Category Archives: World finance: when will the bubble burst?

The world’s financial systems are widely described as a disaster-in-waiting.  Whilst the US Fed, set in place in secret in 1913, was a turning point, greed and covert control by the most powerful banks ensured the unsustainable bubbles that are certain to burst.  The only question is, what will trigger the burst and likely repeat world depression, and when?

World finance: when will the bubble burst?

The great ‘reset’. Fiat currencies and economies collapse as do civilisations. Then what?

Key parts of the world’s financial affairs have been hi-jacked by self-serving financial organisations, bureaucracies, country leaders and individuals.   All this and much more are signs of civilisation collapse – at least in the West. The outlook is dire.  

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The pending financial and governance changes are imminent

The pending financial and governance changes are imminent 29 August 2024

The cracks in the old system are widening, and the truth is spilling out faster than they can patch it up. The whispers about the Quantum Financial System (QFS), the Emergency Broadcast System (EBS), and NESARA have become deafening roars among those who are truly in the know.

Politicians have been leaking crucial details, intentionally or not, preparing the world for what’s about to come. This is a coordinated effort by those who want to be on the right side of history when the hammer drops.

Congressman Jim Jordan was recently caught in a private conversation in a Capitol Hill hallway with Representative Marjorie Taylor Greene. The conversation was about the “imminent unveiling of the new financial system,” a system that would “pull the rug from under the corrupt.” This wasn’t a vague chat about digital currencies or blockchain—it was a direct reference to the QFS.

Greene nodded in agreement, adding that “the EBS is ready to go live any day now,” and “people need to be prepared for the global lockdown.” This was a warning from those on the inside.

At a closed-door MAGA event in Phoenix, Arizona, just weeks ago, Kari Lake let slip to a small group of loyalists that “the QFS is already testing its systems, and we’re at the brink of a total financial and political overhaul.”

She mentioned that key financial players and “the deep state bankers” have been cornered and are losing control over the narrative. She pointed out how some of them are desperately trying to negotiate deals in private to save their own skins before the EBS activation pulls back the curtain on their shady dealings.

And then there’s Mike Pompeo, during a recent fundraiser in Texas, Pompeo hinted at something massive on the horizon. Off the record, while speaking to high-profile donors, he mentioned that “the financial system as we know it is on its last legs” and that “we’re moving towards a financial transparency that’s going to shake the foundations of this country and beyond.”

One attendee, who wishes to remain anonymous, later confirmed that Pompeo was talking about NESARA and the QFS rollout, suggesting that a financial reset would expose decades of corruption.

In Florida, Congressman Matt Gaetz has been more blunt. At a private gathering Gaetz claimed that “the days of the Federal Reserve and their secret manipulations are over.” He went on to say that the QFS is “a divine tool to restore balance and integrity” and that the EBS is poised to “broadcast the truth to the masses, exposing every dirty deal, every hidden transaction.”

Gaetz’s statement sent shockwaves through the room, with some attendees even expressing concern over the potential fallout, but he was adamant: “The only ones who need to be afraid are the corrupt.”

But perhaps the most telling leaks have come from insiders closer to the international stage. During a private meeting in Mar-a-Lago with Trump and key international allies, Hungarian Prime Minister Viktor Orbán spoke candidly about the upcoming “global shift.”

He mentioned that “several European leaders have been briefed” on the rollout of the QFS and that “those who resist will find themselves exposed and powerless.” Orbán’s confidence was clear; he knew this was happening and soon.

But perhaps the most significant leak came from General Michael Flynn. During a recent interview with an independent media outlet in August 2024, Flynn let slip something that can’t be ignored. “The military is prepared,” Flynn stated. “We’re not just talking about a financial reset; we’re talking about a complete restructuring of how the world operates.

The Emergency Broadcast System will soon be activated to ensure that every citizen knows the truth about what’s been happening behind the scenes.” Flynn’s words sent shockwaves through the alternative media community, confirming that the EBS and QFS are not just theories—they are realities, and they are about to be deployed.

At a recent roundtable discussion hosted by Sidney Powell, the conversation turned towards the upcoming global changes. Powell remarked, “The central banks have had their run, but it’s over. We’re moving to a new financial system that will expose every dirty secret they’ve tried to bury. The Emergency Broadcast System is ready, and when it’s triggered, the world will finally see what we’ve been fighting for.”

Powell’s statement was nothing short of a declaration that NESARA and the QFS are poised to dismantle the corrupt financial networks that have enslaved humanity for far too long.

The signs are everywhere, and those with eyes to see can’t ignore them. These politicians are not just talking—they are warning us. The QFS is on its way.

The EBS is about to be triggered. NESARA is about to be implemented. They are dropping hints, leaking information, and preparing the ground for the massive changes that are about to hit.

The time for awakening is now.

The old system is collapsing, and the new one is ready to rise from the ashes. The truth will not be silenced, and those who stand in its way will be swept aside

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NESARA/GESARA – The Progress Report

NESARA GESARA – The Progress Report  By Clif High, 17 June 2024

QFS, Dinar and Zimbabwe RV: the end of fiat currencies

Editor’s note:  All is explained except what happens next, and when.

NESARA (National Economic Security and Recovery Act) and GESARA (Global Economic Security and Recovery Act) are concepts originating from a set of economic reforms proposed in the United States in the 1990s. The original NESARA proposal included measures to abolish income taxes, cancel out debt, and return to a commodity-based currency system (such as gold), among other financial reforms. However, this proposal never became law.

Over time, NESARA and GESARA have become associated with a variety of conspiracy theories. These theories suggest that these acts have secretly passed and will lead to massive positive changes globally such as debt forgiveness, the abolishment of income tax, a new form of government, and even the distribution of vast sums of wealth from hidden sources. The theories often tie in other elements, such as secret societies, alien interventions, and the imminent arrest of powerful political personalities. The linguistics of these theories are focused to attach to Christian ethos mind patterns. In the language associated with NESARA/GESARA as conspiracy theories, the targets are clearly a specific subset of the Evangelical sects within Christianity. There is no penetration of the NESARA/GESARA language within the Islam, or Buddhist, or other religious communities. There is no penetration of this language into Leftist, or atheist, or other, non Christian communities.

Within the conspiracy theories attached to NESARA are statements that the act was signed into Law by President Bush, and then, immediately ‘hidden’ from the public while the Federal government supposedly is ‘blocked’ from implementing it by nefarious actors within the [deep state].

It’s important to note that there is no credible evidence to support the existence of GESARA. While NESARA was an actual legislative proposal, it was never enacted. GESARA language first shows up eight months after the failure of NESARA to be advanced in the legislature. GESARA was a deliberate strategy to expand the scam to non USA citizens. It failed in this effort of expansion. There is evidence of funding behind a push for GESARA into specific Islamic groups in 2005 that failed to obtain traction. The details often cited in these theories do not correspond to anything in our common shared reality and are widely considered to be absolute bullshit by people who work within legitimate political or economic analysis areas.

This attitude of rejection, and disbelief, is also elicited by the ‘QFS’. The “Quantum Financial System” (QFS) is another concept frequently mentioned in conjunction with various conspiracy theories, particularly those surrounding NESARA/GESARA. It is described by proponents as a highly advanced technology system that would completely replace the current banking and financial systems around the world. The QFS is often depicted as being based on quantum computing technology, which proponents claim can provide heightened security through quantum cryptography and create a transparent, fraud-proof system. Aspects of the QFS include the idea that ALL resources within the Earth’s biosphere would be ‘placed on blockchain’ for an absolute accounting, and tracking, of the use of such resources. Note that many of the claims for the QFS actually mirror the goals, and function of the CCP Social Credit System.

Advocates of this theory suggest that the QFS will enable the seamless and instant transfer of currencies and that it would be immune to corruption, hacking, or manipulation. It is also said to be capable of ensuring complete privacy and anonymity of transactions, while simultaneously being fully transparent in terms of authorities’ ability to prevent illegal activities.

It’s important to clarify that, as of now, there is no verified existence of such a system in development or in use by any government or financial institution recognized by any financial entities or technology experts. The descriptions of the QFS often contain a mixture of some factual elements of quantum computing potentials and a lot of speculative, unfounded claims. Quantum computing itself is in the early stages of development, primarily focused on research rather than practical applications, especially on the scale described in QFS theories. There is NO ‘Quantum computer network’ in operation now, and given that Quantum computers are batch process, analog machines that cannot run digital software, it is not technically possible for Quantum computers to run a digital network. Quantum computers cannot run digital software, and can NOT host AI. Most of the Quantum computing world is still in research mode, and the technology is likely two decades away from any form of commercial adoption. Quantum computers, by the nature of the technology, will always be ‘batch processors’, and will NEVER be used to ‘run networks’.

Claims that the QFS is operational, or there is a Quantum computer based network, need to be challenged, and demands made for receipts be imposed upon those people making such claims as they are incorrect, inaccurate, and may be deliberate lies attempting to deceive.

The concepts of NESARA/GESARA and the Quantum Financial System (QFS) can be particularly appealing to individuals with limited financial understanding because they promise simple solutions to complex financial issues and present an idealized scenario where financial burdens such as debt and taxes are effortlessly resolved. These narratives are DESIGNED to specifically target and impact those with lower financial literacy:

  1. Complexity and Jargon: The use of complex terms and financial jargon (like “quantum technology” in the case of QFS) can be overwhelming. People who aren’t familiar with these concepts might assume the information is legitimate simply because it sounds sophisticated and technical.
  2. Promises of Wealth and Debt Relief: These theories often include promises of imminent wealth distribution and debt forgiveness, which can be very attractive to anyone struggling financially. The hope of such outcomes can cloud judgment, leading individuals to overlook the lack of evidence or logical basis behind these claims.
  3. Exploitation of Distrust: Many of these theories tap into a general distrust of governmental and financial institutions. For individuals who feel marginalized or cheated by the system, the idea that there is a hidden or suppressed solution can be very appealing.
  4. Urgency and Exclusivity: By suggesting that these events are about to happen, these theories create a sense of urgency that can rush individuals into making hasty decisions, such as investing in certain assets, joining groups, or donating money to causes that purport to support the implementation of these acts.
  5. Scams and Frauds: Scammers use these theories to legitimize fraudulent schemes, asking people to invest in new “quantum-resistant” cryptocurrencies, participate in exclusive financial opportunities linked to the supposed upcoming changes, or buy products and services that are “necessary” to prepare for the transition.
  6. Social Proof and Echo Chambers: People discussing these theories often form tight-knit communities that reinforce each other’s beliefs. This social validation can make the theories seem more credible to someone who is unfamiliar with how financial systems actually work. A key aspect of identifying these communities is the language that constantly brings the concept back to ‘faith’, and the invocation of language found in religious settings which is tied to the financial frauds of NESARA/GESARA/QFS.

The NESARA/GESARA/QFS scams are dependent on directing the language within the discussion to specific terms in order to invoke ‘faith’ as an emotion in order to support the scam internally within the ethical structure of the victim. It is a sophisticated attempt to prey upon in-built mental pathways. Once these paths are captured by the scammer, it becomes incredibly difficult to dissuade the victim from their attitude that these scams are real. This is due to the deep religious hooks within the victim’s personality. This language is further reinforced by the continuous exposure for a lifetime to the same language from THE most effective scam in history, the Federal Reserve note which is not money, and is a legislative supported debt instrument.

Federal Reserve Notes are legal tender, with the words “this note is legal tender for all debts, public and private” printed on each note. The notes are backed by financial assets that the Federal Reserve Banks pledge as collateral, which are mainly Treasury securities and mortgage agency securities that they purchase on the open market by fiat payment. In other words, the Federal Reserve Bank, which is not part of the Federal government, and is not a bank, is ‘backing’ their debt notes (aka ‘dollars’) with other debt instruments (not money) that the government produces that the FED purchases with its fiat dollars. So the dollar is a debt instrument issued by a private corporation, and loaned to the US Government for use at a cost of interest payments by the People of the USA to the private corporation of the Federal Reserve. The BIGGEST scam of them all.

There are many linguistic ties between the NESARA/GESARA/OFS scam and the ‘Iragi RV’, or the Zimbabwe RV. Note that these scams offer the Kuwaiti Dinar RV as ‘proof’ that the same occurrence will emerge for these other currencies from Iraq and Zimbabwe.

The situation of the Kuwaiti currency ‘revalue’ were entirely unique, and were based off of the geopolitical movements of the Bush Regime. This arose after the failure to convince Saddam Hussein to allow STF (special technology forces) of the US military to enter three ziggurats in Iraq for the purposes of examining, and removing artifacts. This failure led to the Bush Regime giving Saddam Hussein ‘permission’ to invade Kuwait. This permission was to create the conditions of the Iraq invasion of Kuwait. That invasion caused the Kuwaiti dinar currency to collapse as the financial world assumed that the government of the country was gone, thus the currency was worthless. This led to an international devaluation of the Kuwaiti dinar in the global financial markets. There is evidence to support the idea that members of the Bush Regime anticipated this effect, and purchased billions of dinars. They bought the Iraqi currency as they knew the Bush Regime would be restoring the Kuwaiti power structure as part of their invasion of Iraq to loot the ziggurats. This occurred, the Kuwaiti government was restored, and faith returned to the Kuwaiti Dinar within the international currency markets and thus the ‘value’ of the dinar was raised and those who were in on the scheme profited hugely.

Note that the government of Kuwait did NOT ‘revalue’ the dinar. That was a function of the open markets in currency trading, and the underlying plot by the Bush Regime to manipulate these markets as a side effort in their Iraq War. There was NEVER any repurchase of the Kuwaiti Dinar by the government of Kuwait in any deliberate attempt to “Re-Value” their currency.

No government will ever Re-Value their currency upwards in purchasing power (value). There is NO incentive for any fiat currency to be worth ‘more’ in purchasing power. It is in the nature of fiat currencies that they can NOT be revalued upward in purchase power by the government that issues them. INFLATION is the only route available for non-backed currencies.

During the 1930s, the United States was grappling with the Great Depression, a period of severe economic downturn that caused widespread hardship. In response to deflationary pressures—where prices and wages fell dramatically—there were concerted efforts by the government and the Federal Reserve to induce inflation into their currency which was dying against the real purchasing power of gold and silver constitutional money. These efforts aimed to increase the money supply and raise the price level, thereby relieving some of the economic stress. This effort was coordinated by the Fed and forced through a reluctant Congress by bribery, and extortion, and threats.

Key Actions by the Federal Reserve and the U.S. Government:

Abandonment of the Gold Standard (1933): One of the significant steps towards inducing inflation involved the United States moving off the gold standard temporarily. President Franklin D. Roosevelt suspended the gold standard, which had constrained the Fed’s ability to increase the money supply because the dollar was pegged to a fixed amount of gold. By moving off the gold standard, the Fed could print more money which is the definition of inflation.

Executive Order 6102 (1933): This order required U.S. citizens to exchange their gold coins, gold bullion, and gold certificates for U.S. dollars. This measure was intended to prevent hoarding of gold and to increase the gold reserves held by the Federal Reserve, thereby giving it more leverage to increase the money supply. This action made every American citizen an economic eunuch now dependent on a private corporation for ‘money’, and they (the Fed) kept the money (gold), and rented out their currency (the dollar) in exchange for debt against the government and people of the US as was designed by the Freemasons who plotted to bring in the Federal reserve in 1910.

Devaluation of the Dollar: The Gold Reserve Act of 1934 officially devalued the dollar in gold terms from $20.67 to $35 per ounce of gold. This devaluation was aimed at increasing the price of goods, making American goods cheaper for foreigners and thus boosting exports. It also effectively increased the money supply in terms of gold-backed securities which were now constrained by the markets for debt that the Federal Reserve controlled.

Open Market Operations and Interest Rate Reductions: The Fed engaged in open market operations by buying government securities. This action increased the banking system’s reserves and the overall money supply. Additionally, lowering interest rates made borrowing cheaper, encouraging spending and speculation (boom and bust cycles only exist in fiat currencies) which they renamed as ‘investment’.

Public Works and Government Spending: Alongside monetary policy, fiscal policy played a critical role. The government increased its spending on public works and social welfare programs under the New Deal. This not only created jobs but also increased cash flow in the economy, contributing to inflationary pressure. The Federal Reserve was dying a natural death in 1933, and was saved by extreme legislative support that turned all USA citizens into debt slaves until the system itself should (once again) be dying due to natural economic forces (we are there, now).

These actions were part of a broader strategy to counteract the deflation that had aggravated the economic downturn. By inducing mild inflation, the government and the Fed aimed to decrease the real burden of debt and stimulate economic growth by encouraging spending and wild speculation. This effort is now failing under these natural economic forces as the debt has completely consumed all of the purchasing value within the Fed’s currency.

The closure of the gold window by President Nixon in 1971 and the subsequent establishment of the petrodollar system by Henry Kissinger are pivotal moments in the history of global economics and fiat currencies experimentation. These actions marked the end of the Bretton Woods system and significantly reshaped international monetary relations. The result of which include all wars since 1971.

Closing of the Gold Window

Reasons:

Balance of Payments Deficits: Throughout the 1960s, the U.S. faced persistent balance of payments deficits due to high government spending on social welfare programs and military expenditures, particularly related to the Vietnam War. This led to a significant outflow of gold reserves.

Foreign Demand for Gold: As U.S. gold reserves decreased due to these deficits, other countries began losing confidence in the U.S. dollar’s value. They increasingly demanded gold for their dollars, further depleting U.S. gold reserves.

Dollar Overvaluation: The fixed exchange rate under the Bretton Woods system overvalued the dollar relative to gold, making the official rate of $35 per ounce of gold unsustainable. Note that inflation has indeed been brought into the system of the federal reserve note as gold is now over $2000 dollars per ounce with no expectation of an upper limit.

Speculative Attacks: The financial market began speculating against the dollar, exacerbating the outflow of gold. Gold is real money and the Federal Reserve, and the US government freaked out at the out pouring of gold into foreign banks in 1970, and even worse, 1971.

Effects:

End of Bretton Woods System: Nixon’s announcement effectively ended the Bretton Woods system of fixed exchange rates, leading to a system of floating exchange rates, which facilitated massive, continuous, manipulation on extremely speculative global currency markets.

Currency Volatility: The removal of gold backing led to increased volatility in the currency markets as exchange rates could now fluctuate freely based on market forces. We are living those results now.

Inflation: The immediate aftermath saw increased inflation in the U.S. as the dollar’s value was no longer anchored by gold as we see with recent gold price escalation that is expected to go vertical this year.

Creation of the Petrodollar

Reasons:

Need for Stability: Post-1971, with the dollar no longer backed by gold, there was a need to ensure ongoing global demand for the dollar to maintain its value and status as the world’s primary reserve currency.

Oil Market Leverage: The U.S., recognizing the critical role of oil in the global economy, saw an opportunity to create a demand for the dollar through oil transactions.

Mechanism:

In the early 1970s, U.S. Secretary of State Henry Kissinger negotiated with Saudi Arabia and later other OPEC nations to price and trade oil exclusively in U.S. dollars. In return, the U.S. offered military protection and security guarantees to these oil-producing nations.

Effects:

Global Demand for the Dollar: The petrodollar system increased global demand for the dollar since countries now needed substantial dollar reserves to purchase oil. This helped offset potential negative impacts from the end of the gold standard.

U.S. Economic Leverage: By ensuring that oil sales worldwide were denominated in dollars, the U.S. could exert considerable influence over global economic conditions. It also provided the U.S. with significant leverage in geopolitical matters.

Impact on Oil-Producing Countries: These countries accumulated large reserves of dollars, which they often invested back into U.S. assets, further integrating their economies with that of the U.S.

Overall, these strategic economic maneuvers by Nixon and Kissinger significantly distorted global financial systems and political relationships, effects of which are still manifesting in various ways in today’s international economic landscape. Most of the more visible manifestations are the Wars.

We are now at the end of the Federal Reserve system’s fiat (debt) currency. There is the expectation for a resurgent Constitutional dollar to emerge in these next years to replace the Federal Reserve debt currency. Note that it will NOT be a case of ‘revalued’ Federal Reserve Notes. As the Constitutional dollar emerges, it is expected that its purchasing value will be tied to the gold and silver involved in the currency. It is expected that Federal Reserve notes (the actual paper debt instruments) will go the way of the Confederate currency, and become a collectible item with value only as a curiosity. Much like the Iraqi and Zimbabwe currencies.

All that remains is debt.

Humanity is now at the end of the Federal Reserve’s fiat money scheme that had conquered the whole of our globe.

All that remains is debt.

Fiat currencies only have one path. Continuous inflation that always leads to repudiation (refusal) of the debt instruments. We are there now as 70+ %$ of the countries, and peoples of the planet will not accept the Federal Reserve debt instrument (aka the USA dollar).

There is NO Nesara/Gesara.

There is NO QFS.

There will be NO RV of Iraqi or Zimbabwe currencies.

Humanity is entering a completely new period as we move further into the Age of Aquarius.

These fiat currency debt schemes have run their course.

Humanity has had enough of the lies of debt schemes and inflation.

We are into this period a number of years, and in 2024, and 2025, there will be major developments emerging that will alter the rest of your life.

It will not be as you may imagine it now.

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The great reset of world economies as fiat currencies collapse

Bix Weir – Before The Election The Country Will Be Hit With A Cyber Attack, Good Guys Are In Control (rumble.com) 1 March 2024

X22 report interviews Bix Weir, 38 minutes, about his forecasts of how and when most economies in the world will collapse in parallel with all fiat currencies collapsing.  Within a few months – not years – following a massive cyber attack.

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Gold’s Imminent Return As Money

Gold’s Imminent Return As Money  By Alasdair Macleod, via GoldMoney.com, 19 February 2023

Editor’s note: Click on the link above to view several graphics in this very pertinent article.

The consequences of Russia and her Asian allies embracing gold backing for their currencies are poorly understood in western capital markets. This move could lead to the destruction of the global fiat currency system.

According to evidence which is widely ignored in western capital markets, a move by Russia to put a new trade settlement currency and possibly the rouble as well onto a new gold standard is becoming a certainty. As a weapon of mass fiat currency destruction, the timing is probably bound up in on-the-ground military considerations, which are already showing signs of escalating in Eastern Ukraine.

As well as using gold to undermine the western currency system, a return to a credible gold standard has significant advantages for Russia and for her allies in the Shanghai Cooperation Organisation, the Eurasian Economic Union, BRICS+, and all their commodity suppliers beyond Asia. At the same time, it would destroy the west’s fiat currencies and financial system.

This article explains how one part of the global economy can thrive while the other collapses.

Introduction

Recently, I have written about the signals emanating from Russia that President Putin is minded to re-adopt sound money by returning to some sort of gold standard. We do not yet know the details, but consider what he said at the St Petersburg International Economic Forum in June last year:

“Caught in the inflationary storm, many nations are asking, why bother exchanging goods for dollars and euros when they are losing value right before our eyes? Indeed, the economy of imaginary wealth is being inevitably replaced by the economy of real valuables and hard assets.

“According to the IMF, today’s global foreign currency reserves contain 7.1 trillion dollars and 2.5 trillion euros. And this money is depreciating at an annual rate of about 8%. Moreover, it can be confiscated or stolen at the whim of the US if it disapproves of something in a country’s policy.

I think this has become a very real threat for many countries that keep their gold and foreign exchange reserves in these currencies. According to objective expert analysis, in the coming years a conversion process of global reserves will get under way. Reserves will be converted from weakening currencies into tangible resources like food, energy, commodities, and other raw materials. Clearly, this process will further fuel global dollar inflation.”

This message was delivered to 81 official delegations, and 14,000 delegates from a further 49 countries, including heads of state and government attending unofficially. Putin’s message was that central banks will be dumping dollars and euros and accumulating gold reserves instead — the only “tangible resources” they can own, not stored in western vaults where they can be impounded as has happened to Venezuela. And government agencies will stockpile essential commodities, raw materials, and food instead.

The statement on gold reserves was not so specific, but by disposing of dollars and euros, trade and foreign exchange liquidity is bound to swing in favour of gold. With central banks reported to have accumulated record quantities of bullion last year, they appear to agree with President Putin.

In effect, delegates at the St Petersburg Forum were put on notice that the dollar will be attacked by Putin’s mobilisation of foreign liquidation of currency reserves in favour of tangible commodities and gold. For many central banks, the logic of maintaining official currency reserves will no longer apply, while increasing physical gold holdings under their direct control is the new priority.

The timing of the dollar’s demise will in large part be set by Putin’s geopolitical timing, because he can almost certainly trigger foreign liquidation simply by passing the word.

Separately, Putin’s senior economic adviser, Sergey Glazyev, has been working officially on a new trade settlement currency for use between members of the Eurasia Economic Union (EAEU), with an ambition to extend the settlement facility to all members of the Shanghai Cooperation Organisation (SCO) and BRICS+ (a rapidly expanding club of nations including non-Asian nations) who wish to use it. These groupings represent well over half the world’s population.

From the few statements on his thinking, it has become clear that having considered the options Glazyev now favours a currency solution based on gold alone.

We should also note that the proposal for an expanded Moscow gold exchange is being headed up by Glazyev himself. And in a move which appears to front-run developments, Sber — Russia’s largest bank — announced the introduction of a gold-backed digital financial fund.

On 27 December, the same day that Sber announced its new digital gold fund, in an article entitled “Golden rouble 3.0: How Russia can change foreign trade infrastructure”[i] written for Vedomosti, a Moscow-based Russian business newspaper, Glazyev laid out his latest thoughts. It was co-authored by Dmitry Mityaev, who is Assistant Member of the Board for Integration and Macroeconomics of the Eurasian Economic Commission — so this article is not just Glazyev’s musings, and it can be assumed to carry official weight.

From this article, the EAEU currency commission now appears to have dropped earlier proposals for a new currency entirely, using gold instead as the principal means of settling trade imbalances. It is likely to wrapped up as a digital representation of physical gold. If it copies the Bretton Woods model, perhaps only participating central banks will be permitted to demand physical delivery, but the digital currency would be more widely available as credit for trade settlement.

Presumably, the requirement to be prepared to settle national payment imbalances in gold bullion could be then minimised if one or more national currencies went onto a credible gold standard either by linking their currencies to the new trade settlement currency in an Asian version of Bretton Woods, or by going onto individual gold standards. The implication is that the rouble, and probably China’s yuan might do just that to produce a seamless gold-linked pan-Asian settlement system.

Whatever the detail, this is not a step to be taken lightly. China is highly dependent on exports to America and NATO members. But she appears to be refocusing on Asia and has the personal savings available to back the necessary capital investment, which in some cases will offset her imported energy costs. Both Russia and the Saudis heading up OPEC+ will be fully aware of the impact on the fiat petrodollar regime of switching payments to yuan, roubles, or other Asian national currencies for their primary export product — crude oil. Reserves of western alliance fiat currencies not sold might have to be written off. Consequently, the Saudis and other Gulf energy exporters are sure to have sought assurances about the stability of yuan and possibly roubles relative to the dollar.

Therefore, we have three elements pointing to an emerging gold standard in Asia, and for the nations that are associated with it. Firstly, President Putin made it clear that he sees a transition to sound currency values based on commodities (i.e. represented by gold), away from the dollars and euros which can be weaponised by America and alliance nations in its sphere of influence. Secondly, Putin’s view is being echoed by his senior economic adviser, Sergey Glazyev, who is the central figure formulating trade settlement arrangements. And thirdly, it is impossible to imagine that Middle Eastern energy exporters would accept payment in currencies other than dollars unless they were given sufficient reassurances about their future payment values relative to the petrodollar.

Until last year, the Russian and Chinese long-term policy of doing away with dollars for pricing commodities, settling cross-border trade, and intermediating in virtually all foreign exchange transactions has been defensive, letting America make the geopolitical running. Sanctions against Russia changed all that. Backed into a corner, Putin has no option but to seek to destabilise the western financial system deliberately. He quickly moved to protect the rouble. Now he is taking the initiative, and as part of his effort to remove the American threat from Eastern Europe entirely his strategy is both military and financial.

Pricing Russian commodities

As the world’s largest exporter of energy as well as of a wide range of industrial commodities and raw materials, the Russian economy stands to benefit enormously from a shift in global currencies away from the fiat dollar and associated western currencies to the currencies whose economic backing is commodity related. And when we think of the Russian economy, we think primarily in terms of oil. There is a further relevance to energy because it is a topic Putin thoroughly understands, his post-graduate qualification being in energy economics. He has always had a firm grip on the global energy scene, including gas and nuclear, fully understanding the western alliance’s pressure points. And on the evidence, with his close advisers he also appears to have a better grasp of monetary theory than his opposite numbers in the western alliance.

It is in this context that we should view the price of oil and its history.

The chart above is instructive, particularly with respect to the price of oil in gold. In 1950, WTI benchmark oil was priced at $2.57, and with gold fixed at $35 to the ounce, the gold equivalent was 2.361 grammes to the barrel. The oil price increased to $3.56 (3.06 gold grammes) by the time the Bretton Woods agreement was suspended. Until then, priced in dollars the price had been remarkably stable, and some of that increase in the oil price before the end of the Bretton Woods agreement was understandable, because the dollar’s official value in gold began to be challenged in the markets before Bretton Woods was suspended in 1971.

The price stability between 1950 and 1971 (when Bretton Woods ceased) was remarkable. The expansion of credit, measured by M3 money supply between those dates was substantial, since 1960 more than doubling. According to the monetarists, the purchasing power of the dollar should have approximately halved. The plain fact that it didn’t is evidence that so long as a currency’s link with gold enjoys market credibility, it will not lose purchasing power due to credit expansion. What did give eventually was not prices, but an increasing run agaist US gold reserves which fell from a peak in 1949 of 21,828 tonnes to 9,070 tonnes by 1971.

Gold’s purchasing power enjoys unrivalled stability, which is why it has always been money throughout the ages. All evidence confirms this, illustrated in our next chart, which is of wholesale prices in the UK during the gold standard from 1817—1914.

Following the economic consequences of the Napoleonic Wars and when the new gold standard bedded in, over time price levels stabilised. As banking systems became increasingly refined following the 1844 Bank Charter Act and the Bank of England joining the London Clearing System in 1864, by this measure the general level of prices became increasingly constant.

To confirm gold’s price stability, we can go even further back to the time of Diocletian, who produced his edict of maximum prices in 301AD. The circumstances were that the purchasing power of the denarii coin was falling due to its debasement. From the edict, we find that a gramme of gold was fixed at 216 denarii, giving us a conversion value for goods listed in the edict for comparison with today. From this, we know that in today’s currency pork was about $4 a pound, sea fish about $8 a pound and a dozen eggs $3.32. Vin ordinaire was $2.96 for a 75cl bottle, and good quality wine $11.10 a bottle. Beer was $3 a litre. Clearly, prices for staples which we still consume were similar to today, irrefutable evidence that gold valued as money is stable even over thousands of years.

Following the ending of the Bretton Woods agreement, the price of oil in gold showed the same long-term relative stability at a time when it fluctuated wildly in dollars. Since 1971, measured in dollars WTI oil has been as high as $140 and even went negative due to problems emanating from futures markets in April, 2020. In gold grammes the range has been 4.88 and 0.35. There can be little doubt that price volatility in gold would have been considerably less if American attempts to demonetise gold, suppress its dollar price, and rig markets generally over the decades had not taken place. To see prices being considerably more volatile in dollars than in gold grammes following the end of Bretton Woods confirms the better means of pricing oil, and therefore the whole commodity complex, is in gold.

Bearing in mind that Russian economists were never exposed to Keynesian philosophy before the collapse of the Soviet Union, senior advisers such as Sergey Glazyev are almost certainly aware that gold remains money despite American propaganda that it has been superseded by the US dollar. Putin’s economic advisers had complained that the Bank of Russia’s policy of selling all mined gold into London before trade and financial sanctions were imposed showed that its senior management had been captured by the economic and monetary policies of western central bankers and did not represent their own views.

Putin will know that priced in gold, Russia’s commodity exports should have broadly retained their market value. Both Glazyev and Putin will also know that the gold price of oil today is 1.32 grammes per barrel, down 42% from the 1950 level of 2.36 grammes, and down 51% from 2.67 grammes price when the Bretton Woods agreement was suspended. Russia has lost badly from the west’s fiat currency regime.

There is a further issue in that the only significant sources of oil which require minimal energy to extract are in the Middle East and Siberia. Elsewhere, oil, particularly shale requires substantial energy input, fuelled by oil derivatives. It is in this context that we must view attempts by Russia in partnership with the Saudis and Iran to take command of global oil pricing.

According to British Petroleum’s 2022 statistical review, global crude oil supply in 2021 was 89,877,000 barrels daily, of which Russia and the Middle East combined was 41,985,000. Viewed this way, the strategic importance for both Russia and the Middle East to work together to control pricing becomes clear. Furthermore, with the advanced nations in the west bent on reducing fossil fuel dependency and therefore their own oil production hands further pricing power to Asian suppliers.

If Russia decides to push up global prices while continuing to offer oil at discounted prices to her allies, then the price in gold grammes becomes relevant, given the increasing evidence that gold will return to underpin trade and possibly national currencies in the SCO, the EAEU, and BRICS. As noted above, the gold gramme price when Bretton Woods was suspended was 2.67 grammes per barrel, today it is 1.42 grammes. At today’s gold to dollar exchange rate of $1840, that would be the equivalent of $150 per barrel.

The monetary consequences of Asian gold standards

We can assume that the consequences of the Asian hegemons backing their payment systems with gold will have been carefully considered by them, particularly by the Russians who have been forced into bringing forward a means of protecting their export revenues from weaponised dollars.

Besides bringing stability to export values there are other advantages to reintroducing gold into currency systems. Interest rate stability at lower rates is an obvious benefit. Currently, the Bank of Russia’s key interest rate is 7.5% and price inflation is estimated at 11.8%. The yield on Russia’s 10-year OFZ bond is 11%. If the rouble becomes a credible gold substitute, price inflation, interest rates, and bond yields can be expected to decline towards levels that reflect gold’s long-term stability. And assuming that credit expansion by Russia’s commercial banks is not excessive, there is no reason to expect otherwise than that financial stability for the currency and the Russian economy would continue in the long-term. Coupled with low taxes (Russia’s income tax is a flat 13%) this stability can be expected foster genuine economic progress and the accumulation of personal wealth for the Russian people.

Following the Napoleonic Wars, these are the conditions that led Britain to becoming the most powerful commercial entity in the world by the First World War. They will foster the industrial revolution planned by both Russia and China in partnership with the Eurasian continent’s members of the SCO and EAEU. The stability that gold gives to participating currencies is bound to attract other nations away from the US dollar-based fiat currency system to participate in this success. And as momentum for the new currency regime grows, Russia’s price inflation, interest rates and bond yields are bound to decline to zero, 2%, and 3% or 4% respectively.

However, a move towards gold backing for their currencies by the Asian hegemons can be expected to undermine the purchasing power of western fiat currencies. International capital will leave fiat currencies for commodities, with nations rebuilding stockpiles of energy, metals, and other raw materials. Precious metals, specifically gold, will be sought and its price can be expected to increase.

The consequences for commodity prices being measured in gold grammes or in gold currency substitutes will be to drive commodity prices measured in declining fiat currencies even higher. In the example given earlier in this article, which suggests that in today’s dollars the pre-Bretton Woods oil price would be the equivalent of $150 per barrel, this value is struck with gold at $1840. A rise in the gold price measured in declining fiat currency would easily take this oil price estimate to well over $200.

The consequences for wholesale and consumer prices in the western nations would rapidly become obvious, with central banks forced to revise their expectations for price inflation sharply higher, forced to adjust their interest rate policies accordingly. Bond yields can be expected to rise, undermining all financial and property values. As this negative outlook clarifies, measured against gold fiat currencies will likely enter a substantial relative decline.

The consequences of the emergence of gold backing for currencies in Asia on the currencies and economies of the western alliance are bound to differ in their detail. Briefly, the following difficulties for the major players are likely to emerge:

  • The reliance on inward foreign investment has protected the dollar from continual trade deficits and played a key role in funding US Government debt since the end of Bretton Woods. It has allowed the US Government to run budget deficits more or less continually. The accumulation of foreign capital as the counterpart of trade imbalances now appears to have slowed and will reverse if President Putin follows through on his warning at the St Petersburg Economic Forum, persuading attendees to actively sell dollars. The US Government will face significant funding hurdles against foreign liquidation of Treasuries. Bond yields and funding costs for the government are bound to rise to crisis levels. And the Fed’s own financial condition will become a further source of concern for foreign exchange markets. Furthermore, the commercial banks have balance sheet constraints, restricting their ability to create further credit under Basel III rules.
  • The consequences for the EU and the eurozone would be both politically and economically divisive. If it were not for political constraints, Germany would naturally drift towards cooperation with the sound money regimes emerging to her east, particularly as the finances of the Mediterranean club deteriorate, needing yet more support at the expense of Germany’s wealth. With falling bond prices, the entire euro system comprised of the ECB and its national central banks would need to be recapitalised, being already in negative equity. The eurozone’s global systemically important banks (G-SIBs) are extremely highly leveraged and unlikely to survive the combination of falling asset values and bad debts that would be the certain consequences of the euro’s declining purchasing power. Having been assembled at the behest of a political committee and now managed by a political cabal, the euro is at risk of losing all market credibility.
  • The consequences for the Japanese yen will also be harsh. The Japanese economy is highly dependent on imported commodities and raw materials. Higher prices in yen will feed through to yet higher prices through the value chain. Already, Japanese inflation is recorded at 4%. The CPI includes prices suppressed by government subsidies giving a cosmetic effect. The Bank of Japan has taken a losing bet on the inflation outlook, continuing to assume that it was transient long after other major central banks accepted that inflation was not going to subside so easily as they originally thought. Government bond yields up to two years maturity still have negative yields, illustrating the unreality of the BoJ’s three-wise-monkeys approach to price inflation and interest rate policy. For now, the BoJ is aggressively rigging the bond market to keep yields suppressed by buying enormous quantities of 10-year JGBs to cap their yield at 0.5%. One way or another, the ending of this policy is going to forced upon the BoJ and the shock to government finances will be tremendous. The government debt to GDP ratio stands at over 250%, and a rise in funding costs is likely to be catastrophic for the yen.
  • The consequences for the UK pound will also be significant. In a similar debt trap to that of the US Government, the British have the further disadvantage of an economy suppressed by increasing taxes. Furthermore, with London being the international financial centre built on fiat currencies, the UK will be at the epicentre of a fiat currency crisis. For the size of her economy, the UK has little in the way of gold reserves, hampering any future escape from the fiat currency trap.

Not only will the major governments aligned both economically and intellectually with the fiat dollar as their reserve currency be left with a comparative disadvantage by an Asia moving to sound money standards, but their economies are exposed to highly costly welfare commitments. Politically, it is proving impossible for them to respond to developments in Asia with cuts in public spending. Rising prices, which in reality represent declining purchasing power for fiat currencies, will require significantly higher interest rates to stop foreign selling in favour of strategic commodity and gold reserves.

A moment of fundamental choice is rapidly approaching: will central banks continue to suppress interest rates to save financial markets and support economic activity, or will they act to protect the currency and ignore the financial and economic consequences? The political imperative is clear, not least because of the consequences for government funding costs and liabilities. Furthermore, economists in governments and central banks would be reluctant to abandon their embedded economic and monetary policies by protecting their currencies because it would be an admission of failure.

Already, financial commentators are aware of the approaching dilemma, referring to it as a policy pivot. Conditioned to be inflationists, they are all warning of the dangers of higher interest rates, and owners of financial assets are banking on this so-called pivot taking place. But a pivot only delays the outcome by very little time because the consequences of a rapidly depreciating currency relative to commodity and other cost inputs will soon lead to economic activity being hampered, business plans rapidly becoming obsolete, and unemployment rising catastrophically. The Keynesian response of economic stimulation will simply not be available.

The only salvation will be for western governments to jettison Keynesian macroeconomics entirely and revert to classical economic theories. The false assumptions that have built up over the last hundred years will have to be overturned. Therefore, economists in central banks and government departments will not be intellectually equipped to provide solutions. Re-education against a background of economic crisis driven by collapsing fiat currencies will take some time; time that markets are unlikely to grant.

Crises of this sort nearly always emanate in the foreign exchanges because it is foreign holders of currencies who are the first to recognise a currency’s weakness. Usually, it involves a specific currency. But this time, it will affect all the major currencies in the western alliance. Furthermore, instead of a shift between fiat currencies, much of the crisis will reflect the wholesale selling of fiat currencies for commodities and gold. Additionally, the error the western alliance made in rendering their currencies worthless in Russian hands has tipped off all foreign holders of fiat currencies to their true value.

A sensible course for any non-aligned government would be to swap currency reserves for strategic reserves, the latter being comprised of commodities, raw materials, and foodstuffs. The pressure this switch would bring to bear on markets is not restricted to currencies but is a reversal of the conditions which have underpinned the growth of derivatives. The scramble to cover paper obligations as demand for physical commodities begin to drive prices is sure to result in market dislocations, threatening the solvency of trading banks and speculators.

There is also likely to be an unwinding of positions between fiat currencies. Japan has been a source of capital for America through the carry trade, and to a lesser extent a source of direct investment into European bonds. The shock of higher interest rates in Japan is bound to cause a repatriation of these funds for two reasons: firstly, at times of heightened global uncertainty, investors will liquidate positions in markets foreign to them because their accounting is in their native currency and foreign investment is an additional investment risk; and secondly, losses in domestic investments have to be funded.

It’s not just Japan. It is a problem that afflicts all foreign investors in bear markets caused by rising interest rates. The reversal of investment flows which have accumulated since the last financial crisis thirteen years ago is bound to dominate foreign exchange activity. China and Russia never participated in the trend to export capital, but members of the western alliance did. The reversal of these flows is a trend which is likely to hit the dollar hard, not just in terms of commodity prices, but initially against the euro and the yen in particular.

The impact on gold

Throughout history, money has been gold, and the rest credit. When you detach credit from gold, there are consequences. Pricing goods and services in credit diverges from pricing them in gold. It is really that simple.

In this article, the assumption has been that pricing everything in gold has led to minimal fluctuations in gold’s purchasing power. But fluctuations do occur, and because fiat currencies dominate pricing, they are driven mostly by changes in the status of credit. There was no clearer example of this than the divergence in pricing between gold and fiat which followed the end of the Bretton Woods era, illustrated in our earlier chart comparing oil priced in gold with oil priced in dollars. The chart below puts it directly in a gold versus fiat context.

Since the suspension of Bretton Woods, the dollar has lost 98% of its value relative to real money, which is gold. The other major fiat currencies have been similarly impoverishing, and only now is the final act in their destruction looming.

An acceleration in the rate of collapse of fiat currencies will obviously lead to a significant increase in demand for gold. Therefore, commodities and goods values measured in gold will fall. This would also be reflected in the purchasing power of currencies on a credible gold standard, increasing their divergence from fiat currencies even further.

What we have described is the development of a world split by an acknowledgement that gold is money and that currencies must become credible substitutes for it, and a world hooked both practically and intellectually on fiat currencies. Instead of assuming the world economy is interdependent on the economic policies of all nations, we will discover that that is not the case, and while the fiat world sinks into a currency collapse, nations which embrace sound money are set for a new phase of economic prosperity.

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Western Civilization Is In Its Final Years

Western Civilization Is In Its Final Years  By Paul Craig Roberts, 26 September 2022

Insouciance has a cost, and the cost is now coming home to Western civilization.

Perhaps other civilizations have destroyed themselves, but it is certain that the Western world has destroyed itself.  Other civilizations might have underestimated a threat, or made a military blunder, or like Cartage antagonized a more powerful foe.  But the Western world is the first in history that, despite its dominant economic and military power, dismantled itself.

Everywhere one looks in the Western world, governments, intellectual and professional elites, and media have picked apart Western Civilization with relentless demonization beginning in the 1960s. (And yes there are older roots. The “march through the institutions” Frankfort School moved to Columbia University in the 1930s.) White liberals thought that this was the way to reform society, but they were delusional.  It is the way to deconstruct society, and that is what they have achieved.

Education, media, Hollywood, and white liberal politicians are weapons deployed against white society.  They have painted a picture for all generations that came after mine of Western civilization as a racist oppressor of all other peoples — people of color, people who are not heterosexual, people unsure of their gender, and women.  Feminists, minority rights activists, lesbian and homosexual activists, transgender rights activists, together with the neoconservatives who advocate US wars in Israel’s interests, have been the dominating forces in the Western world for 60 years.  The demonization of Western civilization as colonialist, imperialist, and racist is institutionalized in universities, public schools, movies, literature, art, and in the New York Times’ 1619 Project.  Statues and memorials have been destroyed, museum collections removed, and books banned.

As university classes become more diverse in the white countries, the culture, history, and literature of the countries comes under attack as unrepresentative.  Shakespeare, for example, is no longer a requirement for English majors.  Seven years ago the American Council of Trustees and Alumni reported that only 4 of the 52 top American universities  require a knowledge of Shakespeare for an English major. In place of Shakespeare’s central place in the development of English literature, universities provide courses on vampires, cyborgs, and popular movies  and TV shows.  The abandonment of English literature, even by university English departments, has become common. For example, Stirling University in the UK dropped Jane Austin in order to “decolonize the curriculum.”

Each time a piece of the cultural tradition is cast into the Memory Hole, the culture weakens and fades a bit more.  In this way we are being dispossessed of who we are.  To put it simply, year by year Western civilization is being erased.

Narratives are controlled, and censorship is extreme.  Indoctrination of the young with critical race theory and gender theory is emphasized more than reading, writing, and math. That blacks do less well in math than whites is taken as proof that math is a tool of white oppression.  White students, white members of the military, and white employees of corporations and federal, state, and local governments are subjected to “sensitivity training” which inculcates a sense of guilt and teaches white people to be deferential to people of color.  White Americans have become second class citizens who are held back by racial quotas. White Americans are unprotected by prohibitions against hate crimes and have to accept rampages  by backs that loot and burn their businesses, constant insults, and calls for their deaths.  Democrat-controlled cities such as San Francisco have passed a law that permits blacks to steal up to $950 on each occasion from stores without a felony charge.  In other words black crime is being legalized and made a privilege. Consequently, Walgreen and other retailers have closed a large number of stores and reduced open hours in others.  Emboldened by the city’s acceptance of crime, criminal activity has exploded with 45% of the city’s population now victims of theft.

Affirmation of the West is hard to come by and is no longer a part of the educational process.  A corresponding loss of white confidence and a sense of guilt have resulted in many white Americans accepting to their own children’s disadvantage lower educational standards and admission and employment quotas. The merit-based society has disappeared. The majority of people who have come to maturity during these decades  have been affected by concerns for the “oppressed.”  The former oppressed–the working class–has been transformed into oppressors known as “Trump Deplorables.”  The new oppressed are the victims of the white working class that votes for Trump. Today anyone who speaks for the working class is likely to be investigated by the FBI as a  “white supremacist,” or “domestic terrorist.”  The brainwashing has been effective. The latest Rasmussen Poll finds that as many Americans agree as disagree with Biden’s assertion that “Donald Trump and the MAGA Republicans represent an extremism that threatens the very foundations of our republic.”

In the small part of the Earth’s territory in which white people, a small minority of the world population, exist, white people are said to be an oppressive majority and are being shoved aside in their own countries.  In those bye-gone days when a country was a homogenous nation, the nation was based on its race. Germany consisted of Germans. France consisted of French. Britain was British.  Sweden was Swedish.  Today there are no Western nations. The Western countries are merely geographical locations.

Nationalism is the foundation of unity. To prevent immigration from turning the US into a tower of babel, immigrants underwent a process of assimilation, thus forming a nation out of different ethnicities.  But assimilation was abandoned on the grounds that it was against diversity and multiculturalism.  Nationalism was redefined as fascism and white supremacy. But without nationalism there is not a people, and unity disappeared.  For many years the West has had open borders and is being overrun by diverse millions of immigrant-invaders who have acquired the status of “preferred minorities.”

White families are disappearing in corporate advertisements, another indication of the marginalized  status of white people in their own country.  White men are disappearing from cabinet positions.  Scandinavian  governments are essentially female. Liz Truss has put together a diverse government in Britain in which women and people of color are a majority.  Biden’s cabinet is scarce on white gentile men. His Secretary of State is Jewish. His Attorney General is Jewish, his Secretary of Treasury is a Jewish woman, his Secretary of Defense is a black male.  His vice president is a black woman. Of the remaining 18 cabinet members, 15 are either female, black, Hispanic, or homosexual.  Only 3 cabinet members are white heterosexual men. The chief of staff is Jewish.  https://www.whitehouse.gov/administration/cabinet/

We used to hear a great deal about the under-representation of women and blacks. Now it is white men who are underrepresented.  We hear a great deal about “white privilege,” but where is it?  How do we explain the marginalization of white people in white countries? Wilmot Robertson explained it in 1972 in his book, The Dispossessed Majority.  Jean Raspail explained it in 1973 in his book, The Camp of the Saints.  The slow erasure of Western civilization is a multi-decade phenomenon.  In the 21st century the open borders policies of the white countries have accelerated the process.  In Sweden the subordination of white people to immigrant-invaders went so far as to produce a few days ago a political rebellion against Sweden’s long-ruling leftwing Social Democratic Party which was just voted out of power.

In Sweden moderate political parties are called right-wing and extremist, but despite this handicap, what the New York Times calls “the right-wing bloc” unseated the crazed anti-white left-wing Social Democratic Party government that refused to acknowledge the crime rampage by immigrant-invaders.

Over-run by immigrant-invaders, thanks to the Social Democratic Party’s open borders policy, Sweden quickly rose from the lowest rate of fatal shootings in Europe to the highest.  Rape runs rampant. One fourth of Swedish women say they are afraid to leave their homes. Court convictions revealed that in rape cases where the victim did not know the attacker, foreign-born offenders were responsible for 85% of the rapes.  However, far from all the rapes are reported, because the raped Swedish women fear being charged for hate crimes for testifying against a privileged immigrant-invader. The implication is that the Swedish women are racist for accusing an immigrant-invader. Under the Social Democrats, a collection of nut cases as bad as America’s Woke Democrats, rape was becoming a right of immigrant-invaders.

Under the anti-white Social Democrats, the police were not permitted to attribute the crime wave to immigrant-invaders. Finally, a couple of years ago a senior police officer, Peter Springare, had had enough. To quote from the UK Daily Mail, September 18, 2022:

“In an online posting, he wrote of his working week: ‘This is what I’ve handled between Monday and Friday; rape, rape, robbery, aggravated assault, rape-assault and rape, extortion, blackmail, assault, violence against police, threats to police, drug crime, drug crime, felony, attempted murder, rape again, extortion again . . .   Countries representing the crimes this week: Iraq, Iraq, Turkey, Syria, Afghanistan, Somalia, Somalia, Syria again, Somalia . . .’”

The anti-white Social Democrats tried to prosecute Springare for committing a hate crime by telling the truth, but widespread public protests against the silencing of someone who finally told them the truth prevented the Social Democrats from destroying the senior police official.

The immigrant-invaders have sensed the lack of confidence that years of anti-white propaganda has produced in the Swedish people. Immigrant-invader Based Mahmoud recently stated that “Sweden is ours in ten or fifteen years whether they like it or not.”  Demographics support his claim.

In short, it is a safe conclusion that the Social Democrats have destroyed Sweden.  Despite the massive crime wave the Social Democrats unleashed on Sweden, the margin of their defeat was a mere three votes.  The woke media and universities will not be content until they have the party of the immigrant-invaders back in office serving diversity and multiculturalism.  The next great wave of refugees will be white people fleeing from Sweden.

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Financialization and its Discontents

Financialization and its Discontents  By Francis Lee for the Saker blog, 25 September 2022

As the textbooks would have define it Capitalism should be understood as being essentially a dynamic force, constantly growing and mutating, and it takes no prisoners moreover. It is a social system in which individuals are free to own the means of production, property, and maximize profits and which resource allocation is determined by the price system. Well, that’s the theory in its pristine form going all the way back to John Locke (1632-1704). However, in the fullness of time the system changed and adapted to the requirements of its new environment. The early logicians of the system were mostly to be found in Europe, particularly England, France, and Germany. The English School of theoretical practitioners, including Adam Smith – who in fact was Scottish – (1723-90), (David Ricardo (1722-1823) who was originally Portuguese, John Stuart Mill (1806-1873), Karl Marx (1818-1883) and his sidekick (Friedrich Engels – both German (1820-1895) Although much of Engels’ work was journalism rather than economic theory – see for example ‘’The Condition of the working class in England 1844.’’

Such was the golden age of political economy.

Political Economy was, however, about to be eclipsed by a new theory, viz., ‘Economics’. Mathematical Economics has now pretty much insinuated its way into the Political Economy of the dominant school, university, and business curricula. The theory is based upon a system of ‘natural’ laws’ (sic!) which are apparently above dispute and rigidly disciplined by a priesthood of clerics sworn to uphold its religious precepts.

So far, however, any attempt to challenge the teachings of this faith and its defenders will find it tough going. Be that as it may a radical movement among its retractors is building up a head of steam in opposition. Nothing stays the same forever and to be subject to a radical reshaping of the way economics and finance are, and have been, studied and taught. What has gone wrong has long historical roots and will doubtless correct – but correct it must. There has been and increasingly more than dissatisfaction with the current Economics paradigm. Its critics are vehement:

‘’Academic economics has become a disaster and a disgrace. In a particular lecture Nobel Laureate Paul Krugman said that much of the past 30 years of macroeconomics was ‘spectacularly useless at best, and positively harmful at worst.’’’ (1)

Krugman was on this occasion correct. ‘’Not only did most academic economists fail to see the Great Implosion (2008) coming, but they were not even looking in the right direction. And having been surprised by its arrival, they had little to say about its implications – the greatest event to have fallen the capitalist system since the Second World War.’’ (2)

Yet, the herd-like response to the 2008 debacle was not unique. It seems like many other blow-outs inbuilt in popular consciousness. Everything seems to be going along as normal and them – wham, everything collapses. And this is not the first time that this has happened. Much the same was true of the collapse of communism in the early 1990s which broke on an unsuspecting academic community that had written virtually nothing about how a society should move from communism to a market system. The situation was and is hardly unique.

‘’Although there are shining exceptions, most academic economists, whilst clinging to the idea that their subject matter is somehow relevant and of interest to a wider world, in fact practice a modern form of scholasticism – of no use or interest to man or beast. The output of this activity consists of articles entombed in ‘scholarly’ journals usually about questions of startling irrelevance, badly thought out and appallingly badly written, littered with jargon, and liberally dosed with mathematics, destined to be read by no-one outside of a narrow coterie, and increasingly not even by them.’’ (3)

But what happens when civilizations disintegrate as they always do? Well, we would have a case-study – or perhaps I should say case-studies, plural – standing squarely in front of us. During the 1980s and 90s the system enjoyed a period of considerable prosperity. This was occasioned by the fall in the oil price and dominance of the yuppie ideology of leveraged wealth and risk taking. There was also the emergence of China – N.B. Russia was still in the convalescent ward at the time having been ravaged by its own extractive yuppie class oligarchs – China, however, powered ahead as a major supplier of cheap goods and the remarkable advances in technology.

The values of modern financial markets, dominated by the devil-may-care worship of greed, are deeply corrosive of the values which held societies together. They are also corrosive of the values that underpin successful business. Businesses once focused primarily on producing goods and services for which they had a competitive advantage, but today they are more likely to place just as much if not more focused on their share price, their dividends regime, their borrowing, and their bets they have made on exchange rates and interest rates.

What also bears examination was the great sell-off of national assets during the heady years of the Blair/Clinton interlude. Monies which were handed out into the greedy grasp of the oligarch class throughout the US and Europe. Michael Hudson explains:

‘’The West’s former left-wing parties have adopted neo-liberal policies relinquishing political control back to the financial and rentier elites that seemed on the brink of losing them when the 20th century tax and regulatory reforms began to be put in place. Tony Blair’s British Labour Party, and Bill Clinton’s US Democratic Party in the 1990s have been followed by the German Social Democrats SPD and French PS Parti Socialiste in this regression. Not to mention the Greek and Spanish socialist parties.’’ (4)

But we have now moved on to the second leg of the great economic and political reset which was in as sense 2008 on steroids.

The Finance Revolution

The best-known understanding of Finance and Financialization can be delineated as follows: financialization is a global system which involves the increasing role of financial motives, financial markets, financial actors, and financial institutions in the operation of domestic and international economies. (5)

Financialization involves a uniquely new order of wealth extraction – not to be confused with wealth creation (production). In addition, the unchecked growth of finance has given rise to the emergence of a new rentier economy and a rentier class similar to the aristocratic strata of yesteryear; a class against whom the 19th and 20th century proponents of a productive economy toiled in vain. Unfortunately, this social/economic formation has become a growth consuming parasite which has positioned itself astride the national and even global/financial borders of sovereign states. This economic and financial coup against the working class as well as productive capitalism has nurtured a political counter-revolution which has so far been impervious to any change of its social and political position. As Michael Hudson notes.

‘’The distinguishing feature of finance-capitalism is not the real economy of production and consumption, industrial profits, and wages, but the financialization of income and wealth. That is what is imposing austerity, as a result of payments to the Finance, Insurance and Real Estate sector, ‘’crowding out’’ personal and corporate income. This phenomenon is a composite of debt deflation and rent deflation.’’ (6)

Michael Hudson: a note on debt deflation. Below.

‘’Every economy needs credit to finance housing, education, (in the United States) and large consumer durables from automobiles to refrigerators. The problem is that the economy-wide volume of debt grows exponentially by compound interest. The financial expansion of debt (and of ‘’savings’’ on the creditors’ side of the economy’s balance sheet) is extractive, deflating the industrial economy’s circulation of production and consumption spending … Hudson.

David Ricardo (see above) ignored the exponential growth of interest- bearing debt. It was left to Karl Marx to elaborate (In Volumes II and III of Capital) that the financial system of credit and debt is external to industrial capitalism. It grows by purely mathematical laws, and these are independent of the economy’s ability to produce and pay-off the debts. As the rising debt overhead diverts income away from the industrial economy, creditors receiving this exponential growth recycle their interest receipts into yet more lending diverting more and more income to banks and bondholders away from the industrial economy. What doubles is not real growth but the financial burden, leaving less income to be spent on goods and services.

The resulting exponential all-devouring path ‘’assimilates all the surplus value with the exception of the share claimed by the state.’’ see Marx. (7)

The State and Sovereignty

During the post 1945 period it was generally understood that the political institutions of state have always been in a sense neutral. Acting in the public interest the state was responsible for key sectors of the economy which included, health, education, key industries like transportation, public utilities – water, electricity, gas, coal, iron, and steel. Moreover, there were cultural utilities such as music, housing, and theatre drama – and in addition, museums, parks, playing-fields, and lidos which have always been funded by the state. There were a number of things like Circuses for example which remained in the private sector.

But the state no longer oversees most of the above. The only real institutions which now matter are the civil service, the police, and the armed forces, and of course – the media.

First to be targeted were the inhabitants of the global south. The IMF and World Bank were given this particular role. This deadly duo of IMF/WB were provided with a brief to impose the dreaded ‘Structural Adjustment Programmes forced on governments in Latin America Asia and Africa by the IMF/WB duo to pursue export led industrialization, cut welfare spending, lower salaries of civil servants and cut their numbers, rush privatization measures, and above all, enforce private property rights … And the upshot of all this was the creation of crony capitalism which enabled well-connected individuals and companies to take control of key sectors and turn themselves into plutocrats through opportunistic networking and clientelism. Carlos Slim emerged from nowhere and became the richest man in the world by acquiring control of Mexico’s telecom sector on privatization. Predictably other nonentities in the global south emerged as billionaires combining political skills with ruthless commercial acumen.

In the Northern hemisphere what was left was the privatization of much of the above. In Russia this took on the most extreme form and led to a collapse in the Russian state, institutions, culture and religion and the rise of the Oligarch class. Russia was literally gutted by the privatizers and their western backers and took years to recover.

This process also took place in ex-post-soviet states and also took years to recover, and had enjoyed a brief renaissance, until a reemergence of the new capitalist order with the usual smorgasbord of structural reforms imposed by the IMF/WB duo was meted out. (8) These destructive policies brought in by a series of privatizations which were a bonanza to the already well-heeled but has become a new burden for the new working class in the West.

(One of the side effects of this global counter-revolution has been the fall in population particularly in the northern hemisphere. The fertility rate for women has been falling and with it the size of the population. I cannot think of one country in the northern hemisphere which manages the minimum 2.1 fertility rate for women. In short, and to the joy of the eugenicists, the world population has been in long-term decline from 1950 onwards.) The Great Game goes on.

This article by Alastair Macleod can be read in full in Goldmoney

Geopolitics: The world is splitting in 2. 18-Aug-2022. By Alasdair Macleod.

While we are being distracted by Ukraine, President Putin has advanced his geopolitical goals materially. Aided and abetted by President Xi, Putin is taking the Asian continent into his control. The mission is well on its way to being achieved. He now awaits the winter months to finally force the EU to reject America’s hegemony. Only then, will the western end of the Eurasian continent be truly free of America.

This brief synopsis explains how he is achieving his strategic goals. It examines the geopolitics of the Asian landmass and the nations tied to it, which are commercially and financially turning their backs on the US-led western alliance.

I look at the politics from President Putin of Russia’s viewpoint, since he is the only national leader who seems to have a clear grasp of this long-term objectives. His active strategy conforms closely with Halford Mackinder’s predictive analysis of nearly 120 years ago. Mackinder is regarded as the founder of geopolitics.

Putin is determined to remove the American threat to his western borders by squeezing the EU to that end. But he is also building political relationships based on control of global fossil fuel supplies – a pathway opened for him by American and European obsessions over climate change. In partnership with China, the consolidation of his power over the Eurasian landmass has progressed rapidly in recent weeks.

For the Western alliance, financially and economically his timing is particularly awkward, coinciding with the end of the 40-year period of declining interest rates, rising consumer price inflation, and a deepening recession driven by contracting bank credit.

It is the continuation of a financial war by other means, and it looks like Putin has an unbeatable hand. He is on course to push our fragile fiat currency based financial system over the edge.

NOTES

(1) ‘The Trouble with Markets’, Roger Bootle – Saving Capitalism from Itself – Chapter 9 – pp.232-33 – P.Krugman

(2) Bootle – page 233 – Ibid.

(3) Bootle – op. cit.

(4) Michael Hudson – The Destiny of Civilization – p.172

(5) Grace Blakely – Stolen: How to Save The World from Financialization. By Grace Blakeley – page 11.

(6) Michael Hudson – The Destiny of Civilization – p.15

(7) K. Marx – Capital Volume 3, page 699

(8) Meanwhile the Washington Institutions gained a new role in the 1990s as the midwives to capitalist development in the numerous ‘transition’ economies of the former Soviet Union and Eastern Europe the hastily established European Bank for Reconstruction and Development. (ERBD). They adopted the structural adjustment strategy to these countries in what was euphemistically called ‘shock therapy’. This had calamitous social and economic consequences for which the international financial institutions advising them to bear a great deal of responsibility.

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The Fed Has Never Been Right

The Fed Has Never Been Right  By Peter Schiff, Zerohedge, 30 October 2020

Peter Schiff delivered a key-note speech at the Virtual Investor Day Conference. He walked through the history of the Federal Reserve’s monetary policy over the last several decades and explained the inevitable outcome. Peter’s recap of Fed history leads you to an undeniable conclusion: the Federal Reserve has never been right. And it has set us up for an even bigger crisis.

 

Peter opened his talk saying that he thinks we are entering the final chapter of the book Alan Greenspan started to write.

And I have a feeling he had an understanding of how badly it was going to end. But unfortunately, a lot of people who have been adding pages or chapters to that book since Greenspan resigned really don’t have any idea what’s coming.”

Greenspan started the book by unleashing the loose money policy that blew up the dot-com bubble.

When that bubble popped, instead of admitting his mistakes, Greenspan ignored them and tried to revive the economy by inflating a bigger bubble in the real estate market than the bubble that had just popped in the stock market. And the Fed succeeded in inflating that bubble. But that was not a success. It was a failure.”

Peter reminds us that he warned that the Fed policy was distorting the economy. He knew that it was creating a bubble economy. People were using the inflated value of their homes as ATMs and that drove consumer spending. People were living beyond their means. Nobody was saving.

So, the whole economy was distorted by the malinvestments and bad decisions that were being made as a result of artificially low interest rates.”

When the Fed tried to normalize, the bubble popped, the mortgage market blew up, and that gave us the Great Recession.

In the wake of the 2008 financial crisis, the Federal Reserve repeated the process, dropping interest rates to zero and launching quantitative easing. Ben Bernanke promised QE was just temporary – that the Fed was not monetizing the debt. He promised the Fed would shrink its balance sheet once the crisis passed. At the time, Peter said it was impossible. He said even if the Fed tried to normalize rates and shrink its balance sheet, it would fail.

Everything the Fed said about their ability to normalize rates and shrink the balance sheet was wrong. I said they were wrong as they were saying it. They never were able to normalize interest rates. They never came close to returning the balance sheet to pre-crisis levels.”

In Q4 2018, the Fed abandoned rate hikes at about 2.5% – not even close to normal. They called off quantitative tightening. By 2019, the Fed was back to rate cuts and the launched QE, all the while claiming it wasn’t QE. The Fed told us the pivot back to loose monetary policy was only temporary, calling it a “midcourse correction.”  But Peter said we were going back to zero and that’s exactly what happened.

And here we are today with the central bank running QE infinity and saying rates will stay at zero for years.

We are now the banana republic that Ben Bernanke assured us we would never become.”

Peter said he went through the history of Fed failures to make a point that should be pretty obvious.

The Federal Reserve has never been right. Everything they have said about the efficacy of their policies, what their policies would create, and their ability to reverse them or unwind them, has been wrong. And it’s amazing how consistently wrong they have been.”

And now they are pushing toward the logical conclusion.

We are headed for a US dollar crisis and a sovereign debt crisis. The magnitude of this crisis will be unlike anything we’ve ever experienced. Because this is not just mortgages blowing up. This is the credit of the United States government. This is the risk-free asset becoming the most toxic asset on the planet. And it’s not just US Treasuries that are going to collapse, but it’s the entire US-denominated bond market which is built on top the foundation of US Treasuries. So, Treasuries go — it all goes — corporate bonds, muni bonds, mortgages. Any debt instrument that is denominated in US dollars is going to collapse.”

So where will people run?

Gold.

The world is going to return to gold-backed paper money.”

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Debunking The Establishment’s Desperate Plans To Discredit Gold  By James Richards, via DailyReckoning.com. from Zerohedge, 27 August 2020

Central Banks Are Driving Gold

Gold as an asset class is confusing to most investors. Even sophisticated investors are accustomed to hearing gold ridiculed as a “shiny rock” and hearing serious gold analysts mocked as “gold bugs,” “gold nuts” or worse.

As a gold analyst, I grew used to this a long time ago. But, it’s still disconcerting when one realizes the extent to which gold is simply not taken seriously or is treated as a mere commodity no different than soybeans or wheat.

 

The reasons for this disparaging approach to gold are not difficult to discern. Economic elites and academic economists control the central banks. The central banks control what we now consider “money” (dollars, euros, yen and other major currencies).

Those who control the money supply can indirectly control economies and the destiny of nations simply by deciding when and how much to ease or tighten credit conditions, and when to favor (or disfavor) certain types of lending.

When you ease credit conditions in a difficult environment, you help favored institutions (mainly banks) to survive. If you tighten credit conditions in a difficult environment, you can more or less guarantee that certain companies, banks or even nations will fail.

This power is based on money and the money is controlled by central banks, primarily the Federal Reserve System. However, the money-based power depends on a monopoly on money creation.

As long as investors and institutions are forced into a dollar-based system, then control of the dollar equates to control of those institutions. The minute another form of money competes with the dollar (or euro, etc.) as a store of value and medium of exchange, then the control of the power elites is broken.

This is why the elites disparage and marginalize gold. It’s easy to show why gold is a better form of money, why it’s more reliable than central bank money for preserving wealth, and why it’s a threat to the money-monopoly that the elites depend upon to maintain power.

Not only is gold a superior form of money, it’s also not under the control of any central bank or group of individuals. Yes, miners control new output, but annual output is only about 1.8% of all the above-ground gold in the world.

The value of gold is determined not by new output, but by the above-ground supply, which is 190,000 metric tonnes. Most of that above-ground supply is either owned by central banks and finance ministries (about 34,000 metric tonnes) or is held privately either as jewelry (“wearable wealth”) or bullion (coins and bars).

The floating supply available for day-to-day trading and investment is only a small fraction of the total supply. Gold is valuable and is a powerful form of money, but it’s not under the control of any single institution or group of institutions.

Clearly gold is a threat to the central bank money monopoly. Gold cannot be made to disappear (it’s too valuable), and it would be almost impossible to confiscate (despite persistent rumors to that effect).

If gold is a threat to central bank money and cannot be made to disappear, then it must be discredited. So it becomes important for central bankers and academic economists to construct a narrative that’s easily absorbed by everyday investors that says gold is not money.

The narrative goes like this:

There’s not enough gold in the world to support trade and commerce. (That’s false: there’s always enough gold, it’s just a question of price. The same amount of gold supports a larger amount of transactions when the price is raised).

Gold supply cannot expand fast enough to keep up with economic growth. (That’s false: It confuses the official supply with the total supply. Central banks can always expand the official supply by printing money and buying gold from private hands. That expands the money supply and supports economic expansion).

Gold causes financial panics and crashes. (That’s false: There were panics and crashes during the gold standard and panics and crashes since the gold standard ended. Panics and crashes are not caused or cured by gold. They are caused by a loss of confidence in banks, paper money or the economy. There is no correlation between gold and financial panic).

Gold caused and prolonged the Great Depression. (That’s false: Even Milton Friedman and Ben Bernanke have written that the Great Depression was caused by the Fed. During the Great Depression, base money supply could be 250% of the market value of official gold. Actual money supply never exceeded 100% of the gold value. In other words, the Fed could have more than doubled the money supply even with a gold standard. It failed to do so. That’s a Fed failure not a gold failure).

You get the point. There’s a clever narrative about why gold is not money. But, the narrative is false. It’s simply the case that everyday citizens believe what the economists say (usually a bad idea) or don’t know enough economic history to refute the economists (and how could you know the history if they stopped teaching it fifty years ago).

The bottom line is that economists know that gold could be a perfectly usable form of money. The reason they don’t want it is because it dilutes their monopoly power over printed money and therefore reduces their political power over people and nations.

To marginalize gold, they created a phony narrative about why gold doesn’t work as money. Most people were too easily impressed by the narrative or simply didn’t know enough to challenge it. Therefore the narrative wins even if it is false.

In fact, central banks went from being net sellers to net buyers of gold in 2010, and that net buying position has persisted ever since. The largest buyers are Russia and China, but significant purchases have also been made by Iran, Turkey, Kazakhstan, Mexico and Vietnam.

Here’s the bottom line:

Central banks have a monopoly on central bank money. Gold is the competitor to central bank money and most central banks would prefer to ignore gold. Yet, central banks in the aggregate are net buyers of gold.

In effect, central banks are signaling through their actions that they are losing confidence in their own money and their money monopoly. They’re getting ready for the day when confidence in central bank money will collapse across the board. In that world, gold will be the only form of money anyone wants.

As confidence in the dollar is eroded due to Fed money printing and congressional super-deficits, investors will gradually look for alternative stores of wealth, including gold.aily recap featuring a curated list of must-read stories.

Top of Form

Bottom of Form

These trends begin slowly and then gather momentum. As the dollar price of gold really begins to soar, investors will take notice. Even more people will invest in gold, driving the price still higher.

Investors like to say that the price of gold is going up. But what is really happening is that the value of the dollar is going down (it takes more dollars to buy the same amount of gold).

This is the real inflation and the real dollar collapse most investors miss at the early stages.

Eventually, confidence in the dollar will be lost completely, central bankers will need to restore confidence, and they’ll turn to some type of gold standard to do so.

We’re a long way from that point right now.

But if central banks are voting with their printing presses in favour of gold, if the super-rich and their advisers are all jumping on the gold bandwagon, what are you waiting for?

Here’s a once in a lifetime opportunity to front run central banks and acquire your own gold at attractive prices before the curtain drops on paper money.

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Lockdowns, Coronavirus, and Banks: Following the Money

 

Lockdowns, Coronavirus, and Banks. Following the Money  By Prof Anthony Hall, American Herald Tribute 16 August 2020

It usually makes sense to follow the money when seeking understanding of almost any major change. The strategy of following the money in our current convergence of crises in late summer of 2020 leads us directly to the lockdowns. The lockdowns were first imposed on people in the Wuhan area of China. Then other populations throughout the world were told to “shelter in place,” all in the name of combating the COVID-19 virus.

Understanding of the enormous impact of the lockdowns is still developing. The lockdowns are proving to pack a far more devastating punch than any other aspect of the strange sequence of events that is making 2020 a year like no other. Even when the issues are narrowed to those of human health, the lockdowns have had, and will continue to have, far more wide-ranging and devastating impacts than the celebrity virus.

The lockdowns have, for starters, been directly responsible for explosive rates of suicide, domestic violence, overdoses, and depression. In the long run, these maladies from the lockdowns will probably kill and harm many more people than COVID-19.

But this comparison does not tell the full story. The nature and length of the lockdowns are causing millions of people to lose their jobs, businesses and financial viability. It seems that the economic descent is still gathering force. The assault of the lockdowns on our economic wellbeing still has much farther to go.

The lockdowns have proven to be a powerful instrument of social control. This attribute is becoming very attractive especially to some politicians. They have discovered they can derive considerable political traction from hyping and exploiting the largely manufactured pandemic panic.

The lockdowns are still a work-in-progress. There are past lockdowns, revolving lockdowns, partial lockdowns, mandatory lockdowns, voluntary lockdowns, severe lockdowns and probably an array of many lockdown types yet to be invented.

The lockdowns extend to disruptions in supply chains, disruptions in money flows, drops in consumption, breakdowns in transport and travelling, increased bankruptcies, losses of finance leading to losses of housing, as well as the inability to pay taxes and debts.

The lockdowns extend beyond personal habitations to prohibitions on large assemblies of people in stadiums, concert halls, churches, and a myriad of places devoted to public recreation and entertainment. On the basis of this way of looking at what is happening, it becomes clear the economic and health effects of the lockdowns are far more pronounced than the damage wrought directly by the new coronavirus.

This approach to following the money leads to the question of whether the spread of COVID-19 was set in motion as a pretext. Was COVID-19 unleashed as an expedient for bringing about the lockdowns with the goal of crashing the existing economy? What rationale could there possibly be for purposely crashing the existing economy?

One possible reason might have been to put in place new structures to create the framework for a new set of economic relationships. With these changes would come accompanying sets of altered social and political relationships.

Among the economic changes being sought are the robotization of almost everything, cashless financial interactions, and elaborate AI impositions. These AI impositions extend to digital alterations of human consciousness and behaviour. The emphasis being placed on vaccines is very much interwoven with plans to extend AI into an altered matrix of human nanobiotechnology.

There are other possibilities to consider. One is that in the autumn of 2019 the economy was already starting to falter. Fortuitously for some, the new virus came along at a moment when it could be exploited as a scapegoat. By placing responsibility for the economic debacle on pathogens rather than people, Wall Street bankers and federal authorities are let off the hook. They can escape any accounting for an economic calamity that they had a hand in helping to instigate.

A presentation in August of 2019 by the Wall Street leviathan, BlackRock Financial Management, provides a telling indicator of foreknowledge. It was well understood by many insiders in 2019 that a sharp economic downturn was imminent.

At a meeting of central bankers in Jackson Hole Wyoming, BlackRock representatives delivered a strategy for dealing with the future downturn. Several months later during the spring of 2020 this strategy was adopted by both the US Treasury and the US Federal Reserve. BlackRock’s plan from August of 2019 set the basis of the federal response to the much-anticipated economic meltdown.

Much of this essay is devoted to considering the background of the controversial agencies now responding to the economic devastation created by the lockdowns. One of these agencies is empowered to bring into existence large quantities of debt-laden money.

The very public role in 2020 of the Federal Reserve of the United States resuscitates many old grievances. When the Federal Reserve was first created in 1913 it was heavily criticized as a giveaway of federal authority.

The critics lamented the giveaway to private bankers whose firms acquired ownership of all twelve of the regional banks that together constitute the Federal Reserve. Of these twelve regional banks, the Federal Reserve Bank of New York is by far the largest and most dominant especially right now.

The Federal Reserve of the United States combined forces with dozens of other privately-owned central banks thoughout the world to form the Bank of International Settlements. Many of the key archetypes for this type of banking were developed in Europe and the City of London where the Rothschild banking family had a large and resilient role, one that persists until this day.

Along with the Federal Reserve Bank of New York, BlackRock was deeply involved in helping to administer the bailout in 2008. This bailout resuscitated many failing Wall Street firms together with their counterparties in a number of speculative ventures involving various forms of derivatives.

The bailouts resulted in payments of $29 trillion, much of it going to restore failing financial institutions whose excesses actually caused the giant economic crash. Where the financial sector profited greatly from the bailouts, taxpayers were abused yet again. The burden of an expanded national debt fell ultimately on taxpayers who must pay the interest on the loans for the federal bailout of the “too big to fail” financial institutions.

Unsettling precedents are set by the Wall Street club’s manipulation of the economic crash of 2007-2010 to enrich its own members so extravagantly. This prior experience bodes poorly for the intervention by the same players in this current round of responses to the economic crisis of 2020.

In preparing this essay I have enjoyed the many articles by Pam Martens and Russ Martens in Wall Street on Parade. These hundreds of well-researched articles form a significant primary source on the recent history of the Federal Reserve, including over the last few months.

In this essay I draw a contrast between the privately-owned regional banks of the Federal Reserve and the government-owned Bank of Canada that once issued low-interest loans to build infrastructure projects.

With this arrangement in place, Canada went through a major period of national growth between 1938 and 1974. Canada emerged from this period with a national debt of only $20 billion. Then in 1974 Prime Minister Pierre Trudeau dropped this arrangement to enable Canada to join the Bank of International Settlements. One result is that national debt rose to $700 billion by 2020.

We need to face the current financial crisis by developing new institutions that avoid the pitfalls of old remedies for old problems that no longer prevail. We need to make special efforts to change our approach to the problem of excessive debts and the overconcentration of wealth in fewer and fewer hands.

Locking Down the Viability of Commerce

Of all the facets of the ongoing fiasco generally associated with the coronavirus crisis, none has been so widely catastrophic as the so-called “lockdowns.” The supposed cure of the lockdowns is itself proving to be much more lethal and debilitating than COVID-19’s flu-like impact on human health.

Many questions arise from the immense economic consequences attributed to the initial effort to “flatten the curve” of the hospital treatments for COVID-19. Did the financial crisis occur as a result of the spread of the new coronavirus crisis? Or was the COVID-19 crisis set in motion to help give cover to a long-building economic meltdown that was already well underway in the autumn of 2019?

The lockdowns were first instituted in Wuhan China with the objective of slowing down the spread of the virus so that hospitals would not be overwhelmed. Were the Chinese lockdowns engineered in part to create a model to be followed in Europe, North America, Indochina and other sites of infection like India and Australia? The Chinese lockdowns in Hubei province and then in other parts of China apparently set an example influencing the decision of governments in many jurisdictions. Was this Chinese example for the rest of the world created by design to influence the nature of international responses?

The lockdowns represented a new form of response to a public health crisis. Quarantines have long been used as a means of safeguarding the public from the spread of contagious maladies. Quarantines, however, involve isolating the sick to protect the well. On the other hand the lockdowns are directed at limiting the movement and circulation of almost everyone whether or not they show symptoms of any infections.

Hence lockdowns, or, more euphemistically “sheltering in place,” led to the cancellation of many activities and to the shutdown of institutions. The results extended, for instance, to the closure of schools, sports events, theatrical presentations and business operations. In this way the lockdowns also led to the crippling of many forms of economic interaction. National economies as well as international trade and commerce were severely impacted.

The concept of lockdowns was not universally embraced and applied. For instance, the governments of Sweden and South Korea did not accept the emerging orthodoxy about enforcing compliance with all kinds of restrictions on human interactions. Alternatively, the government of Israel was an early and strident enforcer of very severe lockdown policies.

At first it seemed the lockdown succeeded magnificently in saving Israeli lives. According to Israel Shamir, in other European states the Israeli model was often brought up as an example. In due course, however, the full extent of the assault on the viability of the Israeli economy began to come into focus. Then popular resistance was aroused to reject government attempts to enforce a second wave of lockdowns against a second wave of supposed infections. As Shamir sees it, the result is that “Today Israel is a failed state with a ruined economy and unhappy citizens.”

In many countries the lockdowns began with a few crucial decisions made at the highest level of government. Large and proliferating consequences would flow from the initial determination of what activities, businesses, organizations, institutions and workers were to be designated as “essential.”

The consequences would be severe for those individuals and businesses excluded from the designation identifying what is essential. This deep intervention into the realm of free choice in market relations set a major precedent for much more intervention of a similar nature to come.

The arbitrary division of activities into essential and nonessential categories created a template to be frequently replicated and revised in the name of serving public heath. Suddenly central planning took a great leap forward. The momentum from a generation of neoliberalism was checked even as the antagonistic polarities between rich and poor continued to grow.

To be defined as “nonessential” would soon be equated with job losses and business failures across many fields of enterprise as the first wave of lockdowns outside China unfolded. Indeed, it becomes clearer every day that revolving lockdowns, restrictions and social distancing are being managed in order to help give false justification to a speciously idealized vaccine fix as the only conclusive solution to a manufactured problem.

What must it have meant for breadwinners who fed themselves and their families through wages or self-employment to be declared by government to be “non-essential”? Surely for real providers their jobs, their businesses and their earnings were essential for themselves and their dependents. All jobs and all businesses that people depend on for livelihoods, sustenance and survival are essential in their own way.

Was COVID-19 a Cover for an Anticipated or Planned Financial Crisis?

A major sign of financial distress in the US economy kicked in in mid-September of 2019 when there was a breakdown in the normal operation of the Repo Market. This repurchase market in the United States is important in maintaining liquidity in the financial system.

Those directing entities like large banks, Wall Street traders and hedge funds frequently seek large amounts of cash on a short-term basis. They obtain this cash from, for instance, money market funds by putting up securities, often Treasury Bills, as collateral. Most often the financial instruments go back, say the following night, to their original owners with interest payments attached for the use of the cash.

In mid-September the trust broke down between participants in the Repo Market. The Federal Reserve Bank of New York then entered the picture making trillions of dollars available to keep the system for short-term moving of assets going. This intervention repeated the operation that came in response to the first signs of trouble as Wall Street moved towards the stock market crash of 2008.

One of the major problems on the eve of the bailout of 2008-09, like the problem in the autumn of 2019, had to do with the overwhelming of the real economy by massive speculative activity. The problem then, like a big part of the problem now, involves the disproportionate size of the derivative bets. The making of these bets have become a dangerous addiction that continues to this day to menace the viability of the financial system headquartered on Wall Street.

By March of 2020 it was reported that the Federal Reserve Bank of New York had turned on its money spigot to create $9 trillion in new money with the goal of keeping the failing Repo Market operational. The precise destinations of that money together with the terms of its disbursement, however, remain a secret. As Pam Martens and Russ Martens write,

Since the Fed turned on its latest money spigot to Wall Street [in September of 2019], it has refused to provide the public with the dollar amounts going to any specific banks. This has denied the public the ability to know which financial institutions are in trouble. The Fed, exactly as it did in 2008, has drawn a dark curtain around troubled banks and the public’s right to know, while aiding and abetting a financial coverup of just how bad things are on Wall Street.

Looking back at the prior bailout from their temporal vantage point in January of 2020, the authors noted  “During the 2007 to 2010 financial collapse on Wall Street – the worst financial crisis since the Great Depression, the Fed funnelled a total of $29 trillion in cumulative loans to Wall Street banks, their trading houses and their foreign derivative counterparties.”

The authors compared the rate of the transfer of funds from the New York Federal Reserve Bank to the Wall Street banking establishment in the 2008 crash and in the early stages of the 2020 financial debacle. The authors observed, “at this rate, [the Fed] is going to top the rate of money it threw at the 2008 crisis in no time at all.”

The view that all was well with the economy until the impact of the health crisis began to be felt in early 2020 leads away from the fact that money markets began to falter dangerously in the autumn of 2019. The problems with the Repo Market were part of a litany of indicators pointing to turbulence ahead in troubled economic waters.

For instance, the resignation in 2019 of about 1,500 prominent corporate CEOs can be seen as a suggestion that news was circulating prior to 2020 about the imminence of serious financial problems ahead. Insiders’ awareness of menacing developments threatening the workings of the global economy were probably a factor in the decision of a large number of senior executives to exit the upper echelons of the business world.

Not only did a record number of CEOs resign, but many of them sold off the bulk of their shares in the companies they were leaving.

Pam Marten and Russ Marten who follow Wall Street’s machinations on a daily basis have advanced the case that the Federal Reserve is engaged in fraud by trying to make it seem that “the banking industry came into 2020 in a healthy condition;” that it is only because of “the COVID-19 pandemic” that the financial system is” unravelling,”

The authors argue that this misrepresentation was deployed because the deceivers are apparently “desperate” to prevent Congress from conducting an investigation for the second time in twelve years on why the Fed, “had to engage in trillions of dollars of Wall Street bailouts.” In spite of the Fed’s fear of facing a Congressional investigation after the November 2020 vote, such a timely investigation of the US financial sector would well serve the public interest.

The authors present a number of signs demonstrating that “the Fed knew, or should have known…. that there was a big banking crisis brewing in August of last year. [2019]” The signs of the financial crisis in the making included negative yields on government bonds around the world as well as big drops in the Dow Jones average. The plunge in the price of stocks was led by US banks, but especially Citigroup and JP Morgan Chase.

Another significant indicator that something was deeply wrong in financial markets was a telling inversion in the value of Treasury notes with the two-year rate yielding more than the ten-year rate.

Yet another sign of serious trouble ahead involved repeated contractions in the size of the German economy. Moreover, in September of 2019 news broke that officials of JP Morgan Chase faced criminal charges for RICO-style racketeering. This scandal added to the evidence of converging problems plaguing core economic institutions as more disruptive mayhem gathered on the horizons.

Accordingly, there is ample cause to ask if there are major underlying reasons for the financial crash of 2020 other than the misnamed pandemic and the lockdowns done in its name of “flattening” its spikes of infection. At the same time, there is ample cause to recognize that the lockdowns have been a very significant factor in the depth of the economic debacle that is making 2020 a year like no other.

Some go further. They argue that the financial crash of 2020 was not only anticipated but planned and pushed forward with clear understanding of its instrumental role in the Great Reset sought by self-appointed protagonists of creative destruction. The advocates of this interpretation place significant weight on the importance of the lockdowns as an effective means of obliterating in a single act a host of old economic relationships. For instance Peter Koenig examines the “farce and diabolical agenda of a universal lockdown.”

Koenig writes, “The pandemic was needed as a pretext to halt and collapse the world economy and the underlying social fabric.”

Inflating the Numbers and Traumatizing the Public to Energize the Epidemic of Fear

There have been many pandemics in global history whose effects on human health have been much more pervasive and devastating than the current one said to be generated by a new coronavirus. In spite, however, of its comparatively mild flu-like effects on human health, at least at this point in the summer of 2020, there has never been a contagion whose spread has generated so much global publicity and hype. As in the aftermath of 9/11, this hype extends to audacious levels of media-generated panic. As with the psyop of 9/11, the media-induced panic has been expertly finessed by practitioners skilled in leveraging the currency of fear to realize a host of radical political objectives.

According to Robert E. Wright in an essay published by the American Institute for Economic Research, “closing down the U.S. economy in response to COVID-19 was probably the worst public policy in at least one-hundred years.” As Wright sees it, the decision to lock down the economy was made in ignorant disregard of the deep and devastating impact that such an action would spur. “Economic lockdowns were the fantasies of government officials so out of touch with economic and physical reality that they thought the costs would be fairly low.”

The consequences, Wright predicts, will extend across many domains including the violence done to the rule of law. The lockdowns, he writes, “turned the Constitution into a frail and worthless fabric.” Writing in late April, Wright touched on the comparisons to be made between the economic lockdowns and slavery. He write, “Slaves definitely had it worse than Americans under lockdown do, but already Americans are beginning to protest their confinement and to subtly subvert authorities, just as chattel slaves did.”

The people held captive in confined lockdown settings have had the time and often the inclination to imbibe much of the 24/7 media coverage of the misnamed pandemic. Taken together, all this media sensationalism has come to constitute one of the most concerted psychological operations ever.

The implications have been enormous for the mental health of multitudes of people. This massive alteration of attitudes and behaviours is the outcome of media experiments performed on human subjects without their informed consent. The media’s success in bringing about herd subservience to propagandistic messaging represents a huge incentive for more of the same to come. It turns out that the subject matter of public health offers virtually limitless potential for power-seeking interests and agents to meddle with the privacies, civil liberties and human rights of those they seek to manipulate, control and exploit.

The social, economic and health impacts of the dislocations flowing from the lockdowns are proving to be especially devastating on the poorest, the most deprived and the most vulnerable members of society. This impact will continue to be marked in many ways, including in increased rates of suicide, domestic violence, mental illness, addictions, homelessness, and incarceration far larger than those caused directly by COVID-19. As rates of deprivation through poverty escalate, so too will crime rates soar.

The over-the-top alarmism of the big media cabals has been well financed by the advertising revenue of the pharmaceutical industry. With some few exceptions, major media outlets pushed the public to accept the lockdowns as well as the attending losses in jobs and business activity. In seeking to push the agenda of their sponsors, the big media cartels have been especially unmindful of their journalistic responsibilities. Their tendency has been to avoid or censor forums where even expert practitioners of public health can publicly question and discuss government dictates about vital issues of public policy.

Whether in Germany or the United States or many other countries, front line workers in this health care crisis have nevertheless gathered together with the goal of trying to correct the one-sided prejudices of of discriminatory media coverage. One of the major themes in the presentations by medical practitioners is to confront the chorus of media misrepresentations on the remedial effects of hydroxychloroquine and zinc.

On July 27 a group of doctors gathered on the grounds of the US Supreme Court to try to address the biases of the media and the blind spots of government.

Another aspect in the collateral damage engendered by COVID-19 alarmism is marked in the fatalities arising from the wholesale postponement of many necessary interventions including surgery. How many have died or will die because of the hold put on medical interventions to remedy cancer, heart conditions and many other potentially lethal ailments?

Did the unprecedented lockdowns come about as part of a preconceived plan to inflate the severity of an anticipated financial meltdown? What is to be made of the suspicious intervention of administrators to produce severely padded numbers of reported deaths in almost every jurisdiction? This kind of manipulation of statistics raised the possibility that we are witnessing a purposeful and systemic inflation of the severity of this health care crisis.

Questions about the number of cases arise because of the means of testing for the presence of a supposedly new coronavirus. The PCR system that is presently being widely used does not test for the virus but tests for the existence of antibodies produced in response to many health challenges including the common cold. This problem creates a good deal of uncertainty of what a positive test really means.

The problems with calculating case numbers extend to widespread reports that have described people who were not tested for COVID-19 but who nevertheless received notices from officials counting them as COVID-19 positive. Broadcaster Armstrong Williams addressed the phenomenon on his network of MSM media outlets in late July.

From the mass of responses he received, Williams estimated that those not tested but counted as a positive probably extends probably to hundreds of thousands of individuals. What would drive the effort to exaggerate the size of the afflicted population?

This same pattern of inflation of case numbers was reinforced by the Tricare branch of the US Defense Department’s Military Health System. This branch sent out notices to 600,000 individuals who had not been tested. The notices nevertheless informed the recipients that they had tested positive for COVID 19.

Is the inflation of COVID-19 death rates and cases numbers an expression of the zeal to justify the massive lockdowns? Were the lockdowns in China conceived as part of a scheme to help create the conditions for the public’s acceptance of a plan to remake the world’s political economy? What is to be made of the fact that those most identified with the World Economic Forum (WEF) have led the way in putting a positive spin on the reset arising from the very health crisis the WEF helped introduce and publicize in Oct. of 2019?

As Usual, the Poor Get Poorer

The original Chinese lockdowns in the winter of 2020 caused the breakdowns of import-export supply chains extending across the planet. Lockdowns in the movement of raw materials, parts, finished products, expertise, money and more shut down domestic businesses in China as well as transnational commerce in many countries outside China. The supply chain disruptions were especially severe for businesses that have dispensed with the practice of keeping on hand large inventories of parts and raw material, depending instead on just-in-time deliveries.

As the supply chains broke down domestically and internationally, many enterprises lacked the revenue to pay their expenses. Bankruptcies began to proliferate at rates that will probably continue to be astronomical for some time. All kinds of loans and liabilities were not paid out in full or at all. Many homes are being re-mortgaged or cast into real estate markets as happened during the prelude and course of the bailouts of 2007-2010.

The brunt of the financial onslaught hit small businesses especially hard. Collectively small businesses have been a big creator of jobs. They have picked up some of the slack from the rush of big businesses to downsize their number of full-time employees. Moreover, small businesses and start-ups are often the site of exceptionally agile innovations across broad spectrums of economic activity. The hard financial slam on the small business sector, therefore, is packing a heavy punch on the economic conditions of everyone.

The devastating impact of the economic meltdown on workers and small businesses in Europe and North America extends in especially lethal ways to the massive population of poor people living all over the world. Many of these poor people reside in countries where much of the paid work is irregular and informal.

At the end of April the International Labor Organization (ILO), an entity created along with the League of Nations at the end of the First World War, estimated that there would be 1.6 billion victims of the meltdown in the worldwide “informal economy.” In the first month of the crisis these workers based largely in Africa and Latin America lost 60% of their subsistence level incomes.

As ILO Director-General, Guy Ryder, has asserted,

This pandemic has laid bare in the cruellest way, the extraordinary precariousness and injustices of our world of work. It is the decimation of livelihoods in the informal economy – where six out of ten workers make a living – which has ignited the warnings from our colleagues in the World Food Programme, of the coming pandemic of hunger. It is the gaping holes in the social protection systems of even the richest countries, which have left millions in situations of deprivation. It is the failure to guarantee workplace safety that condemns nearly 3 million to die each year because of the work they do. And it is the unchecked dynamic of growing inequality which means that if, in medical terms, the virus does not discriminate between its victims in its social and economic impact, it discriminates brutally against the poorest and the powerless.

Guy Ryder remembered the optimistic rhetoric in officialdom’s responses to the economic crash of 2007-2009. He compares the expectations currently being aroused by the vaccination fixation with the many optimistic sentiments previously suggesting the imminence of remedies for grotesque levels of global inequality. Ryder reflected,

We’ve heard it before. The mantra which provided the mood music of the crash of 2008-2009 was that once the vaccine to the virus of financial excess had been developed and applied, the global economy would be safer, fairer, more sustainable. But that didn’t happen. The old normal was restored with a vengeance and those on the lower echelons of labour markets found themselves even further behind.

The internationalization of increased unemployment and poverty brought about in the name of combating the corona crisis is having the effect of further widening the polarization between rich and poor on a global scale. Ryder’s metaphor about the false promises concerning a “vaccine” to correct “financial excess” can well be seen as a precautionary comment on the flowery rhetoric currently adorning the calls for a global reset.

Wall Street and 9/11

The world economic crisis of 2020 is creating the context for large-scale repeats of some key aspects of the bailout of 2007-2010. The bailout of 2007-2008 drew, in turn, from many practices developed in the period when the explosive events of 9/11 triggered a worldwide reset of global geopolitics.

While the events of 2008 and 2020 both drew attention to the geopolitical importance of Wall Street, the terrible pummelling of New York’s financial district was the event that ushered in a new era of history, an era that has delivered us to the current financial meltdown/lockdown.

It lies well beyond the scope of this essay to go into detail about the dynamics of what really transpired on 9/11. Nevertheless, some explicit reckoning with this topic is crucial to understanding some of the essential themes addressed in this essay.

Indeed, it would be difficult to overstate the relevance of 9/11 to the background and nature of the current debacle. The execution and spinning of 9/11 were instrumental in creating the repertoire of political trickery presently being adapted in the manufacturing and exploiting of the COVID-19 hysteria. A consistent attribute of the journey from 9/11 to COVID-19 has been the amplification of executive authority through the medium of emergency measures enactments, policies and dictates.

Wall Street is a major site where much of this political trickery was concocted in planning exercises extending to many other sites of power and intrigue. In the case of 9/11, a number of prominent Wall Street firms were involved before, during and after the events of September 11. As is extremely well documented, these events have been misrepresented in ways that helped to further harness the military might of the United States to the expansionistic designs of Israel in the Middle East.

The response of the Federal Reserve to the events of 9/11 helped set in motion a basic approach to disaster management that continues to this day. Almost immediately following the pulverization of Manhattan’s most gigantic and iconographic landmarks, Federal Reserve officials made it their highest priority to inject liquidity into financial markets. Many different kinds of scenario can be advanced behind the cover of infusing liquidity into markets.

For three days in a row the Federal Reserve Bank of New York turned on its money spigots to inject transfusions of $100 billion dollars of newly generated funds into the Wall Street home of the financial system. The declared aim was to keep the flow of capital between financial institutions well lubricated. The Federal Reserve’s infusions of new money into Wall Street took many forms. New habits and appetites were thereby cultivated in ways that continue to influence the behaviour of Wall Street organizations in the financial debacle of 2020.

The revelations concerning the events of 9/11 contained a number of financial surprises. Questions immediately arose, for instance, about whether the destruction of the three World Trade Center skyscrapers had obliterated software and hardware vital to the continuing operations of computerized banking systems. Whatever problems arose along these lines, it turned out that there was sufficient digital information backed up in other locations to keep banking operations viable.

But while much digital data survived the destruction of core installations in the US financial sector, some strategic information was indeed obliterated. For instance, strategic records entailed in federal investigations into many business scandals were lost. Some of the incinerated data touched on, for instance, the machinations of the energy giant, Enron, along with its Wall Street partners, JP Morgan Chase and Citigroup.

The writings of E. P Heidner are prominent in the literature posing theories about the elimination of incriminating documentation as a result of the controlled demolitions of 9/11. What information was eliminated and what was retained in the wake of the devastation? Heidner has published a very ambitious account placing the events of 9/11 at the forefront of a deep and elaborate relationship linking George H. W. Bush to Canada’s Barrick Gold and the emergence of gold derivatives.

The surprises involving 9/11 and Wall Street included evidence concerning trading on the New York Stock Exchange. A few individuals enriched themselves significantly by purchasing a disproportionately high number of put options on shares about to fall precipitously as a result of the anticipated events of 9/11. Investigators, however, chose to ignore this evidence because it did not conform to the prevailing interpretation of who did what to whom on 9/11.

Another suspicious group of transactions conducted right before 9/11 involved some very large purchases of five-year US Treasury notes. These instruments are well known hedges when one has knowledge that a world crisis is imminent. One of these purchases was a $5 billion transaction. The US Treasury Department would have been informed about the identity of the purchaser. Nevertheless the FBI and the Securities Exchange Commission collaborated to point public attention away from these suspect transactions. (p. 199)

On the very day of 9/11 local police arrested Israeli suspects employed in the New York area as Urban Movers. The local investigators were soon pressured to ignore the evidence, however, and go along with the agenda of the White House and the media chorus during the autumn of 2001.

In the hours following the pulverization of the Twin Towers the dominant mantra was raised “Osama bin Laden and al-Qeada did it.” That mantra led in the weeks, months and years that followed to US-led invasions of several Muslim-majority countries. Some have described these military campaigns as wars for Israel.

Soon New York area jails were being filled up with random Muslims picked up for nothing more than visa violations and such. The unrelenting demonization of Muslims collectively can now be seen in retrospect as a dramatic psychological operation meant to poison minds as the pounding of the war drums grew in intensity. In the process a traumatized public were introduced to concepts like “jihad.” At no time has there ever been a credible police investigation into the question of who is responsible for the 9/11 crimes.

Defense Secretary Donald Rumsfeld chose September 10, the day before 9/11, to break the news at a press conference that $2.3 trillion had gone missing from the Pentagon’s budget. Not surprisingly the story of the missing money got buried the next day as reports of the debacle in Manhattan and Washington DC dominated MSM news coverage.

As reported by Forbes Magazine, the size of the amount said to have gone missing in Donald Rumsfeld’s 2001 report of Defense Department spending had mushroomed by 2015 to around $21 trillion. It was Mark Skidmore, an Economics Professor at the University of Michigan, who became the main sleuth responsible for identifying the gargantuan amount of federal funds that the US government can’t account for.

As the agency that created the missing tens of trillions that apparently has disappeared without a trace, wouldn’t the US Federal Reserve be in a position to render some assistance in tracking down the lost funds? Or is the Federal Reserve somehow a participant or a complicit party in the disappearance of the tens of trillions without a paper trail?

The inability or unwillingness of officialdom to explain what happened to the lost $21 trillion, an amount comparable to the size of the entire US national debt prior to the lockdowns, might be viewed in the light of the black budgets of the US Department of Defense (DOD). Black budgets are off-the-books funds devoted to secret research and to secret initiatives in applied research.

In explaining this phenomenon, former Canadian Defense Minister, Paul Hellyer, has observed, “thousands of billions of dollars have been spent on projects about which Congress and the Commander In Chief have deliberately been kept in the dark.” Eric Zuess goes further. As he explains it, the entire Defense Department operates pretty much on the basis of an unusual system well outside the standard rules of accounting applied in other federal agencies.

When news broke about the missing $21 trillion, federal authorities responded by promising that special audits would be conducted to explain the irregularities. The results of those audits, if they took place at all, were never published. The fact that the Defense of Department has developed in a kind of audit free zone has made it a natural magnet for people and interests engaged in all kinds of criminal activities.

Eric Zuess calls attention to the 1,000 military bases around the world that form a natural network conducive to the cultivation of many forms of criminal trafficking. Zuess includes in his reflections commentary on the secret installations in some American embassies but especially in the giant US Embassy in Baghdad Iraq.

The US complex in Baghdad’s Green Zone is the biggest Embassy in the world. Its monumental form on a 104 acre site expresses the expansionary dynamics of US military intervention in the Middle East and Eurasia following 9/11.

The phenomenon of missing tens of trillions calls attention to larger patterns of kleptocratic activity that forms a major subject addressed here. The shifts into new forms of organized crime in the name of “national security” began to come to light in the late 1980s. An important source of disclosures was the series of revelations that accompanied the coming apart of the Saudi-backed Bank of Credit and Commerce International, the BCCI.

The nature of this financial institution, where CIA operatives were prominent among its clients, provides a good window into the political economy of drug dealing, money laundering, weapons smuggling, regime change and many much more criminal acts that took place along the road to 9/11.

The BCCI was a key site of financial transactions that contributed to the end of the Cold War and the inception of many new kinds of conflict. These activities often involved the well-financed activities of mercenaries, proxy armies, and a heavy reliance on private contractors of many sorts.

The Enron scandal was seen to embody some of the same lapses facilitated by fraudulent accounting integral to the BCCI scandal. Given the bubble of secrecy surrounding the Federal Reserve, there are thick barriers blocking deep investigation into whether or not the US Central Bank was involved in the relationship of the US national security establishment and the BCCI.

The kind of dark transactions that the BCCI was designed to facilitate must have been channelled after its demise into other banking institutions probably with Wall Street connections. Since 9/11, however, many emergency measures have been imposed that add extra layers of secrecy protecting the perpetrators of many criminal acts from public exposure and criminal prosecutions.

The events of 9/11 have sometimes been described as the basis of a global coup. To this day there is no genuine consensus about what really transpired to create the illusion of justification for repeated US military invasions of Muslim-majority countries in the Middle East and Eurasia.

The 9/11 debacle and the emergency measures that followed presented Wall Street with an array of new opportunities for profit that came with the elaborate refurbishing and retooling of the military-industrial complex.

The response to 9/11 was expanded and generalized upon to create the basis of a war directed not at a particular enemy, but rather at an ill-defined conception identified as “terrorism.” This alteration was part of a complex of changes adding trillions to the flow of money energizing the axis of interaction linking the Pentagon and Wall Street and the abundance of new companies created to advance the geopolitical objectives emerging from the 9/11 coup.

According to Pam Martens and Russ Martens, the excesses of deregulation helped induce an anything-goes-ethos on Wall Street and at its Federal Reserve regulator in the wake of 9/11. As the authors tell it, the response to 9/11 helped set important precedents for the maintaining flows of credit and capital in financial markets.

Often the destination of the funds generated in the name of pumping liquidity into markets was not identified and reported in transactions classified as financial emergency measures. While the priority was on keeping financial pumps primed, there was much less concern for transparency and accountability among those in positions of power at the Federal Reserve.

The financial sector’s capture of the government instruments meant to regulate the behaviour of Wall Street institutions was much like the deregulation of the US pharmaceutical industry. Both episodes highlight a message that has become especially insistent as the twenty-first century unfolds.

The nature of the response to 9/11 emphasized the mercenary ascent of corporate dominance as the primary force directing governments. Throughout this transformation the message to citizens became increasingly clear. Buyer Beware. We cannot depend on governments to represent our will and interests. We cannot even count on our governments to protect citizens from corporatist attacks especially on human health and whatever financial security we have been able to build up.

Bailouts, Derivatives, and the Federal Reserve Bank of New York

The elimination of the Glass-Steagall Act in 1999 was essential to the process of dramatically cutting back the government’s role as a protector of the public interest on the financial services sector. The Glass-Steagall Act was an essential measure in US President Franklin D. Roosevelt’s New Deal. Some view the New Deal as a strategy for saving capitalism by moderating ts most sharp-edged features. Instituted in 1933 in response to the onset of the Great Depression, the Glass-Steagall Act separated the operations of deposit-accepting banks from the more speculative activity of investment brokers.

The termination of the regulatory framework put in place by the Glass Steagall Act opened much new space for all kinds of experiments in the manipulation of money in financial markets. The changes began with the merger of different sorts of financial institutions including some in the insurance field. Those overseeing the reconstituted entities headquartered on Wall Street took advantage of their widened latitudes of operation. They developed all sorts of ways of elaborating their financial services and presenting them in new packages.

The word, “derivative” is often associated with many applications of the new possibilities in the reconstituted financial services sector. The word, derivative, can be applied to many kinds of transactions involving speculative bets of various sorts. As the word suggests, a derivative is derived from a fixed asset such as currency, bonds, stocks, and commodities. Alterations in the values of fixed assets affect the value of derivatives that often take the form of contracts between two or more parties.

One of the most famous derivatives in the era of the financial crash of 2007-2010 was described as mortgaged-backed securities. On the surface these bundles of debt-burdened properties might seem easy to understand. But that would be a delusion. The value of these products was affected, for instance, by unpredictable shifts in interest rates, liar loans extended to homebuyers who lacked the capacity to make regular mortgage payments, and significant shifts in the value of real estate.

Mortgage-backed securities were just one type of a huge array of derivatives invented on the run in the heady atmosphere of secret and unregulated transactions between counterparties. Derivatives could involve contracts formalizing bets between rivals gambling on the outcome of competitive efforts to shape the future.  An array of derivative bets was built around transactions often placed behind the veil of esoteric nomenclature like “collateralized debt obligations” or “credit default swaps.”

The variables in derivative bets might include competing national security agendas involving, for instance, pipeline constructions, regime change, weapons development and sales, false flag terror events, or money laundering. Since derivative bets involve confidential transactions with secret outcomes, they can be derived from all sorts of criteria. Derivative bets can, for instance, involve all manner of computerized calculations that in some cases are constructed much like war game scenarios.

The complexity of derivatives became greater when the American Insurance Group, AIG, began selling insurance programs to protect all sides in derivative bets from suffering too drastically from the consequences of being on the losing side of transactions.

The derivative frenzy, sometimes involving bets being made by parties unable to cover potential losses, overwhelmed the scale of the day-to-day economy. The “real economy” embodies exchanges of goods, services, wages and such that supply the basic necessities for human survival with some margin for recreation, travel, cultural engagement and such.

The Swiss-based Bank of International Settlements calculated in 2008 that the size of the all forms of derivative products had a monetary value of $1.14 quadrillion. A quadrillion is a thousand trillions. By comparison, the estimated value of all the real estate in the world was $75 trillion in 2008.

[Bank for International Settlements, Semiannual OTC derivative statistics at end-December, 2008.]

As the enticements of derivative betting preoccupied the leading directors of Wall Street institutions, their more traditional way of relating to one another began to falter. It was in this atmosphere that the Repo Market became problematic in December of 2007 just as it showed similar signs of breakdown in September of 2019.

In both instances the level of distrust between those in charge of financial institutions began to falter because they all had good reason to believe that their fellow bankers were overextended. All had reason to believe their counterparts were mired by too much speculative activity enabled by all sorts of novel experiments including various forms of derivative dealing.

In December of 2007 as in the autumn of 2019, the Federal Reserve Bank of New York was forced to enter the picture to keep the financial pumps on Wall Street primed. The New York Fed kept the liquidity cycles flowing by invoking its power to create new money with the interest charged to tax payers.

As the financial crisis unfolded in 2008 and 2009 the Federal Reserve, but especially the privately-owned New York Federal Reserve bank, stepped forward to bail out many financial institutions that had become insolvent or near insolvent. In the process precedents and patterns were established that are being re-enacted with some modifications in 2020.

One of the innovations that took place in 2008 was the decision by the Federal Reserve Bank of New York to hire a large Wall Street financial institution, BlackRock, to administer the bailouts. These transfers of money went through three specially created companies now being replicated as Special Purpose Vehicles in the course of the payouts of 2020.

In 2008-09 BlackRock administered the three companies named after the address of the New York Federal Reserve Bank on Maiden Lane. BlackRock emerged from an older Wall Street firm called Blackstone. Its former chair, Peter C. Peterson, was a former Chair of the Federal Reserve Bank of New York.

The original Maiden Lane company paid Bear Stearns Corp $30 billion. This amount from the New York Fed covered the debt of Bear Stearns, a condition negotiated to clear the way for the purchase of the old Wall Street institution by JP Morgan Chase. Maiden Lane II was a vehicle for payouts to companies that had purchased “mortgage-backed securities” before these derivative products turned soar.

Maiden Lane III was to pay off “multi-sector collateralized debt obligations.” Among these bailouts were payoffs to the counterparties of the insurance giant, AIG. As noted, AIG had developed an insurance product to be sold to those engaged in derivative bets. When the bottom fell out of markets, AIG lacked the means to pay off the large number of insurance claims made against it. The Federal Reserve Bank of New York stepped in to bail out the counterparties of AIG, many of them deemed to be “too big to fail.”

Among the counterparties of AIG was Goldman Sachs. It received of $13 billion from the Federal Reserve. Other bailouts to AIG’s counterparties were $12 billion to Deutsche Bank, $6.8 billion to Merrill Lynch, $5 billion to Switzerland’s UBS, $7.9 billion to Barclays, and $5.2 billion to Bank of America. Some of these banks received additional funds from other parts of the overall bailout transaction. Many dozens of other counterparties to AIG also received payouts in 2008-2009. Among them were the Bank of Montreal and Bank of Scotland.

The entire amount of the bailouts was subsequently calculated to be a whopping $29 trillion with a “t.” The lion’s share of these funds went to prop up US financial institutions and the many foreign banks with which they conducted business.

Much of this money went to the firms that were shareholders in the Federal Reserve Bank of New York or partners of the big Wall Street firms. Citigroup, the recipient of the largest amount, received about $2.5 trillion in the federal bailouts. Merrill Lynch received $2 trillion,

The Federal Reserve Bank was established by Congressional statute in 1913. The Federal Reserve headquarters is situated in Washington DC. The Central Bank was composed of twelve constituent regional banks. Each one of these regional banks is owned by private banks.

The private ownership of the banks that are the proprietors of the Federal Reserve system has been highly contentious from its inception. The creation of the Federal Reserve continues to be perceived by many of its critics as an unjustifiable giveaway whereby the US government ceded to private interests its vital capacity to issue its own currency and to direct monetary policy like the setting of interest rates.

Pam Martens and Russ Martens at Wall Street on Parade explain the controversial Federal Reserve structure as follows

While the Federal Reserve Board of Governors in Washington, D.C. is deemed an “independent federal agency,” with its Chair and Governors appointed by the President and confirmed by the Senate, the 12 regional Fed banks are private corporations owned by the member banks in their region. The settled law under John L. Lewis v. the United States confirms: “Each Federal Reserve Bank is a separate corporation owned by commercial banks in its region.”

In the case of the New York Fed, which is located in the Wall Street area of Manhattan, its largest shareowners are behemoth multinational banks, including JPMorgan Chase, Citigroup, Goldman Sachs and Morgan Stanley.

There was no genuine effort after the financial debacle of 2007-2010 to correct the main structural problems and weaknesses of the Wall Street-based US financial sector. The Dodd-Frank Bill signed into law by US President Barack Obama in 2010 did make some cosmetic changes. But the main features of the regulatory capture that has taken place with the elimination of the Glass-Steagall Act remained with only minor alterations. In particular the framework was held in place for speculative excess in derivative bets.

In the summer edition of The Atlantic, Frank Partnoy outlined a gloomy assessment of the continuity leading from the events of 2007-2010 to the current situation. This current situation draws a strange contrast between the lockdown-shattered quality of the economy and the propped-up value of the stock market whose future value will in all probability prove unsustainable. Partnoy writes,

It is a distasteful fact that the present situation is so dire in part because the banks fell right back into bad behavior after the last crash—taking too many risks, hiding debt in complex instruments and off-balance-sheet entities, and generally exploiting loopholes in laws intended to rein in their greed. Sparing them for a second time this century will be that much harder.

Wall Street Criminality on Display

The frauds and felonies of the Wall Street banks have continued after the future earnings of US taxpayers returned them to solvency after 2010. The record of infamy is comparable to that of the pharmaceutical industry.

The criminal behaviour in both sectors is very relevant to the overlapping crises that are underway in both the public health and financial sectors. In 2012 the crime spree in the financial sector began with astounding revelations about the role of many major banks in the LIBOR, the London Interbank Offered Rate. The LIBOR rates create the basis of interest rates involved in the borrowing and lending of money in the international arena.

When the scandal broke there were 35 different LIBOR rates involving various types of currency and various time frames for loans between banks. The rates were calculated every day based on information forwarded from 16 different banks to a panel on London. The reporting banks included Citigroup, JP Morgan Chase, Bank of America, UBS, and Deutsche Bank. The influence of the LIBOR rate extended beyond banks to affect the price of credit in many types of transactions.

The emergence of information that the banks were working together to rig the interest rate created the basis for a huge economic scandal. Fines extending from hundreds of millions into more than a billion dollars were placed on each of the offending banks. But in this instance and many others to follow, criminality was attached to the financial entities but not to top officials responsible for the decisions that put their corporations on the wrong side of the law.

One of the factors in the banking frauds comprising the LIBOR scandal was the temptation to improve the chance for financial gains in derivative bets. The biggest failure of the federal response to the financial meltdown of 2007-210 was that little was done to curb the excesses of transactions in the realm of derivatives.

Derivatives involved a form of gambling that exists in a kind of twilight zone. This twilight zone fills a space somewhere between the realm of the real economy and the realm of notional value. Notional values find expression in unrealized speculation about what might or might not come to fruition; what might or might not happen; who might win and who might lose in derivative speculations.

The addiction of Wall Street firms to derivative betting remains unchecked to this day. The bankers’ continuing fixation with unregulated gambling, often with other people’s money, is deeply menacing for the future of the global economy…. indeed for the future of everyone on earth. According to the Office of the Controller of Currency, in 2019 JP Morgan Chase had $59 trillion in derivative bets. In July of 2020 it emerged that Citigroup held $62 trillion in derivative contracts, about $30 trillion more than it held before it was bailed out in 2008. In 2019 Goldman Sachs held $47 trillion and Bank of America held $20.4 trillion in derivate bets.

A big part of the scandal embodied in these figures is embedded in the reality that all of these banks carry their most risky derivative bets in units of their corporate networks that are protected by the Federal Deposit Insurance Corporation. This peril played a significant part in deepening the crisis engendered by financial meltdown that began in 2007.

One of the most redeeming features of the Dodd-Frank Act as originally drafted was a provision preventing financial institutions from keeping their derivative portfolios in banks whose deposits and depositors were backed up by federal insurance.

Citigroup led the push in Congress in 2014 to allow Wall Street institutions to revert back to a more deregulated and danger-prone economic environment. The notoriously inept decisions and actions of Citigroup had played a significant role in the lead up to the financial debacle of 2007 to 2010. Since 2016 Citigroup has become once again the biggest risk taker by loading itself up with more derivative speculations than any other financial institution in the world.

By returning derivative speculations to the protections of federal financial backstops, taxpayers are once again forced to assume responsibility for the most outlandish risks of Wall Street’s high rollers. It is taxpayers who are the backers of the federal government when it comes to their commitment to compensate banks for losses, even when these losses come about from derivative bets.

How much more Wall Street risk and public debt can be loaded onto taxpayers and even onto generations of taxpayers yet unborn? How is national debt to be understood when it plunders working people to guarantee and augment the wealth of the most privileged branches of society? Why should those most responsible for creating the most excessive risks to the financial wellbeing of our societies be protected from bearing the consequences of the very risks they themselves created?

Along with Citigroup, JP Morgan Chase stands out among a group of financial sector reprobates most deeply involved in sketchy activities that extend deep into the realm of criminality. In a simmering scandal six of JP Morgan Chase’s traders have been accused of breaking laws in conducting the bank’s futures trading in the value of precious metals. They have been accused of violating the RICO statute, a law meant for people suspected of being part of organized crime.

In the charges pressed by the Justice Department on JP Morgan Chase’s traders it is alleged that they “conducted the affairs of the [minerals] desk through a pattern of racketeering activity, specifically, wire fraud affecting a financial institution and bank fraud.”

In 2012 JP Morgan Chase faced a $1 billion fine for its role in the “London Wale” series of derivative bets described as follows by the Chair of the US Senate’s Permanent Subcommittee on Investigation. Senator Carl Levin explained, “Our findings open a window into the hidden world of high stakes derivatives trading by big banks. It exposes a derivatives trading culture at JPMorgan that piled on risk, hid losses, disregarded risk limits, manipulated risk models, dodged oversight, and misinformed the public.”

Traders at Goldman Sachs appear to have been part of the Wall Street crime spree. The tentacles of corruption in the Goldman Sachs case apparently extend deep into the US Justice Department. The case involves allegations of embezzlement, money laundering and missing billions. These manifestations of malfeasance all spin out of a scandal-prone Malaysian sovereign wealth fund administered by Goldman Sachs.

A big part of the scandal reported in Wall Street on Parade in July of 2020 involves the fact that the Justice Department’s prosecutors seem to be dragging their feet in this possible criminal felony case against Goldman Sachs. The prosecutors, including the US Attorney-General, William Barr, worked previously for the law firm, Kirkland and Ellis. Kirkland and Ellis was retained to defend Goldman Sachs in this matter.

Pam Martens and Russ Martens express dismay at the failure of US officialdom to hold Wall Street institutions accountable for the crime spree of some of its biggest firms. They write, “Congress and the executive branch of the government seem determined to protect Wall Street criminals, which simply assures their proliferation.”

Even racketeering charges against officials at JP Morgan Chase, where Jamie Dimon presides as CEO, failed to receive any attention from the professional deceivers that these days dominate MSM. The star reporters of Wall Street on Parade write, “Crime and fraud are so de rigueur at the bank led by Dimon that not one major newspaper ran the headline [of the racketeering charge] on the front page or anywhere else in the paper.

While federal charges that JP Morgan Chase’s Wall Street operation engaged in criminal racketeering was not of interest to the press, Jamie Dimon’s surprise visit in early June to a Chase branch in Mt. Kisco New York aroused considerable media attention. Dimon was photographed with staff wearing a mask and taking the knee. By participating in this ritual Dimon signaled that his Wall Street operation is in league with the sometimes violent cancel culture pushed into prominence by the Democratic Party in partnership with Black Lives Matter and Antifa.

In an article on 21 July marking ten years since the Dodd-Frank Act of 2010, the Martens duo conclude, “So here we are today, watching the Fed conduct another secret multi-trillion dollar bailout of Wall Street while the voices of Congress and mainstream media are nowhere to be heard.”

Enter BlackRock

In March it was announced that representatives of the US Treasury Department, the Federal Reserve Board and the BlackRock financial management were joining forces to make adjustments in the US economy. The aim was to address the financial dislocations resulting from the decision to lock down businesses, citizens, schools, entertainment, and social mingling outside the home, all in response to the health care hysteria promoted by governments and their media extensions.

The format of this process suggested some relaxation in the strict distinctions historically drawn between the US Treasury and the Federal Reserve. What would be the role of the third member of the group? In reflecting on this topic Joyce Nelson observed, “the new bailout bill not only further erases the line between the Federal Reserve and the U.S. Treasury, it places BlackRock effectively in an overseer position for both.”

Some saw as symbolically instructive the delegation to BlackRock of a larger role than that assigned it during the first bailout of 2007-2008. It would be hard to overestimate the significance of this prominent Wall Street firm’s return to a strategic role near the very heart of this major exercise of federal power. This invitation to take part in such crucial negotiations at such a consequential juncture in history caused some to characterize BlackRock as a “fourth branch of government.”

As Victoria Guida commented in Politico, “This is a transformational moment for the Fed, and BlackRock’s now going to be in an even stronger position to serve the Fed in the future.”

BlackRock officials had been instrumental in helping to manoeuvre their company into such a strategic role by responding proactively to the understanding in some elite circles that another financial debacle was imminent. Only months before the financial meltdown actually occurred a group of former central bankers all commissioned by BlackRock delivered a recovery plan in August of 2019.

Presented at a G 7 summit of central bankers in Jackson Hole Wyoming, the plan for the government responses to the looming financial collapse was entitled Dealing with the Next Downturn. Its authors are Stanley Fischer, former Governor of the Central Bank of Israel, Philipp Hildebrande, former Chairman of the Governing Board of the Swiss National Bank, Jean Boivin, former Deputy Governor of the Bank of Canada, and Elga Bartsch, Economist at Morgan Stanley.

The BlackRock Team at Jackson Hole put forward the case that a more aggressive and coordinated combination of monetary and fiscal policy must be brought to the job of stimulating a financial recovery. Monetary policy includes the setting of interest rates. Where monetary policy has historically been the domain of the central banks, fiscal policy, involving issues of taxation as well as the content and size of government budgets, lies within the jurisdiction of elected legislatures.

The nub of the proposal to unite fiscal and monetary policy put the US Treasury and the US Federal Reserve on the same political platform. As the author of this merger of monetary and fiscal policy, BlackRock became third member of the triumvirate charged to address the broad array of economic maladies that arrived in the wake of the lockdowns.

In the spring of 2020 BlackRock has been hired by the Bank of Canada and by Sweden’s Central Bank, the Riksbank, to deliver on the approaches to crisis management its representatives had laid out at Jackson Hole. BlackRock’s most high-profile and strategic engagement, however, began with its involvement in the negotiation of the $2 trillion CARES stimulus package that passed through the US Congress in March of 2020.

The CARES Act included $367 billion for loans and grants to small business, $130 billion for health care systems, $150 billion for state and local government, $500 billion for loans to corporate America, and $25 billion for airlines (in addition to loans).

The heart of the plan involved a payout of $1,200 per adult and $500 per child for households making up to $75,000. This payment to citizens approaches the concept of disseminating “helicopter money” as referred to in BlackRock’s initial outline for dealing with the “downturn.” Helicopter money distributed by the federal government to its citizens was also related to the concept of “going direct” in strategies for stimulating the economy.

BlackRock seems to be moving into the space recently held by Goldman Sachs as Wall Street’s best embodiment of ostentatious success including in the preparation of its corporate leaders for high-ranking positions in the federal government. Laurence Fink, BlackRock’s founder and CEO, might well have replicated this career path to become Treasury Secretary if Hillary Clinton had succeeded in becoming US President in 2016.

BlackRock’s leadership went to great lengths to avoid being tagged with the title in the United States of a “systematically important financial institution” (sifi). To be subject to this “sifi” label entails added federal scrutiny and regulation as well as heightened requirements to keep high amounts of capital on hand. BlackRock’s status as a private company not subject to sifi regulations makes the financial management firm more attractive to its federal partners in the federal payout operation presently underway.

One of the reasons for including a private company in the trio of partners involved in the payouts is to sneak around limitations on the legal powers of the Federal Reserve. As explained by Ellen Brown in her essay, Meet BlackRock: The New Great Vampire Squid, the Federal Reserve can only purchase “safe federally-guaranteed assets.” As a private company, BlackRock apparently faces no such restrictions. It can purchase more risky assets not backstopped by federal insurance.

The regional banks of the Federal Reserve Board are owned by private companies whose directors seem to have been part of the decision to include BlackRock in the implementation of the CARES process. There can be no doubt that the format of the CARES negotiations pulled the supposedly independent Federal Reserve more deeply into the political orbit of the US Treasury branch. The presence of a major Wall Street firm in the process, however, apparently gave the advocates of the Fed’s supposed independence from politics a sense that they retained some leverage in the process.

The inclusion of private companies in the conduct of government business has become in recent decades a very common expression of neoliberalism. One of the reasons for this embrace of public-private partnerships in the conduct of government business is to take advantage of the legal nature of private companies. The apportionment to private companies of significant roles in deciding and implementing public policies helps put veils of secrecy over the true nature of government decisions and actions.

Private companies can more easily assert claims to “proprietary information” than can public institutions when they act on behalf of citizens. This feature of privatization in the performance of public responsibilities by elected government runs counter to the imperatives of democratic transparency. It puts obstacles in the way of genuine accountability because the public is more likely to be kept in the dark about key aspects of what is being decided and done on their behalf.

Suck Up Economics and State Monopoly Capitalism

BlackRock owns, controls, or manages about $30 trillion in total in securities. It directly controls or owns somewhat less than a third of this amount. The remainder of the assets BlackRock manages are to service clients responsible for taking care of pension funds, philanthropies, foundations, endowments, family offices, superannuation funds and such.

A big part of BlackRock’s business model involves attracting customers by allowing them access to great masses of timely information of significant utility to those responsible for making investment decisions. This technological wizardry happens on a very advanced computational platform known as Aladdin.

Aladdin remains a work-in-progress, one that is widely recognized as the most sophisticated medium of its kind for assessing all manner of financial risks and potentials for profit. Its future as an investment platform is to become more and more integrated into the complex mix of hardware and software animating Artificial Intelligence.

BlackRock’s job is to dispense funds ushered into existence through the money-creating powers of the Federal Reserve. These transactions are to take place through eleven so-called “special purpose vehicles” similar to the Maiden Lane companies that BlackRock administered during the prior bailouts.

The funds it distributes in this round starting in 2020 are meant, at least at this early stage of the crisis, as payments for various sorts of assets. These assets might include an array of corporate bonds spanning a range from so-called investment grade to garbage grade junk bonds. The losses incurred in this exchange, involving supposed assets that might turn out to be worthless, or loans that might not be paid back, are to be charged to the US Treasury. Ultimately the liability lies on US taxpayers who are the holders of the national debt.

Bonds of varying levels of worth lie beneath another asset eligible for transformation into cash. This instrument of value is referred to as Exchange Traded Funds, ETFs. ETFs happen to be a specialty of BlackRock ever since the company launched a range of commercial ETFs into Stock Market circulation through its iShares division. BlackRock’s role on both sides of buying and selling ETFs comes up repeatedly as one of the many conflicts of interest of which the Wall Street firm stands accused.

Given that BlackRock is involved in one way or another in the proprietorship of pretty much every major company in the world, there is plenty to back up the allegation that Black Rock is an interested party in most of the transactions in which it engages as part of its partnership with the US Fed and Treasury Branch.

Pam Matens and Russ Martens have been very critical of the role of the Federal Reserve and BlackRock in the current economic crisis. They have anticipated that, if the current drift of events continues, American taxpayers will once again be gobsmacked with a huge growth in the national debt. This development would amount to another major transfer of wealth away from working people to the beneficiaries of Wall Street firms and the same commercial institutions that received the lion’s share of funds during the last bailout.

The co-authors picture BlackRock is part of a scheme to use “Special Purpose Vehicles” like “Enron used to hide the true state of its finances and blow itself up.” They entitle their article published on 31 March, 2020 as  “The Dark Secrets in the Fed’s Wall Street Bailout Are Getting a Devious Makeover in Today’s Bailout.”

The authors observe. “What makes the New York Fed’s bailout of Wall Street so much more dangerous this time around is that it has decided to use a different structure for its loans to Wall Street – one that will force losses on taxpayers and, it hopes, will provide an ironclad secrecy curtain around how much it spends and where the money goes.”

I find this account of an effort by the Federal Reserve to create an “ironclad secrecy curtain” shocking under these circumstances. It suggests an intention to exceed the deceptiveness of the last bailout. This warning renews longstanding suspicions that the failures of transparency and accountability have not subsided since the beginning of the era when deregulation and the 9/11 deceptions converged in the domestic and international operations of Wall Street.

The structural problems already identified in the process initiated to implement the CARES Act could have enormous consequences if the current economic crisis continues to deteriorate. This deterioration is not likely to stop anytime soon given the depth of the crash and its probable domino effects. It was reported in late July that during the second quarter of 2020 the US Gross Domestic Product collapsed at an annualized rate of 33%, the deepest decline in output ever recorded since the US government began measuring GDP in 1947.

The CARES Act helped set in motion a program with the potential to repeat elements of the earlier bailout. The amount of $454 billion was to be set aside to assist the banking sector. The Fed can leverage this amount by ten times according to the principles of fractional reserve banking.

The news of this development caused Mike Whitney to imagine “the Fed turning itself into a hedge fund in order to buy the sludge that has accumulated on the balance sheets of corporations and financial institutions for the last decade,” Whitney pictured an onslaught of “scheming sharpies who will figure out how to game the system and turn the whole fiasco into another Wall Street looting operation.”

Meanwhile the Martens Team at Wall Street on Parade called attention to the $9 trillion already injected by the New York Fed to flood liquidity into the still-troubled Repo Markets that began to falter in September of 2019. Add to this revelation the news that the Fed “has not announced one scintilla of information on what specific Wall Street firms have received this money or how much they individually received.”

There is no doubt that the nature of economic relations will be substantially altered in the process of dealing with the financial meltdown induced by the lockdowns and by the overreliance on high debt rates combined with artificially low interest rates prior to 2020. The altered political economy that is beginning to emerge following the lockdowns is sometimes described as state monopoly capitalism.

In deciding what companies get bailed out and what companies don’t, the financial authorities that are intervening in this crisis are pretty much deciding what enterprises get the advantage of federal financial backstops and what enterprises will not enjoy government sanction. Increasingly, therefore, it is the state that determines winners and losers in the organizing of financial relations. This development further undermines any notion that some idealized vision of competition and market forces will determine winners and losers in the economy of the future.

As Peter Ewarts has observed, it seems that BlackRock is being delegated by federal authorities to exercise “discretionary powers to pick winners and losers,” a choice that is “where the real bonanza and clout lies.” Will the winners be chosen from the companies run by executives that used the money gained from the prior bailouts to engage in stock buy backs? This process of buying back stock tends to be reflected in CEO bonuses and higher share prices. Alternatively this way of allocating funds tends to short change workers as well as innovation and efficiency in industrial production?

Will companies be rewarded whose executives have moved production facilities overseas or issued billions in junk bonds? Will companies be rewarded whose directors have participated in the effort to censor the Internet, bring about lockdowns or foment mask hysteria? Why is it that the coddled elites serving the financial imperatives of most wealthy branches of society are being put in the best position to decide who gets a life preserver from the state and who must sink and drown?

Might this bias be a factor in the current process that led Forbes Magazine to conclude in a headline that “Billionaries Are Getting Richer During the Covid-19 Pandemic While Most Americans Suffer.”

There can be no doubt that the financial transactions beginning with the CARES Act represent a crucial initial stage in what the promoters of the World Economic Forum have been labeling as the Great Reset. Laurence Fink and the BlackRock firm are significant participants in the World Economic Forum. The WEF helped introduce the pandemic in Event 201 in October of 2019 even as it is now trying to put a positive face on the fiasco.

Why should the people most harshly affected by the lockdowns tolerate that the very Wall Street interests dispossessing them, are tasked once again to lead and exploit the reset of the financial system? As presently structured by the likes of BlackRock and its beneficiaries, this process is once again transferring new wealth to the most wealthy branches of society. Simultaneously it is burdening the rest of the population with yet another massive increase in both personal and national indebtedness.

There is no more discussion of “trickle down” economics, a frequent metaphor invoked in the Reagan-Thatcher era. Instead we are in the midst of an increasingly intense phase of suck up economics. The rich are being further enriched and further empowered through the dispossession of the poor and the middle classes. This procedure, initiated when locked down citizens were sidelined from the political process, has the potential to result in the largest upward transfer of wealth so far in history.

BlackRock Versus the Debt-Lite Legacy of the Bank of Canada

At the end of March Laurence Fink, CEO and founder of BlackRock, announced in a letter to his company’s shareholder, “We are honored to have been selected to assist the Federal Reserve Bank of New York and the Bank of Canada on programs designed to facilitate capital to businesses and support the economy.”

This announcement might leave the impression that the Bank of Canada and the Federal Reserve Bank of New York are similar institutions. This impression is unfounded. The two banks have very different structures and histories. A spotlight on these differences helps illuminate the nature of a number of core financial issues.

These financial issues should command avid attention during this time of reckoning with a serious economic crisis that may well be still in its early stages. Such issues inevitably draw attention to the current manifestations of very old questions about the character of money and its relationship to the concepts of usury and debt. Questions about debt, debt enslavement as well as the possibility of debt renunciation or debt forgiveness are becoming especially pressing.

These controversial queries arise in an era when a tiny minority is aggressively asserting sweeping claims to ownership of vast concentrations of the world’s available assets. The other side of this picture reveals that the largest mass of humanity is sinking into a swamp of rising debt on a scale that is concurrently unsustainable and unconscionable. How did this level of inequity reach such audacious extremes? Are there any remedies in sight?

There is nothing to suggest structural remediation in the current approach to the economic crisis. In fact so far there is every indication that the current approach of bringing about an enormous expansion in the availability of debt-laden money will only compound the further dispossession of the already dispossessed in order to expand the wealth of the already wealthy.

As already noted, the Federal Reserve Bank of New York is one of twelve regional banks that together constitute the US Federal Reserve. Every regional Federal Reserve Bank is owned by a group of private banks. Each of the private banks at the base of a Federal Reserve regional bank marks its proprietorship through the ownership of shares. These shares cannot be freely traded in stock markets. The ownership of these shares expresses the private ownership of the US banking system.

The Fed’s New York regional bank has a special role in money creation given its location at the heart of the US financial sector on and around Wall Street. In this crisis, the Federal Reserve Bank of New York is creating new money in the name of holding back onslaughts of destitution and penury in a traumatized society. Ever since 1913 every new dollar brought into existence by the Federal Reserve, which is the central bank of the United States, creates added debt that collects compound interest as long as it is left unpaid.

The Bank of Canada was created to counter the delegation of money-creating authority to privately-owned banks. The Bank of Canada was founded during the Great Depression, a time when the failure of many existing institutions created the conditions to try out alternative entities in the attempt to improve economic relationships.

One of the driving forces in the creation of Canada’s new banking system was Gerald Gratten McGeer. McGreer was an elected official in British Columbia dedicated to changing the system so that the people of Canada could generate their own currency through the sovereign authority of Canada’s Parliament. McGeer helped to push the national government of Prime Minister R.B. Bennett in this direction. The wheels were set in motion in 1933 through the work on the Royal Commission on Banking and Currency.

McGeer drew much of his inspiration from former US President, Abraham Lincoln. Lincoln led the US federal government throughout the US Civil War. To finance the Armed Forces of the Union, Lincoln used the authority of the federal government to create “Greenbacks” as a means of paying the troops. By employing the sovereign authority of the US government to create its own currency, Lincoln avoided the intrigues that often accompanied the process of borrowing money from foreign lenders.

McGreer had obtained what he viewed as credible evidence that Lincoln had been assassinated because of his antagonism to the designs of private bankers seeking to widen their base of power in the United States. The Canadian politician had taken to heart a comment attributed often to Lincoln: “The privilege of creating and issuing money is not only the supreme prerogative of Government, but it is the Government’s greatest creative opportunity.”

The Bank of Canada was created in 1934 and nationalized as a Crown Corporation in 1938. To this day it retains its founding charter that affirms,

WHEREAS it is desirable to establish a central bank in Canada to regulate credit and currency in the best interests of the economic life of the nation, to control and protect the external value of the national monetary unit and to mitigate by its influence fluctuations in the general level of production, trade, prices and employment, so far as may be possible within the scope of monetary action, and generally to promote the economic and financial welfare of Canada.

The Bank of Canada formed an essential basis of a very creative period of Canadian growth, development, and diversification throughout the middle decades of the twentieth century. The Bank of Canada created the capital that financed the Canadian war effort from 1939 until 1945. After the war the Bank of Canada lent money at very low rates of interest to the municipal, provincial and national governments. The monies were used for infrastructure projects and for investments to increase the wellbeing and creative potential of Canada’s most important resource, its people.

This type of low interest or no interest financing formed the economic basis for projects like the creation of a national pension plan, national health care insurance, the Trans-Canada Highway, the St. Lawrence Seaway, the Avro-Arrow initiative as well as a formidable system of colleges and universities.

One could say that the Bank of Canada provided an indigenous money supply that was spent into the operations of a fast growing economy greased with lots of federal liquidity. The new money derived its value from the efforts of Canadian workers.  Together they brought about significant increases in the country’s net worth through practical improvements that bettered the lives of all citizens.

Consider the contrast between this type of national development and the kind of larceny facilitated by the Federal Reserve’s infusions of the money it creates into Wall Street’s operations in the twenty-first century. In, for instance, the financial bailouts of 2007 to 2010 the largest part of the newly-created money ended up in the coffers of the wealthy whereas the new debt created ended up as part of a US national debt.

The burden of carrying this debt falls inter-generationally on average working people who form the lion’s share of taxpayers. They have long been saddled with an “inextinguishable debt” that unrelentingly grows, hardly ever shrinks, and remains basically unpayable forever. The very concept of “compound interest” conveys the image of an overall debt spread out over many venues. This debt must grow in perpetuity. There is a constant need for additional debtors while existing debtors must face constantly growing personal debt.

There is reason to suspect that the financial debacle of 2020 will re-enact some the worst excesses of the 2008 bailout. Might the payouts this time around to derivative-addicted Wall Street firms like Citigroup, Goldman Sachs and JP Morgan Chase exceed the scale of the prior bailout? Would there be any way of even knowing whether the current round of payouts outdoes the former round of bailouts? The current process of federal disbursements is not transparent. In fact the process has been described as one designed to “provide an ironclad secrecy curtain around how much [the Fed} spends and where the money goes.”

Why is the Canadian government turning to the very firm that emerged as Wall Street’s main fixer and winner in the 2008 bailouts? Why is Justin Trudeau looking to BlackRock to respond to the Canadian aspects of the 2020 economic crash?

Justin Trudeau seems unwilling or unable to provide a coherent answer to this question and others requiring thoughtful replies rather than barrages of platitudes. Why is Justin Trudeau instituting what Joyce Nelson has characterized as a “new feudalism” in Canada’s economic policies?

Any decent effort of response on Trudeau’s part would have to make some reference to the background of the current debacle. There would have to be some acknowledgment that between 1934 and 1974 the Canada government did not build up any significant national debt. Then, between 1974 and 2020, the national debt of Canada skyrocketed from $22 billion to $700 billion.

Why was such a good and sustainable use of the Bank of Canada put aside, one that contributed magnificently to the health and wellbeing of the Canadian people as well as the Canadian federation? Who lost out? Who gained besides the international bankers?

The incomprehensible abandonment of a winning formula for Canadian development by Prime Minister Pierre Trudeau puts a special onus on his son, Canada’s current PM, to explain the incredibly costly mistake of his father. Why won’t Justin Trudeau fix the mistake of his father and restore the Bank of Canada to its former role in Canadian nation building?

There has never been a full and satisfactory explanation of what really happened in 1974 to persuade Pierre Trudeau to throw aside the means of developing infrastructure with resources generated internally within Canada. Trudeau Senior’s decision to stop building up Canada through the operation of the Canadian people’s own national bank was not debated in Parliament. The option was never part of an election platform let alone the subject of a national referendum.

Apparently the Swiss-based Bank of International Settlements, which is often referred to as the central bank for central bankers, had some role in Pierre Trudeau’s decision to cease using the Bank of Canada’s powers to generate near-debt-free Canadian currency.

Government as a Means of Escaping Debt Entrapment

That powers of debt-lite money creation invested by Parliament in the Bank of Canada have never been formally withdrawn. The Bank of Canada could still revert back to the direct creation of Canadian currency to be spent into an economy of national recovery; to be spent in investments in infrastructure as well as in cultivating and applying the creative skills of the Canadian people.

Between 2011 and 2017 a court case was brought against the government of Canada with the aim of restoring the Bank of Canada to its former role. As Rocco Galati, the lawyer for the Committee on Monetary and Economic Reform (COMER) explained  “Not only has the government abandoned its constitutional duty to govern, but it has transferred it to international private banks which corresponds to an abandonment of its sovereignty.”

After some significant rulings and contentious appeals, the COMER case came to an end without delivering results that its plaintiffs sought. But the court case helped to put a spotlight on the potential of the Bank of Canada. If properly utilized, this institution could provide a model corrective to the subordination of governance to the international Lords of Debt Explotation and their minions.

This process of politicizing the role of the Bank of Canada should extend to a process of calling out Justin Trudeau’s current approach to selling off key components of Canada’s infrastructure.

This topic came up in private discussions between Larry Fink and Justin Trudeau at the World Economic Forum in Davos in January of 2016. Fink apparently got Trudeau interested in attracting private investors to the project of improving or building Canadian infrastructure projects like roads, high-speed trains, airports and such. This kind of approach to developing infrastructure projects runs counter to the role once played by the Bank of Canada in incorporating self-sufficiency into the process of national building.

The dangers and opportunities in this time of manufactured crises are indeed unprecedented.  Instead of rejecting the Davos crowd’s preoccupation with a giant reset, why not embrace the concept? Why not treat this moment as an opening to reset the global economy in a way that would restore the Bank of Canada to some of its former functions. Why not highlight this return to the sovereign embrace of benevolent nation building as an example for the rest of the world?

Why not reconstitute the worldwide structures of the international system of economic relations to restore elected governments to the functions that have been pre-empted by unaccountable institutions like the US Federal Reserve or the Bank for International Settlements? Why not renew the model of banking as an exercise and expression of national sovereignty and the self-determination of peoples in a dynamic global arena of rules-based economic interaction?

Why not withdraw the power from private bankers to create national currencies? Why not follow the advice of the deceased Abraham Lincoln by restoring “the greatest of all creative possibilities available to governments,” namely their power to issue money and set interest rates. The restoration of economic power to governments and the people and peoples they represent would involve the infusion of life into conceptions of globalization very different than those used to justify the industrialization of China and the deindustrialization of North America.

By delegating to international organizations much of their capacity to influence the economic conditions affecting their own people, national legislatures have lost much of their capacity to provide responsible government. Governments thus weakened are not realistically in a position to derive their authority from the consent of the governed. When representative bodies cannot effectively express the right of their constituents to collective self-determination in economic realm, what legitimacy is left to the institution of representative government?

This strange moment puts humanity face to face with much that is novel and unprecedented and much that is old and integral to the history of human interaction. The economic dimensions of this crisis constitute its most devastating and far-reaching attribute. The supposed remedy being rushed into operation is to flood large quantities of debt-laden loans into existence and for governments to distribute the borrowed funds to individuals, businesses, and organizations as they see fit.

Once again, vast quantities of debt-laden money are being created without the informed consent of those on whose shoulders the vastly increased loads of debt are falling. Once again governments are rewarding political friends and punishing political enemies by means of the way the new funds are being apportioned.

Decisions are pushed forward that emanate not from citizen constituents but from cabals of supranational connivers actively engaged in wrecking what little remains of responsible government. As governments lose legitimacy by engaging in collusion with corrupt cronies and international crime syndicates they must depend more and more on police state thuggery to enforce some semblance of order.

This process is going forward in spite of the fact that alternative means exist to create as much new money as is required without having to pay large amounts of compound interest to private bankers. Every sovereign government has the capacity to generate new money by following the model of the Bank of Canada between 1938 and 1974.

There is an especially urgent need at this time for some serious reckoning with the economic dimensions of the crisis before us. This reckoning will inevitably meet the resistance of extremely powerful interests who are deriving great benefits from the existing system. The process of privatizing the creation of money has enriched and empowered a clique whose institutionalized, deep-rooted and continuing kleptocracy was exposed in part by the bailout of 2008.

Why should we take for granted in 2020 that the best way to deal with the economic debacle put before us is to create new money by agreeing to go much deeper into a quagmire of debt entrapment. This debt trap, whose cumulative amount will soon be more that $300 trillion globally, creates gross liabilities in a trajectory of disadvantage that severely limits the life chances even of many generations still unborn.

The other side of debt is embodied in assets. Who gets the assets and who gets the liabilities that coalesce to form indebtedness? What is to be made of the role of birth or inheritance or race or natural ability or social connections in apportioning assets or imposing the enslavements of accumulated debt?

John Perkins addressed some of these issues in his Confessions of an Economic Hit Man and in a subsequent follow-up volume. Perkins chronicled how an inter-related complex of US institutions aligned themselves with his own greedy and unscrupulous interventions. The goal of their coordinated aggressions was aimed at imposing the enslavements of massive debt with compound interest. Their version of loan sharking is one of many manifestations expressing a very old and common phenomenon. It often happens that powerful interests parasitically exploit the weak to further enrich themselves.

This partnership between John Perkins and the kleptocratic agencies directed by the US government has long been drawing wealth from struggling countries by pushing them more deeply into national indebtedness. Once the governments of target countries succumbed to greater dependence on debt-based financing, the conditions were ripe to force officials into adopting policies of austerity that harmed local citizens in order to augment the assets of international investors.

Significantly the World Bank demonstrated how this coercion works in the context of the current economic crisis. The World Bank attempted to impose conditions on a loan of $940 million to Belarus because the WB wanted Belarus to conform to the lockdowns that are a primary cause of the current manufactured crisis.

As revealed by the Belarus’s President, Alexander Lukashenko, the World Bank wanted his country to adopt the full set of COVID-19 measures that had been implemented by the Italian government. Lukashenko said no to the loan. He refused to accept the conditions and carried on the established policies of Belarus, a country that has “not implemented strict coronavirus containment measures.”

Lukashenko is far from alone in his contempt for the manipulative tactics of the apparatus promoting the manufactured crisis. For instance Tanzanian President, John Magufuli, tested the accuracy of the testing procedures being forced on his country by the World Health Organization. President and Medical Doctor Mugufi included in the samples submitted to the testing agency some tissue of a goat and a papaya. Both the goat and the papaya tested positive for COVID-19, an outcome he publicized before ordering the WHO group to leave his country.

The Political Economy of Usury From the Middle Ages to the Era of Social Credit and Ezra Pound

We cannot assess the division of humanity between a massive group of debtors and a much smaller group of creditors without touching on the issue of usury. The subject of usury, the lending of money with the addition of interest payments, has been an extremely contentious issue throughout much of human history.

There were prohibitions against usury in ancient Greece, ancient India and the Roman Empire. Throughout much of the last thousand years usury has been regarded as a sin outlawed in the Bible, the Torah and the Koran. At different times in history the Roman Catholic Church has been an especially zealous opponent of some forms of usury.

Considering the nature of our current predicaments including obscene levels of economic inequality, usury might yet again arouse contentions. Some of the core ethical issues raised by the resort to usury remain unresolved. How is it ethical, for instance, to subject disinherited children in poor countries to the indignities of deepened poverty so that rich folks in rich parts of the world can reap larger dividends?

Beginning in the Middle Ages, forms of usury began to show up first in the Italian city states and in the towns of the Franco-Flemish realm. The act of loaning money with interest gradually spread throughout Europe. In some predominately-Muslim jurisdictions, the concept conveyed in the Arabic term, “riba,” approximated the idea of usury or interest. Over time various versions of riba have affected Muslim banking practices.

Often there were prohibitions preventing Jews from demanding interest on loans made to other Jews. There were many Talmudic teachings, however, permitting interest to be collected from gentiles when they borrowed money from Jews. Many accounts of Jewish efforts to break down prohibitions on usury highlight obstacles preventing Jews from pursuing other lines of work. The case is made that the pull of some Jews into banking came about in part because of their exclusion from other occupations.

Whatever the case, the obstacles to usury continued to be lessened including through the changes to Biblical interpretation that came with the Protestant Reformation. Even in the twentieth century, however, usury continued to arouse criticism and distrust. Ezra Pound was one of those who became very outspoken when it came to problems with usury.

The modernist poet and scholar, Ezra Pound, was one of the most influential literary figures of the twentieth century. The importance of his work was expressed not only in his own literary efforts but also in his contributions to other authors in his circle of friends and colleagues.

Pound’s outspoken criticism of usury formed part of the discourse that was integral to the political movements seeking economic reform. The creation and successful nationalization of the Bank of Canada was one of the outgrowths of the concerted quest to give substance to economic institutions that would more effectively serve human needs.

The creation of the Bank of Canada drew on the ideas of Abraham Lincoln and also on those of many other theorists including Major C.H. Douglas. While Major Douglas and John Maynard Keynes each denounced one another’s work, both sought to stimulate economic activity by expanding the supply and distribution of money.  Major Douglas’ vision of Social Credit, one that Pound enthusiastically embraced, sought to bring about greater harmony and equilibrium between the forces of production and consumption.

A biographer of Pound has explained that this formidable literary figure believed “there was the prospect of building a Social Credit society where money served the consumer and served the producer.”  As Pound pictured it, “the middle men” seeking usurious, interest bearing profit” to be collected “without work or prior motivation, could be cut out.” During the Depression the hope of prosperity through the application of Social Credit principles was seized upon by many. One of them was an evangelical preacher in the Canadian province of Alberta.

Largely as a result of the popularity he gained by incorporating Major Douglas’ analysis of Social Credit into his Sunday afternoon Christian radio broadcast, “Bible Bill” Aberhart became the Premier of Alberta. His Social Credit Party gained 56 of 63 seats in the Alberta Legislature. The Social Credit Party continued in power until 1971.

The Social Credit preoccupation with bringing about changes in the relationship of citizens to financial institutions helped add to the discourse from which the Bank of Canada emerged as a dynamic instrument of nation building.

The enthusiasm was well placed of those who threw their lot in with the movement to create and enlivened the Bank of Canada. The generations that put their trust in this federal financial institution had the satisfaction of knowing that their taxes were not devoured to pay big amounts of interest to private bankers in the style that presently prevails almost everywhere.

Like his good friend and colleague, Ernest Hemingway, Pound was a devotee of clear, terse and succinct prose.

This characteristic of his writing comes through strongly in his harsh condemnations of usury. “Usury is the cancer of the world,” Pound wrote. He explained, “Until you know who has lent to whom, you know nothing of politics, you know nothing whatever of history, you know nothing of international wrangles.”

Ezra Pound was born in Idaho but was attracted to Italy throughout long periods of his life. In Italy he lionized its fascist leader, Benito Mussolini. He embraced the Axis side in World War II developing close relations with the British fascist leader, Oswald Mosley. Pound threw himself into the contest producing a torrent of radio broadcasts seeking to win over English-speaking converts to the Axis side. These broadcasts are today widely described as war propaganda.

Pound was indicted in the United States in 1943 and arrested at the war’s end by the US Armed Forces in Italy. After being jailed in Pisa, Pound was charged with treason. Then Pound was diagnosed as being mentally unfit to face charges.

The finding that he was mentally ill caused Pound to be locked up as a patient in St. Elizabeth’s Hospital in the Washington DC area for the next 13 years. In spite of his severe prejudices against Jewish bankers and his active embrace of fascism during the war years, Pound continued to carry on very lively interactions with his formidable circle of poets, essayists and novelists.

Pound’s circle included James Joyce, Ernest Hemingway, and T.S. Eliot. All these writers wrote works that won a Nobel Prize for Literature. These and many other authors benefited from Pound’s encouragement and mentorship. In 1948 Eustace Mullins joined Pound’s circle. Mullins was introduced to the famous poet and scholar through Pound’s wife, Dorothy Shakespeare,

When he first met Pound, Mullins was an art school student and a veteran of the US Air Force. He had already published some short pieces in the British journal, Social Creditor. Mullins remembered Pound’s place of forced residence as “a hideous, urine-soaked madhouse in Washington D.C.” As their visits became increasingly regular, Pound encouraged Mullins to conduct research into the history and activities of the Federal Reserve.

When Pound proposed the idea Mullins was unaware of the existence of the Federal Reserve. Nevertheless, Mullins threw himself into the project that he supported by combining his research with work as a book stacker at the Library of Congress. At the Library he befriended George Stimpson who was well known among Washington journalists and government officials for his wealth of knowledge and his ability to locate relevant research materials.

Stimpson happily worked with Mullins. He helped the aspiring author by guiding him into the primary and secondary literature illuminating many facets of the Federal Reserve’s history

Eustace Mullins Explores the Secrets of the Federal Reserve

An initial edition of the volume appeared in 1952 as Mullins on the Federal Reserve. Another edition with added information was published in 1954. The text has been republished many times, sometimes in different editions under the title Secrets of the Federal Reserve. The text is organized around both thematic and chronological facets.

Mullins lays out the history of the Federal Reserve with considerable attention to the institution’s roots and origins. The author emphasizes several strands of continuity showing the links of the Federal Reserve to the banking establishments of Europe but especially those of Great Britain and Germany.

Mullins characterizes the Federal Reserve as the most powerful institution in the United States whose influence grew so that “it gradually superseded the popular elected government of the United States.” The power of the Fed and its core facet, the Federal Reserve Bank of New York, is said to have become so formidable because the agency operates in secrecy without any genuine form of accountability to any public institution. The NY Fed combines the power of secrecy with the enormous power to create new currency and to set interest rates becoming in the process “the most gigantic trust on earth.”

Mullins makes the case that the financial district known as the City of London exercised enormous influence over the activities of the Federal Reserve and many of the large Wall Street banks. Mullins wrote, “London is the world’s financial centre, because it commands enormous sums of capital created at its command by the Federal Reserve Board of the United States.”

Mullins is conscientious in presenting many citations to back up his observations and interpretations. He cites, for instance the New York Times on January of 1920 where it states, “The Federal Reserve is a fount of credit not capital.” The manipulation of credit, however, can greatly affect the industrial economy by affecting the ability of manufacturers and farmers to produce.

Mullins emphasizes throughout the text how events are often engineered to strengthen the hand of the Lords of Credit in the matrix of society’s operations. In referring, for instance, to a secret banker’s plan to crash the stock market in 1929, Mullins expressed a view that could as easily describe the growing suspicion in 2020. Could it be that the lockdowns of businesses and workers were purposely engineered to strengthen the hands of the Lords of Credit whose main platform is the Federal Reserve Bank of New York?

Mullins explains that sometimes “bankers paralyse the industrial energies of the country” in order to highlight and strengthen “their tremendous powers” over the financial and business organization of the American economy. Mullins’ observation that “panic is an instrument of [financial] power” is another statement with obvious relevance to the current crisis.

As have many authors since, Mullins emphasizes the importance of a top-secret meeting on Jekyll Island in the state of Georgia in 1910. At this meeting Paul Warburg essentially took the intellectual lead in creating a plan for a Central Bank in the United States. Such an institution was long contemplated and promoted but it had been stopped repeatedly, most famously be Andrew Jackson. Jackson’s political career culminated in his winning the US presidency between 1829 and 1837.

Warburg left his family banking business in Hamburg Germany in 1902. He joined the Wall Street Office of Kuhn Loeb, a Wall Street House that helped finance the Bolshevik Revolution in Russia. Mullins devotes much effort to describing the complex of alliances and rivalries that characterized banking before and after the founding of the Fed.

Weaving throughout these networks of financial activity were the banking operations of the Rothschild family. Mullins leaves no doubt that the operations of the Rothschild family of bankers were extensive, elaborate and very influential.

In the nineteenth century the Rothschild banking establishment gradually wove its operations into those of large segments of Europe’s royal and aristocratic establishments. Mullins emphasizes the genesis of the close business relationship between the Rothschild banking clan and a London-based US company, George Peabody and Company.

Peabody’s bank was passed on to a father and son team, Junius Spencer Morgan and John Pierpont Morgan. In the days of the Fed’s founding and even today, the name of J.P. Morgan is synonymous with New York banking. Mullins explains how the Rothschild bankers kept a fairly low profile in New York by conducting much of their American business largely through the financial organizations associated with the name and reputation of J.P. Morgan.

Mullins outlines the role of the Federal Reserve in the funding of two world wars. Many of the topics covered in Secrets of the Federal Reserve were later pursued in much more detail in the prolific writings of Antony C. Sutton.

Most of Sutton’s volumes describe the role of Wall Street in helping to bring about many of world history’s major turning points during the twentieth century. These turning points include Wall Street’s funding of the rise of the National Socialist government in Germany in the 1930s and the role of Wall Street in financing the Bolshevik Revolution and the business activities of the Soviet Union.

The capacity of the New York Bank of the Federal Reserve to create vast quantities of credit to finance wars, often with the same bankers funding competing sides in conflicts, provided the key to the creation of huge fortunes. The funding of both sides in war can be seen as an early form of hedging one’s bets. This kind of high impact intervention through banking sometimes created huge leverage for a very small number of people to steer history towards preconceived destinations.

As Mullins explains it, the Federal Reserve was founded in extreme secrecy and often employs deceptive tactics to misrepresent its true nature. As Mullins sees it, for instance, the creation of the twelve regional banks was a ploy to gain political acceptance for the Central Bank’s core entity, the Federal Reserve Bank of New York. Mullins explains, “the other eleven banks were so many expensive mausoleums erected to salve local pride and quell the Jacksonian fears of the hinterland.”

The ability of Wall Street bankers to invoke the credit creating powers of the New York Fed forms a key aspect of the frequent military adventurism of the US government. This military adventurism continued full force even after the United States became the world’s largest debtor nation after 1990. How large has been the role of the US Fed in building up the US national debt together with the tens of trillions missing from the books of the US Defense Department?

The Israel Lobby and the Federal Reserve

Much of the military adventurism of the United States especially after 9/11 was directed into invasions of Muslim-majority countries that threaten a particular view of Israel as a dominant power in its region and in the world. Why would it be that the Federal Reserve is any less involved in creating the available credit for the waging of wars in the twenty-first century than it was in creating the wars of the twentieth century?

In his authorship of The Secrets of the Federal Reserve, Mullins seems largely oblivious to the role in world history of Zionism and the genesis of Israel. His main attention lay elsewhere. As I read his text, he accurately conveyed how the large Jewish influence in the banking institution of Europe, including the influence of the Rothschild consortium, was extended into Wall Street including the Federal Reserve.

While Mullins does not shy aware from dealing with the Jewish component of the story he set out to tell, I don’t think he belabours this subject or becomes aggressively polemical about it. Certainly the same cannot be said of some of his critics whose condemnations of Mullins can sometimes be extremely polemical.

Mullins might have made more of the identity politics prevailing throughout the twentieth century. The sensibilities of the dominant Christian constituency in the United States probably influenced the decisions of many customers shopping for banking services. Quite likely some of them would have been more comfortable dealing with firms identified with names like J.P. Morgan, Rockefeller and Mellon rather than Warburg, Greenspan or Fink. Times, however, have changed.

Some of the more severe prejudices seem to have subsided around the time that Sandy Weill combined his Travellers Insurance Company with Citicorp to create Citigroup. This merger helped create the political momentum leading to the elimination of the Glass-Steagall Act in 1999. With Glass-Steagall’s elimination, Citigroup tried to become a giant department store of varied financial services. In its inner sanctums, however, Citigroup developed a preoccupation with derivatives that continues yet.

In the twenty-first century it happened that some of the cosmetic overlays were removed that had previously been imposed to disguise the large representation of Jews in Wall Street banking, including in the Federal Reserve Bank of New York. For good or bad, usury has become a core features of how the contemporary world is organized. Some reckoning with the ethnic inheritances attending usury are therefore inescapable, especially when dealing with the some of the most dramatic displays of usury on steroids in Wall Street institutions.

Where I see the need to draw a line in the sand is not on the question of the ethnicity of Wall Street personnel. Rather this line in the sand involves the question of how power is used or abused at the domineering heights of our financial institutions. Generally speaking it is not a justifiable use of the Federal Reserve to produce credit that enables the waging of wars that are offensive rather than defensive in character.

The waging of war has long been one of the big bonanzas producing major windfalls for international bankers. In the twenty-first century so many of the wars involve the flexing of military might by the United States to advance the expansionary designs of the Israeli state. The US Federal Reserve has been part of the process of creating what some would consider wars for Israel in Iraq, Syria, Yemen and Iran.

Why are the money-generating powers of the secretive Federal Reserve being invoked to help fund wars for Israel and also to help shape public opinion to accept the US role in these wars of aggression. Especially sensitive is the further indebting of the American people to subsidize the production of propaganda aimed at persuading them to back wars for Israel. This propaganda is deemed necessary to deflate opposition to Israel’s actions including the ruthless dehumanizing treatment of Palestinian Arabs.

We have seen that the Federal Reserve Bank of New York was deeply engaged in 2008 in transferring tens of trillions into the coffers of its own member institutions and counterparties. What uses were made of this bailout produced through a dubious process of legalized financial larceny?

One way or another the Israel Lobby must be a prime beneficiary of the machinations of Wall Street and its money spigot, the Federal Reserve Bank of New York. This pattern of priority can easily be related to US federal funding of the Israel project as a higher priority in federal budgeting than even the basic needs of the domestic population of the United States. Black Lives Do Matter but why is it that the lives of Israel First Partisans seem to matter more than any other group?

This Israel Lobby has the power to prevent any critic of Israeli policies from gaining the nomination of a major US party to run for US president. The result is that, in election after election, Americans are offered a very limited choice between competitors who are equally supportive of Israel.

The Israel Lobby can intervene to prevent the leadership of opposition parties from adopting policies that emphasize equity in Israel-Palestinian relations. Through its campaign contributions, the Israel Lobby dominates the process of choosing and electing representatives in Congress. How much does it cost to buy the political obedience of most federal politicians? How much does it cost to replicate this feat in the state legislatures and even municipal governments?

Through the ownership and/or control of major media outlets, the Israel Lobby exerts major influence in determining the main outlines of much public discourse when it comes to US-Israeli relations and many related subjects. How could one calculate the amount of money it took to achieve this feat? How much of this money is directed into payments for compliance, in other words, bribery? In the post-Epstein era what is the role of bribery’s criminal cousin, namely backmail?

The Israel Lobby is deeply engaged with other lobbies in transforming the Internet from an open forum of public interaction and debate into a centrally controlled propaganda instrument. Prominent among the Internet’s most aggressive censors and thought police are Google, You Tube, Facebook, Twitter and the Anti-Defamation League of B’nai B’rith.

Through all kinds of interventions the Israel Lobby asserts significant forms of control over a broad array of institutions and operations including those of the judiciary, the universities, book publishing, magazine publishing, municipal governments, trade unions and cultural groups. The biggest and most influential cultural group of all is the Hollywood film industry. Not surprisingly there is little in its cinematic output that provides critical perspectives on Zionism and its emanations.

The injection of huge amounts of money are essential to the exercise of so much concerted influence over such a broad sweep of political, intellectual and cultural organizations. Where do the large quantities of money supporting the activities the Israel project come from? Why is it that so many of agencies of the Israel Lobby have the status of charitable organizations with the capacity to extend tax write-offs to donors? What is the relationship of the Israel Lobby to Wall Street and the Federal Reserve Bank of New York?

Even the act of asking such questions will be seen by some as heretical. There is, however, nothing wrong with looking into issues that have so much impact on the quality of our political discourse… so much impact on our capacity to live together with the civility and security we have been losing so quickly with the imposition of the economically crippling lockdowns.

It is no less legitimate to ask questions about the ethnic identity of those who benefit most from the US economy than it is to ask questions about what groups suffer the most from the deprivations of poverty. Wouldn’t it make sense to try to moderate the disparities beginning with processes of research and discussion?

In a book of the same name, former ADL Executive Director, Abe Foxman, has opened the discussion of Jews and Money. Foxman effectively counters the view that all Jews are rich. Foxman, of course, is correct in this assertion. All Jews are not rich. Some are outright poor. A fairly large number of Jews, however, are somewhat rich and a small minority of Jews are disproportionately invested with wealth and power. Jews are especially well represented in the billionaires club both within the United States and internationally.

Some of the wealthiest Jews are part of the Wall Street establishment including the Federal Reserve Bank of New York. Perhaps the time has come to begin retiring this, “the most gigantic trust on earth.” Perhaps it is time to retire some of the debt created over more than a century of putting private bankers in charge of dictating interest rates as well as creating debt-laden dollars. Perhaps the time has come to lessen the debt burden that is narrowing the life chances of so many people who have been funding the wars for Israel mounted in the wake of the 9/11 deception.

The severity of the crisis before us compel all thoughtful people of conscience to look beyond the redeployment of old institutions and old remedies for old problems that are different from the challenges facing us now. One of the most obvious ways to avert further calamity is to move away altogether from the empowerment of private bankers to massively expand national debts with compound interest charged to tax payers.

The alternative to this approach is to change the present means of creating new money. The creation of many banking systems similar to that of the Bank of Canada should be considered in the quest for the main ingredients of a global reset. The Bank of Canada brought about an almost-debt-free run of prodigious nation building before Pierre Trudeau bent the policies of his government to meet the impositions of the Bank of International Settlements.

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How Central Banks Made the Covid Panic Worse

How Central Banks Made the Covid Panic Worse  By Kristoffer  Mousten Hansen, Mises Institute, 5 August 2020

Introduction

Historical events are complex phenomena, and monocausal explanations are therefore by definition wrong when explaining history. Many factors go into explaining why people and the world’s governments reacted as they did to the coronavirus. It is, however, my contention that examining the inflationary policies pursued by central banks and governments are fundamental to understanding how the current corona hysteria developed.

Calling it hysteria may sound harsh. When the coronavirus first started to draw attention back in February, and when most Western countries instituted extremely restrictive measures in March, one could make a plausible argument that the world was dealing with an unknown and seemingly catastrophic disease and that therefore extreme measures were justified. To be sure, this does not mean that the measures implemented were in any way effective, nor that the sacrifices imposed were morally justified; but there was at least an argument to be made.

At this point in time, however, the Centers for Disease Control and Prevention (CDC) has repeatedly cut the COVID-19 fatality rate, and it is now comparable to a bad year of the seasonal flu (see the useful aggregation of studies and reports by Swiss Propaganda Research). The glaring question therefore is: Why do governments across the West act as if they were still dealing with an unprecedented threat? It is no good to simply reply that what politicians really want is power and that they are just using coronavirus as an excuse for extending government control. While a plausible claim, it does not explain why vast majorities in most countries support whatever policies their rulers have thought good. Given the extreme restrictions placed on social and economic life and the mendacious, ever shifting narrative used to justify them, one would think that there would be widespread opposition after four months. So why is there practically none?

Inflation in the Age of Corona

We can better understand this strange phenomenon if we consider the inflationary policies pursued by central banks across the world. I’ll here cleave to the old definition of the term inflation and the one still favored by Austrian school economists: an increase in the quantity of money. The rise in prices which is commonly referred to as inflation is simply the effect of such an increase. While the complexities of modern central banking can sometimes obscure the realities of the process, there can be no doubt that the last couple of months have seen very high levels of inflation.

Modern central banks are no longer content with the classic role of lender of last resort. As the financial system has evolved, central banks have assumed the role of market maker of last resort—that is, they have either implicitly or explicitly assumed the responsibility of making sure that there is always a buyer for financial assets—and first of all government bonds. Thus the Federal Reserve’s balance sheet has ballooned from just over $4 trillion at the beginning of March to now just below $7 trillion; the Bank of England’s has increased from about £580 billion in March to about £780 billion; and the European Central Bank has increased its holdings from about €4.6 trillion to about €6.3 trillion. The balance sheets of the largest central banks thus expanded by between 35 and 75 percent in about five months.

Inflated central bank balance sheets suggest inflation is coming, but actual inflation of the money supply naturally lags behind, since central bank purchases of bonds and securities do not necessarily result in an immediate expansion of the stock of money. The American money stock (measured by the monetary aggregate M2) grew from $15.5 trillion to $18.4 trillion (March–July 13), the British one from £2.45 trillion to about £2.67 trillion (January–May) and the euro area money stock from €12.4 trillion to almost €13.2 trillion (January–June). The annualized rates of inflation in the major monetary areas during the corona episode is then between about 13 (eurozone) and about 50 (USA) percent, well above the norm.1 If we look at the Austrian, “true” measure of the money supply (TMS) for the United States, we see a similar picture, as the TMS in June grew 34.5 percent year over year (YOY).

The Effects of the Present Inflation

Inflation is not an act of God; it is the outcome of a determined policy on the part of governments and central banks. Such a policy has both long-run and short-run effects, which brings us to the first and most obvious way in which inflation has fueled corona hysteria: by essentially putting freshly printed money at the disposal of governments, these latter have been able to first shut down their countries and then pose as saviors as they distributed largesse to workers and businesses. The states have often reimbursed the costs of furloughing employees, either directly or through (sometimes forgivable) loans to companies, or they have distributed generous unemployment benefits to the workers. This, and not any economic collapse, is the story behind the unprecedented spike in unemployment claims in the United States. The central bank has also created facilities to lend to municipal governments and the Main Street Lending Program to “support lending to small and medium-sized businesses and nonprofit organizations that were in sound financial condition before the onset of the COVID-19 pandemic.”

The effect of these programs and policies and others like them in other countries has been to mitigate the direct impact of government-imposed shutdowns. Businesses may have no revenues, but government aid and loans allow them to meet their contractual payments; workers may be unemployed, but generous unemployment subsidies allow them to maintain themselves comfortably; government support of furloughing schemes hides the true extent of unemployment caused by the shutdowns. And all this seemingly at no cost, since no one notices the inevitable dilution of the purchasing power of the monetary unit.

In the absence of these inflationary policies, the consequences of the shutdown would be much more immediately apparent. Workers would have to spend out of their saved cash and liquidate their savings, while businesses earning no revenues would start to default on their contractual payments. A drastic fall in the prices of real and financial assets would have resulted. The pressure to end the restrictions would have been much stronger. Instead, it looks to most people as if they can go on at their old standard of living indefinitely—or at least as long as they continue to receive their government checks. The economic effects of the shutdown are still the same, however: dislocation of the production structure and capital consumption on a vast scale, but these have been hidden—papered over by inflation and government support.

To the individual business owner and worker, the economic reality is hidden. Inflation leads to a fundamental disconnect with reality. Paul Cantor has previously described “the web of illusions endemic to the era of paper money” and how inflation destroys people’s sense of reality.2 In our case, inflationary monetary policy has hidden the costs of engaging in pandemic hysteria, and hence people do not—indeed, cannot—take account of economic realities when assessing the coronavirus and the shutdowns. Governments at all levels can continue to pose as saviors, inventing new mandates and restrictions to combat the nonexistent threat. Germophobes and busybodies can obsess over other people trying to go about their normal lives, since both the costs to them personally and to society as a whole are completely hidden. How many Karens would have the time to boss peaceful citizens around if they had to actually work to earn a living?

Eventually and pretty quickly, these policies will result in price inflation and a hollowing out of the standard of living. Not only has production been severely restricted, as seen in the drastic fall in US GDP figures; insofar as the newly printed money is used on unemployment compensation in different forms, it will quickly reach normal consumers and be spent on consumer goods. If the programs go on much longer, consumer price inflation, as a result of the fiat money inflation, cannot be far off. Once that happens, only increased rates of inflation can keep the programs going—for a time.

The Effects of the Inflationary System

The effects of the inflationary system as such are much more far-reaching than economic dislocation and destruction, however. Fiat money produced out of thin air by central bankers leads to a long-run change in social attitudes and personal character. Joseph Salerno in a stimulating paper discusses how hyperinflation leads to the destruction of personality,3 and following Guido Hülsmann,4

 

I would argue that fiat inflation entails the erosion of culture and character. This is perhaps most fully in evidence in Japan, where people have suffered under artificially low interest rates for decades. What are some of the consequences of an inflationary fiat standard and the culture it brings about, and what is the connection to the corona crisis? There is first of all a change in time preferences, as inflation leads to repressed interest rates and hence less incentive to save and invest. People’s time horizons change, as they increasingly discount long-run value creation and instead focus on present enjoyments and short-run yields. The changing role of central banks only intensifies this development. Instead of “lenders of last resort,” central banks are now “market makers of last resort.” That is to say, stock markets and bond prices cannot be allowed to fall, and it is the role of the banks to make sure they don’t. As a consequence, investors increasingly turn to the pursuit of short-run yields.

This change in time preference has effects beyond the market. Since a premium is placed on short-term thinking in market affairs, naturally people transfer the same attitude to their nonmarket pursuits. Present benefits and present dangers are both emphasized at the expense of future costs and benefits, respectively. It is not hard to see the connection to the virus: since there is a possibility that the virus may potentially be very dangerous, people get frightened and act to make the fear go away. No matter the future consequences of their actions, the present danger of the virus trumps all.

Closely connected to this change in time preferences is a skewed perception of reality. Inflation alters what constitutes successful action, since it is increasingly no longer productive endeavors but closeness to the source of inflation that determines the individual’s success in life. Since the ability of the central banks to create paper wealth seems virtually boundless, naturally people come to have unrealistic expectations of what is possible. Of course we can have a shutdown. We’ll have a central bank–fueled “v-shaped” recovery once it’s over. Of course governments can and should do whatever it takes to protect us from the virus. They can just finance spending with paper money for however long it takes. Whatever costs there are to these courses of action are hidden or far in the future.

Conclusion

There are many reasons for the corona crisis and the present almost total government control of the economy and society. But if we want to understand why states across the Western world have met virtually no resistance in their quest for power, we need to understand the role of inflation in enabling governments: directly through hiding the real costs and pain of the shutdowns, but also more fundamentally by distorting culture and personal character.

  • Trading Economics, www.tradingeconomics.com; Federal Reserve Bank of St. Louis, FRED, www.fred.stlouisfed.org.
  • Paul A. Cantor, “Hyperinflation and Hyperreality: Thomas Mann in Light of Austrian Economics,” Review of Austrian Economics7, no. 1 (1994): 3–29.
  • Joseph T. Salerno, “Hyperinflation and the Destruction of Human Personality,” Studia humana2, no. 1 (2013): 15–27.
  • Jörg Guido Hülsmann, “Cultural Consequences of Monetary Interventions,” Journal des économistes et des études humaines22, no. 1 (2016).?

Author:

Kristoffer Mousten Hansen

Kristoffer Mousten Hansen is a PhD candidate at the University of Angers and a Mises Institute Research Fellow.

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Welcome To The Crazed, Frantic Demise Of Finance Capitalism

 

Welcome To The Crazed, Frantic Demise Of Finance Capitalism  By Charles Hugh Smith, via OfTwoMinds blog, 20 July 2020

 The cognitive dissonance required to ignore the widening gap between the real economy and the fraud’s basic machinery–speculation funded by “money” conjured out of thin air–has reached a level of denial that can only be termed psychotic.

 When scams start unraveling, the scammers become increasingly frantic to maintain the illusion of legitimacy and the delusion of guaranteed gains that are the lifeblood of every scam. One sure sign that the flim-flam is about to collapse is the manic rise of FOMO, fear of missing out, as the scammers jam the Ponzi scheme’s stellar returns to new extremes.

What greedy human can resist guaranteed gains, especially of the enviously grandiose variety?

The greatest scam of the past century is unraveling before our eyes. I’m calling it finance capitalism as a general descriptor of the dominant form of what’s called “capitalism” because calling it what it actually is–a fraud that’s destroyed the foundations of our economy and society–is, well, a much more difficult sell than “capitalism,” which still has some faint echoes of the open markets, etc. that characterized traditional capitalism, which I call naive capitalism because it is incapable of differentiating between the parasitic, predatory finance version cloaking itself as “capitalism” and actual capitalism, in which capital is put at risk, markets are transparent, etc.

There are many labels for the distorted, corrupted “capitalism” that dominates our economy and society: I’ve long used state-cartel capitalism, others prefer monopoly capitalism or crony capitalism.

I now favor finance capitalism because the heart of the fraud is finance: printing “money” out of thin air without creating any value or any goods and services. If you can’t print “money,” then borrow it into existence–that’s just as profitable a fraud as printing it.

As I explained in Our Wile E. Coyote Economy: Nothing But Financial Engineering (June 11, 2020), the fairy tale that America has a truly capitalist economy no longer aligns with the reality that the U.S. economy is now a decaying billboard of “producing goods and services” behind which the real money is made in financial engineering, a.k.a. legalized fraud.

I’ve discussed this fraudulent distortion of capitalism for years:

Has “Financial Innovation” Capitalism Run its Course? (June 22, 2010)

When Capitalism Turns to Cannibalism (July 15, 2015)

What Makes You Think the Stock Market Will Even Exist in 2024? (July 6, 2020)

Just as Communism was a god that failed, finance capitalism is also a god that failed, an extreme version of crony-capitalism that is nothing more than a mechanism for concentrating wealth and power at the expense of everyone toiling in the real-world economy.

And if we understand this, then we also understand that with its stock buybacks, high-frequency trading and after-hours manipulation, the stock market is nothing more than finance capitalism’s primary mechanism for increasing the concentration of wealth.

How did outright fraud come to dominate our economy? The answer is simple: infinite greed plus the decline of gains from “real capitalism,” i.e. increasing productivity via producing goods and services. The appeal of something for nothing is irresistible when “money” can be printed / borrowed out of thin air and used to run a fraud that exploits human greed.

Like every good Ponzi scheme, those invested in the scam promote the fraud and cajole new marks to sink their cash into the “guaranteed gains” scheme because everyone already in the fraud will lose if there aren’t enough new marks joining to keep it from collapsing. That perfectly describes the entire financial media, the financial “industry” and everyone in it.

Unfortunately for everyone invested in the scam, all the “wealth” created by financial engineering / legalized fraud is fictitious, i.e. phantom. All Ponzi schemes collapse once the supply of greed-blinded marks dries up, and so the “solution” in our finance capitalism fraud is for the central bank, the Federal Reserve, to become the mark with an infinite checkbook: the Fed is busily conjuring “money” out of thin air to buy corporate junk bonds and other “assets” (ha-ha, as if these are actually worth anything–the joke’s on you) to prop up the Ponzi scheme.

This works until it doesn’t, of course. In the meantime, the folks running the fraud are pulling out all the stops to keep it from imploding–goosing the FOMO frenzy, printing and throwing trillions into the scam to maintain the illusion of legitimacy and the delusion of guaranteed gains and talking up the god-like powers of the Fed to prop up the fraud indefinitely.

Despite these massive manipulations, the cracks are increasingly visible. Volatility refuses to sink back to near zero, and the swings in the skimming machine, a.k.a. the stock market are becoming more extreme.

The cognitive dissonance required to ignore the widening gap between the real economy and the fraud’s basic machinery–speculation funded by “money” conjured out of thin air–has reached a level of denial that can only be termed psychotic.

All bubbles pop, all frauds implode, all scams collapse. That ominous clicking coming from behind the tattered billboard is the sound of dominoes falling.

As Mark, Jesse and I discuss in Salon #13: The “Phase Shift” everyone is worried about has already happened, the meteor triggering the demise of finance capitalism has already hit.

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Previous articles

  • Central Banks Driving Gold  By Jim Rickards, for The Daily Reckoning, 2 July 2020
  • The Sneaky Covid War on Cash  By Viv Forbes, saltbushclub.com, 19 June 2020
  • The biggest experiment in money creation ever  By Peter Schiff, Via Zerohedge, 28 May 2020
  • 18 Signs That We Are Facing A Record Breaking Economic Implosion In 2020  By Michael Snyder, The Economic Collapse, 7 May 2020
  • The Real Reason Why the Government Shutdown Caused an Economic Collapse  By David Stockman, International Man, 25 April 2020
  • Losing Faith in Fiat, The Collapse is Underway  Greg Hunter interviews Michael Pento, 20 April 2020
  • A Debt Jubilee Is the Only Way to Avoid a Depression  By Michael Hudson, Unz Review, 14 April 2020
  • The Future Of What’s Called CapitalismBy Charles Hugh Smith, via Zerohedge, 24 January 2020
  • The Biggest Stock Market Melt Up In US HistoryBy Michael Snyder, Zerohedge, 21 January 2020
  • The Century Of Total War Coincided With The Century Of Central BankingVia The Mises Institute, 2 November 2019
  • Ludwig Von Mises explained the world’s adoption of faulty economics  By Richard Ebeling, The Heartland Institute, 8 September 2019
  • Billionaires, Bezos, And The Real Big Brother   By Eric Zuesse, via ConsortiumNews.com & Zerohedge, 30 August 2019
  • US Dollar’s Achilles heel, and gold to soar  By Dr. Jim Willie, 13 August 2019
  • Former Lehman Brothers chief economist warns ‘risk incentives’ could cause new crisis  By Adam Creighton, The Australian, 22 October 2018
  • Ten signs we’re heading for economic Armageddon  By Liam Dann, Herald News Business Editor, 11 February 2018
  • The Greatest Bubble Ever, Why You Better Believe It – Part 1 and 2  By  David Stockman via Contra Corner blog, ZeroHedge, 31 December 2017
  • This Is What A Pre-Crash Market Looks Like  By Michael Snyder, The Economic Collapse blog, 14 November 2017
  • The Economic End Game Continues  By Brandon Smith via Alt-Market.com, 5 November 2017
  • Get Ready for a World Currency by 2018  By Jay Syrmopoulos, 13 July 2017
  • Without Glass-Steagall America Will Fail  By Paul Craig Roberts, 10 June 2017
  • Creating another ‘crash of 1929’  By Jeff Thomas, Editor, International Man, 20 April 2017
  • Why Investors Deserve to Get Mauled  By Vern Gowdie, Daily Reckoning, 21 March 2017
  • Bubbles always burst, eventually  By Vern Gowdie, The Daily Reckoning, 16 March 2017
  • This Global Debt Bomb Is Ready To Explode  By Michael Snyder via The Economic Collapse blog, 14 March 2017
  • Great Political and Social Leaders Always Call Out Bankers  By Waking Times, 16 February 2017
  • What Will President Trump Do About The Central-Bank Cartel  By Thorstein Polleit, via The Mises Institute, 14 February 2017
  • The Deep State’s Doomsday Bug  By Bill Bonner, Bonner and Partners, 1 February
  • Only Glass-Steagall Can Save the U.S. from Another Epic Crash  By Pam Martens, 31 January 2017
  • This could be the biggest ‘black swan’ of 2017  By Nick Giambruno, International Man, 24 January 2017
  • Banks Owned or Controlled by the Rothschild Family  From HumansAreFree.com, 23 January 2017
  • The ‘Axis of Gold’ is launching an attack on the U.S. dollar  By Jim Rickards,   29 December 2016
  • rickards-the-global-elites-secret-plan-for-the-next-financial-crisis  By Jim Rickards, Editor, Currency Wars Alert, 28 October 2016
  • we-are-living-on-borrowed-money-time   By Vern Gowdie, The Daily Reckoning, 13 October 2016
  • deutsche-bank-in-dire-straights  From Zerohedge, 30 September 2016
  • big-banks-a-culture-of-crime  By Jeff Nielson, Bullion Bulls Canada, 30 September 2016
  • jim-rickards-there-will-be-a-war-on-gold  From Tekoa De Silve at Sprott Thoughts, 14 September 2016
  • supervisor-of-massive-fraud-at-wells-fargo-leaves-bank-with-125-million-bonus  From Zerohedge, 13 September 2016
  • The-end-game-of-central-banking-is-nigh  By David Stockman via Contra Corner blog, Zerohedge, 8  September 2016
  • Are Central Bankers Coming To A Bitter End  By Martin Armstrong via ArmstrongEconomics.com, Zerohedge, 30 August 2016
  • Pentagon Cannot Account For $6.5 Trillion Dollars  By Jay Syrmopoulos, Global Research, 17 August 2016
  • IMF, An Inheritance of Incompetence  By John Mauldin | Aug 13, 2016
  • Abolish the FOMC  By David Stockman, from Zerohedge, 11 August 2016
  • Memo To The Donald – 10 Great ‘Deals’ To Save America Before It’s Too Late  By David Stockman, via Zerohedge, 10 August 2016
  • The War on Cash is still being planned in the background  By Jim Rickards, Editor, Rickards’ Gold Speculator, from The Crux, 5 August 2016
  • IMF admits disastrous love affair with the euro and apologises for the immolation of Greece  By Ambrose Evans-Pritchard, The Telegraph, 31 July 2016
  • Central banks hell-bent on a currency debauch Lenin would love  By Maurice Newman, The Australian, 22 July 2016
  • Financial collapse, the trigger is inconsequential  By Jim Quinn, Zerohedge, 7 July
  • The global monetary system is collapsing  From Sean Goldsmith, Editor-in-Chief, Stansberry Research, 3 July 2016
  • Marc Faber, clear message to sick political elite  From Zerohedge, 29 June 2016
  • Australia faces danger as politicians ignore danger signs  By Maurice Newman, The Australian, 23 June 2016
  • Australian Labor’s amazing economic magic pudding  By Nick Cater, The Australian, 21 June 2019
  • During the Next Crisis, Entire Countries Will Go Bust  By Phoenix Capital, 16 June
  • Criminal Bankers Threaten Entire World Economy By Greg Hunter,  USAWatchdog, 25 May 2016
  • Keynes must die so the economy may live  By Llewellyn Rockwell, 24 May 2014
  • In praise of the gold standard  Via The Mises Institute, 16 May 2016
  • “A scramble for gold has begun”  By Jim Rickards, Editor, Currency Wars Alert, 22 April 2016
  • The Keynesian House Of Denial  By David Stockman, 19 April 2016 
  • Dick Smith retail chain failure gives capitalism a bad name  Article 20 March
  • China’s economic doomsday machine  By David Stockman, Zerohedge, 11 March 2016
  • The European Depression Was A Deliberate Act  From Zerohedge, 3 March 2016
  • Syria’s state-owned central banks  By ‘anonymous’, 18 February 2016
  • 22 Signs of global economic turmoil  By Michael Snyder, Zerohedge, 6 February 2016
  • Will Bitcoin of similar replace fiat currencies when confidence dies  By David Uren, The Australian, 29 January 2016
  • The deflation monster has arrived  By Chris Martenson, 17 January 2016
  • The Big Short, a must-see movie about Wall St  From ZeroHedge, 24 December 2015
  • Iceland shows how to treat criminal banksters  From Zerohedge, 25 October 2015
  • By David Stockman via Zerohedge, 17 Dec 2015
  • Bankers will be jailed in the next financial crisis  By Mike Kreiger, Zerohedge, 16 September 2015
  • Marc Faber warnings  Interview with Mark Faber, Zerohedge, 3 September 2015
  • Global financial crash, 12 signs  By Michael Snyder, 13 August 2015
  • How a glitch nearly crashed the global financial system
  • The bankruptcy of the planet accelerates
  • “Central banks are out of control”
  • How a glitch nearly crashed the global financial system  From Zerohedge, 10 August
  • Most of the world’s banks are headed for collapse  By Doug Casey, 16 July 2015
  • How much of the Greek debt is legitimate  By Kurt Nimmo, 7 July 2015
  • Greek debt, ‘illegal, illegitimate, odious and unsustainable’  From Zerohedge, 18 June
  • The perils of populist democracy and debt  By Gary Johns, 17 June 2015
  • The FED knows the financial sun revolves around the financial earth  By James Rickards, The Daily Reckoning, 12 June 2015
  • Lessons for Australia are stark  By Henry Ergas, The Australian, 8 June 2015
  • The Perfect Storm Approaches  James Rickards, Contributing Editor, The Daily Reckoning, 3 June 2015
  • “Central banks are out of control”  By David Stockman, Zerohedge, 25 May 2015
  • Terminal phase of the global financial system  David Stockman interview, by Eric King, Contra Corner blog, 19 May 2015
  • Grexit jingle mail  By Charles Hugh-Smith, OfTwoMinds blog, Zerohedge, 16 May 2015
  • Massive bank crimes receive the usual token slap  From Zerohedge, 13 May 2015
  • Deutsch banks decade of ‘lying, cheating and stealing’  From Zerohedge, 6 May 2015
  • How this debt-addicted world could go the way of the Mayans  By Satyajit Das, MarketWatch, 28 April 2015
  • None dare call it a fraud, it’s just a ‘savings glut’  By David Stockman, 13 April 2015
  • “The UK economy is a ticking time bomb”  By Simon Black, Sovereign Man, 8 April
  • Banks will be obsolete within 10 years  By Simon Black, Sovereign Man, 5 April 2015
  • No Fed bets from the IMS  From Silver-Coin-Investor.com, 2 April 2015
  • USD dominance is dying rapidly  From Zerohedge, 26 March 2015
  • Austrian bank Black Swan  From Zerohedge, 16 March 2015
  • SWIFT and the de-dollarization axis  From Zerohedge, 10 Mar 2015
  • China’s fiscal cliff  By Ambrose Evans-Pritchard, The Telegraph, 6 Feb 2015
  • The real economy is about to implode  By Brandon Smith.  5 Mar 2015
  • EU financial suicide, extend and pretend  By Charles Hugh-Smith, 19 Feb
  • Financial Parasites and Debt Bondage  Interview, Prof Michael Hudson, 16 Feb 2015
  • Audit The Fed, And Shackle It Too  By David Stockman, Contra Corner, 13 Feb 2015
  • GREECE should exit the eurozone ASAP  By Alan Kohler, The Australian, 10 Feb 2015
  • Greece, the EU and crony capitalism By David Stockman, Contra Corner, 5 Feb 2015