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ECONOMICS AND ESOTERICA FOR A NEW PARADIGM

Posts Tagged ‘Fail

500 Million debt-serfs: the European Union is a neo-feudal Kleptocracy

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by Charles Hugh Smith
Posted July 22, 2011 on Of Two Minds

The banks of Europe are the new Feudal Manors and Masters. All Europeans now serve them as debt-serfs in one way or another.

IF WE KNOCK DOWN ALL THE FLIMSY SCREENS OF ARTIFICE AND OBSCURING COMPLEXITY, what we see in Europe is a continent of debt-serfs, indentured to the banks under the whip of the European Union and its secular religion, the euro. I know this isn’t the pretty picture presented by the EU Overlords, of a prosperity built not just on debt, but on resolving the problem of debt with more debt, but it is the reality behind the eurozone’s phony facade of economic “freedom.”

What else can we call the stark domination of the big banks other than Neo-Feudalism? In one way or another, every one of the 27-member nations’ citizens are indentured to the big international banks at risk in Europe, most of which are based in Europe.

Amidst the confusing overlay of voices and agendas, there is really only one agenda item: save the big European banks. Everything else is just mechanics. The banks are the new feudal manor houses, the bankers are the new feudal lords, and the politicians of the EU and its influential member nations are the servile vassals who enforce the “rule of law” on the serfs.

Here is the fundamental fact: there are trillions of euros of debt which can never be paid back. In a non-feudal system, one in which the banks were not the Masters, then this fact would be recognized and acted upon: something like 50% of the debt would be written off in one fell swoop, all the banks whose assets had just been wiped out would be declared insolvent and liquidated, the remaining debt would be sized to the economic surplus of each debtor nation, and a new, decentralized banking sector of dozens of strictly limited, smaller banks would be established.

To the degree that is “impossible,” Europe is nothing but a Neo-Feudal Kleptocracy serving its Banker Lords.

The Greek worker whose pay has been slashed in the “austerity” demanded by the banks serves the Banker Lords, as does the German worker who will be paying higher taxes to bail out Germany and France’s Banker Lords. Though the German is constantly told he is bailing out Greece, the truth is Greece is just the conduit: he’s actually bailing out the EU’s Banker Lords.

We can clear up much of the purposeful obfuscation by asking: exactly what tragedy befalls Europe if all the sovereign debt in the EU was wiped off the books? The one and only “tragedy” would be the destruction of the “too big to fail” banks, not just in Europe but around the world. As the big European banks imploded, then their inability to service their counterparty obligations on various derivatives to other big banks would topple those lenders.

While the political vassals call that possibility a catastrophe, it would actually spell freedom for Europe’s 500 million debt serfs. From the lofty heights of the Manor House, then the loss of enormously concentrated power and wealth is indeed a catastrophe for the Lords and their political lackeys. But for the debt-serfs facing generations of servitude for nothing, then the destruction of the banks would be the glorious lifting of tyranny.

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Operation Empire State Rebellion resumes attack on Fed Chairman

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from Zero Hedge
Posted June 11, 2011

OPERATION EMPIRE STATE REBELLION IS BACK. Perhaps in the aftermath of the IMF “very major breach” by anonymous hackers, it is really time to make sure all external access points to FedWire and FedLine are truly safe and sound. It will be very sad if it is uncovered that this source of externally accessible portal to hundreds of billions in emergency Fed funding has been somehow compromised. Just imagine the loss of confidence in the system… Why, a global distributed attack would really stretch the Fed’s 1,200-strong police force quite thin.

Transcript, from Op ESR’s just released video:

Ninety days ago, we requested Ben Bernanke’s resignation as Federal Reserve chairman. Mr. Bernanke has not complied with our request.

  • The Federal Reserve’s policies are systematically looting the country to enrich one-tenth of one percent of the population.
  • The Federal Reserve has deliberately driven tens of millions of people into poverty.
  • The Federal Reserve is responsible for Crimes Against Humanity!
  • The Federal Reserve gave trillions of American taxpayer dollars, in secrecy, to the people who were most responsible for causing our economic crisis.
  • Our tax dollars were handed out as all-time record-breaking bonuses to top executives at the “Too Big to Fail” global banks.
  • The Federal Reserve gave American taxpayer dollars to foreign banks and corporations.
  • The Federal Reserve directly subsidized tax evasion by funneling taxpayer dollars into to the Cayman Islands.
  • The Federal Reserve gave American tax dollars to their primary dealer banks, so the banks could then lend that same money back to the US government at higher interest rates, leading to significant profits for the banks, at the further expense of the American public.
  • Through bailout programs the Federal Reserve socialized financial losses onto American taxpayers and privatized profits into the hands of global banks.
  • The Federal Reserve aids and abets trillions of dollars in accounting fraud.
  • The Federal Reserve routinely manipulates the stock market.
  • The Federal Reserve deliberately caused inflation in the price of food, gas and basic necessities, while devaluing the dollar!
  • The Federal Reserve represents the central planning force behind a global banking cartel that has deliberately impoverished people throughout the world.

US Politicians have not taken action to break up the Federal Reserve and the “Too Big To Fail” Banks.
US Politicians have not taken action to prosecute the people who caused our economic crisis.
US Politicians have not taken action to end the system of political bribery, the campaign finance and lobbying racket, which allows global bankers to control our political process.
Democrats have failed us.
Republicans have failed us.
No one is defending our interests.
We cannot remain passive while our future is going up in flames.
It is time for us to stand up for ourselves.
It is time for you to stand up for yourself.
We must restore the rule of law and fight back against the organized criminal class.
We must now launch Operation Empire State Rebellion.
The operation will commence on June 14th.
As a first step, we are calling upon you to occupy a public space until Federal Reserve Chairman Ben Bernanke steps down.

Operation Empire State Rebellion, Engaged.

Our economic future – From best to worst case

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by Doug Casey of Casey Research
Posted originally June 7, 2011

THERE IS A GREAT DEAL OF UNCERTAINTY ABOUT WHAT THE FUTURE OF THE U.S. ECONOMY MAY LOOK LIKE – so I decided to take a stab at what’s likely to happen over the next 20 years. That’s enough time for a child to grow up and mature, and it’s long enough for major trends to develop and make themselves felt.

I’ll confine myself to areas that are, as the benighted Rumsfeld might have observed, “known unknowns.” I don’t want to deal with possibilities of the deus ex machina sort. So we’ll rule out natural events like a super-volcano eruption, an asteroid strike, a new ice age, global warming, and the like. Although all these things absolutely will occur sometime in the future, the timing is very uncertain – at least from the perspective of one human lifespan. It’s pointless dealing with geological time and astronomical probability here. And, more important, there’s absolutely nothing we can do about such things.

So let’s limit ourselves to the possibilities presented by human action. They’re plenty weird and scary, and unpredictable enough.

THE MARKET FOR PROGNOSTICATION

People are all ears for predictions, whether from psychics or from “experts,” despite the repeated experience that they’re almost always worthless, often misleading and more than rarely the exact opposite of what happens.

Most often, the predictors go afoul by underrating human ingenuity or extrapolating current trends too far. Let me give you a rundown of the state of things during the last century, at 20-year intervals. If you didn’t know it’s what actually happened, you’d find it hard to believe.

1911— The entire world is at peace. Stability, freedom and prosperity prevail almost everywhere. Almost every country in Europe is ruled by a king or queen. Western civilization has spread to nearly every corner of the world and is received with appreciation. Stunning breakthroughs are being made in science and technology. There’s no sign of a gigantic world war about to come out of nowhere to rip apart the political and cultural map of Europe and bankrupt everybody. Who imagined that a dictatorial communist regime would arise in Russia?

1931— It’s early in a disastrous worldwide depression. Attention is on economic troubles, not on the virtually unthought-of possibility that in less than 10 years a new world war would be under way against Nazism and a resurgent Germany.

1951— Except for Vietnam, all that remains of the colonies the West had established in the 19th century are quiescent. Nobody guessed almost all would either be independent, or on their way, in 10 years. China has joined Russia – and many other countries – as totally collectivist. Who imagined that Germany and Japan, although literally leveled, would be perhaps the best investments of the century? Who guessed that the U.S. was already at its peak relative to the rest of the world?

1971— Communist and overtly socialist countries all over the world seem to be in ascendance, soon to be buoyed further by a decade of rising commodity prices. The U.S. and the West are entering a deep malaise. Little significance is attached to rumblings from the Islamic world.

1991— Communism has collapsed as an ideology, the USSR has disappeared, and China has radically reformed. Islam is increasingly in the news.

2011—The world financial/economic crisis is four years old, but things are still holding together. Islamic terrorism and collapse of old regimes in the Arab world dominate the news. China is viewed as the world’s new powerhouse.

BAD AND WORSE

Regrettably, I’m not much of a linguist. But I do pick up interesting semantic trivia. In Spanish they don’t say “in the future,” as we do in English, which implies a definite outcome. Instead they say “en un futuro” – in a future – which implies many possible outcomes. It’s a better way of assessing reality, I think.
Here are three 20-year futures to consider. There are, obviously, many, many more – but I think these encompass the three most realistic broad possibilities.

• BEST CASE – FACTS GET FACED

Realizing what a disaster the complete destruction of their currencies would be, most governments decide to endure the pain of allowing interest rates to rise and limiting increases in the money supply. Poorly run corporations and banks are left to fail. Talk of abolishing the Federal Reserve, and using a commodity for money, becomes serious and widespread.

Shaken, the U.S. ends its profligate ways, in part because it lacks the means to continue, and in part because everyone but collectivist ideologues has actually learned something from the brutal ‘10s and ‘20s.

Amidst massive protests, the government closes much of its counterproductive apparatus, eliminates many taxes, and lets 30% of its employees go. It also, albeit reluctantly, liberalizes its regulation of the economy because it has become impossible to deny that the U.S. has been falling behind in all areas.

Although there is a resurgence of libertarian thought – reminiscent of the Reagan-Thatcher era – simple practicality is mainly responsible for forcing the government’s hand. For one thing, it can’t afford the bureaucracy needed to enforce detailed interference. For another, entrepreneurs are increasingly just doing what they please, partly from necessity and partly from a growing sense of righteousness. Interest rates go to 25%, to compensate for high levels of inflation. That’s high enough to make it worthwhile for people to save, and the capital base starts growing. The stock market has collapsed to its lowest level in living experience (in real terms), but the values available encourage people to become investors. Business is restructured on a sound, debt-free basis, with little speculation.

The U.S. radically cuts its military spending and pulls almost all troops out of their foreign bases and wars. The War on Drugs comes to an end, and the crime rate in both the U.S. and Mexico plummets.

The government solves most of its overhanging financial problems with a seriously devalued – but not hyperinflated – dollar. The Social Security deficit is eliminated by abstaining from benefit increases and by inflating away much of what had been promised before. Most Americans suffer a severe drop in their standard of living, as they’re forced into new patterns of production and consumption. A generation of college students find that their degrees in sociology, political science, economics, English lit, Black studies, gender studies and underwater basket weaving are of no real value.

When it’s all over, the tough times that started in ’07 prove to have been no more than a cyclical bump in the road, like all the other recessions since WW2, just much bigger.

A rough and memorable ride, but it ends with a return to prosperity.

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Bernanke’s QE^X Box

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by Gordon T. Long
of Tipping Points
Posted originally April 21, 2011

Chairman Bernanke has placed himself in a box. It is not a box of his choosing, but rather the result of his misguided economic beliefs, use of flawed statistical data, geo-political events occurring during his watch, poor decisions and a penchant for political pandering. Some of these may be requirements for academia success but not for leading global financial markets during turbulent times.

It is time for Professor Bernanke to return to the collegial setting of Princeton University while the world still has time to correct the path he has mistakenly set us on.

I was angry during most of former Chairman Greenspan’s tenure because of his persistent use of liquidity pumping to solve every problem from Y2K to the Peso crisis. Greenspan’s inability to see a bubble two inches from his nose and yet still pontificate about irrational exuberance, rather than taking the punch bowl away from the party, incited me. Bernanke does not affect me that way. He simply disappoints and leaves a taste like eating dry shredded wheat, with the hope of a child, to eventually get the prize at the bottom of the box.

Character flaws show during times of stress. Honesty, integrity, value systems and beliefs are put to test and are highlighted under the public media microscope. I’m sure Chairman Bernanke is a nice guy, loved by his family but he is missing a backbone. On April 27th, 2011, that will become obvious to all.

SIGNAL MEETING

On April 27th, 2011 the Federal Open Market Committee (FOMC) issues its next decision and statement regarding the future of Quantitative Easing (QE) II. Though previously announced to officially end June 30th, 2011 there are serious questions if this is still a viable option.

This particular meeting is the ‘signal’ meeting that the financial community will be looking for to assess risk and strategy. Many (including myself) have already concluded what the outcome will be and are preparing accordingly. On this date Bernanke will hold the first ever press briefing by the Federal Reserve, in addition to releasing forward forecasts which are usually held another 3 weeks. It is going to be an exciting event.

Unfortunately, Chairman Bernanke is going to disappoint!

THE BERNANKE BOX

Let’s summarize the box Bernanke presently finds himself in.

REAL RATES

Interest rates have been artificially suppressed for such a long time that no matter what Bernanke does come June, interest rates will likely begin rising. Therein lies the problem for the Fed.  Any further debt monetization by the central bank is now becoming counterproductive. If Bernanke enacts another iteration of Quantitative Easing, the Fed may find itself the only player in the bond market. According to my analysis this is nearly the case already.

The truth is that only a central banker can afford to own bonds that are yielding rates well below inflation, and growing even more so.  The lower real interest rates become, the less participation there will be in the bond market from private sources. If you don’t believe me, ask PIMCO, the world’s largest Bond fund who is not only out of US Treasuries but selling short. China  has been a net seller of US Treasuries since October. Besides the Fed, who is willing to buy the $1.65 Trillion in fresh new US debt paper?

So if Bernanke extends QEII we have a collapse in the US$ and a complete lockout of auction buyers. If they stop QE II, interest rates go through the roof immediately and the US government with short duration paper has an immediate and serious fiscal funding gap.

Bernanke is in a Box!

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Why 2011 is not 2008 – Why it is much worse

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From Michael Krieger of KAM LP
Originally posted March 10, 2011

If we are to have another contest in the near future of our national existence, I predict that the dividing line will not be Mason and Dixon but between patriotism and intelligence on the one side, and superstition, ambition and ignorance on the other. –Ulysses S. Grant

Mubarak has been an ally of ours in a number of things. And he’s been very responsible on, relative to geopolitical interest in the region, the Middle East peace efforts; the actions Egypt has taken relative to normalizing relationship with – with Israel… I would not refer to him as a dictator. –United States Vice President, Joe Biden

Stuck in a Time Capsule

I remember as a kid on several occasions putting together a time capsule as part of a school project. I am sure many of you reading this have done a similar thing at some point. The concept is simple and elegant. The group involved in creating the time capsule picks various things from their current society or culture that they feel is representative of the environment at the time and then they bury these items so that future generations can get a glimpse of what life was like for people in a prior time.

The reason humans have a desire to perform acts such as this is because our collective consciousness understands how much things change over time. Empires rise and fall, major belief systems dominate and then become discredited, broad concepts of what is considered acceptable human behavior with respect to our fellow human beings also change and vary within different cultures over time.

Everyone knows the saying “nothing is certain except death and taxes.” Actually this is garbage. Taxes may be certain in the current society we live in but there is nothing eternal about taxes. It is entirely a human creation. I would replace taxes with the word change (not Obama change, real change). From my perspective the one thing in addition to death that is certain in humanity’s existence is change. Volatile, massive change. What confuses people is that this change happens very suddenly and seemingly out of nowhere to those only paying attention to the establishment parrots that assure you all is stable and ok because they are the elites and they want things to stay the same. They want that giant boot stamped firmly on your face forever.

This is exactly where we find ourselves today. In the middle of the most profound change in the paradigm of the world as we know it that we will ever see in our lifetimes. Hosni Mubarak had been dictator of Egypt since 1981. So basically my entire life on this planet this guy had dominated the Egyptian people (with complete and total U.S. government support). He was an immovable object. Yet within a couple of weeks this guy was tossed out with relatively little violence. For someone like me that lives and breathes within the macro zeitgeist of this planet this event was absolutely extraordinary and more importantly just a small piece of the wider puzzle of the world changing all around us.

As anyone that has been reading my pieces for several years knows I have been saying for a very long time that we are in a period of immense economic, geopolitical and social change throughout the world. This change is of an order of magnitude so great that by the time this period passes (we are still very early in the process) virtually nothing about the way we live our lives and view the world will be the same. This will be the case everywhere, but nowhere will the impact be as great as in the United States.

The reason is quite simple. What we are witnessing in the Middle East is the dismantling of the American Empire, the existence of which is actually not even known to the majority of Americans as a result of highly effective media and cultural propaganda. Most Americans have lived their lives in complete ignorance that it is this American Empire rooted in a counterfeit currency that we force down the world’s throat which has given them their bloated standard of living and will therefore be completely confused about why their standard of living has collapsed once the Empire crumbles.

The entire purpose of these articles is to wake up as many people in the United States as possible to the reality of the situation we are dealing with so they can prepare for what is coming and ride out the storm as best as possible. So that people can form tighter communities and learn to help their neighbors. The biggest risk we face is not lower standards of living. That is written in stone in the near-term. The biggest risk is that the emotional trauma caused by such an event allows us to be thrown into the arms of a demagogue that promises us security, stability and strength. This is exactly how it went down in Nazi Germany.

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