“Government Is Waging A Perpetual War Against Human Nature… They Can Never Win”

Courtesy of Martin Armstrong:

The one war that never ends is how people constantly try to fight the trend. The ECB will buy bad government debt they created instead of doing what was necessary from the start – consolidate all state debt. That would have enabled the Euro to be a viable currency creating a reserve base that does not exist today. Instead, leaving each country with its own debt that was then reserve quality for the banking system was the greatest mistake in history. European banks are really in trouble. They do not mark-to-market sovereign debt. Government PRESUMES they are always the best.

Europe is a failure for they just will not reform Euroland. Instead, this is like a Chinese Water torture or an NSA Waterboarding vacation – a slow gradual and painful process. This Euro Crisis cannot be resolved in such a manner. Buying in sovereign debt is DEFLATIONARY for it is effectively retiring the debt that is worthless. It is bailing out banks, not inflating the economy, since the banks will not lend that money out again. The banks will crumble to dust for their reserves are worthless. This is a very interesting problem that nobody wants to discuss publicly for it is the biggest political manipulation in history gone really, really bad.

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Tiberius Used Quantitative Easing To Solve The Financial Crisis Of 33 AD

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Jean-Paul Laurens’ “La Mort de Tibere”

Tiberius did not use QE in the same way as Central Banks today do, they’re not monitising debt. He provided liquidity into the system and it is important to remember they used money, not currency back in those days so no printing presses, digital or physical were used. This article shows that it is not the first time our financial system has been intertwined and fraud is the cause of the problems. Courtesy of Business Insider; Brian Taylor Global Financial Data:

Although many people have hailed Ben Bernanke’s response to the current financial crisis for going outside of the box and using unorthodox policies to avoid a financial collapse, in reality, similar policies were used by Tiberius during the Financial Crisis of 33 AD, almost 2000 years ago.

Tiberius ruled the Roman Empire from 14 AD to 37 AD. He was frugal in his expenditures, and consequently, he never raised taxes during his reign. When Cappadocia became a province, Tiberius was even able to lower Roman taxes. His frugality also allowed him to be liberal in helping the provinces when, for example, a massive earthquake destroyed many of the famous cities of Asia, or when a financial panic struck the Roman Empire in 33 AD.

As with many financial panics, this one began when unexpected events in one part of the Roman world spread to the rest of the Empire. To quote Otto Lightner from his History of Business Depressions, “The important firm of Seuthes and Son, of Alexandria, was facing difficulties because of the loss of three richly laden ships in a Red Sea storm, followed by a fall in the value of ostrich feather and ivory. About the same time the great house of Malchus and Co. of Tyre with branches at Antioch and Ephesus, suddenly became bankrupt as a result of a strike among their Phoenician workmen and the embezzlements of a freedman manager. These failures affected the Roman banking house, Quintus Maximus and Lucious Vibo. A run commenced on their bank and spread to other banking houses that were said to be involved, particularly Brothers Pittius. Continue reading

The Counter-Productive Monetary Policy of the Fed

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Sowing Inflation, Reaping Deflation

Courtesy of Antal E Fekete @ New Austrian.org

New Austrian School of Economics

Introduction

Typically, bond speculators carry on interest arbitrage along the entire yield curve. They sell the short maturity and buy the long, hoping to capture the difference between the higher long rate and the lower short rate of interest (borrowing short and lending long). This arbitrage is not risk-free per se as it has the effect of flattening the yield curve. As a result the normal yield curve could get inverted unexpectedly, that is, turned upside down, making the rising curve into a falling one while turning the speculators’ profit into a loss.

However, as a direct result of the policy of open market operations (introduced clandestinely and illegally in 1922 through the conspiracy of the US Treasury and the Fed, long before the practice was legalized ex post facto in 1935) interest arbitrage was made risk-free. Astute bond speculators could thereafter pre-empt Fed action profitably. It never fails. Speculators know that sooner or later the Fed will have go to the bill market to buy in order to boost the money supply. They will buy beforehand. On rare occasions the Fed would be a seller. Then speculators, perhaps acting on inside information, will sell beforehand. This copycat action is an inexhaustible source of risk-free profits. Thanks to the Fed’s open market purchases speculators are assured that they will always be able to dump the bonds at a profit which they have bought pre-emptively. The more aggressively the Fed persists in its effort to increase the monetary base, the greater the bond speculators’ profits will be.

Absolute bad faith Continue reading

Even The BIS Is Shocked At How Broken Markets Have Become

Courtesy of ZeroHedge:

Not a quarter passes without the Bank of International Settlements (BIS) aka central banks’ central bank (also the locus of some of the most aggressive manipulation of gold and FX in human history) reiterating a dire warning about the fire and brimstone that is about to be unleashed upon the global economy.

It started in June of 2013, when Jaime Caruana, certainly the most prominent doom and gloomer at the BIS (who also was Governor of the Bank of Spain from 2000 to 2007 when this happened) asked if “central banks [can] now really do “whatever it takes”? As each day goes by, it seems less and less likely… [seven] years have passed since the eruption of the global financial crisis, yet robust, self-sustaining, well balanced growth still eludes the global economy…. low-interest policies have made it easy for the private sector to postpone deleveraging, easy for the government to finance deficits, and easy for the authorities to delay needed reforms in the real economy and in the financial system. Overindebtedness is one of the major barriers on the path to growth after a financial crisis. Borrowing more year after year is not the cure…in some places it may be difficult to avoid an overall reduction in accommodation because some policies have clearly hit their limits.”

The BIS’ preaching did not end there, and hit a new crescendo in June of 2014, when in its 84th Annual Report, the BIS slammed “Market Euphoria”, and found a “Puzzling Disconnect” between the economy and the market”:

“it is hard to avoid the sense of a puzzling disconnect between the markets’ buoyancy and underlying economic developments globally”, that “despite the euphoria in financial markets, investment remains weak. Instead of adding to productive capacity, large firms prefer to buy back shares or engage in mergers and acquisitions” and that “the temptation to go for shortcuts is simply too strong, even if these shortcuts lead nowhere”… “Particularly for countries in the late stages of financial booms, the trade-off is now between the risk of bringing forward the downward leg of the cycle and that of suffering a bigger bust later on.” Continue reading

Alan Greenspan: QE Failed To Help The Economy, The Unwind Will Be Painful, “Buy Gold”

Courtesy of Zerohedge:

It appears it is time for some Hillary-Clinton-esque backtracking and Liesman-esque translation of just what the former Federal Reserve Chief really meant. As The Wall Street Journal reports, the Fed chief from 1987 to 2006 says the Fed’s bond-buying program fell short of its goals, and had a lot more to add.

Mr. Greenspan’s comments to the Council on Foreign Relations came as Fed officials were meeting in Washington, D.C., and expected to announce within hours an end to the bond purchases.

He said the bond-buying program was ultimately a mixed bag. He said that the purchases of Treasury and mortgage-backed securities did help lift asset prices and lower borrowing costs. But it didn’t do much for the real economy.

“Effective demand is dead in the water” and the effort to boost it via bond buying “has not worked,” said Mr. Greenspan. Boosting asset prices, however, has been “a terrific success.”

He observed that history shows central banks can only prick bubbles at great economic cost. “It’s only by bringing the economy down can you burst the bubble,” and that was a step he wasn’t willing to take while helming the Fed, he said.

The question of when officials should begin raising interest rates is “one of those questions I cannot answer,” Mr. Greenspan said.

He also said, “I don’t think it’s possible” for the Fed to end its easy-money policies in a trouble-free manner…. Continue reading

The Greatest Propaganda Coup of Our Time?

Courtesy of Mike Whitney @ Counterpunch.org:

There’s good propaganda and bad propaganda. Bad propaganda is generally crude, amateurish Judy Miller “mobile weapons lab-type” nonsense that figures that people are so stupid they’ll believe anything that appears in “the paper of record.” Good propaganda, on the other hand, uses factual, sometimes documented material in a coordinated campaign with the other major media to cobble-together a narrative that is credible, but false.

The so called Fed’s transcripts, which were released last week, fall into the latter category. The transcripts (1,865 pages) reveal the details of 14 emergency meetings of the Federal Open Market Committee (FOMC) in 2008, when the financial crisis was at its peak and the Fed braintrust was deliberating on how best to prevent a full-blown meltdown. But while the conversations between the members are accurately recorded, they don’t tell the gist of the story or provide the context that’s needed to grasp the bigger picture. Instead, they’re used to portray the members of the Fed as affable, well-meaning bunglers who did the best they could in ‘very trying circumstances’. While this is effective propaganda, it’s basically a lie, mainly because it diverts attention from the Fed’s role in crashing the financial system, preventing the remedies that were needed from being implemented (nationalizing the giant Wall Street banks), and coercing Congress into approving gigantic, economy-killing bailouts which shifted trillions of dollars to insolvent financial institutions that should have been euthanized.

What I’m saying is that the Fed’s transcripts are, perhaps, the greatest propaganda coup of our time. They take advantage of the fact that people simply forget a lot of what happened during the crisis and, as a result, absolve the Fed of any accountability for what is likely the crime of the century. It’s an accomplishment that PR-pioneer Edward Bernays would have applauded. After all, it was Bernays who argued that the sheeple need to be constantly bamboozled to keep them in line. Here’s a clip from his magnum opus “Propaganda”:

“The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country.” Continue reading

I set up Parasite Street to balance the benefits debate

The UK is full of Orwellian double speak, austerity is my favourite because there is none. Debt up, tax evasion and avoidance up, MPs pay up, quantitative easing, privatisation of anything that is not nailed down while the poorest and most vulnerable in our society are persecuted for being who they are. It will get to the point when the only thing which will sort this whole debacle out is heads on spikes. I look forward to that day, it is long over due. Courtesy of Stephen Reid @ The Independent:

Thousands of people have now signed a petition demanding that Channel 4 take Benefits Street off air for ‘creating a skewed image of a section of society and stirring up hatred’.

Yes, the show focuses on relatively minor parts of the benefits system (benefit fraud) whilst ignoring other, more widespread phenomena (in-work poverty).

But the show has started a national conversation, and this is one conversation we needn’t shy away from. You want to talk about systems that allow people to cheat the taxpayer? I say ‘bring it on’.

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