullion In Safest Ways – Learning from Tragic Venezuela Today 

– Store gold bullion in the safest ways possible and learn from Venezuela’s gold battle with the Bank of England and Trump’s White House 
– What in the world is happening in Venezuela and to the people of Venezuela’s gold?
– How you store gold and invest in gold is vitally important in these uncertain times

As a sovereign nation, Venezuela should have the right to take possession of and sell their gold on the open market. As sovereign individuals, we should too.

It is a difficult issue as the recent election is in doubt and the concern is that the euros (or dollars) garnered by the sale of the people’s gold reserves may be squandered trying to prop up the Maduro government rather than looking after the humanitarian needs of the people of Venezuela.

Central banks are repatriating and taking possession of their gold and indeed buying gold today. This tragic story highlights the importance of all people owning gold in the safest ways possible.

We must all become our own central banks!

What are the ‘7 Key Gold & Silver Storage Must Haves’?

1. How to store gold bullion and the importance of owning individually segregated and allocated coins and bars
2. Can you visit, view and collect your bullion whenever you want and is liquidity and competitive pricing ensured?
3. Chain of integrity that ensures the authenticity of your store of gold bullion
4. Bailment and legal structures that best protects the investor
5. Risks inherent in ETF, electronic & digital gold (online gold platforms or bullion vaults)
6. Vital insurance considerations to know: Ensure that your bullion provider and its storage partners have adequate insurance cover
7. Can you visit, view and collect your gold bullion whenever you want and is liquidity and competitive pricing ensured?

Bank of England tears up its Gold Custody contract with Venezuela’s central bank

Bank of England tears up its Gold Custody contract with Venezuela’s central bank

In early November 2018, it first came to light that the Bank of England in London was delaying and blocking the withdrawal of 14 tonnes of gold owned by the Venezuelan central bank, Banco Central de Venezuela (BCV). At the time, Reuters and The Times of London both reported that according to unnamed British ‘public officials’, the delays were being caused by the difficulty and cost of obtaining insurance for the gold shipment back to Venezuela, and also due to “standard measures to prevent money-laundering“.

As I explained in a BullionStar article on 15 November titled ‘Bank of England refuses to return 14 tonnes of gold to Venezuela’, the explanations given to Reuters and the Times for the withdrawal delays were completely bogus, and that the real reason for blocking the BCV gold withdrawal was undoubtedly US and UK joint government interventions to stall the withdrawal. As I wrote at the time:

“The reasons put forward by official sources in the Reuters and Times articles for why Venezuela can’t withdraw its gold from the Bank of England are clearly bogus. The more logical and likely explanation is that the US, through the White House, US Treasury and State Department have been liaising with the British Foreign office and HM Treasury to put pressure on the Bank of England to delay and push back on Venezuela’s gold withdrawal request.”

As it turns out, this was an entirely correct prediction, since by 25 January, Bloomberg confirmed in an ‘exclusive report’ (two and a half months later) that:

 …click on the above link to read the rest of the article…

Bank Of England Refuses To Release Venezuela’s Gold After US Lobbying

Bank Of England Refuses To Release Venezuela’s Gold After US Lobbying

With Maduro desperately clinging to power in Venezuela – albeit protected by Russian “security contractors” – The Bank of England just ‘virtue-signaled’ another jab in the socialist utopia’s back by confirming its refusal to hand over Venezuela’s gold from its vaults.

Bloomberg reports that Maduro’s embattled regime, desperate to hold onto the dwindling cash pile it has abroad, was stymied in its bid to pull $1.2 billion worth of gold out of the Bank of England, according to people familiar with the matter.

The Bank of England’s (BoE) decision to deny Maduro officials’ withdrawal request comes after top U.S. officials, including Secretary of State Michael Pompeo and National Security Adviser John Bolton, lobbied their U.K. counterparts to help cut off the regime from its overseas assets, according to one of the people, who asked not to be identified.

Mike Krieger recently dug into the gold part of the Venezuelan coup sagaIn case you forgot, Hugo Chavez didn’t make any friends in the empire back in 2011 when he repatriated around 160 tonnes of gold from banks in the United States and Europe. But the story doesn’t end there. As Reuters reports:

The government of Nicolas Maduro has since last year been seeking to repatriate about $550 million in gold from the Bank of England on fears it could be caught up in international sanctions on the country.

Its holdings at the bank more than doubled in December to 31 tonnes, or around $1.3 billion, after Venezuela returned funds it had borrowed from Deutsche Bank AG through a financing arrangement that uses gold as collateral, known as a swap, one of the sources said.

Venezuela last year started carrying out gold barter operations with Turkey to import food following U.S. sanctions that have made international banks reluctant to handle Venezuelan transactions.

 …click on the above link to read the rest of the article…

Olduvai IV: Courage
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Olduvai II: Exodus
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