Saving Bankers, Sacrificing Society

International banking was saved by endangering all major societies and governments.  By destroying currencies, the banks were saved.  This will prove to be a vast historical mistake.  It is easy to replace banks or bankers but much, much harder to replace governments, societies and in the end, human lives.  

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ΩΩInevitably, the roster of people Obama is using to run the White House is a bunch of Clinton retreads led by a JP Morgan banker:  William Daley Reportedly Being Considered By Obama To Be New Chief Of Staff

• Daley, an executive at JPMorgan Chase, has extensive private sector experience, an attractive profile for a White House trying to counter the notion that the president is antibusiness. Obama aides have been discussing naming an executive to a top job as a way to give the business community more of a voice in the administration.

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ΩΩOne poster commented at Huffington Post:  ‘And so, into the Obama banker-stuffed circle comes….another banker.  This is like being airlifted off the Titanic by the Hindenburg.’

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ΩΩOf course, the chief feature of the present financial collapse has been how eager governments are, bailing out the big 12 international banks and how this entire crisis has been created by these same banks.  The ‘too big to fail’ banks are not failing but instead, way too big governments are going to fail and worse than that, the forms of currencies supporting these banks are now going to fail most spectacularly.

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ΩΩIt should be obvious that saving a bank by killing a currency is insane.  There is no other way of looking at this.  The inability to understand the different overall value of various systems is due to the bankers being pretty much cut off from social/patriotic systems.  They are, to be blunt, internationalists who look upon currencies or labor pools as things to use or exploit.  Not protect or preserve.

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ΩΩNaturally, they need one of their own to run the White House since the US economy and currency is on the verge of collapse thanks to internationalists running that stupid free trade/floating fiat currency game.  These bankers are the same fools who ran off to pirate coves to evade government regulations and taxes and now are returning home, in force, using their illicit profits to take over the government and use it to keep on enabling wild lending with virtually no capital base and of course, tax cuts.

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ΩΩThe other place run by the top 12 international bankers is our central bank.  Fed Moves To Gut Predatory Lending Regulation: rather simple laws set up to punish bankers when they give unsustainable or supportable loans is being eliminated by the bankers because it interferes with handing out impossible to pay back loans.

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ΩΩJust the other day, Nouriel Roubini Purchases $5.5 Million Condo in East Village and the fool bought it with a noxious balloon variable mortgage.  He, of all people, should have known the hazards of his purchase but he ignored reality because the bank made him a very tempting offer which any sane person would refuse except he was very enamored with his pied a terre so he signed the contract.

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ΩΩThe new regulation would allow him to back out of it when the balloon busts and he goes bankrupt.  Instead, he will have to man up and be evicted if he doesn’t win the lottery or be able to turn around and sell that baby before she blows.  It is a risky loan and the housing bubble was all about giving out risky loans. Now that the banks know that risky loans will be sucked up by the government, the Treasury and the Federal Reserve, the banks have resumed handing these out.  To our great peril.

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ΩΩThe GOP swept into office and imagine that Americans want social services cut.  Most Americans Say Tax The Rich To Balance The Budget: Poll

• Sixty-one percent of Americans polled would rather see taxes for the wealthy increased as a first step to tackling the deficit, the poll showed.

• The next most popular way — chosen by 20 percent — was to cut defense spending.

• Four percent would cut the Medicare government health insurance program for the elderly, and 3 percent would cut the Social Security retirement program, the poll showed.

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ΩΩTax the wealthy and stop the wars!  Sounds right to me.  Sounds quite sensible!  And of course, this is exactly what DC won’t do.  The GOP will talk about cutting things and then not do it.  The only things they want cut are the taxes.  The childish disregard about consequences isn’t just in the GOP, it isn’t just in Democrats, either, it is across the board.  Nearly everyone wants to have a magical solution to our overspending.  And hopes we can do this forever and ever and never lose the dollar as a currency or have to declare bankruptcy.

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ΩΩThe latest foolish belief is that hostile world powers who are rivals will desperately want the US to not go bankrupt.  Any brief look at history tells us, empires that go bankrupt, die.  Yes, they die.  And guess what?  Some of the rival empires on earth want our empire to die so they have great incentive to drive us into bankruptcy!  This is a ‘Duh!’ thought even a child should entertain.  Yet, our wild overspending elites think the Chinese or Russians or significant numbers of Muslims can’t think this way.

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ΩΩCongress is very aware that a vast majority wants an end to war spending so Pentagon Set To Announce $100 Billion In Spending Cuts.  This is how much our wars cost per annum.  But the Tea Party GOP thinks otherwise:  Lindsey Graham: Permanent U.S. Presence In Afghanistan Would Be ‘Enormously Beneficial’.  This is totally insane but typical.  The utter disconnect from reality is a feature we are so familiar with and which persists no matter what.  The news from Pakistan should interest us since we are deeply embedded in a war there and the ills there reflect ills here:  Pakistan Province Governor Shot Dead – NYTimes.com

• The governor, Salman Taseer, was shot at close range as he was getting into his car in the Kohsar Market, an area frequently visited by the city’s elite and by foreigners. Interior Minister Rahman Malik said that a police guard was the killer….Mr. Taseer was a prominent member of the ruling Pakistan Peoples Party and a close ally of President Asif Ali Zardari, who appointed him governor of Punjab in 2008….Effigies of Mr. Taseer were burned in countrywide protests last Friday when a strike by Islamist parties, seeking to head off any change in the blasphemy law, brought Pakistan to a standstill.  Thousands of people took to the streets and forced businesses to close.

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ΩΩIt isn’t just the US, Europe is nearly as incapable of figuring out the obvious despite a very bloody and not very distant history of ‘bad things happen thanks to collapsing currencies and bankruptcies’ business:  Too-Big-to-Fail Banks Face Trade Limits Under EU Plan (Update2) – Bloomberg.com

• The European Union may give regulators power to block new products and limit trading risks at banks deemed too big to fail, as part of plans to protect public finances from future financial crises….The plan also envisages measures “requiring the credit institution to limit its maximum individual and aggregate exposures” or forcing banks to “limit or cease” some activities, according to the document, dated December 2010.

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ΩΩThis is sensible and will therefore not be allowed to happen.  The bankers hate this idea.  It is basically aimed straight at the Dark Pool heart of the Derivatives Beast.  I am betting this won’t ever be enforced.  Creating new ‘money magic machines’ is what makes bankers filthy rich!  It is also tremendously inflationary, it destroys currencies and creates unreal bubbles but then, this is the whole point: to create new wealth via tricks.

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ΩΩTwenty years of growing the Derivatives Beast from a mere $10 billion into a $600 trillion behemoth is causing…Inflation Jumps in Europe – NYTimes.com.

• Higher prices for food, oil and other commodities are starting to stoke inflation in the euro area, data released Tuesday indicated, while British residents got their first taste of higher taxes on retail goods and services.

• Annual inflation in the euro area jumped to 2.2 percent in December from 1.9 percent in November, according to an initial estimate from Eurostat, the European Union’s statistics agency.

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ΩΩNot to mention, in the US.  Much of this new money doesn’t exist within any economic system but its SHADOW already has caused tremendous inflation and fixing the AIG mess which supports this massive fake money mountain has forced central banks to issue trillions of ‘new’ dollars to lend to these bankers and thus, save them from bankruptcy.

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ΩΩThis, in turn, is killing the currencies.  And is a fool’s errand since a dead currency directly leads to dead bankers, dead politicians, dead peasants, dead armies and lots and lots of dead civilians in cities and I would suggest from the last upheavals in Europe, at least 20 million people will die.  This is a severe fact of life.  The bankers didn’t think about this as they merrily went about, creating the Derivatives Beast.  They simply viewed this as great fun.

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ΩΩThe gold markets went wild as currencies died.  But now, like any commodity bubble, it has also reached a peak and will probably fall:  Bulgari Gold Succumbs to Ceramics With Jewelry Hostage (Correct) – Bloomberg.com

• The rising value of bullion — reaching a record $1,431.25 an ounce on Dec. 7 — has upended the economics of jewelry for buyers and sellers alike, with a mix of outcomes around the world. U.S. purchases of gold jewelry have fallen 36 percent by volume in three years. Women in India, where demand is booming, are buying hollow bangles made to look like solid gold. European jewelers are mixing the metal with steel and ceramics. Turkish exporters are closing offices as orders fall.

• “The jewelry business is being held hostage by something completely out of its control,” says Michael Langhammer, CEO of Quality Gold, a Fairfield, Ohio, privately held wholesaler that Langhammer says is redesigning pieces to use more silver.

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ΩΩEven when JP Morgan and Goldman Sachs were playing the gold markets, the Indian/Chinese/Asian jewelry markets which use gold as dowery bangles began to thin out.  Replacing gold with fakes is a sign that the metal has reached an upper limit.  As I keep pointing out, gold isn’t money.  It is a commodity and when we have government chaos, the value of gold relative to things we need to survive fluctuates wildly and is hard to gage except via ‘monetarizing’ its value.

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ΩΩLike any bubble, this one will suddenly collapse.  People trying to keep their savings growing via this game will lose value.  Traditionally, keeping money in banks was useful since the bankers needed capital for loans and then would pay savers handsomely for the use of their money.  In a ZIRP system there is no need to park any money in a bank as we see in Japan:  More than Y82 tril in banknotes kept at households, businesses › Japan Today.

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ΩΩBanks in Japan restrict loans and have little capital base but there is little inflation due to hoarding paper money at home where it doesn’t circulate.  The US ships its inflation overseas to FOREX holdings in rival nations whereas Japan’s population keeps money out of circulation by hiding it.  When US savers buy gold, at least their money is circulating as they make purchases even if the things they buy don’t do much except sit there, inert, in some box or cave.

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ΩΩHere is a paper put out by the Bank of Britain explaining how they have to redefine ‘what is money’ due to all the funny magic money created by the bankers in the last 20 years.  Below is an interesting graph which shows how the Bank of England allowed the creation of credit that nearly totally matched the US process.  That is, there is the Dot Com Bubble and then the much, much bigger Derivatives Beast Real Estate Bubble.

http://www.bankofengland.co.uk/publications/quarterlybulletin/qb070304.pdf

• The concept of money traditionally relates to goods or assets that are generally accepted as media of exchange. In practice, there is considerable disagreement about how money should be measured. To ensure its measure of broad money remains relevant, the Bank regularly reviews the theoretical and practical basis of its definition of M4, as part of its long-term research programme. This article explains the Bank’s analysis undertaken over the past year, in which a key issue has been to question whether the present boundary between the money-creating and the money-holding sectors is still appropriate. The Bank proposes to move that boundary in a few places, to address some changes that have taken place in the global financial system in recent years. In most other respects, the Bank’s measure of broad money will be unaffected, as there are no compelling reasons for further modifications. The Bank welcomes readers’ views on the proposals discussed in this article, by the end of December.

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ΩΩInstead of viewing this all as ‘maybe we should stop this money making business’ the Bank of England just wants to track it.  Of course, raging inflation hasn’t totally swamped England right now due to the populace being hammered by real estate losses, losses on pensions, losses of jobs and of course, social service reductions and heavier taxes.  So inflation is kept at bay by basically starving the masses.

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ΩΩOsborne defends ‘tough but necessary’ VAT hike – Home News, UK – The Independent

• He confirmed he regarded the increase introduced from midnight as permanent, but said alternatives to tackle the deficit, such as rises in National Insurance or income tax, would hit poorer families harder….Campaigners for a “Robin Hood tax” on banks said the proceeds from the VAT increase would be significantly less than the £20 billion which they believe could be raised from a levy on financial transactions.

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ΩΩThe GOP will want to raise fees and taxes on the general public, too.  They have to be very sneaky about this so they will first reduce some taxes and then destroy whole segments of social services we depend on (such as snow removal!).  Meanwhile, China has cut back on things due to inflation so this is causing more distress in other export powers like Germany:  German Unemployment Climbs on Early Winter Onslaught – Bloomberg.com

• German unemployment unexpectedly rose in December for the first time since June 2009 as the coldest weather in more than 40 years led companies to shed staff.

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ΩΩI am happy that people are noting that we are having a cold, not warm winter.  I sense that the global warming people are bundling up, too, since the howls of ‘you are stupid’ when we mention the cold is dropping in volume but isn’t gone, yet.  It snowed in Greece, Israel, Syria and even Egypt this week!  And ice in southern China where it is tropical, etc.

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ΩΩThe cold is hammering various economies especially ones that normally have milder winters.  Blizzards paralyzing whole countries are costly.  This raises fuel prices and reduces working hours, sometimes drastically.  So incomes drop and sales suffer and this is another wrench to weak economies.

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ΩΩFinally, a story about the New Carry Trade which is no longer Japanese but American due to super-low interest rates:  Currency Carry Trade Losses May Bolster U.S. Dollar (Update2) – Bloomberg.com

• Currency traders that seek profits by borrowing in nations with low interest rates to fund purchases in countries with higher yields are losing more money than at any time in at least a decade.

• The strategy lost 2.5 percent in 2010 as the dollar — a favorite for financing the trades because of record low U.S. rates — appreciated, according to an index compiled by UBS AG, the world’s second-largest foreign-exchange trader. That’s more than the 0.98 percent drop in 2008 when the collapse of Lehman Brothers Holdings Inc. caused credit markets to freeze and the worst performance for so-called carry trades since at least 1999 when UBS began releasing yearly figures.

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ΩΩNote that UBS who was (Fed May Be ‘Central Bank of the World’ After UBS, Barclays Aid …) bailed out by our central bank, is merrily getting super rich by playing the idiotic and useless and dangerous carry trade game.  Free money from the Bank of Japan and the Federal Reserve set at near zero rates is translated into loans in say, Australia or China, etc and voila!  Great profits while doing very little real work.  But when the currencies get suddenly stronger like the yen and now, the dollar, the carry trade deals go sour.

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ΩΩThe point here is, the funny money currency carry game destabilizes all other systems.  The flood/drought problem is stark!  When China restricted currency movements into and out of China this last several months, this caused all other parts of the international carry trade game to slam into a brick wall.

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ΩΩAnd why on earth this UBS still the world’s largest foreign exchange trader?  These guys should be in prison or sitting in the curb with the trash!  Why are they allowed to continue  doing what they did when they destroyed the international banking system in the first place?

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ΩΩWhat did they do?  Replicate the problems so it would happen again!  In less than three years!  Note the graph above from the Bank of England: each wave is taller than the previous wave and are about 3-5 years apart!  We have to stop this.

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