My book “The Financial Jigsaw” has now been accepted and published at my academic network. Scroll down and Hit: ‘View Full Text’ button for the complete book: https://www.researchgate.net/publication/358117070_THE_FINANCIAL_JIGSAW_-_PART_1_-_4th_Edition_2020 I will be pleased to email a free PDF on request to: [email protected].
WISE QUOTE: “Governing a great nation is like cooking a small fish – too much handling will spoil it.” – Lao Tzu
THOUGHT FOR THE WEEK: How vulnerable is the EU now? Tom Luongo has some astute thoughts about where this toxic concoction of disparate nation states is going and it doesn’t look particularly hopeful for the 447 million inhabitants going forward.
“The birth of a new Europe is one where the currency risk is now all on the importer of commodities, not the exporter of commodities. I’ve been saying for years that Europe always thought that its huge share of Russian energy exports would give it monopsony power over Russia. That, they thought, without Europe as a buyer, Russia would be at their mercy.
In a hyper-financialized world, that assumption had always held true. But, in a new monetary regime, where the world is beyond debt saturation, the bills are due and there’s no more road to kick the can down, it simply isn’t true anymore.
By Russia tying the ruble to gold and both the US and EU weaponizing offshore dollar markets, that misperception of buying power is being laid bare. Sure, the EU has euros to offer but it does so into the revaluation of commodities versus fiat currencies which have ever-shrinking use cases.” https://tomluongo.me/2022/04/22/my-energy-your-problem-birth-new-europe/
BREAKING NEWS: IS LIZ TRUSS STARK RAVING MAD? Do the Tories really want a nuclear war? If so they are going the right way about it!
“The Russian president told lawmakers in St Petersburg on Wednesday the west wanted to cut Russia into pieces and accused it of pushing Ukraine into conflict with Moscow. “If someone intends to intervene in the ongoing events from the outside, and create strategic threats for Russia that are unacceptable to us, they should know that our retaliatory strikes will be lightning-fast,” said Putin.
“We have all the tools for this, things no one else can boast of having now. And we will not boast, we will use them if necessary. And I want everyone to know that.”
His comments came as British foreign secretary Liz Truss called for a “doubling down” on support for Ukraine in a speech on Wednesday night, including further supplies of heavy weapons, and for allies to push for Russian forces to entirely leave Ukraine’s territory, with the country reverting to its pre-2014 borders.”
This is bloody madness but not untypical of Britain’s warmongering if you study history ”Keep Calm and Carry On’: https://www.theguardian.com/world/2022/apr/27/uk-leading-g7-allies-to-weaken-putins-military-arsenal AND “She is clearly revelling in her imagined proxy war on the Russian bear and no one in Whitehall appears able to restrain her.” This moment of maximum danger demands all the judgment and skill that narrowly resolved Cuba in 1962. Read: Liz Truss & Tory Warmonging Gang risk a repeat of Cuba 1962
NATO should be seriously negotiating a peaceful settlement. When you trap a tiger in a corner with no way out, he will attack. Here is a reminder of the last time we arrived at a nuclear impasse: https://www.dailymail.co.uk/news/article-10603313/Government-Protect-Survive-leaflet-gave-tips-coping-nuclear-war.html
BUT “Liz-the Fizz” doesn’t stop at Europe – now she’s after the world! “British Foreign Secretary Liz Truss said her government favors the creation of a “global NATO” that is able to guarantee the defense of Taiwan and the broader Pacific region, calling for pre-emptive action against would-be aggressors.” Phew, tin hats on folks it’s going to get very hot here in Britain: https://libertarianinstitute.org/news-roundup/uk-wants-global-nato-capable-of-defending-pacific/
I REMEMBER THE 1970s but not many in charge today have the benefit of my experience. With interest rates at 8% at one point and inflation at 25% I was in an excellent position to ‘make out like a Bankster’ by expanding current debt and repaying in debased fiat among other strategies. In fact this period was merely a replay of John Law’s interventions in 1720s France which I describe in my book. Nothing is new under the sun and now we find ourselves repeating the exercise in spades. This prescient article describes the history – here is the punchline:
“There is a complacent assumption that central banks are in control of interest rates and always will be. What is missing is an understanding of markets, which ultimately reflect human action. It is an error which eventually leads to states’ combined actions failing completely.
We saw this in the 1970s, after the last vestiges of gold backing for the dollar were abandoned with the suspension of the Bretton Woods Agreement. Not only did the dollar lose its tie to gold, but all other currencies from that moment lost it as well. Consequently, inflation in the form of consumer prices began to rise shortly thereafter, fuelled by a combination of monetary expansion and loss of faith in currencies’ purchasing power — the latter particularly from OPEC members who demanded substantially higher dollar prices for crude oil. Despite the prospects for North Sea oil, the consequences for the UK’s government finances were catastrophic, leading to a bailout from the IMF in September 1976 (IMF bailouts were exclusively for third-world nations — for the UK this was beyond embarrassing). And the Labour government was forced to issue gilts bearing coupons of 15%, 15 ¼%, and 15 ½%.
Globally, we have a similar situation today, except instead of entering the post-Bretton Wood years with the US dollar’s Fed Funds Rate at 6.62%, we have entered the new commoditisation era with the FFR at zero. We exited the 1970s with a FFR of over 19%. In August 1971 when the Bretton Woods Agreement was suspended the yield on the 10-year US Treasury constant maturity note was 6.86%. By September 1981 it stood at 15.6%. In August 2020 it was at an unnatural 0.5%, going to —who knows?
In 1980, Paul Volker slayed the inflation dragon by hiking interest rates to economically destructive levels. It is hard to envisage a similar action being taken by the Fed today. But what we can see is the potential for consumer prices to rise, driven by currency debasement, to at least similar if not greater levels seen during the 1970s decade. Accordingly, bond yields have much, much further to rise. The bankruptcies of over-indebted businesses, their bankers, the central banks loaded with failing financial assets, and governments themselves all beckon.
Financial assets are at the top of their bubble, of that there should be little doubt. As interest rates rise, all financial assets will begin to collapse in value. That cannot be denied. And where financial assets interact with the real world, such as mortgage finance, the disruption will undermine values of physical assets as well. Financial assets represent a higher level of collateral backing for bank credit than on previous credit cycles. Forced collateral liquidation will also drive financial asset prices lower.
The potential for a crash on the scale of Wall Street between 1929—1932 should be obvious. Equally obvious is the likely reaction of central banks, which will surely redouble their efforts to prevent it happening. Quantitative easing is set to increase to finance all spendthrift government spending shortfalls, which can only escalate in these conditions. Central banks will be doing it not just because they want to preserve a “wealth effect” for the private sector, but to save themselves from the consequences of earlier currency debasement.
The central banks of Japan, the euro system, the UK and the US have all loaded up on government bonds, whose prices are just beginning to collapse, if the higher bond yields seen in the 1970s return. Central bank liabilities are beginning to exceed their assets, a situation which in the private sector requires directors to admit to bankruptcy and cease trading. In most cases, recapitalising a central bank is a simple operation, whereby the central bank makes a loan to its government, and through double entry bookkeeping, instead of the government being credited as a depositor it is credited as a shareholder.
[It’s] simple, but embarrassing in the middle of a developing financial crisis when pure fiat currencies are involved. Undoubtedly, this is what the Bank of Japan will be forced to do, but for now it is refusing to accept the reality of higher interest rates and the effect on its extensive portfolio of JGBs, corporate bonds and equity ETFs. Consequently, its currency, the yen, is collapsing.
The position of the ECB is more complex because its shareholders are the national central banks in the euro system which in turn will need bailing out. The imbalances in the TARGET2 settlement system are an additional complication, and outstanding repos last estimated at €8.725 trillion are there to be unwound.
Between Japan and the Eurozone, we can expect to see their currencies collapse first. Initially, the dollar will appear strong on the foreign exchanges reflecting their decline. But foreigners possess financial assets and deposits totalling over US$33 trillion on current valuations. If the Fed is unable to prevent bond yields from soaring much above current levels, most of this, including the $15 trillion invested in equities, will be wiped out. The destruction of value measured in collapsing currencies will be economically catastrophic.” Read in full how it all works https://www.goldmoney.com/research/goldmoney-insights/value-destruction
ONE BIG QUESTION on everyone’s lips is: “Why Inflation and Will it Go Away?” First we must agree on what inflation is, because most people will see it as a sudden rise in prices. Wrong. An increase in the price of goods and services is a consequence of inflation. “Inflation, monetary inflation specifically, is as desired and necessary by the state as food is necessary for human nourishment.
Without inflation, the state finds itself shackled within the confines of what it can confiscate via taxes. A limited and noninterventionist government is, as sound economics shows and history proves, vital for freedom, prosperity and peace. But because the state is the inherently violent and coercive, holding the power to legislate and enforce legislation, it is therefore inevitable that the government will, through political trickery and economic lies inflate the money supply” – aka ‘Money Printing’ – the age-old, catch-all solution eventually applied by all failing empires down the centuries.
“This is also why, from the state and statist economics (e.g., Keynesian economics) standpoint, the definition of inflation had to be deliberately distorted – to facilitate monetary inflation and currency debasement. This feeds the state with the nutrients it needs to grow larger in size, scope and reach to the detriment of truth, justice and liberty.” My book describes and illustrates inflation at ‘Chapter 9 – Inflation & Deflation’. Here is an explanation of monetary inflation: https://mises.org/wire/inflation-isnt-what-experts-say-it-confusion-terms-deliberate
BUT IT’S NOT THE FAULT OF THE 99% because the rules for banking have been forever compromised. We can no longer rely on our money in the banks being secure; it can, and has, been stolen by the authorities on a whim. Not only did the 2013 Cyprus bank robbery illustrate the point, which sparked my book where I detail what happened lest we forget, but 2022 has seen the WEF captured Canadian government steal bank accounts without a by-your-leave. Capital Exploits has the story:
“Think about it. Western governments confiscated the assets and money of rich Russian citizens (oligarchs), including the EPL team Chelsea and London properties from its owner. You may well ask yourself what the owner of Chelsea has to do with an invasion of Ukraine, and you’d be asking a good question.
Then we had the LME canceling 9,000 trades worth $4bn, effectively using this money (stolen) from “regular” traders to bailout a Chinese tycoon. Talk about creating moral hazard. Good gracious!
You may not like trucker protestors and you may not like LME traders and you may not like Russian oligarchs, and that’s fine. That’s your prerogative. But understand that the Rubicon has been crossed in a few mere months and the rules-based world order that we all lived under for our entire lives is gone. It’s over. The vast majority of people you talk to won’t understand this and most will get angry if you suggest it. They’ll look to the MSM to “explain” what “actually took place.” They may not fully agree but they’ll take their word for it. Why? Because it’s too hard to consider the truth.
The truth is that your net worth is zero. My net worth is zero. All of our net worth is the property of the financial institution that holds it. The land we own is the property of the state (wherever that may be held) should they choose it to be so.
All we will need to do to keep it is to keep in their good books. Don’t step out of line. Money will soon fall into this category when CBDCs are issued. We will be allowed to use it for the purposes they deem suitable.
The good news is that communism never works. Humans will continue to search for freedom and find a way. The cracks in this totalitarian system will begin to appear and mark a path for us, and with it will likely be some of the greatest asymmetry we’re ever to experience in our lifetimes. Let’s hope we navigate it well. Our children and grandchildren will thank us.” https://www.zerohedge.com/news/2022-04-13/new-rules-no-rules
COLLAPSE MONITOR: Capital Exploits always has a solid practical approach to the coming catastrophe and works to seek advantage in the arbitrage duly offered: “Feels like a lifetime ago, when — back in February 2020 — we started warning that lockdowns will bring about inflation and shortages. Fast forward to today, and this pesky stuff is now part of our daily lives. We recently set up a dedicated inflation channel in our Insider private forum, where members can share their own experiences with all things “transitory”. We spilled a lot of digital ink on how soaring fertilizer prices will affect food supplies all over the world.
If you think that it is just energy that is affected by the Ukraine war, then think again. Arguably, fertilizer is even more affected as Russia and Belarus are some of the biggest players in the global fertilizer market. It’s why we’re holding onto our fertilizer plays, even though they’ve been up on a stick this year and many of you are now sitting on some juicy returns.” https://capitalistexploits.at/central-bank-hubris-bubble-finally-bursting-owtw/
THE NARRATIVE BATTLE HAS COMMENCED: Mister Musk to the rescue? “Musk is moving out of California and into Texas. Now he is making an interesting move, a hostile takeover bid of Titter. (That’s not a spelling error, that’s a statement.) Musk could put the ‘w’ back into that social media platform. It is his way of championing free speech. But he is doing so the big business way; by buying it up and maybe privatising it.
How can this platform ban a US president and yet allow a list of baddies including Putin to stay up? The excuse is that forces like populism and so-called conspiracy theories are worse than terrorism or war crimes. This is crazy. Personally, I hope that Musk succeeds and that he eliminates the double standard. At the moment it is not a free speech platform, it is censorship” https://www.biznews.com/news/2022/04/28/spiritual-provocation-wokeness
AND a positive letter supporting Elon: https://www.biznews.com/global-investing/2022/04/28/elon-musk-twitter
A PLEA FOR PEACE IN THE WORLD: “IF I DON’T KNOW – I CAN’T ACT” – Information and knowledge should be free to everyone. Those less fortunate, who are unable to pay, are often those most in need. MAKING A DONATION will spread knowledge and understanding far and wide and empower humanity to keep the peace: https://www.gofundme.com/f/fnahvp-free-book
UNTIL NEXT WEEK: Tell Your Truth– Gently; Don’t Comply – Gently: Laugh At Them – Gently: SPREAD THE WORD: YOUR DAILY COVID NEWS (cmnnews.org)
“and the rules-based world order that we all lived under for our entire lives is gone.”
A true WTF moment.
Do even some thoughtful people not yet understand the difference between a “law-based order” and a “rules-based order”?
(The former applies from the weak towards the mighty too, and across time; the latter not so much.)
Great distinction ‘m’ – I hadn’t thought of it that way – food for thought thank you.
“The Athenian envoys presented the Melians with a choice, destruction or surrender, and from the outset asked them not to appeal to justice, but to think only about their survival. In the envoys’ words, “We both know that the decisions about justice are made in human discussions only when both sides are under equal compulsion, but when one side is stronger, it gets as much as it can, and the weak must accept that”. This is an essential context for Thucydides’ claim that “the strong do what they will and the weak suffer what they must”.
Not much has changed since 416 BC. Or since our ancestors came down out of the trees.
So true august, thank you for the reminder – human nature is constant: strong v weak; good v bad – it’s a binary universe illustrated by the yin & the yan etc.
Might makes Right.
No mention of the US’s new Disinformation Agency?
Thanks AP… for all the really bad news.
But, But – Capital Exploits had some good news – arbitrage! The chance of a lifetime? That Ministry of Truth stuff came too late Ghost, I will look at it this week but I am not taking it seriously – just noise in my view and with Mr Musk on board I hope for great things to counterbalance any idiocy from Go Brandon.
We have our own ‘ministry’ here in UK:
https://reclaimthenet.org/uk-online-safety-bill-explained-summary/
Plus the BoE are racing ahead of the pack:
https://dailyexpose.uk/2022/03/31/uk-gov-digital-identity-launch-april-22/
Enough to keep us busy this side of the pond. 🙂
The animal dream turned out to be a “real” dream, not a result of the glass of wine. I drove past the wildlife refuge by circumstance the other day and remembered the dream and it all sort of made sense.
My husband’s father, whom I called Poppa Grooch, was in the dream too, a glimpse of him standing near the gate of the refuge* playing a polka on his accordion. (It is just an old pasture and woods converted to local wildlife refuge. It’s private, which is why I do not mind setting my unwanted white/pink-eyed bunnies free there, where there are some white rabbits to be seen, at least for a time.)
I truly believe our Father will shield us from the worst and provide to us the best, when it is time for us to enter the refuge. And Poppa Grooch will play the Pennsylvania Polka.
Lovely Ghost – thank you – it’s playing and I love the accordion – just like the organ and Bach on this is stunning.
It is and Steve should mention it in the Sunday Classics.
Speaking of Bombs Away….
202 seconds to London
(1:13, subtitled)
A chilling segment from what I assume to be Putin-approved Russian television. It’s little wonder the DC-Progs don’t want easy access to this sort of thing by Americans. Not relaxing. Nothing you want up on the scoreboard video during the 7th-inning stretch.
https://americandigest.org/202-seconds-to-london/
Neither you nor the original author got the [Russian] memo.
As far as I know, there currently are no nukes stationed in Kaliningrad (a part of Russia since end of WWII.)
The Russians are hinting at that could change.
https://www.veteranstoday.com/2021/05/04/israels-attack-on-uss-liberty-the-full-story/
This is the most detailed account of the attack on the USS Liberty I’ve seen. I could add something Captain McGonagle told me at a ROTC meeting while I was in college at OU in Oklahoma.
He said the reconnaissance planes that passed over to assess damage after that first strike flew low enough to see him standing on deck with his wounded sailors, all waving flags. They could see their eyes and realized they knew what they had done and were doing.
He was sworn to secrecy by Johnson himself at the Medal of Honor ceremony.
He was in his mid to late 80s, when talking to me at OU. I was a student reporter.
We’ve got terrible storms here. If you see the TBP Sunday Classics Czar around int he a.m., tell him old Magster found a real gem: The Moonlight Sonata like no one’s ever played it before!
I actually “play” the Moonlight, or at least a very good simile thereof… nothing like this guy, but there are some sequences I can replicate pretty darned good, for an old country gal.
Very valuable info Ghost, thank you. Real eye-witness experiences and information is so important as we explore the global processes at work today.
Thanks B_MC this is indeed sobering. I have no doubt that the Globalist elites will have no compunction in using tactical nukes first as Ukraine bogs down then of course it’s back to MAD. This is what a WEF site says and they should know!
“The damaging effects of the light, heat, blast, and radiation caused by a nuclear explosion have been known to scientists since the end of the Second World War and the bombings of Hiroshima and Nagasaki. Much of the existing literature on the climate, economic, humanitarian, and societal effects of a nuclear exchange is out of date and inconclusive.”
Seen on The Automatic Earth today….
Chinese state television channel CCTV map showing which countries would receive the territories of the Scoto-Russian federation after its collapse.
And Lithuania gets nothing? That’s so unfair!
Great find, thanks again B_MC – Pepe’s article is worth reading.
Liz Truss on Global NATO…
cued to the story…
Excellent find Ghost – I can use this one in my Substack today.
The first US Truth Prize given by the DHS should go to President Putin who called America the Empire of Lies. First runner up should go to Margie Taylor Greene who appeared before the J6 Show Trial Commissars and got the Ron Paul, Joseph McCarthy, Donald Trump, etc treatment but she boldly spoke the Truth to them and in dozens of hostile MSM interviews. If the communist can ban her from Congress, they can ban Trump. If Americans don’t kick the communist out on 8Nov2022, it won’t be long before there are firing squads in the basement of the Ministry of Truth , and 20 million missing Christians.
As always rhs jr – exactly on the button, you should work as a prophet and write a book! 🙂
The term ‘Empire of Lies’ had been around for a while already, before Putin used it for the first time –
I just cannot remember if it was Pepe Escobar or Andrei Martyanov, or someone else in that league.
But obviously hat tip to Putin, to making it widely known.