Home » Posts tagged 'Banking'
Tag Archives: Banking
Citi Fails Fed Stress Test … The REAL Story Washington's Blog
Citi Fails Fed Stress Test … The REAL Story Washington’s Blog.
“Too Big To Fail” … Fails
Bloomberg reports that Citigroup has failed the Fed’s new round of stress tests:
Citigroup Inc.’s capital plan was among five that failed Federal Reserve stress tests, while Goldman Sachs Group Inc. and Bank of America Corp. passed only after reducing their requests for buybacks and dividends.
Citigroup, as well as U.S. units of Royal Bank of Scotland Group Plc, HSBC Holdings Plc and Banco Santander SA, failed because of qualitative concerns about their processes, the Fed said today in a statement. Zions Bancorporation was rejected as its capital fell below the minimum required. The central bank approved plans for 25 banks.
In reality, Citi “flat lined” – went totally bust – in 2008. It was insolvent.
And former FDIC chief Sheila Bair said that the whole bailout thing was really focused on bringing a very dead Citi back from the grave.
Indeed, the big banks – including Citi – have repeatedly gone bankrupt.
For example, the New York Times wrote in 2009:
Over the past 80 years, the United States government has engineered not one, not two, not three, but at least four rescues of the institution now known as Citigroup.
So why did the U.S. government give Citi a passing grade in previous stress tests?
Because they were rigged to give all of the students an “A”.
Time Magazine called then Secretary Treasury Tim Geithner a “con man” and the stress tests a “confidence game” because those tests were so inaccurate.
But the bigger story is that absolutely nothing was done to address the causes of the 2008 financial crisis, or to fix the system:
- Even though everyone knows that breaking up the big banks is essential to stabilizing the economy, it hasn’t happened. Indeed, they’re bigger than ever
- The faulty incentive system – huge bonuses that encourage reckless risk-taking by bankers – arestill here
- Even though rampant speculation helped destabilize the economy, speculation has shot through the roof
- Another big problem – shadow banking – has only gotten worse
- Derivatives? Washington has poured gasoline on the fire
- Cracking down on fraud and holding criminals accountable is perhaps the most important thing to fix the economy. So has this happened? Nope … just phony P.R.
Indeed, the only the government has done is to try to cover up the problems that created the 2008 crisis in the first place … and to throw huge amounts of money at the fattest of the fatcats.
Remember, Nobel prize winning economist George Akerlof has demonstrated that failure to punish white collar criminals – and instead bailing them out- creates incentives for more economic crimes and further destruction of the economy in the future.
Indeed, professor of law and economics (and chief S&L prosecutor) William Black notes that we’ve known of this dynamic for “hundreds of years”. (Actually, the government has ignored severalthousand years of economic wisdom.)
Heck of a job, guys …
Share this:
An invaluable lesson for U.S. Citizens from the bank confiscation in Cyprus
An invaluable lesson for U.S. Citizens from the bank confiscation in Cyprus.
It was almost exactly one year ago to the day that an entire nation was frozen out of its savings… overnight.
Cypriots went to bed on Friday thinking everything was fine. By the next morning, they had no way to pay bills or buy food.
It’s certainly a chilling reminder of how quickly things can change. And why.
The entire crisis sprang from a mountain of debt. The government had accumulated too much debt. The banking system had accumulated too much debt.
And banks had lost a lot of their customers’ money making risky, stupid bets on things like Greek government bonds.
By March 2013, Cypriot banks were almost entirely devoid of cash.
Sure, customers could log on to a website and check their bank balances.
But there’s a huge difference between a number displayed on a screen, and a well-capitalized bank that actually holds abundant cash.
The government was too insolvent to bail anyone out. And as a member of the eurozone, Cyprus didn’t have the ability to print its own money.
So they did the only thing they could think of– confiscate customer deposits.
And they imposed capital controls on top of that to make sure that people couldn’t withdraw their remaining funds out of the banks as soon as the freeze was lifted.
It was a truly despicable act. But again, even though it all unfolded overnight, the warning signs were building for at least a year. Especially the debt.
When countries, central banks, and commercial banks accumulate too much debt, and specifically too much debt relative to assets, you can be certain there is trouble ahead in the system.
Think about it like your own personal finances. If you have a million dollars in debt, that seems like a lot. But if you own a home worth $5 million, you are still in good shape financially.
If, on the other hand, you have a million dollar mortgage for a home that’s worth $250,000, you’re in deep trouble.
The US government’s official, ‘on the books’ debt now exceeds $17.5 trillion. This is an enormous figure.
If the Uncle Sam just happened to have $20 trillion or so laying around, however, this debt load wouldn’t be a big deal. But that’s not the case.
By the US government’s own admission, their own financial statements show net equity (assets minus liabilities) of MINUS $16.9 trillion.
That’s including ALL the assets: Every tank. Every bullet. Every body scanner. Every highway.
Then you have to look at the Central Bank, which is itself teetering on insolvency.
The Federal Reserve’s balance sheet has exploded since 2008, and right now the Fed’s net equity (assets minus liabilities) is about $56 billion.
That’s a razor-thin 1.34% of its $4 trillion in assets (it was 4.5% before the crisis).
Here’s the thing: in its own annual report, the Fed just admitted that it had accumulated ‘unrealized losses’ totaling $53 billion. This is almost the Fed’s ENTIRE EQUITY.
So in the Land of the Free, you now have an insolvent government and insolvent central bank underpinning a commercial banking system that is incentivized to make risky, stupid bets with their customers’ money.
To be fair, I’m not suggesting that bank accounts in the US are going to be frozen tomorrow morning.
But a rational person should recognize that the warning signs are very similar to what they were in Cyprus last year.
And if there is one thing we can learn from the Cyprus bail-in, it’s that it behooves any rational person to have a plan B, even if you think the future holds nothing but sunshine and smiley faces.
Having a plan B can mean a lot of different things depending on your situation– moving some funds abroad, securing a second source of income, having an escape hatch overseas, owning physical gold, holding extra cash, etc.
You’re not going to be worse off for having a plan B based on the possibility that there -could- be some problems down the road.
But if those consequences are ever realized,and Plan B becomes Plan A, it might just turn out to be the smartest move you’ve ever made.
If you think this makes sense then I encourage you to sign up for our free Notes From the Field if you haven’t already done so, and you can also share this article with your friends below so they’re not without a plan B if things do take a turn for the worse.
March 17, 2014
Dallas, Texas, USA
Share this:
The Failure of Keynesianism – Ludwig von Mises Institute Canada
The Failure of Keynesianism – Ludwig von Mises Institute Canada.
It’s hard not to agree with the old aphorism “history doesn’t repeat itself, but it does rhyme.” It’s nice to think we learn from our mistakes; yet we always seem to repeat them at some later date.
Reading the daily news, you would be hard-pressed to find mention that there is still an employment crisis unfolding in many industrialized countries. The New York Times recently reported that employers in the United States hired only 175,000 workers in February. This is apparently a cause for celebration among economists. The unemployment rate in the U.S. still remains at an historic high of 6.7%, and there appears to be no date in sight for a return of full employment, but no matter; the economy is supposedly gaining steam.
The only problem is, nobody seems to care much anymore. High unemployment is a constant reality now. Nearly six years of slagging job creation has created a cloud of apathy for most people. It’s just accepted that not everyone who wants to find work will be able to; or they will wander from low-wage job to low-wage job without any kind of security.
The current economic malaise is reminiscent of what the Great Depression was like. Persistently high unemployment with no conceivable end; massive government intervention in the marketplace; a changing industrial landscape; and even social and cultural transformation. We’re less than a century removed from the biggest economic hardship ever faced in America, and the same mishaps are unfolding in front of our eyes.
Then and now, something has remained perennial: the utter incompetence on government’s part to cure economic stagnation.
Newscasters, state officials, and academic economists all tell us government is capable of spending us into prosperity. No matter how much dough is thrown at the glob known as the “economy,” large numbers of people remain out of work. During the Depression, the glut of joblessness lasted for nearly fifteen years. Uncle Sam spent like a drunken sailor while swallowing up much of the economy in fascist scheme after fascist scheme.
The very same thing goes on today, all at the behest of Keynesian-type political actors who provide the intellectual ammunition necessary to justify government’s outstretched hand. With neatly obscure formulas and obtuse language, the apparatchik darlings of Keynes love branding themselves as deep-thinking scientists capable of engineering the perfect economy. When their policy is put to work, we get the opposite. Job creation stagnates, living standards slump, and misery spreads. The siphons of entrepreneurial growth don’t pump; they are bogged down with the grimy sludge of currency manipulation and government hubris.
After decades of constant failure, I mean this wholeheartedly: the followers of the Keynesian school don’t have a damn clue on how to fix the economy. Why my gauche phrasing? Their policy prescription is a complete and total failure. The Great Depression; the stagflation of the 1970s; the Great Recession we see today; in each instance, Washington was impotent to reverse the damage. Keynesians are either pathetically ignorant, or maliciously deceptive.
Taking rhetorical shots doesn’t mean much without some evidence. So let’s meet the Keynesians on their terms. First, economic science itself will be interpreted through the lens of positivism. That means data, in whatever form, will be used to justify whether something works or not. Of course the assumption will be made that spending is the driver of economic prosperity – not saving or investment. The same goes for boundless money printing, which is said to infuse the “animal spirits” with a rejuvenating elixir.
So what have they got for successes? Keynesians used to tout the efforts of Franklin Roosevelt (not so much Herbert Hoover, who was proto-Rooseveltian) during the Great Depression as vindication for their theory. I remember being told in no uncertain terms that Uncle Sam stepped up to save the downtrodden from excess capitalism in my American Presidency 301 class. Sure, it wasn’t an economics course; but it’s the same tale spun by economists anyway.
What does the data say? From 1931 to 1940, the unemployment rate never went south of 10%. From the onset of the Depression, Washington spending went up 97% under the Hoover Administration. According to the White House’s official statistics, the federal budget increased from $3.5 billion in 1931 to $13.6 billion in 1941, jumping in size year after year. A combination of deficit spending and tax hikes (admittedly not a Keynesian remedy) allowed for this gorge in consumption. Meanwhile, the Federal Reserve goosed the economy by first stabilizing the monetary base and increasing the supply of money after the initial contraction during the Depression’s early years. According to the Historic Statistics of the United States, the Federal Reserve increased its holding of U.S. securities from $510 million in 1929 to over $6 billion in 1942. During the same period, the central bank’s balance sheet went from about $5.5 billion to $29 billion.
That’s no small stimulus. And yet the unemployment rate failed to drop significantly during the Depression years. Most of Keynes’s disciples admit that nearly fifteen years of high unemployment leaves much to be desired on the part of muscular government. The counterfactual is then deployed that Roosevelt’s domestic efforts lightened the economic burden foisted upon America. What finally put the Depression to bed, they argue, was the incredible amount of spending during World War II.
But as economic historian Robert Higgs shows, measures of economic performance were highly skewed during wartime. Unemployment fell and production ramped up, but this was due to the draft and building of armaments. Rationing was widespread to the point where basic foodstuffs and toiletries were scarce. If a wartime economy counts as prosperity, then the homeless today are the living embodiment of luxury.
World War II is a bunk fantasy that in no way proves the Keynesian theory correct. The same goes for the fascist orgy known as the New Deal. Fast-forward to today, and the same charlatans are preaching from the gospel of government interventionism. They implore Washington to fight back against the Great Recession with the same blunted tools: spending and money printing.
When the housing bubble burst and the economy began to tank, then-Chairman of the Federal Reserve Ben Bernanke and crew nearly tripled the central bank’s balance sheet. As of right now, the Fed’s sheet stands at about $4 trillion. In 2008, it was at $800 billion. Not to be outdone, the federal government ramped up spending by running nearly-trilliondollar deficits year-after-year. Once again, all this effort has only made a slight dent in the unemployment rate.
From a strictly empirical perspective, the Keynesian theory is a disaster. Positivism wise, it’s a smoldering train wreck. You would be hard-pressed to comb through historical data and find great instances where government intervention succeeded in lowering employment without creating the conditions for another downturn further down the line.
No matter how you spin it, Keynesianism is nothing but snake oil sold to susceptible political figures. Its practitioners feign using the scientific method. But they are driven just as much by logical theory as those haughty Austrian school economists who deduce truth from self-evident axioms. The only difference is that one theory is correct. And if the Keynesians want to keep pulling up data to make their case, they are standing on awfully flimsy ground.
James E. Miller is editor-in-chief of the Ludwig von Mises Institute of Canada. Send him mail
Share this:
Are You Crazy To Continue Believing In Collapse?: James Howards Kunstler | Peak Prosperity
Are You Crazy To Continue Believing In Collapse?: James Howards Kunstler | Peak Prosperity.
Sandra Cunningham/Shutterstock
Are You Crazy To Continue Believing In Collapse?
It’s nerve-wracking to live in the historical moment of an epic turning point, especially when the great groaning garbage barge of late industrial civilization doesn’t turn quickly where you know it must, and you are left feeling naked and ashamed with your dark worldview, your careful preparations for a difficult future, and your scornful or tittering relatives reminding you each day what a ninny you are to worry about the tendings of events.
Persevere. There are worse things in this life than not being right exactly on schedule.
Two simple words explain why more robust signs of an economic collapse have hung fire since the tremors of 2008: inertia and fraud. Never in human history has there been such a matrix of complex systems so vast, dense, weighty, and powerful for running everyday life (nor a larger population engaged in it). That much stuff in motion takes a while to slow down. The embodied energy has kept enough of it running to give the appearance of continuity. For instance, agri-biz still sends its amber waves of grain and tankers of corn-syrup to the Pepsico snack-food factories, and the WalMart trucks still faithfully convey the pallets of Cheetos, Fritos, Funyons, and Tostitos from the Pepsico loading dock to the big box aisles of glory. The freeways still hum with traffic even though oil is pricey at $100 a barrel. The lights stay on. The gabble and blabber of Cable TV continues remorselessly in the background of life. All of that is due to inertia. It gives the superficial impression of the old normal carrying on. Things go on until they can’t, in the immortal words of Herb Stein
The fraud is present in the abuse and misrepresentation of official statistics used as metrics in government policy, in the pervasive accounting chicanery of that same government in its fiscal dealings, as well as in our leading financial institutions and corporations, including control fraud in banking, interest rate rigging, mortgage and title fraud, front-running, naked shorting, re-hypothecation, money laundering, pumping-and-dumping, channel stuffing, the endless innovation of swindles, and, most importantly, the fundamental mispricing of the cost of money, which reverberates through everything else, most particularly real estate, stocks, and bonds. Beyond that, in the shadows of the shadowland known as shadow banking, a liminal realm of secrets and intrigues, only a few are privileged to know what is going on, and you can be sure they only know their end of the trade — while immense sums of ever more abstract “money” slosh through the derivative sewers on their way to oblivion in the ocean of failed trust.
So, don’t feel bad if this colossal armature of folly still stands, and have faith that the blinding light of God’s judgment will eventually shine even unto the watery depths where failed trust has sunk. Sooner or later the relationship between reality and truth re-sets to the calculus of what is actually happening.
Meanwhile, the big questions worth reflecting upon are: What is the shape of the future? How might we conduct ourselves in it and on our way to it; and how will we think and feel about all that? It’s very likely that the journey to where we’re going will be rougher than the actual destination, once we get there. There is a hearty consensus outside the mainstream financial media and the thickets of academia that the models we have been using to understand the economy look more broken each month, and this surely adds to the difficulty of constructing our own mental models for how the everyday world of the years ahead will operate.
Some of the commentators in blogville and elsewhere like to blame capitalism. Capitalism is a phantom adversary. It isn’t an economic system. It isn’t an ideology, really, or a belief system. If the word means anything, it describes the behavior of accumulated surplus wealth in concert with the known laws of physics — the movement of energy through time and space — and the choices we make organizing society in relation to that. The energy is embodied as capital, represented in money for convenience. Interest expresses the cost of money over time and the risks associated with lending it. By the way, interest rates work the same way under all political systems, despite attempts in some societies to criminalize it.
During the high tide of the industrial expansion, when fossil fuels were cheap and we accumulated the greatest wealth surplus ever in history, humanity made some very bad choices, squandering this possibly one-time bonanza. We fought two world wars, and lots of wasteful lesser ones. Russia and its imitators attempted to collectivize wealth under gangster government and only succeeded in impoverishing everyone but the gangsters. America built suburbia and Las Vegas. The one thing that no “modern” culture did was plan for a future when the fossil fuel orgy and the techno-industrial fiesta might wind down, which is exactly the case now. Instead, we opted for the Julian Simon folly of crossing our fingers and hoping that some unnamed band ofgenius wizard innovators would mitigate the problems of resource scarcity and population overshoot just in time.
The demonizers of capitalism propose to remedy our compound predicament by just getting rid of money. But the idea of a human society without money leaves you either up a baobab tree on the paleolithic savannah, or in some sort of Ray Kurzweil techno-narcissistic masturbation fantasy multiverse with no relation to the organic doings on planet earth. I suspect as long as there are human societies there will be things to exchange that have a quality we call “money,” and as long as that’s the case, some individuals will have more of it than others, and they will lend some of their surplus to others on terms. What most people call capitalism was a model of economy derived from a particular transitory moment in history. It seemed to describe reality, but after a while it didn’t because reality changed and it was, finally, just a model. Nothing lasts forever. Boo-hoo, Karl Marx, J.M Keynes, and Paul Krugman.
What’s cracking up first is the complexity and abstraction of our current money operations, sometimes loosely called the financialized economy. If we blame anything for our problems with money, blame our half-baked attempts to mitigate the wind-down of the techno-industrial cavalcade of progress by issuing ersatz surplus wealth in the form of debt — that is, promises to fork over hypothetical not- yet-accumulated wealth at some future date. There are too many promises now, and too few trustworthy promisors, and poor prospects for generating the volumes of wealth as we did in the recent past.
The hidden (or ignored) truth of this quandary expresses itself inevitably in the degenerate culture of the day, the freak show of pornified criminal avarice that the USA has become. It only shows how demoralizing our recent history has been that the collective national attention is focused on such vulgar stupidities as twerking, or the Kanye-Kardashian porno romance, the doings of the Duck Dynasty, and the partying wolves of Wall Street. By slow increments since about the time John F. Kennedy was shot in the head, we’ve become a land where anything goes and nothing matters. The political blame for that can be distributed equally between Boomer progressives (e.g., inventors of political correctness) and the knuckle-dragging “free-market” conservatives (e.g.,money is free speech). The catch is, some things do matter, for instance whether the human race can continue to be civilized in some fashion when the techno-industrial orgy draws to a close.
In Part 2: How Life Will Change, we sort out the new operating principles that will matter more in the future than the trash heap of current cultural norms. The society that emerges from the post-growth economy will surely require a new moral compass, a set of values based on qualities of behavior and things worth caring about — as opposed to coolness, snobbery, menace, or power, the current lodestars of human aspiration.
Click here to access Part 2 of this report (free executive summary; enrollment required for full access).
Share this:
Are You Crazy To Continue Believing In Collapse?: James Howards Kunstler | Peak Prosperity
Are You Crazy To Continue Believing In Collapse?: James Howards Kunstler | Peak Prosperity.
Sandra Cunningham/Shutterstock
Are You Crazy To Continue Believing In Collapse?
It’s nerve-wracking to live in the historical moment of an epic turning point, especially when the great groaning garbage barge of late industrial civilization doesn’t turn quickly where you know it must, and you are left feeling naked and ashamed with your dark worldview, your careful preparations for a difficult future, and your scornful or tittering relatives reminding you each day what a ninny you are to worry about the tendings of events.
Persevere. There are worse things in this life than not being right exactly on schedule.
Two simple words explain why more robust signs of an economic collapse have hung fire since the tremors of 2008: inertia and fraud. Never in human history has there been such a matrix of complex systems so vast, dense, weighty, and powerful for running everyday life (nor a larger population engaged in it). That much stuff in motion takes a while to slow down. The embodied energy has kept enough of it running to give the appearance of continuity. For instance, agri-biz still sends its amber waves of grain and tankers of corn-syrup to the Pepsico snack-food factories, and the WalMart trucks still faithfully convey the pallets of Cheetos, Fritos, Funyons, and Tostitos from the Pepsico loading dock to the big box aisles of glory. The freeways still hum with traffic even though oil is pricey at $100 a barrel. The lights stay on. The gabble and blabber of Cable TV continues remorselessly in the background of life. All of that is due to inertia. It gives the superficial impression of the old normal carrying on. Things go on until they can’t, in the immortal words of Herb Stein
The fraud is present in the abuse and misrepresentation of official statistics used as metrics in government policy, in the pervasive accounting chicanery of that same government in its fiscal dealings, as well as in our leading financial institutions and corporations, including control fraud in banking, interest rate rigging, mortgage and title fraud, front-running, naked shorting, re-hypothecation, money laundering, pumping-and-dumping, channel stuffing, the endless innovation of swindles, and, most importantly, the fundamental mispricing of the cost of money, which reverberates through everything else, most particularly real estate, stocks, and bonds. Beyond that, in the shadows of the shadowland known as shadow banking, a liminal realm of secrets and intrigues, only a few are privileged to know what is going on, and you can be sure they only know their end of the trade — while immense sums of ever more abstract “money” slosh through the derivative sewers on their way to oblivion in the ocean of failed trust.
So, don’t feel bad if this colossal armature of folly still stands, and have faith that the blinding light of God’s judgment will eventually shine even unto the watery depths where failed trust has sunk. Sooner or later the relationship between reality and truth re-sets to the calculus of what is actually happening.
Meanwhile, the big questions worth reflecting upon are: What is the shape of the future? How might we conduct ourselves in it and on our way to it; and how will we think and feel about all that? It’s very likely that the journey to where we’re going will be rougher than the actual destination, once we get there. There is a hearty consensus outside the mainstream financial media and the thickets of academia that the models we have been using to understand the economy look more broken each month, and this surely adds to the difficulty of constructing our own mental models for how the everyday world of the years ahead will operate.
Some of the commentators in blogville and elsewhere like to blame capitalism. Capitalism is a phantom adversary. It isn’t an economic system. It isn’t an ideology, really, or a belief system. If the word means anything, it describes the behavior of accumulated surplus wealth in concert with the known laws of physics — the movement of energy through time and space — and the choices we make organizing society in relation to that. The energy is embodied as capital, represented in money for convenience. Interest expresses the cost of money over time and the risks associated with lending it. By the way, interest rates work the same way under all political systems, despite attempts in some societies to criminalize it.
During the high tide of the industrial expansion, when fossil fuels were cheap and we accumulated the greatest wealth surplus ever in history, humanity made some very bad choices, squandering this possibly one-time bonanza. We fought two world wars, and lots of wasteful lesser ones. Russia and its imitators attempted to collectivize wealth under gangster government and only succeeded in impoverishing everyone but the gangsters. America built suburbia and Las Vegas. The one thing that no “modern” culture did was plan for a future when the fossil fuel orgy and the techno-industrial fiesta might wind down, which is exactly the case now. Instead, we opted for the Julian Simon folly of crossing our fingers and hoping that some unnamed band ofgenius wizard innovators would mitigate the problems of resource scarcity and population overshoot just in time.
The demonizers of capitalism propose to remedy our compound predicament by just getting rid of money. But the idea of a human society without money leaves you either up a baobab tree on the paleolithic savannah, or in some sort of Ray Kurzweil techno-narcissistic masturbation fantasy multiverse with no relation to the organic doings on planet earth. I suspect as long as there are human societies there will be things to exchange that have a quality we call “money,” and as long as that’s the case, some individuals will have more of it than others, and they will lend some of their surplus to others on terms. What most people call capitalism was a model of economy derived from a particular transitory moment in history. It seemed to describe reality, but after a while it didn’t because reality changed and it was, finally, just a model. Nothing lasts forever. Boo-hoo, Karl Marx, J.M Keynes, and Paul Krugman.
What’s cracking up first is the complexity and abstraction of our current money operations, sometimes loosely called the financialized economy. If we blame anything for our problems with money, blame our half-baked attempts to mitigate the wind-down of the techno-industrial cavalcade of progress by issuing ersatz surplus wealth in the form of debt — that is, promises to fork over hypothetical not- yet-accumulated wealth at some future date. There are too many promises now, and too few trustworthy promisors, and poor prospects for generating the volumes of wealth as we did in the recent past.
The hidden (or ignored) truth of this quandary expresses itself inevitably in the degenerate culture of the day, the freak show of pornified criminal avarice that the USA has become. It only shows how demoralizing our recent history has been that the collective national attention is focused on such vulgar stupidities as twerking, or the Kanye-Kardashian porno romance, the doings of the Duck Dynasty, and the partying wolves of Wall Street. By slow increments since about the time John F. Kennedy was shot in the head, we’ve become a land where anything goes and nothing matters. The political blame for that can be distributed equally between Boomer progressives (e.g., inventors of political correctness) and the knuckle-dragging “free-market” conservatives (e.g.,money is free speech). The catch is, some things do matter, for instance whether the human race can continue to be civilized in some fashion when the techno-industrial orgy draws to a close.
In Part 2: How Life Will Change, we sort out the new operating principles that will matter more in the future than the trash heap of current cultural norms. The society that emerges from the post-growth economy will surely require a new moral compass, a set of values based on qualities of behavior and things worth caring about — as opposed to coolness, snobbery, menace, or power, the current lodestars of human aspiration.
Click here to access Part 2 of this report (free executive summary; enrollment required for full access).
Share this:
Why Bankers Want Control of Ukraine | Zero Hedge
Why Bankers Want Control of Ukraine | Zero Hedge.
We all know about the important military consequences of controlling Ukraine to the US and Russia, but an equally important and overlooked topic is why bankers want control of Ukraine’s monetary supply and ultimately control of Ukraine through controlling its debt (the proposed $1 billion loan from the IMF). All major Western military invasions in the past several years – Somalia, Sudan, Afghanistan, Iraq, Libya and attempts in Syria – involved countries in which the Bank for International Settlements had not yet gained control of the monetary supply at the time of these invasions.
The international banking cartels represented by the World Bank, the IMF and the Bank for International Settlements are unhappy with their low level of influence in controlling the debt of emerging economic powers like China and Russia and know that they very well can’t directly declare war on Russia and China to effect regime change in order to obtain control of their debt as they accomplished with the aforementioned much smaller countries that didn’t have the military strength to withstand a US/EU/banking led invasion. However, these global banking cartels know that they can gain influence through regime change without direct military intervention in the 15 newly independent states of the former USSR a la John Perkin’s Confessions of an Economic Hit Man (or at least this was their first initial thought in Ukraine). Below, JS Kim of SmartKnowledgeU discusses the above neglected topic and the gravity of the growing military escalation in Ukraine at the current time.
Share this:
Why Bankers Want Control of Ukraine | Zero Hedge
Why Bankers Want Control of Ukraine | Zero Hedge.
We all know about the important military consequences of controlling Ukraine to the US and Russia, but an equally important and overlooked topic is why bankers want control of Ukraine’s monetary supply and ultimately control of Ukraine through controlling its debt (the proposed $1 billion loan from the IMF). All major Western military invasions in the past several years – Somalia, Sudan, Afghanistan, Iraq, Libya and attempts in Syria – involved countries in which the Bank for International Settlements had not yet gained control of the monetary supply at the time of these invasions.
The international banking cartels represented by the World Bank, the IMF and the Bank for International Settlements are unhappy with their low level of influence in controlling the debt of emerging economic powers like China and Russia and know that they very well can’t directly declare war on Russia and China to effect regime change in order to obtain control of their debt as they accomplished with the aforementioned much smaller countries that didn’t have the military strength to withstand a US/EU/banking led invasion. However, these global banking cartels know that they can gain influence through regime change without direct military intervention in the 15 newly independent states of the former USSR a la John Perkin’s Confessions of an Economic Hit Man (or at least this was their first initial thought in Ukraine). Below, JS Kim of SmartKnowledgeU discusses the above neglected topic and the gravity of the growing military escalation in Ukraine at the current time.
Share this:
Ukraine Capital Control Crunch: Largest Bank Limits Cash Withdrawals To $100 Daily | Zero Hedge
Ukraine Capital Control Crunch: Largest Bank Limits Cash Withdrawals To $100 Daily | Zero Hedge
As we warned on Friday, the military escalation in Ukraine has had dire consequences for the financial state of the country, its banks, and ultimately its people. The central bank promised to rescue domestic banks so long as they agreed to its complete control and it appears the first consequences of that “we are here to help you” promise is coming true:
- UKRAINE’S PRIVATBANK LIMITS ATM WITHDRAWALS TO UAH1,000/DAY ($103/day)
Privatbank is Ukraine’s largest bank and while claiming this move is temporary (just like Cyprus’ capital controls), the bank has also ceased new loans amid what it calls “geopolitical instability”. In summary, you can’t have your money back! Expect long angry lines at Ukrainian banks on Monday morning (and at the pace of collapse in the Hyrvnia, hyperinflation next).
Ukraine’s largest commercial bank, Privatbank, announced temporary limits on cash withdrawals for its account holders and suspended writing new loans, saying in a statement the measures were intended to stop those undermining the political situation in the country. “A temporary limit on withdrawals is needed to stop the forces that are working to destabilize the situation [and] are using the cash for [their] sabotage,” the bank said in a statement. The bank didn’t clarify which political forces it was referring to.
The bank first announced withdrawal limits of 1,000 hryvnia ($103) a day at both automated teller machines and in over-the-counter transactions.
…
Privatbank’s announcement was the first case in which a major Ukrainian bank has limited customers’ immediate access to cash in the local currency since the military tensions erupted. Privatbank is the largest retail bank by number of clients in Ukraine, a country of approximately 45 million people.
Last week, the National Bank of Ukraine introduced a $1,500 daily limit on foreign-currency withdrawal.
But perhaps the most notable, somewhat hidden, comment from the bank was this:
Privatbank said it was suspending all its credit lines issued to both private and corporate customers, including credit cards. It said it would no longer accept debit cards from other banks in the Crimea.
In other words, we won’t allow the people of Crimea (the region now in play with the Russians) to ‘run’ on our bank…
Privatbank said its measures were a “rational” response to the current situation and they were designed to help the bank serve its customers and protect the national currency.
We wonder what ‘loophole’ the uber-wealthy will find (as in Cyprus deposit shifts to the UK) to extract their deposits before the real capital controls collapse the currency.
Share this:
Ukraine Capital Control Crunch: Largest Bank Limits Cash Withdrawals To $100 Daily | Zero Hedge
Ukraine Capital Control Crunch: Largest Bank Limits Cash Withdrawals To $100 Daily | Zero Hedge
As we warned on Friday, the military escalation in Ukraine has had dire consequences for the financial state of the country, its banks, and ultimately its people. The central bank promised to rescue domestic banks so long as they agreed to its complete control and it appears the first consequences of that “we are here to help you” promise is coming true:
- UKRAINE’S PRIVATBANK LIMITS ATM WITHDRAWALS TO UAH1,000/DAY ($103/day)
Privatbank is Ukraine’s largest bank and while claiming this move is temporary (just like Cyprus’ capital controls), the bank has also ceased new loans amid what it calls “geopolitical instability”. In summary, you can’t have your money back! Expect long angry lines at Ukrainian banks on Monday morning (and at the pace of collapse in the Hyrvnia, hyperinflation next).
Ukraine’s largest commercial bank, Privatbank, announced temporary limits on cash withdrawals for its account holders and suspended writing new loans, saying in a statement the measures were intended to stop those undermining the political situation in the country. “A temporary limit on withdrawals is needed to stop the forces that are working to destabilize the situation [and] are using the cash for [their] sabotage,” the bank said in a statement. The bank didn’t clarify which political forces it was referring to.
The bank first announced withdrawal limits of 1,000 hryvnia ($103) a day at both automated teller machines and in over-the-counter transactions.
…
Privatbank’s announcement was the first case in which a major Ukrainian bank has limited customers’ immediate access to cash in the local currency since the military tensions erupted. Privatbank is the largest retail bank by number of clients in Ukraine, a country of approximately 45 million people.
Last week, the National Bank of Ukraine introduced a $1,500 daily limit on foreign-currency withdrawal.
But perhaps the most notable, somewhat hidden, comment from the bank was this:
Privatbank said it was suspending all its credit lines issued to both private and corporate customers, including credit cards. It said it would no longer accept debit cards from other banks in the Crimea.
In other words, we won’t allow the people of Crimea (the region now in play with the Russians) to ‘run’ on our bank…
Privatbank said its measures were a “rational” response to the current situation and they were designed to help the bank serve its customers and protect the national currency.
We wonder what ‘loophole’ the uber-wealthy will find (as in Cyprus deposit shifts to the UK) to extract their deposits before the real capital controls collapse the currency.
Olduvaiblog: Musings on the coming collapse 
