It's a real Tinkerbell moment. Come on folks, just believe in the power of "money". God is not dead yet and neither is Castro though Franco is still dead. I have always wondered why the CB balance sheet couldn't go from $5T to $25T and then write it off. Who's complaining about their debt forgiveness? The question is whose debt gets forgiven? I might argue for my mortgage but Wells Fargo will have another idea. OF COURSE it's unjust and flagrantly criminal (unless the laws allow it). But when the CB is insolvent so are ALL the banks which means your bank account is now questionable. But you "own" stocks and bonds in Schwab and Citi and VAnguard accounts who are also bankrupt because they have no bank accounts either. So your concern about the rich "cashing out" is balanced by their problem of- into what asset? Green paper notes? If they have Ferrari's, land, and gold well they'll just be like the rest of America trying to sell their stuff on e-bay.
I was interested to see in the chart of the "Top 0.1% Wealth Share" that the wealth inequality in the US was as high in 1913 as it was in 2013. I have two questions for you on this:.
Great chart that Chris dug up. I have the same questions.
If banks and investment operations freeze up, then cash, PM’s, barter &IOU’s will remain. Craig’s list might work. Ebay is too dependent on banking.
I have always wondered why the CB balance sheet couldn't go from $5T to $25T and then write it off. Who's complaining about their debt forgiveness?There Is No Free Lunch.
If the CB went out and bought another $20T in bonds, and then wrote them all off, all that 20T in new base money would be forever in the system. It could never be removed. If and when inflation hits, which at some point, it will (once the deflation is passed), there would be no way for the CB to mop up all that cash.
If you thought 1.9 trillion in "excess reserves" was high at a 5 trillion dollar balance sheet, just imagine what it would be at 25 trillion. Interest rates would never, ever rise above 0%. I can't even imagine what that would do to asset prices. And wealth disparity. And productivity.
A Mises quote via KWN:
“[…] there cannot be any question of abolishing interest by any institutions, laws, and devices of bank manipulation. He who wants to “abolish” interest will have to induce people to value an apple available in a hundred years no less than a present apple. What can be abolished by laws and decrees is merely the right of the capitalists to receive interest. But such laws would bring about capital consumption and would very soon throw mankind back into the original state of natural poverty.”http://kingworldnews.com/the-unthinkable-has-now-become-reality/
Mises is telling us that zero interest rates results in the consumption of capital, because it violates a very basic state of human nature - having something now is preferable to waiting to get it later. And so that's what we're seeing right now; falling productivity, and low rates of capital investment.
And that just gets drastically worse if the balance sheet rises by a factor of 5.
When highways become congested the go to solution has always been more and bigger highways. No real effort is made to starve this beast and let another solution develop. The same rule applies to the infrastructure of banks. If the only way out of town in a disaster was on the highway (not all of us own helicopters), then you either suffer the disaster in place or suffer gridlock on the highway.
When it comes to banking there is only one built infrastructure! Real wealth (food, land, precious metals ((which are inedible))and the other forms is capital so well discussed on this site are the helicopter. Think of it as elite personal banking! To depend on the banks in any coming financial disaster is admitting beforehand that you will suffer in place or wait out the gridlock and accept what is left after it. At present I have a small financial helicopter.
My current job is to get my family members to get their own or pursue a less flexible goal of getting one big enough for the whole extended crew.
for the Chomsky/Varoufakis discussion link. Wow! After listening to the whole thing Varoufakis closes out comparing bankers, public purse teat suckers (my language), and European corporations who socialize their loses as the grasshoppers and the small working citizens as the ants. And he calls himself “left leaning”!–Did I miss the political pendulum when it swung by? What a great and educational public conversation. Thanks for the post.
for the Chomsky/Varoufakis discussion link. Wow! After listening to the whole thing Varoufakis closes out comparing bankers, public purse teat suckers (my language), and European corporations who socialize their loses as the grasshoppers and the small working citizens as the ants. And he calls himself “left leaning”!–Did I miss the political pendulum when it swung by? What a great and educational public conversation. Thanks for the post.
A couple of weeks ago I was street campaigning for Ae911truthA big thank-you to Bankers Slave for helping to spread 9/11 truth!!
Yes, but I have children who will inherit a world bereft of resources, capital, and basic humanity because of the greed of other generations, and I'm pissed. I pray they live to be my age, but fear they may not have that chance. I just don't see how we step down from this precipice without a die-off on a massive scale, civilizational collapse, or humanity-destroying war.
Chris wrote:
"Once the illusion of central bank control is fully lost, the financial markets will implode in a deflationary wave that has been held at bay for far too long. Asset prices will collapse…"
If public confidence in CBs is lost in this way, surely they will not be able to double down with their policies of QE and Helicopter Money, and thus will not be able to bring about the hyperinflationary reflation i.e. the 'Poom'.
Do we need to reconsider Ka-Poom theory on this basis?
is much appreciated. If any of you good folks here are ever in Edinburgh, send me a PM and we can arrange a meet up. Otherwise, every Saturday weather enabling, you will find me at the east end of Princes Street beside these good ladies,
DB feeling the heat today…
Shares in Deutsche Bank have closed down 7.54% to a new low after a weekend report said Chancellor Angela Merkel had ruled out giving it state aid.
Concerns have been raised about its financial health and the bank's shares are down more than 50% this year.Focus magazine also said that Ms Merkel would not get involved in its dispute with the US over a $14bn bill regarding the sale of mortgage products.
Deutsche Bank said it had not expected Ms Merkel to intervene in the US case.
"At no point has [chief executive] John Cryan asked Chancellor Merkel to intervene in the RMBS [residential mortgage-backed securities] issue with the US Department of Justice," it said in a statement. "Deutsche Bank is determined to meet the challenges on its own."
Of the $14bn bill, which relates to products sold in the run-up to the financial crisis, Deutsche Bank has previously said it has "no intent to settle these potential civil claims anywhere near the number cited. The negotiations are only just beginning."
The Focus magazine report had quoted unidentified government sources.
During a regular news conference on Monday, government spokesman Steffen Seibert said: "There is no reason for such speculation [about state aid] and the federal government doesn't engage in such speculation."
Regarding its financial position, the bank said: "The question of a capital increase is currently not on the agenda, we comply with all capital requirements."
On Monday, shares in Deutsche - which is one of Germany's biggest banks - finished down 7.54% to 10.55 euros, its lowest level since the 1980s.
'Red rag to a bull'
Michael Hewson, chief market analyst at CMC Markets UK, said: "While one can understand the reticence of German politicians to bailout yet another bank, particularly in the lead up to an election next year, one has to question the wisdom of articulating that reluctance out loud when markets are already nervous about Deutsche Bank's capital position."It's akin to a red rag to a bull… given that due to its size Deutsche Bank is arguably too big to fail," he added.
"Markets could well look to test the German government's resolve on that as we head into next year, with further falls in the share price below €10 looking increasingly possible, which will increase the pressure on regulators and politicians to step in, and shore up confidence." (Source)
Great quote from Mises. So, it totally makes sense that zero interest rates devour capital. But does it devour from all ‘investors’ at the same speed? It seems true, as Varoufakis’s book title says, that the weak suffer. As the financialization of real wealth is unwound who ends up holding the real wealth?, the Wizard of Oz? Can you help unpack the details of real wealth transfer we see going on before our eyes day by day? Some financial wealth appears to be hot air, but a lot of it has real collateral at stake. You seem to understand the gears in the machine better than I do, Dave, so could you help me understand how this all works and where the capital goes?
Probably been "Manchurian'd" once or twice already anyway, don't you think?
I don't mind people making money. I own a business with 7 employees, and I cherish the fact that free market capitalism makes that possible. However, the problem is that Wall Street is picking the pockets of middle class workers like me. My marginal tax rate, including payroll taxes, is well over 50%. Meanwhile, hedge fund managers pay less than 17%. And that doesn't even include the billions in subsidies that Wall Street traders and big banks get from the taxpayers every single year.
Hell to Pay
Posted by Ron Bolin on August 29, 2012 in CITY FINANCE | Leave a comment
At its meeting of August 27, 2012, our Nanaimo City Council was notified by Staff of the process for the preparation of the 2013-2017 Financial Plan. Here is what was said in the agenda about the process:
“City staff have been installing a new budgeting program, which means that the preparation of the 2013- 2017 Financial Plan will be completed slightly later than usual. The current plan is for the staff review to be done in November, with the budget to be presented to Council at the Committee of the Whole meeting on 2012-NOV-26.
Thereafter, there will be an opportunity at each Council Meeting and Committee of the Whole Meeting for Council get information, discuss the budget and make amendments. Staff will bring forward a bylaw to adopt the financial plan in January.
So good for this sentence.But 'dumb' mistakes have become 'stupid', and 'stupid' became 'idiotic', and now 'idiotic' mistakes are piling up, accumulating into a mountain of stored potential energy that will someday topple destructively across the global markets.I'm common rail come from sensor .I look hard for every you said…