– Pope Francis, November, 2013
– Pope Francis, November, 2013
November 25, 2013
Jamie Dimon rented Buckingham Palace to celebrate JPMorgan’s $13 billion settlement with US regulators. It’s a clear statement of how untouchable the too-big-to-fail policies have made Wall Street and the City (of London).
From the Financial Times:
Only days after Dimon finally agreed to a $13 billion settlement with US mortgage regulators, he and dozens of his corporate clients were sitting back amid the splendor of Buckingham Palace, enjoying a fine dinner and performances by the Royal Philharmonic and the English National Ballet.
The event, hosted by Prince Andrew, Duke of York, reflects growing enthusiasm by the Royal Family to use its premises to promote business interests.
The JPMorgan event on October 30th had a guest list that included up to 100 corporate and political heavyweights, ranging from Kofi Annan (former UN Secretary General), to Indian industrialist Ratan Tata. Also present was Tony Blair, the former British prime minister who chairs JPMorgan’s “international council” of senior advisers.
A Labour Party spokesman said this about the party at the Palace: “This should be a special place. This is the home of the Queen. Where is it all going to end?”
Well, sir, maybe it’s time to wake up, because the new kings and queens of the world have taken over. And they intend to be loud and proud about it, like any group of conquerors throughout history.
From CNN Money:
The majority of the $13 billion settlement that JPMorgan struck with the government is likely to be tax deductible.
From 1913 (the same year that the Federal Reserve was created – EDITOR) onward, U.S. tax laws have permitted companies to deduct ‘ordinary and necessary’ expenses, which include compensation and restitution payments.
For people like Jamie Dimon, it’s all a big game. It’s merely a matter of sport to try to lower the fines for the bank as much as possible, using billions in bank assets to pay lawyers’ fees.
But more than that – while everybody else remains blissfully unaware – it’s a way to show kings, and queens, and regulators, and justice departments, and parliaments, and presidents, who is really the king of the world today.
October 11, 2013
The Red Cross will this winter start collecting and distributing food aid to the needy in Britain for the first time since the Second World War, as welfare cuts and the economic downturn send soaring numbers of people to soup kitchens and food banks across Europe.
In what could be the start of an increased role in Britain for the Geneva-based charity best known for its work in disaster zones, its volunteers will be mobilised to go into supermarkets across the country at the end of November and ask shoppers to donate dry goods.
Britain is just one of many countries where families are struggling to put food on the table.
In a report released today on the devastating humanitarian impact of Europe’s financial crisis, the Red Cross recorded a 75 per cent increase in the number of people relying on their food aid over the last three years.
At least 43 million people across the Continent are not getting enough to eat each day, and 120 million are at risk of poverty.
From the Red Cross report:
After two bailouts, Greece has the most stringent austerity programme in the eurozone. This is having a devastating impact on health and well-being, the Red Cross says; the suicide rate among women has doubled since the start of the crisis.
Austerity cuts are causing soaring unemployment in Spain, where a quarter of young people are now out of work. The Red Cross said unemployment in Europe is “a ticking time bomb,” increasing the risk of social unrest and upheaval.
Migrants from all over the world who move to Europe for jobs get no social support. The report tells the story of Meerby from Kyrgyzstan, who went to Russia to work but ran out of money and was offered $3,000 to sell her newborn baby. She refused and fled.
Up to 150,000 small businesses have closed, sending homelessness soaring. Some 50,000 people in Milan alone are receiving food aid. T
Human trafficking is also rising because of the crisis, the report says, as more people are desperate to move to places where they can earn more money. Moldovans pay up to €3,800 (£3,200) to be smuggled to another country, putting women and children at risk of exploitation.
Even in the richest nation in the EU, with a per capita income of about £67,000, the Red Cross is running a programme providing food to the needy. France, meanwhile, has seen 350,000 people fall below the poverty line from 2008 to 2011.
December 04, 2013
On the other side of the world today, a couple of gentlemen that few people have ever heard of signed an agreement that has massive consequences for the global financial system.
It was a Memorandum of Understanding signed by representatives of the Singapore Exchange and the Hong Kong Exchange. Their aim – to combine their forces in rolling out more financial products denominated in Chinese renminbi (aka: yuan).
This is huge.
Hong Kong and Singapore are THE two dominant financial centers in Asia. For years they’ve been locked in competition with one another, so their public partnership is a very big deal, indicative of the clear objective they have in front of them.
Bottom line – finance executives in Asia see the writing on the wall.
They can see that the U.S. dollar is in a period of terminal decline, and it’s clear that the Chinese renminbi is going to take tremendous market share away from the dollar. They want a big piece of the action.
The renminbi has already surpassed the euro to become the second most-used currency in the world when it comes to trade settlement, according to a report released by the Society of Worldwide Interbank Financial Telecommunication (SWIFT). See link:
Yuan Passes Euro as Second Most Used Currency (12/03/13)
Right now, the renminbi has about an 8.6% share of the global market for trade settlement. The dollar has the lion’s share of trade settlements at more than 80%.
But look at how quickly the renminbi has grown!
In January 2012, its share of the global market was just 1.9%. So it’s grown by nearly a factor of 5 times in less than two years. With today’s agreement between the Hong Kong and Singapore financial exchanges, that growth will likely accelerate.
We’ll soon see more financial products – oil, gold, Fortune 500 corporate bonds, etc. denominated in renminbi and traded in Asia. As trade in these renminbi products grows, the dollar will come closer and closer to its reckoning day.
The warning signs are all right there in front of us. Today’s agreement between Hong Kong and Singapore is one of the strongest signs yet.
December 03, 2013
The Royal Bank of Scotland (RBS) remains one of Britain’s largest weapons of financial mass destruction.
Tax payer bailed-out RBS (82% government-owned), crashed Christmas for millions of customers. Debit cards were declined and ATMs went offline on “Cyber Monday,” freezing customers out of their accounts on the busiest shopping day of the year.
Perhaps someone hit the panic button that is in place to prevent a run on the banks in the event of loss of confidence in the financial system.
This is not the first time that RBS has effectively ceased to operate as a bank by locking customers out of funds deposited with the bank. RBS “bank holidays” have taken place at least half a dozen times during the past two years, and for some customers it has become a near monthly occurrence.
The latest RBS banking catastrophe follows hard on the heels of mainstream media reports…that RBS and other banks deliberately bankrupted many companies by putting them into default on loans so as to effectively steal their assets such for a pittance at auction sales.
Despite all of this and more RBS will soon be paying out Christmas bonuses totaling more than £600 million to senior staff, even though it reported a loss of £5.2 billion (in 2012)!
There is another equally plausible reason for the mess at RBS.
Internet and smart phone banking opens up the bank to cyber criminals who hack there way into tens of thousands of accounts. The only response to this would be for RBS to pull the plug on the whole system before accounts were drained of funds.
For obvious reasons, such as that customers would lose confidence in RBS being a safe place to deposit funds, the bank will not admit to such cyber crime, but will instead go for the marginally better public relations option of being perceived as incompetent.
There are a few reports in the mainstream news suggesting that this may be the case. Some RBS customers, having gained access to their accounts, are reporting that their balances have vanished into thin air.
December 05, 2013
On the surface U.S. Q3 GDP (Gross Domestic Product) was a stunner, coming at 3.6%.
But the reality is that most of this apparent growth came from a revised estimate of how many private inventories were being stockpiled during the quarter.
Of the $230 billion total increase in GDP, $146 billion – more than 63% – was due to inventory stockpiling.
Inventory hoarding is now the most hollow of “growth” components, since it relies on future purchases by consumers who have less and less purchasing power.
Of the $534 billion total rise in nominal GDP during the past year, a whopping 56% was due to nothing but inventory hoarding. See chart.
The problem with inventory hoarding is that at some point it will have to be ‘unhoarded.’ Many forecasters expect downward revisions to future GDP as the inventory overhang is destocked.
Going into November, U.S. automobile dealer inventories were reported as being “dreadfully high,” with a 76-day supply – the highest since 2005. Year to date, auto sales are up 8.4%, but this is said to be due primarily to “cheap and increasingly risky” financing. See link:
November 22, 2013
by Paul Craig Roberts
Since 2006, the US dollar has experienced a one-quarter to one-third drop in value against the Chinese yuan.
Now, China…is considering undermining the petrodollar by pricing oil futures on the Shanghai Futures Exchange in yuan.
The People’s Bank of China has said that the country no longer benefits from increasing its foreign currency holdings (primarily US bonds).
“It is no longer in China’s favor to accumulate foreign exchange reserves,” Yi Gang, a deputy governor at the central bank, said in a speech organized by China Economists 50 Forum at Tsinghua University.
The Chinese monetary authority will “end normal intervention in the currency market, and broaden the yuan’s daily trading range,” Governor Zhou Xiaochuan wrote in a recent guidebook explaining the reforms.
The dollar’s role as the world’s reserve currency is coming to an end, which means the end of the US as a financial imperialist.
The US economy is already in shambles. Bonds and stock markets are being propped up by massive and unprecedented money printing by the Federal Reserve.
This new blow to the dollar, in addition to jobs being offshored, and the gambling casino that was created by financial deregulation, means that the US economy as we know it is also coming to an end.
November 29, 2013
China’s new air defense zone, stretching far into East Asia’s international skies, is an historic challenge to the United States, which has dominated the region for decades.
Beijing is now confronting strategic assumptions that have governed the region since World War Two.
China’s recent maritime muscle-flexing in disputes over the Paracel islands and Scarborough Shoal in the South China Sea, and over Japanese-administered islands in the East China Sea, has stirred concern in Washington.
China’s unilateral creation of the air defense zone – accompanied by warnings that it would take “defensive emergency measures” against aircraft that didn’t identify themselves – has raised the stakes in a territorial dispute with Japan over tiny, uninhabited islands in the area.
A Chinese analyst with ties to the military warned Tokyo and Washington…that U.S. surveillance flights near China’s coast – such as one that sparked a fatal collision over Hainan Island in 2001 – “will never be allowed to happen again.”
The fact China’s air defense zone overlaps Japan’s – including contested islands that the U.S. is obliged to defend under its treaty with Japan –represents a dangerous strategic shift, U.S. officials say.
And China’s declaration that it could take action against unidentified aircraft that ignore its warnings has sparked fears of an increased risk of accidents and miscalculations.
In China, there is a palpable sense of historic mission.
“China’s actions are a way of facing up to the U.S. escalation of military power in the region,” said Ni Lexiong, a defense analyst at the Shanghai University of Political Science and Law. “This is an issue of face and respect.”
“It’s also about national interests. You have to look at this in the context of history – there have been many agrarian countries that have developed their economies and then transformed into naval powers. It’s a consequence of a country doing business globally. It’s normal,” he noted.
November 25, 2013
At a brand new housing development in Irvine, Calif., some of America’s largest home builders are back at work after a crippling housing crash.
“They see the market here still has room for appreciation,” said Irvine-area real estate agent Kinney Yong, of RE/MAX. “What’s driving them over here is that they have this cash, and they want to park it somewhere or invest somewhere.”
Yong’s phone has been ringing off the hook, with more than 5,000 new homes slated for the nearby Great Park Neighborhood. Most of the calls are from overseas, but prospective buyers are not looking solely for financial returns on the real estate.
While American secondary schools and universities are a big draw for Chinese buyers…many are also concerned about China’s political instability, and inflation. They are paying cash for real estate in California, using it as a safe haven for their wealth.
The homes range from the mid-$700,000s to well over $1 million. Cash is king, and there is a seemingly limitless amount. “The price doesn’t matter. If they like it, they will purchase it,” said Helen Zhang of Tarbell Realtors.
Many of the buyers don’t want any questions asked about where the cash is coming from.
November 25, 2013
Most people – certainly most governments and economists – define inflation as a general rise in prices. But this is wrong.
Inflation is an increase in the money supply, of which a rising general price level is just one possible result, and not the most common one.
Excessive money creation more often shows up as asset bubbles whereby new money, instead of flowing equally to all products, flows disproportionately into the ‘hottest’ asset classes.
People who were paying attention in the 1990s might recall that the consumer price index was well behaved, while huge amounts of money flowed into financial assets, thereby producing the dot-com bubble.
The same thing happened in the 2000s, when excess currency flowed into housing and equities.
In each case, mainstream economists and government officials pointed to modest consumer price inflation as a sign that things were fine.
And in each case they were simply looking in the wrong place, and were completely missing (we would say “deliberately missing” – EDITOR) the destabilizing effects of an inflating money supply.
Now they’re at it again.
Economists, legislators, and central bankers are using low consumer price inflation as a rationale for even easier money, while ignoring the epic bubbles that are occurring in sovereign bonds, equities, high-end real estate, and collectibles all around the world.
These bubbles are the true evidence of inflation. And since they’re growing progressively larger, it is accurate to say that inflation is high and accelerating.
Because so much of society’s wealth is flowing to the top 1% – who after all can only drive one car at a time and tend to eat no more than the rest of us – inflation isn’t showing up in food, suburban houses, or mass-market products.
Instead, trillions of dollars are pouring into tangible assets, which are then being hoarded in mansions and high-end storage facilities.
When you think about it, this is a truly startling asset grab.