Economic Reality: Neo-Keynesian Experiment on Death Bed

“Ignorance is refuge from reality. Willful ignorance is refuge from reason”. – Anonymous

INFANTILE OBSESSIONS WITH FAIRNESS

Wealth and income inequality are neither abnormal nor abhorrent. The tug of war between labor and capital is normal and equilibrium seeking. Excessive regulation distorts the mechanism.

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CAN YOU SAY ZIRP, NIRP?

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1997-2014

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2008-2014

The Federal funds rate has been set at 0.25% for over the past 5 years. When the current bubble bursts, the interest rate can’t go down much further and still be positive. The ECB is currently at 0.05%. Hmmm, who will win the race? The Bank of Japan is already at 0.00%. I guess it is the winner. I foresee potential for negative interest rates. This is when you pay the bank interest to look after your money, which only exists in physical form at around 2% anyways. The rest is just data stored on a computer. They don’t need to rent warehouses or have massive vaults to store cash. It doesn’t exist in that form. It’s digital now. Perhaps some deposit haircuts are around the corner. Bail-ins are supposedly the next big thing. The banks close for a bank holiday, and open up with less of your money. Sound good?  ZIRP and NIRP, they are acronyms of the hard working saving class, right?

Now lets look at the S&P 500. Has that reached nominal values higher than the last two previous bubbles? Oh good it has. The current bubble is quite ambitious. I guess now is really a great time to sell if you haven’t just entered the market.

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Perhaps the Dow Jones Industrial Average hasn’t fallen victim to the interest rates. Nope, it appears it is just as ambitious as the S&P 500. How far will it go? It will continue to rise and make us all rich right? CEO’s must be loving their executive compensation. Stock buy backs are so in right now.

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The NASDAQ took quite a beating when the Dotcom bubble burst. But don’t worry, it is trying hard to get back to where it once was. It’s all about market capitalization right?

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China doesn’t really have a stock market. I think its citizens don’t trust it. Instead, they like real estate bubbles. Japan likes QE. Europe isn’t even bothering to replace its citizens anymore. Demographics have gotten ugly. The U.S prints money and lives off its exorbitant privilege to pay its bills. Nothing quite like having the worlds reserve currency. Thank you House of Saud! But the tide is turning. Gold is being sucked into a giant vortex in Asia. It stops off at Switzerland though to be processed before making its final stop in Asia. Yes, the world is about to experience another financial crisis. But when?

Look at the trend for 10 year treasury notes. They have been trending downward for sometime huh. No wonder the U.S government has been able to spend $100’s of billions on war every year. Force projection doesn’t come cheap. Still, better to destabilize the Middle East than to invest in your nations infrastructure. Actually, just print more food stamps. Go hard or go home!

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Allow me to make some predictions. At least then I can gauge how accurate I was at the time of writing this blog. In a years time, so, by the 2nd of November, 2015, GMT, the next global financial crisis will have hit.

Sell sell sell!

– U.S stock markets take a tumble. S&P500 at 700, DJIA 6000, NASDAQ 1400

– US Federal funds rate. Damn, umm, take it to NIRP. Bail ins. Gotta kill the savers right!

Bull

What?

Gold, Silver, Bitcoin, Litecoin, Water

Revolt, you obsolescent serf.

What is debt? Perhaps an imaginary number. Is money lent into existence at interest ‘negative money’. Are you familiar with ‘Impossible contract theory’. DEBT IS FICTION.

In reality, the tree either has apples or it does not. There cannot exist negative apples on the tree. This concept is pure imagination. Real apples have weight. Imaginary apples do not.

There is no need to borrow at interest from investors. The monetary supply of a nation can not be left up to the banks to inflate by ultra profitable fractional reserve banking, or by even more hilarious means, loans out of no reserves at all. Roughly 2% of money exists in physical form. Governments do not need to issue bonds to cover fiscal short falls. Negative money creates interest payments. Debt equals wealth extraction. A nation can create its own national currency in the volume it sees fit. Inflation is generally created when there is too much money chasing too fewer goods, or when the price of inputs go up. Inflation is already created by fractional reserve banking. Careful decisions must be made no matter what. Simply issuing limitless amounts of money will cause harm obviously, like issuing too little. Both have consequences. The current system with its boom and bust cycles and central banking for the bankers seems to have only really benefited the owners of capital. Average Joe has never been poorer. Food stamp anyone.

The monetary supply of a nation is a common good. It is their to facilitate commercial activity. People need work. When they have money, they can spend it. Most people want their children to have a good education. Do they need to go into massive debt even before they get their first real job? What type of lunacy is this? Get into DEBT to find a low paying job in the service economy along with everyone else (thanks manufacturing offshoring and robotization), rack up lots of payments for things you can’t afford. Get a mortgage. Remain a debt slave and service your debt. Too busy servicing debt to take heed that the system is gamed for you to fail. WTF people! I hope you enjoy serfdom. I guess the whole point of issuing credit cards and GE money shopping cards is so people can continue to buy their shit because less and less people have jobs.

When there is a great lack of money in the system, people simply do not have money to buy stuff. The economy grinds to a halt. Do they not still have their labor to sell. It is not that the soil has ceased to be fertile, or that the sun has refused to shine. The farmers can produce, but who can they sell to if there is no money in the hands of the people? Bill Gates can’t eat 1,000,000 cheeseburgers a day no matter how rich he is.

Why do these usurious banks have such power to inflate or deflate the supply of money in circulation? Oh how they love to privatize the gains and externalize the costs.

Look at economies like the United States of America or the European Union, and their central banking. What is happening in the U.S stock market? How many people are now on food stamps? When the next crisis hits and the greedy class of ultra wealthy cash out of their stocks leaving pensions funds and other idiots holding the losses and put their wealth into a new asset classes, what will the poor fucks at the bottom do without jobs and houses?

What retarded system is in place where there is no money for national parks, but there is always money available for war? The debt clock keeps rising, the banks are allowed to operate like gods, the politicians read their lines and barely ever step out of line. The people can never be poor enough, the ultra rich are never rich enough to satiate their greed. The middle class of debt slaves are too busy to revolt. The unemployed too ignorant. The wealthy are too comfortable to protest. Only when they suffer will they take interest.

The next financial crisis will be more severe than the last. All that has happened since the last crisis is more alcohol has been consumed to keep the party going. Major economies can’t cut interest rates any further. It has done nothing but inflate the asset classes of the rich. There is no recovery in sight.

If the people can’t decide what is best for their country, and unite against the common evil, then they will be broken one class at a time. If the bottom 80-90% of the people who are closer to being poor than rich can’t unite and stand together, then the top 10% are not gonna help you since they are way too rich to step out of their comfort zone. And even then, the top 1% have vastly more wealth comparatively than the top 10%. And even further, the top 10% of the 1% have vastly more money compartively than the bottom 90% of the 1%.

Its been a good rort, but it needs to stop. I don’t think we can count on the ultra rich to make the changes necessary. It’s gotta be the poor huddled masses demanding change before they disappear down a FEMA camp. I guess if you are too despondant and distracted to stand up for yourself and your country, then maybe you are not worthy of freedom. Perhaps you are a serf who deserves nothing more…

Watch this fucking clip

Revolt debt slave. Spread the message. Link it, share it, post it, criticize it, just do something other than briefly skim reading it!!!

CENTRAL BANKS, CHEAP CREDIT, AND NAKED CORRUPTION

“We cannot solve our problems with the same thinking we used when we created them.” Albert Einstein

The world is currently awash with cheap credit. When the credit tap is turned off, all that will be left is a bathtub full of debt. – Anonymous

WHERE ARE THESE BUBBLES?

The majority of financial transactions that take place today are electronic. Fiat currency is fast becoming obsolete. Honest money has not been used as currency for a while now. Central banks such as the European Central Bank, the Federal Reserve Bank of America, and the Bank of Japan, have interest rates at or near zero percent. This basically translates into super cheap borrowing for connected financial institutions. This cheap credit is obviously creating bubbles, so I guess the question is; how big are these bubbles and what markets are they in? Since I’m not able to borrow trillions of dollars to speculate and manipulate markets and economies on leverage, I’m guessing neither are you. That leaves the connected criminal elite of bankers and their cronies whom I imagine are the primary benefactors of all this quantitative easing, and super low interest rate lunacy. The largest American and European banks have enormous derivative exposure on their books. With this much leverage, they need to perpetually inflate the value of the assets they are tied up in. Additionally, they continually need fresh credit. The credit is created, and lent to the borrower. When the music stops however, shit will hit the fan. Bail outs were used before, however, bail ins are currently more fashionable. Heads they win, tails I lose. How does this end? The bubble will burst. Plain and simple. It is pure madness. Whether these colossal bubbles pop first or the United States dollar inflates into oblivion beforehand, I can only speculate. The outcome is a little easier to predict, however.

Below are two very interesting links that help visualize this madness

http://demonocracy.info/infographics/usa/federal_reserve-qe3/money_printing-2012-2013.html
http://demonocracy.info/infographics/usa/derivatives/bank_exposure.html

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WHAT IS THE FALLOUT OF THIS MADNESS?

Firstly, I will ask you a question. What is the value to the globalists and the criminal elite that are engineering social and economic collapse?  Will a new global currency be ushered in? Will countries need to sell off their assets, and cede sovereignty. It is hard to imagine the fallout and chaos that would ensue, as most people haven’t experienced this in their lifetime, coupled with normalcy bias, helping people to interpret warnings in the most optimistic way possible, or seizing on any ambiguities to infer a less serious situation.

People generally don’t live in the countryside in a mufti-generational home, where the the extended family grows food and helps each other to survive. People in the city simply lack the resources to cultivate enough food to sustain themselves and are totally dependent on energy from the grid. If the power was turned off, this would collapse society faster than a lack of food. People in cities are near helpless. However the collapse arrives, whether all at once, or piece meal, the goal is to put the excess population into camps. Total global domination. Of course for the authoritarian soldier ants that will herd the population into these camps, they will need a good story to follow. So a good story will be told. All that is required to temporarily subdue rationality is fear.

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SHIFTING THE PARADIGM

If people start to wake up, and by our good graces manage to boot the corrupt out of power and into a jail cell, we still need to learn how to better coexist with each other, and the ecosystem. Regardless of who is in power, we can’t continue to pollute en-mass, over-fish, deforest, and consume exponentially. The stress put on our environment would lead to a catastrophe somewhere down the line. We have a chance to change today. To cast off the old paradigm, and start thinking about a world where we are not debt fueled consumption addicts, escaping our sorry lives into alcohol and television at the end of the day. We need to get back to the roots. A good start would be to produce food locally. Eating healthy unprocessed nutrient rich foods. Develop a sense of community. There are enough educated intelligent loving people out there to lead the way. We need to let the spirit of giving and joy takeover. These simple pleasures are free. Obviously this type of thinking is alien to most people today. This is unfortunate because change will come swiftly and powerfully. Species either adapt or perish. Will mankind wake up in time, or will we be herded into camps? We have the capacity to make the changes. Do we have the will? In my opinion, we would need to be shaken to our core to understand the importance of coexisting with nature harmoniously. As long as peoples lifestyles aren’t affected, they will continue to ignore the warning signs. Some people don’t want to know. They think ignorance is bliss. But ignorance is futile. Knowledge is power.

Siphon away my wealth please, dear banker

David Rockefeller. Born 1915. US Nazi continuum. #1ab.

“Give me control over a nation’s currency and I care not who makes its laws”

If you aren’t already aware of what is taking place around the world in respect to banking, and most recently in Cyprus, then you need to start paying attention.

NOTE: Warren Buffet, called derivatives ‘Weapons of Mass Destruction’. These financial instruments are colossal in size and power.

In New Zealand, our deposits are not insured. Depositors are viewed basically if not completely as unsecured creditors (call them up and ask +64 4 472 2029), whose funds will assist in bailing in banks. That’s right. They will bail themselves in with your money. It’s not enough to lend out deposits at interest with the magic of fractional reserve banking. You must also give depositors a haircut if you fail.

READ: http://www.globalresearch.ca/derivatives-managed-by-mega-banks-threaten-your-bank-account-all-depositors-secured-and-unsecured-may-be-at-risk/5330700.

Visual on sub prime crisis

John Key, current New Zealand prime minister, put an end to deposit insurance. This means your money is not safe. Was it ever safe? I don’t know. Although I don’t believe taxpayers money should be used to pay depositors back, I do believe that the bank has an obligation to their depositors. These days it’s quite hard living without a bank account. Without a bank account and an IRD number of some description, you can’t do shit really. And what about when cash no longer exists? Then what are you gonna do? Your money will be paid into a bank regardless. So how do you want banks to treat us? By giving us deposit haircuts to save themselves after they over extend themselves. They create money in their ledgers via Fraction Reserve Banking. A truly amazing concept really. Truth really is stranger than fiction.

Q. So what?

A. I’d like to hear you to tell me that after your money takes a haircut.

Q. It won’t happen in my country!

A. LOL. The resolution is already in place for New Zealand – http://www.rbnz.govt.nz/regulation_and_supervision/banks/policy/4335146.pdf  (previously http://www.rbnz.govt.nz/finstab/banking/4335146.pdf, but linked was changed) and since the link may change again, it is also available here, in my dropbox account.  Please visit http://www.rbnz.govt.nz/ if you wish to research further. We are in line for a haircut, just like everyone else. Cyprus is the litmus test. The people there didn’t really have a choice. But we, non-Cypriots, have witnessed it, and can learn from it.

Q. I don’t believe you!

A. I don’t have to make you believe anything. What do I have to gain from writing this blog? A few token readers? All I need to do is peel your eyes open wide enough so that you can start seeing again. “In the land of the blind, the one-eyed man is king”

You simply can’t afford to not pay attention to world events. They affect you regardless. Some more than others obviously. It’s time to pay attention people.

Big Trouble > Little Cyprus

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“The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it. The process by which banks create money is so simple the mind is repelled. With something so important, a deeper mystery seems only decent.” John Kenneth Galbraith (1908-2006 ), former professor of economics at Harvard, writing in ‘Money: Whence it came, where it went’ (1975).

Could it happen to you?

I’ve been following the Cypriot financial problem recently. An interesting euphemism caught my attention.’Deposit haircut’ –  http://online.wsj.com/article/BT-CO-20130326-708329.html. I thought the term sounded puzzling. Everybody likes haircuts right? So why use it in that way I thought, like it’s just a minor inconvenience. Would you mind if your bank account was given a haircut? You only park your money in an account with a bank because you think it’s safe right? If on any given day it could be a given a 40% haircut, would you keep your money there?

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In a nutshell

Here is a very quick and dirty explanation of the issue currently plaguing Cyprus. Basically, a few major banks of Cyprus are in bad shape after the Greek bailout debacle impacted severely on their balance sheets. The European Central Bank is offering a bailout, but one of the conditions is to use the uninsured money (deposits over 100,000 Euros) to services its debts. Some sources are stating 40% of funds above the maximum insurable amount.  Under European Union law, depositors are only insured up to 100,000 Euros. Obviously, this will trigger people rushing to the banks and ATM’s to withdraw their money. So just as obviously, the banks have taken a holiday, capital controls have been implemented, and ATM’s are only dispensing a limited amount – http://www.youtube.com/watch?v=qzawVJ-75HU.

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What does it mean for New Zealand?

The Cyprus fiasco has opened our eyes to the possibility of this happening in New Zealand, and is cited in this link  – http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10873059. If you’d like to read and possibly decipher a consultation document named “Pre-position of Open Bank Resolution” by the Reserve Bank of New Zealand, then by all means http://www.rbnz.govt.nz/finstab/banking/4335146.pdf.

Sharing in the losses, but not the profits

There is currently no deposit insurance for New Zealanders. There is in Australia at current. But what does that mean? The fruits of labour which is already taxed at the source (P.A.Y.E), should not be used to bail out banks in my opinion. Why is the taxpayer so generous? They pay for wars and bailout banks, but they never seem to be getting any return on their investment. Just more interest to pay on debt.  The OPM principle coupled with moral hazard spells D-I-S-A-S-T-E-R, as we have seen countless times throughout the past few decades. If banks want to be greedy, then they can risk the money of their largest investors. All the bank profits go to someones hands right? All those little fees and interest they charge us.

Fractional Reserve Banking has created money at the touch of a button, and the stroke of a pen. They then charge us substantial amounts of interest, and if we can’t pay, the house is foreclosed. The least they can do is spare us the haircut when they run out of cash!

“The banks do create money. They have been doing it for a long time, but they didn’t realise it, and they did not admit it. Very few did. You will find it in all sorts of documents, financial textbooks, etc. But in the intervening years, and we must be perfectly frank about these things, there has been a development of thought, until today I doubt very much whether you would get many prominent bankers to attempt to deny that banks create it.” H W White, Chairman of the Associated Banks of New Zealand, to the New Zealand Monetary Commission, 1955.