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Economic News

China is Now Officially the Worlds Largest Economy Surpassing The US – Webster Tarpley

China is Now Officially the Worlds Largest Economy Surpassing The US – Webster Tarpley

China is Now Officially the Worlds Largest Economy Surpassing The US – Webster Tarpley

By | Financial Armageddon

Worlds Largest Economy

Webster Tarpley Historian and President of Washington Grove Institute, a think tank in Washington D.C, Webster Tarpley, discussed the conspiratorial mindset, and shared his intriguing analysis of current geopolitical and historical situations. More and more people are turning toward conspiracies because the “official story” behind such events as 9-11 and the JFK assassination are unbelievable or fantastic, he said. Tarpley doesn’t consider himself a conspiracy theorist, but a seeker of truth, though he admitted that the uncovering of facts in many instances often does point to conspiracies.

We live in an oligarchy run by financiers, and they often do conspire together for shared goals, he noted, adding that they compose a shadow government that secretly rules the US, intersecting with people at the State Dept., the CIA, and perhaps the Treasury and the Federal Reserve.

Tarpley spoke about his forthcoming book about Pearl Harbor and the assassination of FDR. We’re told a lot of fakery about Roosevelt like he provoked Japan, and that he kept his Naval Admirals in the dark, but the opposite was true, he said. Further, a group of Wall St. Republicans that FDR put in control of the Pentagon wanted a defeat to weaken FDR in the postwar world, and Churchill knew the time and place of the Pearl Harbor attack but kept quiet in order to draw the US into the war, he continued. Roosevelt was poisoned by a female Russian painter in April 1945, Tarpley claimed, and Stalin reportedly told FDR’s son “your father was poisoned/murdered by the Churchill gang.”

Tarpley also commented on current situations in France, China, and Russia, as well as Syria and Libya, two countries that he visited during recent turmoils. America can get out of its economic woes by seizing control of the Federal Reserve, and stop using it to give 0% loans to bankers and financial interests, and instead give these loans with a hundred year maturity to the states, who could then start massive infrastructure rebuilding projects, he argued.

Webster Griffin Tarpley is a philosopher of history who seeks to provide the programs and strategies needed to overcome the current world crisis. As an activist historian he first became widely known for his book George Bush: The Unauthorized Biography (1992), a masterpiece of research which is still a must read. Tarpley is a member of the “world anti-imperialist conference” Axis for Peace, of Scholars for 9/11 Truth and of a research Netzwerk of German 9/11 authors founded in September 2006. He is featured in the film, Zero: an investigation into 9/11 During 2008, he warned of the dangers of an Obama presidency controlled by Wall Street with Obama: The Postmodern Coup, The Making of a Manchurian Candidate and Barack H. Obama: The Unauthorized Biography. His interest in economics is reflected in Surviving the Cataclysm: Your Guide Through the Worst Financial Crisis in Human History Against Oligarchy. He is currently completing a study of Pearl Harbor as an episode in Wall Street’s war against President Franklin D. Roosevelt, the New Deal, and FDR’s economic bill of rights. His books have appeared in Japanese, German, Italian, French, and Spanish. From 1974 to 1984, he was a correspondent in central Europe, during which time he co-authored Chi ha ucciso Aldo Moro (Who Killed Aldo Moro, 1978) a study of international terrorism. In 1979-80, he appeared as commentator for Teleradiosole, a television station in Rome. From 1984 to 1996, he was a correspondent in Washington DC. Tarpley is the co-author of George Bush: The Unauthorized Biography (1992), which has sold 30,000 copies and remains the only critical biography of the former President. In 1997 he published an anthology entitled Against Oligarchy: Essays and Speeches 1970-1996. These books can be consulted on the internet at www.tarpley.net. His 9/11 Synthetic Terror, the Bible of the 9/11 Truth Movement, has sold over 20,000 copies. His two books on Obama are virtually the only critical ones in print from a progressive viewpoint. Tarpley has lectured in numerous colleges and universities around the world. In 1995 he was named a consultant to the Universal Ecological Academy of Moscow. He holds an MA from Skidmore College and a Ph.D. in history from the Catholic University of America. Webster Tarpley’s talk show World Crisis Radio is now broadcast on the Genesis World Report on GCNLive Free Internet Streaming Radio, Saturdays, 2:00 pm – 4:00 pm Eastern (1-3 Central, 11-1 Pacific), all 4 networks.

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Posted by Red Pill Reports in Economic News
Bankster Lobbyists Try to Sneak Derivatives Bailout in Budget Legislation

Bankster Lobbyists Try to Sneak Derivatives Bailout in Budget Legislation

Bankster Lobbyists Try to Sneak Derivatives Bailout in Budget Legislation

By Kurt Nimmo | Infowars

Congress reveals once again it is a tool for the financial elite.

More evidence Congress is a subsidiary of Wall Street and the banks.

On Friday Michael Krieger, the editor of Liberty Blitzkrieg, wrote about a behind the scenes effort by banksters to include in a provision in government funding legislation that would make the Federal Deposit Corporation responsible for financial derivatives losses.

Last October, Krieger wrote about a similar push to put American taxpayers on the hook for bankster gambling losses:

Five years after the Wall Street coup of 2008, it appears the U.S. House of Representatives is as bought and paid for as ever. We heard about the Citigroup crafted legislation currently being pushed through Congress back in May when Mother Jones reported on it.

The main backer of the bill was Goldman Sachs operative Jim Himes, a Democrat member of the House of Representatives. Himes, Krieger wrote, “discovered lobbyist payoffs can be just as lucrative as a career in financial services.”

Lobbyists Try to Sneak Derivatives Bailout

At the time, Himes and his colleagues launched a campaign to roll back 2010 Dodd-Frank Act, legislation showcased as a corrective for bankster abuse.

Instead, Dodd-Frank codified “too big to fail,” hammered small business, protected bankster investors, jacked up the prices consumers pay for bank services, interfered with basic market functions, and set the stage for the next economic disaster planned by the financial elite.

The effort by Himes and crew, according to Marcus Stanley, policy director of Americans for Financial Reform, would do “Wall Street’s bidding” and allow it to “write the law to its own benefit in ways that harm the public.”

“After inflicting so much pain and suffering on the American people, now is not the time to let the largest banks back into the casino,” Representative Maxine Waters, the ranking Democrat on the House Financial Services Committee, said in a statement as legislation moved through the House.

The bill was shot down and never made it into law, but that has not stopped the banksters and their operatives in Congress from reintroducing the legislation.

“According to multiple Democratic sources, banks are pushing hard to include the controversial provision in funding legislation that would keep the government operating after Dec. 11. Top negotiators in the House are taking the derivatives provision seriously, and may include it in the final bill, the sources said,” Zach Carter wrote for Huffington Post on Friday.

Many Democrats, however, fearing a political backlash, have stepped away from supporting “derivatives perks,” at least for now. They voted 2-to-1 against the bill in the House and it also appeared doomed in the Senate where Majority Leader Harry Reid failed to bring it up for a vote.

Obama, FDIC Chair Sheila Bair, former House Financial Services Committee Chairman, and Democrats Barney Frank and Rep. Maxine Waters, currently the top Democrat on the Financial Services Committee, oppose the bill.

Krieger, however, added an advisory to his Friday commentary: “Remember what Wall Street wants, Wall Street gets. Have a great weekend chumps.”

Source

Posted by Red Pill Reports in Economic News
First Currency Trading Center Opened on Vietnam-China Border

First Currency Trading Center Opened on Vietnam-China Border

First Currency Trading Center Opened on Vietnam-China Border

By Want China Times

China has opened a currency trading center on the border with Vietnam, the first of its kind in the country that has effectively reduced rampant and illegal private foreign exchange trading there, Shanghai’s China Business News reports.

Currency Trading Center OpenedIn Vietnam, it requires tens of thousands of Chinese yuan to obtain the government’s approval for the establishment of a bank, the main reason behind the rampant illegal private forex trading at the border, according to the report.

Before 2009, exchanges between the two currencies had to be conducted via US dollars in local banks, contributing to the rise of “bank stalls” that provided the illegal service of direct exchanges between the Chinese yuan and the Vietnamese dong in the cross-border region.

Merchants in Dongxing in southern China’s Guangxi Zhuang autonomous region near the border with Vietnam had to conduct currency conversions through such “bank stalls,” where there could a huge difference currency exchange rates from one stall to the next, the report said.

Since there was no official exchange rate from yuan to dong, the market price was determined by local “bank stalls” and the conversion process was simple and underdeveloped.

Since China established a currency trading center on the China-Vietnam border in April though, the situation of rampant illegal private currency trading has improved significantly.

The ASEAN (Association of Southeast Asian Nations) Currency Business Center, initiated by the Agricultural Bank of China in Dongxing, allows direct convertibility of yuan and dong by both individuals and companies.

China was Vietnam’s largest trade partner in 2013 with its total turnover reaching US$50 billion, up 22% year-on-year, according to Vietnam customs authorities.

In 2013, Vietnam spent US$ 37 billion on imports from China, up 28.4%, while it exported US$ 13 billion worth of goods to China, up 7% year-on-year.

After it began promoting the yuan’s globalization in 2009, China launched a series of programs to promote usage. These included a pilot program to expand the investment quota under its renminbi qualified foreign institutional investors (RQFII) that allows foreign investors access to stocks traded on China’s mainland. They also liberalized the yuan’s capital account in Shanghai’s free trade zone.

The government has also launched a pilot scheme to boost the cross-border use of yuan and a scheme to connect the Shanghai stock exchange to its counterpart in Hong Kong, among others.

Source

Posted by Red Pill Reports in Economic News
New G20 Rules: Cyprus-style Bail-ins to Hit Depositors AND Pensioners

New G20 Rules: Cyprus-style Bail-ins to Hit Depositors AND Pensioners

New G20 Rules: Cyprus-style Bail-ins to Hit Depositors AND Pensioners

By Ellen Brown

On the weekend of November 16th, the G20 leaders whisked into Brisbane, posed for their photo ops, approved some proposals, made a show of roundly disapproving of Russian President Vladimir Putin, and whisked out again. It was all so fast, they may not have known what they were endorsing when they rubber-stamped the Financial Stability Board’s “Adequacy of Loss-Absorbing Capacity of Global Systemically Important Banks in Resolution,” which completely changes the rules of banking.

G20 Rules: Cyprus-style Bail-ins to Hit Depositors AND Pensioners

Image credit: Governo Italiano

Russell Napier, writing in ZeroHedge, called it “the day money died.” In any case, it may have been the day deposits died as money. Unlike coins and paper bills, which cannot be written down or given a “haircut,” says Napier, deposits are now “just part of commercial banks’ capital structure.” That means they can be “bailed in” or confiscated to save the megabanks from derivative bets gone wrong.

Rather than reining in the massive and risky derivatives casino, the new rules prioritize the payment of banks’ derivatives obligations to each other, ahead of everyone else. That includes not only depositors, public and private, but the pension funds that are the target market for the latest bail-in play, called “bail-inable” bonds.

“Bail in” has been sold as avoiding future government bailouts and eliminating too big to fail (TBTF). But it actually institutionalizes TBTF, since the big banks are kept in business by expropriating the funds of their creditors.

It is a neat solution for bankers and politicians, who don’t want to have to deal with another messy banking crisis and are happy to see it disposed of by statute. But a bail-in could have worse consequences than a bailout for the public. If your taxes go up, you will probably still be able to pay the bills. If your bank account or pension gets wiped out, you could wind up in the street or sharing food with your pets.

In theory, US deposits under $250,000 are protected by federal deposit insurance; but deposit insurance funds in both the US and Europe are woefully underfunded, particularly when derivative claims are factored in. The problem is graphically illustrated in this chart from a March 2013 ZeroHedge post:


Deposits vs Reserves vs Derivs

More on that after a look at the new bail-in provisions and the powershift they represent.

Bail-in in Plain English

The Financial Stability Board (FSB) that now regulates banking globally began as a group of G7 finance ministers and central bank governors organized in a merely advisory capacity after the Asian crisis of the late 1990s. Although not official, its mandates effectively acquired the force of law after the 2008 crisis, when the G20 leaders were brought together to endorse its rules. This ritual now happens annually, with the G20 leaders rubberstamping rules aimed at maintaining the stability of the private banking system, usually at public expense.

According to an International Monetary Fund paper titled “From Bail-out to Bail-in: Mandatory Debt Restructuring of Systemic Financial Institutions”:

Bail-in . . . is a statutory power of a resolution authority (as opposed to contractual arrangements, such as contingent capital requirements) to restructure the liabilities of a distressed financial institution by writing down its unsecured debt and/or converting it to equity. The statutory bail-in power is intended to achieve a prompt recapitalization and restructuring of the distressed institution.

The language is a bit obscure, but here are some points to note:

  • What was formerly called a “bankruptcy” is now a “resolution proceeding.” The bank’s insolvency is “resolved” by the neat trick of turning its liabilities into capital. Insolvent TBTF banks are to be “promptly recapitalized” with their “unsecured debt” so that they can go on with business as usual.
  • “Unsecured debt” includes deposits, the largest class of unsecured debt of any bank. The insolvent bank is to be made solvent by turning our money into their equity – bank stock that could become worthless on the market or be tied up for years in resolution proceedings.
  • The power is statutory. Cyprus-style confiscations are to become the law.
  • Rather than having their assets sold off and closing their doors, as happens to lesser bankrupt businesses in a capitalist economy, “zombie” banks are to be kept alive and open for business at all costs – and the costs are again to be to borne by us.

The Latest Twist: Putting Pensions at Risk with “Bail-Inable” Bonds

First they came for our tax dollars. When governments declared “no more bailouts,” they came for our deposits. When there was a public outcry against that, the FSB came up with a “buffer” of securities to be sacrificed before deposits in a bankruptcy. In the latest rendition of its bail-in scheme, TBTF banks are required to keep a buffer equal to 16-20% of their risk-weighted assets in the form of equity or bonds convertible to equity in the event of insolvency.

Called “contingent capital bonds”, “bail-inable bonds” or “bail-in bonds,” these securities say in the fine print that the bondholders agree contractually (rather than being forced statutorily) that if certain conditions occur (notably the bank’s insolvency), the lender’s money will be turned into bank capital.

However, even 20% of risk-weighted assets may not be enough to prop up a megabank in a major derivatives collapse. And we the people are still the target market for these bonds, this time through our pension funds.

In a policy brief from the Peterson Institute for International Economics titled “Why Bail-In Securities Are Fool’s Gold”, Avinash Persaud warns, “A key danger is that taxpayers would be saved by pushing pensioners under the bus.”

It wouldn’t be the first time. As Matt Taibbi noted in a September 2013  article titled “Looting the Pension Funds,” “public pension funds were some of the most frequently targeted suckers upon whom Wall Street dumped its fraud-riddled mortgage-backed securities in the pre-crash years.”

Wall Street-based pension fund managers, although losing enormous sums in the last crisis, will not necessarily act more prudently going into the next one. All the pension funds are struggling with commitments made when returns were good, and getting those high returns now generally means taking on risk.

Other than the pension funds and insurance companies that are long-term bondholders, it is not clear what market there will be for bail-in bonds. Currently, most holders of contingent capital bonds are investors focused on short-term gains, who are liable to bolt at the first sign of a crisis. Investors who held similar bonds in 2008 took heavy losses. In a Reuters sampling of potential investors, many said they would not take that risk again. And banks and “shadow” banks are specifically excluded as buyers of bail-in bonds, due to the “fear of contagion”: if they hold each other’s bonds, they could all go down together.

Whether the pension funds go down is apparently not of concern.

Propping Up the Derivatives Casino: Don’t Count on the FDIC

Kept inviolate and untouched in all this are the banks’ liabilities on their derivative bets, which represent by far the largest exposure of TBTF banks. According to the New York Times:

American banks have nearly $280 trillion of derivatives on their books, and they earn some of their biggest profits from trading in them.

These biggest of profits could turn into their biggest losses when the derivatives bubble collapses.

Read more

Posted by Red Pill Reports in Economic News
Guess What Happened The Last Time The Price Of Oil Crashed Like This?

Guess What Happened The Last Time The Price Of Oil Crashed Like This?

Guess What Happened The Last Time The Price Of Oil Crashed Like This?

By Michael Snyder | Economic Collapse Blog

There has only been one other time in history when the price of oil has crashed by more than 40 dollars in less than 6 months.  The last time this happened was during the second half of 2008, and the beginning of that oil price crash preceded the great financial collapse that happened later that year by several months.  Well, now it is happening again, but this time the stakes are even higher.  When the price of oil falls dramatically, that is a sign that economic activity is slowing down.  It can also have a tremendously destabilizing affect on financial markets.  As you will read about below, energy companies now account for approximately 20 percent of the junk bond market.  The Price Of OilAnd a junk bond implosion is usually a signal that a major stock market crash is on the way.  So if you are looking for a “canary in the coal mine”, keep your eye on the performance of energy junk bonds.  If they begin to collapse, that is a sign that all hell is about to break loose on Wall Street.

It would be difficult to overstate the importance of the shale oil boom to the U.S. economy.  Thanks to this boom, the United States has become the largest oil producer on the entire planet.

Yes, the U.S. now actually produces more oil than either Saudi Arabia or Russia.  This “revolution” has resulted in the creation of  millions of jobs since the last recession, and it has been one of the key factors that has kept the percentage of Americans that are employed fairly stable.

Unfortunately, the shale oil boom is coming to an abrupt end.  As a recent Vox article discussed, OPEC has essentially declared a price war on U.S. shale oil producers…

For all intents and purposes, OPEC is now engaged in a “price war” with the United States. What that means is that it’s very cheap to pump oil out of places like Saudi Arabia and Kuwait. But it’s more expensive to extract oil from shale formations in places like Texas and North Dakota. So as the price of oil keeps falling, some US producers may become unprofitable and go out of business. The result? Oil prices will stabilize and OPEC maintains its market share.

If the price of oil stays at this level or continues falling, we will see a significant number of U.S. shale oil companies go out of business and large numbers of jobs will be lost.  The Saudis know how to play hardball, and they are absolutely ruthless.  In fact, we have seen this kind of scenario happen before

Robert McNally, a White House adviser to former President George W. Bush and president of the Rapidan Group energy consultancy, told Reuters that Saudi Arabia “will accept a price decline necessary to sweat whatever supply cuts are needed to balance the market out of the US shale oil sector.” Even legendary oil man T. Boone Pickens believes Saudi Arabia is in a stand-off with US drillers and frackers to “see how the shale boys are going to stand up to a cheaper price.” This has happened once before. By the mid-1980’s, as oil output from Alaska’s North Slope and the North Sea came on line (combined production of around 5-6 million barrels a day), OPEC set off a price war to compete for market share. As a result, the price of oil sank from around $40 to just under $10 a barrel by 1986.

But the energy sector has been one of the only bright spots for the U.S. economy in recent years.  If this sector starts collapsing, it is going to have a dramatic negative impact on our economic outlook.  For example, just consider the following numbers from a recent Business Insider article

Specifically, if prices get too low, then energy companies won’t be able to cover the cost of production in the US. This spending by energy companies, also known as capital expenditures, is responsible for a lot of jobs.

“The Energy sector accounts for roughly one-third of S&P 500 capex and nearly 25% of combined capex and R&D spending,” Goldman Sachs’ Amanda Sneider writes.

Even more troubling is what this could mean for the financial markets.

As I mentioned above, energy companies now account for close to 20 percent of the entire junk bond market.  As those companies start to fail and those bonds start to go bad, that is going to hit our major banks really hard

Everyone could suffer if the collapse triggers a wave of defaults through the high-yield debt market, and in turn, hits stocks. The first to fall: the banks that were last hit by the housing crisis.

Why could that happen?

Well, energy companies make up anywhere from 15 to 20 percent of all U.S. junk debt, according to various sources.

It would be hard to overstate the seriousness of what the markets could potentially be facing.

One analyst summed it up to CNBC this way

This is the one thing I’ve seen over and over again,” said Larry McDonald, head of U.S strategy at Newedge USA’s macro group. “When high yield underperforms equity, a major credit event occurs. It’s the canary in the coal mine.

The last time junk bonds collapsed, a major stock market crash followed fairly rapidly.

And those that were hardest hit were the big Wall Street banks

During the last high-yield collapse, which centered around debt tied to the housing sector, Citigroup lost 63 percent of its value in the following 60 days, Kensho shows. Bank of America was cut in half.

I understand that some of this information is too technical for a lot of people, but the bottom line is this…

Watch junk bonds.  When they start crashing it is a sign that a major stock market collapse is right at the door.

At this point, even the mainstream media is warning about this.  Just consider the following excerpt from a recent CNN article

That swing away from junk bonds often happens shortly before stock market downturns.

“High yield does provide useful sell signals to equity investors,” Barclays analysts concluded in a recent report.

Barclays combed through the past dozen years of data. The warning signal they found is a 30% or greater increase in the spread between Treasuries and junk bonds before a dip.

If you have been waiting for the next major financial collapse, what you have just read in this article indicates that it is now closer than it has ever been.

Over the coming weeks, keep your eye on the price of oil, keep your eye on the junk bond market and keep your eye on the big banks.

Trouble is brewing, and nobody is quite sure exactly what comes next.

Source

 

Posted by Red Pill Reports in Economic News
This Sunday May Mark the End of Western Monetary Dominance

This Sunday May Mark the End of Western Monetary Dominance

This Sunday May Mark the End of Western Monetary Dominance

By Simon Black | Sovereign Man

Walking down the streets of Constantinople in the early Middle Ages, you would have immediately felt the energy and prosperity.

Constantinople was one of the wealthiest, most advanced cities in the world, and some historians estimate its population could have been as high as 500,000 people.

Byzantine architecture in Constantinople was world famous, and local artists were producing mosaics that are still regarded as some of the finest ever made.

End of Western Monetary Dominance

At this point in history, wealth and power in the world was clearly concentrated in the East.

Europe was nothing more than a plague-infested backwater. Constantinople flourished. And even further to the east, China was sporting some of the most advanced technology in the world.

But times changed.

By the 13th century, the Byzantine Empire was in clear decline. Its borders were shrinking and the empire was at the center of almost constant warfare.

And more importantly, they had begun to debase their currency. Again.

For centuries, the Byzantine gold solidus had acted as sort of de-facto international reserve currency. It contained roughly 4.5 grams of pure gold and was used in trade and commerce around the world for nearly seven centuries.

(Modern archaeologists have unearthed medieval gold solidus coins as far east as Inner Mongolia!)

Problem is– war is terribly expensive. And they paid for it by debasing by their currency. By the 11th century, the gold content in the solidus had been debased to the point that it was no longer worth anything.

So they gave it another try. Fool me once. Shame on you.

The successor to the solidus was called the hyperon; it was initially struck at 20.5 carats of gold (roughly 85% purity). But this was quickly reduced to 18 carats, then 15, then 12.

Fool me twice. Shame on me.

Enough was enough, and the rising powers in Europe demanded an alternative.

It was the Italians (the most advanced power in Europe at the time) who solved the problem.

Florence, Genoa, and Venice were all minting their own gold coins by the 13th century, and the 3.5g Florentine florin soon became the new international reserve standard used across Europe.

In many ways, this marks the beginning of the West’s rise to dominance: it all started with declaring their monetary independence from a declining power and a currency they could no longer trust.

Fast forward several centuries and we can see that the tables have clearly turned.

The West has been the dominant superpower for centuries. Yet like the Byzantines before, the West is in obvious decline.

At this point insurmountable debts and deficits plague nearly all Western governments. And they make up the difference by debasing their currencies.

This has created massive distrust, especially in the world’s most dominant reserve currency today, the US dollar.

Like the Venetians and Florentines before them, rising powers in Asia are starting to take matters into their own hands.

The Chinese renminbi (though surely not a one-way bet) is rising in international prominence. And China is at the center of a new emerging global financial system being set up in partnership with Russia, India, Brazil, etc.

Western dominance was born from a distrust in the dominant reserve currency at the time. Its decline will be because they followed the same route.

And the canary in the coal mine is what’s happening in Switzerland this weekend.

On Sunday, the people of Switzerland are going to the polls to vote on a return to the gold standard.

It was only 14 years ago that the Swiss franc, traditionally seen as a safe haven currency due to Switzerland’s reputation for stability, was still on a gold standard.

In fact, of all the major currencies, the Swiss franc was the last to abandon prudent monetary standards.

Ever since then, the Swiss National Bank’s balance sheet has absolutely exploded.

Now there’s a national election to return to a gold standard and conservative monetary policy.

Right now the polls suggest that the Swiss are leaning towards ‘NO’, i.e. they want to continue to abandon prudent practices and hand over total control of the money supply to unelected central bankers.

And if the country that has the world’s strongest traditions for financial stability chooses to turn its back on sound money, what hope is there for the rest of the West?

If the Swiss vote NO this weekend, I view that as a major watershed moment in signaling the beginning of the end of Western monetary dominance.

We can already see the signs everywhere.

Across Europe, government bond yields are NEGATIVE, i.e. you have to PAY these bankrupt governments for the privilege of loaning them money.

And as IMF director Christine Lagarde said last week that a diet of high debt, low growth and high unemployment may yet become “the new normal in Europe”.

Each of these data points signals an obvious long-term trend. We can see where this is going.

But here’s the good news: none of this need affect you. The power is in your hands.

Even if the Swiss divorce themselves from prudent policy, and even if your government refuses to maintain sound money, you still have options.

You can choose to maintain a portion of your savings at a well-capitalized bank abroad in stronger currencies.

You can choose to hold some physical precious metals (or even cryptocurrency) overseas at a secure location where it can’t be confiscated by a bankrupt government.

You can choose to own productive assets abroad or collectibles that cannot be conjured out of thin air by central bankers.

All of these tools and resources already exist today. And for now, they’re available for anyone to take advantage of.

Our goal is simple: To help you achieve personal liberty and financial prosperity no matter what happens.

If you liked this post, please click the box below. You can watch a compelling video you’ll find very interesting.

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About the author: Simon Black is an international investor, entrepreneur, permanent traveler, free man, and founder of Sovereign Man. His free daily e-letter and crash course is about using the experiences from his life and travels to help you achieve more freedom.

 

Posted by Red Pill Reports in Economic News
OPEC Policy Ensures U.S. Shale Crash, Russian Tycoon Says

OPEC Policy Ensures U.S. Shale Crash, Russian Tycoon Says

OPEC Policy Ensures U.S. Shale Crash, Russian Tycoon Says

By Will Kennedy and Jillian Ward | Bloomberg

OPEC policy on crude production will ensure a crash in the U.S. shale industry, a Russian oil tycoon said.

The Organization of Petroleum Exporting Countries kept output targets unchanged at a meeting in Vienna today even after this year’s slump in the oil price caused by surging supply from U.S shale fields.

U.S. Shale Crash, Russian Tycoon Says American producers risk becoming victims of their own success. At today’s prices of just over $70 a barrel, drilling is close to becoming unprofitable for some explorers, Leonid Fedun, vice president and board member at OAO Lukoil (LKOD), said in an interview in London.

“In 2016, when OPEC completes this objective of cleaning up the American marginal market, the oil price will start growing again,” said Fedun, who’s made a fortune of more than $4 billion in the oil business, according to data compiled by Bloomberg. “The shale boom is on a par with the dot-com boom. The strong players will remain, the weak ones will vanish.”

Oil futures in New York plunged as much as 3.8 percent to $70.87 a barrel today, the lowest since August 2010.

At the moment, some U.S. producers are surviving because they managed to hedge the prices they get for their oil at about $90 a barrel, Fedun said. When those arrangements expire, life will become much more difficult, he said.

Read more

Posted by Red Pill Reports in Economic News
This Is Why You Should NEVER Trust a Bank: Wells Fargo Refuses To Pay Woman

This Is Why You Should NEVER Trust a Bank: Wells Fargo Refuses To Pay Woman

This Is Why You Should NEVER Trust a Bank: Wells Fargo Refuses To Pay Woman What She’s Owed

By Mac Slavo | SHTFplan.com

The recent actions of mega behemoth Wells Fargo show us just why so many people are distrustful of large financial  institutions. The bank, which claims it will help you achieve what’s important, has done exactly the opposite in the case of Rosemary Ronstein.

At the height of the 2009 financial crisis Ms. Ronstein was facing a home foreclosure. After her husband passed away that same year the widow was searching through personal records when she happened across a 30-year old CD purchased by her husband in 1984 for the sum of $18,000. The CD, which offered the bearer a 10.9% interest rate and renewed automatically until it was cashed in, was originally issued by First Interstate Bank, an entity that has since been acquired by Wells Fargo.

Wells Fargo

At the time, Ronstein faced the real possibility of having her house seized for failing to pay her mortgage. The CD was like a dream come true. All her problems would be solved, which is exactly the reason why her late husband originally purchased the CD and gave it to her for safekeeping.

But when Ronstein arrived at Wells Fargo to trade in her financial instrument, she says that not only did the bank refuse to make good on the Cash Deposit, they practically laughed in her face.

But when she tried to get the money that she believes is rightfully hers, she the bank “practically almost laughed at me.”

KPHO claims that Wells Fargo refused to comment on the story but claim in court documents that it had no records of the CD and believes it’s possible that it could have already been paid out at some point in the past, pointing out that First Interstate had a policy of allowing customers to retain paid-out certificates.

The widow insists that her late husband never cashed out the CD, while her lawyer notes that the CD states that it must be “presented and surrendered” in order to be redeemed. He claims that it’s not enough for Wells to cite a lack of documentation on its part as evidence that the CD had been paid.

“Given the passage of the time, the bank doesn’t have a record of it,” says the lawyer. “And so really what needs to be decided by the court is, what’s the import of the lack of a record in the face of the instrument?” (Source: Consumerist)

Video via KPHO:

According to Ronstein’s attorney, the accumulated interest and automatic renewals on the CD amount to over $400,000 today, a claim disputed by Wells Fargo which says it is worth only around $60,000.

In essence, Wells Fargo says that because it doesn’t have a record of the 30-year old legal financial instrument it doesn’t have to pay the sum owed. Moreover, they claim that even if the certificate was legitimate, First Interstate bank used to allow CD bearers to keep the CD after being paid out, so it may have already been paid. But Ronstein disputes this claim, noting that the CD clearly states the instrument must be surrendered to the bank at the time it is paid.

Wells Fargo, like many other large financial institutions, may claim they are looking out for the little guy. They may have vibrant advertisements telling you they’ll take care of you when you need help. But in reality, they are interested in one thing and one thing only – your money.

This isn’t the first time Wells Fargo has had some serious issues with paperwork and record keeping. Last year the very same bank actually showed up at someone’s home with the local police and claimed that the owner had failed to pay their mortgage. They seized everything in the home, boarded it up, and sold the delinquent homeowner’s possessions. Except there was one problem. They seized the wrong house. What’s worse, after they sold the owner’s possessions they refused to repay them the retail value of the goods! According to the homeowner the bank President told her, “We’re not paying you retail here, that’s just the way it is.”

I did not tell them to come in my house and make me an offer. They took my stuff and I want it back.

Now, I’m just angry… It wouldn’t be a big deal if they would step up and say ‘I’m sorry, we will replace your stuff.’ Instead, I’m getting attitude from them. They’re sarcastic when they talk to me. They make it sound like I’m trying to rip the bank off. All I want is my stuff back.

Ms. Ronstein’s case is just another example of how much you should trust your local banking institution to do what’s right.

The short answer? You can’t.

What you can expect is that they will take from you whenever they can and refuse to make good when they make a mistake.

Now, with the introduction of “bail-in” provisions which essentially turn your personal account deposits into bank assets (rather then your assets), should the bank make a mistake on the order of Lehman Brothers in the 2008 financial crisis you can fully expect to lose every single dime you’ve deposited. In fact, the Vice Chairman of the Federal Reserve recently warned that this is exactly what would happen to your life savings should your bank ever need to recapitalize itself:

The United States is preparing a proposal to require systemically important banks to issue bail-inable long-term debt that will enable insolvent banks to recapitalize themselves in resolution without calling on government funding–this cushion is known as a “gone concern” buffer.

You’ve been warned.

Your personal deposits and live savings are nothing more than investment vehicles for your bank. And if they screw up, you are the one who will get screwed.

Ms. Ronstein is just the latest example of how America’s large financial institutions are taking everything they can from the little guy to further enrich themselves.

If you have your money at a bank then you should fully expect it to be disappeared at the very moment you need it most.

Posted by Red Pill Reports in Economic News
Economic Collapse Approaches; German Bank Charging Customers Negative Interest

Economic Collapse Approaches; German Bank Charging Customers Negative Interest

Economic Collapse Approaches; German Bank Charging Customers Negative Interest

By J. D. Heyes | NaturalNews

German bank begins charging customers negative interest as economic collapse approaches. Save and prepare prudently, America.

(NaturalNews) In a sane world, developed countries consider financial debt to be a bad thing, especially when it comes to consumer debt, because overwhelming consumer debt is bad when governments are trying to grow their economies.

Growing economies solve a lot of problems for government officials and elected leaders — growing economies provide governments with funding so the government can do the things that its citizens expect it to do: defend them, provide basic infrastructure and perform other services endemic to a modern society.

Economic Collapse Approaches; German Bank Charging Customers Negative Interest

Image credit: Avij (Own work) [Public domain]

But when economies do not grow and instead are mired in stagnation, that usually means the general population isn’t doing so well — which, in turn, means the government isn’t doing so well. Such governments don’t have the revenue on hand to perform the functions they are expected to perform, so what do they do? They do what many consumers do, they borrow.

Wait — doesn’t that merely worsen the country’s economic situation by growing its debt? Sure, but the practice works for a little while. It allows government leaders to kick the can down the road, so that future government leaders will have to deal with the country’s financial problems and its ever-growing debt.

Growing debt only worsens an economy

Except that, eventually, the country can’t borrow any more. At that time, whoever is in charge has to deal with far fewer options to solve the debt problem. And leaders put in such positions tend to get desperate; they adopt desperate measures that often hurt the very people whom they were elected or appointed to serve, though the people had very little to do with the policies that led to the country’s financial dire straits to begin with.

Am I talking about America? I certainly could be; America, with a $17 trillion-plus national debt and over $100 trillion in future (unfunded) liabilities, is well on its way to a day of economic reckoning. But so, too, are many of the countries of Europe, including one of its “wealthiest” nations: Germany.

For decades, most of Europe’s democracies have experimented with economic socialism, which is nothing short of massive wealth redistribution (think Barack Obama’s “Obamacare” and the Dodd-Frank Act, which is currently transferring tens of billions in taxpayer dollars to the country’s biggest banks). And now, after taking all they can from their people and over-promising benefits, the global economic downturn of 2007-2008 has left them scrambling for ways to pay those promised benefits.

Some countries have simply been unable to do so. One of them is Greece, whose economy nearly collapsed, save for massive austerity measures taken a couple of years ago. The government of Cyprus, which is currently wading through a similar economic morass, robbed the bank accounts of its citizens to help stave off bankruptcy.

Germany, much more wealthy than those two countries, is nonetheless experiencing economic doldrums as well. And now, a bank in Deutschland has implemented a negative interest rate of 0.25 percent for its richest clients, reports WolfStreet.com:

Retail and business customers with over €500,000 on deposit as of November 1 will earn a “negative interest rate” of 0.25%. In less euphemistic terms, they have to pay 0.25% per annum to the bank for the privilege of handing the bank their hard-earned money or their business cash.

‘No political will to reform’

That means, according to some analysts, that the central planners must see the gathering of economic storm clouds quickening on the horizon; when a bank (admittedly not Germany’s biggest bank) has to resort to imposing a fee on its depositors for the “privilege” of depositing there, something is very economically amiss. Germans are calling it “punishment interest.”

Read more

Sources:

http://www.zerohedge.com

http://www.sovereignman.com

http://wolfstreet.com

http://www.usdebtclock.org

 

Posted by Red Pill Reports in Economic News
Dutch Central Bank Quietly Brings 120T of Gold from US to Amsterdam

Dutch Central Bank Quietly Brings 120T of Gold from US to Amsterdam

Dutch Central Bank Quietly Brings 120T of Gold from US to Amsterdam

By Mina

The Dutch central bank has secretly brought a large part of the national gold reserves being held in a secure depot in New York back to Amsterdam.

In total, 120 tonnes of gold valued at €4bn has been brought back to the Netherlands by ship, Nos television said. The high security reparations for the move took months. The central bank decided to bring some of its gold reserves back to the Netherlands to ensure a better spread, the bank said in a statement.

Dutch Central Bank Quietly Brings 120T of Gold from US to Amsterdam

In addition, the bank hopes to boost consumer confidence by showing there is enough gold in the Netherlands to take the country through a new economic crisis. Now 31% of the Dutch gold reserves are in Amsterdam, the same percentage as in New York.

The rest is in Ottowa and London. The Netherlands has 612 tonnes of gold – worth €19bn at current gold prices, Nos said.

Source

Posted by Red Pill Reports in Economic News
Citigroup Said to Be Ousted From ECB FX Group for Rigging

Citigroup Said to Be Ousted From ECB FX Group for Rigging

Citigroup Said to Be Ousted From ECB FX Group for Rigging

By Gavin Finch | Bloomberg

The European Central Bank ejected Citigroup Inc. (C) from its foreign-exchange market liaison group after the U.S. bank was fined for rigging the institution’s own currency benchmark, two people with knowledge of the move said.

The ECB removed Citigroup from the panel, which advises the central bank on market trends, after regulators fined the lender $1 billion for rigging currency benchmarks including the ECB’s 1:15 p.m. fix, said the people, who asked not to be identified because the decision hasn’t been made public.

Citigroup Said to Be Ousted From ECB FX Group for RiggingCitigroup was one of six banks fined $4.3 billion by U.S. and U.K. regulators last week and is the only one that also sits on the ECB Foreign Exchange Contact Group. About 20 firms with large foreign-currency operations, ranging from Airbus Group NV to Deutsche Bank AG (DBK), sit on the committee. The panel’s agenda includes how to improve currency benchmarks.

Citigroup is the world’s biggest foreign-exchange dealer, with a 16 percent market share, according to a survey by London-based Euromoney Institutional Investor Plc. A spokesman for the New York-based bank declined to comment.

The panel isn’t involved in how the ECB’s daily fix is calculated. Currency benchmarks such as the ECB fix and the WM/Reuters rates are used by asset managers and pension funds to value their holdings, including $3.6 trillion in index tracker funds around the world.

According to documents released with the settlements, senior traders at the firms shared information about their positions with each other and coordinated trading strategies to the detriment of their clients. They’d congregate in electronic chat rooms an hour or so before benchmark rates were set to discuss their orders and how to execute them to their mutual benefit.

Read more

 

Posted by Red Pill Reports in Economic News
Christine Lagarde – IMF Data Now to be Free and Open for Public Perusal

Christine Lagarde – IMF Data Now to be Free and Open for Public Perusal

Christine Lagarde – IMF Data Now to be Free and Open for Public Perusal

By Red Pill Reports

(RedPillReports) On Tuesday, November 18, 2014, Christine Lagarde, Managing Director of the International Monetary Fund made a surprising announcement. She said, “I have an important announcement to make—starting January 1, 2015 we will provide all our online data free-of-charge to everyone.” This transparency is key to numerous global economic benefits important to all nations and all individuals.

Christine Lagarde - IMF Data Now to be Free and Open for Public Perusal

Image credit: Andrew Taylor/G20 Australia

Here are her statements on the IMF website:

3. Data Publication Initiative
Finally, let me turn to another very important aspect of the IMF’s statistical work—data publication.
We very much recognize the importance of data as a public good. In this context, we are upgrading our data platforms and improving the way we distribute data and statistics to our membership throughout the world.
Think of the One African Data Hub that the IMF has recently launched in collaboration with the African Development Bank. This is a “cloud-based” data reporting tool that makes it less onerous for reporters to provide economic data, and much easier for users to share data.
Much of our data is already freely available. This is especially true of the data that supports our main forecasts for the global economy in the World Economic Outlook.
And I have an important announcement to make—starting January 1, 2015 we will provide all our online data free-of-charge to everyone.
This will help all those who draw on our data make better use of this vital statistical resource—from budget numbers to balance of payments data, debt statistics to critical global indicators.
The IMF will continue to be a vital source of public information that is needed to underpin sound policy decisions.
Thank you.

Reference: http://www.imf.org/external/np/speeches/2014/111814.htm

Posted by Red Pill Reports in Economic News
Banker Found Dead with Throat Slit in Apparent Suicide: Cops

Banker Found Dead with Throat Slit in Apparent Suicide: Cops

Banker Found Dead with Throat Slit in Apparent Suicide: Cops

By Jamie Schram, Natasha Velez and Beckie Strum

A prominent banker was found dead in the tub of his posh downtown apartment with his throat slashed — in what detectives suspect is a suicide, police sources said on Wednesday.

Shawn D. Miller, 42, who traveled the world for Citigroup as one of its top environmental policy experts, sliced his neck and wrists with a knife inside his home at 120 Greenwich St, the sources said.

Police investigate the scene Tuesday where Shawn D. Miller (inset) was found dead in a bathtub with his throat slit. Photo: William Miller

Police investigate the scene Tuesday where Shawn D. Miller (inset) was found dead in a bathtub with his throat slit. Image credit: William Miller

His body was found by a doorman Tuesday, after his boyfriend called building operators and said he was worried for the banker’s safety.

Miller was last seen on surveillance video getting off an elevator at about 6 p.m. Monday with a mysterious man who was not his beau. The unidentified male was later spotted on camera leaving alone.

Investigators, however, believe the death is a suicide because of the nature of the wounds and the fact a knife was found under his body, sources said.

The doorman who found Miller’s body, Tommy Perez, told investigators that he went to the victim’s apartment on Tuesday afternoon after getting a call from a concerned man who claimed to be the banker’s boyfriend, the sources said.

Miller had built a successful career in assessing the risk of investments.

In 2011, Citigroup promoted Miller to an executive position as managing director of environmental and social risk management.

Miller, who had previously worked for the World Bank, traveled frequently for Citigroup and was instrumental in designing Equator Principles, which banks widely use for establishing voluntary environmental policies.

The bank sent out a note Wednesday informing staff of Miller’s death.

Read more

Posted by Red Pill Reports in Economic News
Ukraine Admits Its Gold Is Gone: “There Is Almost No Gold Left In The Central Bank Vault”

Ukraine Admits Its Gold Is Gone: “There Is Almost No Gold Left In The Central Bank Vault”

Ukraine Admits Its Gold Is Gone: “There Is Almost No Gold Left In The Central Bank Vault”

By Tyler Durden

Back in March, at a time when the IMF reported that Ukraine’s official gold holdings as of the end of February, so just as the State Department-facilitated coup against former president Victor Yanukovich was concluding, amounted to 42.3 tonnes or 8% of reserves…

Ukraine's official gold holdings Feb. 2014

… and notably under the previous “hated” president, Ukraine gold’s reserves had constantly increased hitting a record high just before the presidential coup…

Ukraine gold's reserves

 

… we reported of a strange incident that took place just after the Ukraine presidential coup, namely that according to at least one source, “in a mysterious operation under the cover of night, Ukraine’s gold reserves were promptly loaded onboard an unmarked plane, which subsequently took the gold to the US.” To wit:

Tonight, around at 2:00 am, an unregistered transport plane took off took off from Boryspil airport. According to Boryspil staff, prior to the plane’s appearance, four trucks and two cargo minibuses arrived at the airport all with their license plates missing. Fifteen people in black uniforms, masks and body armor stepped out, some armed with machine guns. These people loaded the plane with more than forty heavy boxes.

 

After this, several mysterious men arrived and also entered the plane. The loading was carried out in a hurry. After unloading, the plateless cars immediately left the runway, and the plane took off on an emergency basis.

 

Airport officials who saw this mysterious “special operation” immediately notified the administration of the airport, which however strongly advised them “not to meddle in other people’s business.”

 

Later, the editors were called by one of the senior officials of the former Ministry of Income and Fees, who reported that, according to him, tonight on the orders of one of the “new leaders” of Ukraine, all the gold reserves of the Ukraine were taken to the United States.

Needless to say there was no official confirmation of any of this taking place, and in fact our report, in which we mused if the “price of Ukraine’s liberation” was the handover of its gold to the Fed at a time when Germany was actively seeking to repatriate its own physical gold located at the bedrock of the NY Fed, led to the usual mainstream media mockery.

Until now.

In an interview on Ukraine TV, none other than the head of the Ukraine Central Bank made the stunning admission that “in the vaults of the central bank there is almost no gold left. There is a small amount of gold bullion left, but it’s just 1% of reserves.”

As Ukraina further reports, this stunning revelation means that not only has Ukraine been quietly depleting its gold throughout the year, but that the latest official number, according to which Ukraine gold was 8 times greater than the reported 1%, was fabricated, and that the real number is about 90% lower.

According to official statistics the NBU, the amount of gold in the vaults should be eight times more than is actually in stock. At the beginning of this month, the volume of gold was about $ 1 billion, or 8% of the total gold reserves. Now this is just one percent.

Of course, considering the official reserve data at the Central Bank has been clearly fabricated, one wonders just how long ago the actual gold “dmsplacement” took place.

Gold "dmsplacement" took place

We get some additional information from Rusila:

Read more on Zero Hedge

 

Posted by Red Pill Reports in Economic News
JPMorgan’s 5 Reasons To Sell USA & Buy Europe

JPMorgan’s 5 Reasons To Sell USA & Buy Europe

JPMorgan’s 5 Reasons To Sell USA & Buy Europe

By Tyler Durden | ZeroHedge

JPMorgan Cazenove’s global equity strategy group has decided enough is enough – the underperformance of the Eurozone is getting stretched (they note), and are upgrading Euro equity allocations to Overweight at the expense of an Underweight in US stocks. Here are the fives reasons why they made the shift…

 

1) Eurozone has posted an exceptionally poor performance ytd, lagging the US by 22% in USD terms. It is now trading at a lower price relative than the one recorded at the point of peak stress in ’12, when Eurozone breakup was almost the base case.

Euro to US

 

In contrast to record wide peripheral spreads seen in ‘12, these are nowadays well behaved, at a tight 130bp,

Spanish and Italian

 

and financial CDS spreads are at a healthy 65bp.

Senior CDS

 

2) Forward P/E relative of Eurozone has improved substantially. Eurozone traded at record expensive levels earlier in the year, but has moved to the cheap side of fair value now.

MSCI Eurozone

 

The longer-term metrics, such as Shiller P/E and P/B, remain supportive of Eurozone.

MSCI Eurozone

3) The level of Eurozone earnings relative to the US has never been as depressed as it is today.

Eurozone vs US

 

The ROE differential between the two regions is at the top of its historical range, and it should start to normalise from here. We note that the EPS revisions in the US are not much better than those in Eurozone anymore – the gap is closing.

S&P500 vs MSCI Eurozone

4) Eurozone M3 has been picking up since April and it tends to lead economic activity. The credit cycle appears to be bottoming out in the region – there is a clear 2nd derivative visible in Spain and Italy.

Eurozone M3

 

German loan growth has already turned outright positive.

German Private Loan Growth

 

Three quarters of all financing in Europe is done through banks, so the fact that stress tests are finally behind us should allow the banks to be more supportive of the economy. The takeup in December T-LTRO could be more favourable than the previous one. ECB balance sheet will expand by 35% from here, we expect, which is not negligible. In contrast, US money printing is done.

ECB and FED Balance Sheets

5) Falling Euro is a tailwind for growth, for exporters and for earnings. Our economists suggest a 10% move lower in the trade-weighted Euro should boost growth by 1% over a two-three year period.

Europe relative to US EPS vs Euro / USD

 

*  *  *

We see this as a relative call, where we believe Eurozone is due a period of outperformance vs the US, but continue to expect US stocks to make new highs in absolute terms. We stay UW the UK and OW Japan in the global portfolio.

Source

Posted by Red Pill Reports in Economic News