Monthly Archives: January 2015

Thank you Mac Salvo of SHTFplan   (  http://www.shtfplan.com/ )

The Davos World Economic Summit has long been a parade for the insider agenda, putting the power players’ plans for the world’s economies on display as a preview to their playing out for the rest of the year.

But so far, the 2015 elite retreat in the Swiss Alps has proven to be full of apprehension, and even horror… with many of its own members expressing regret at the world they have built.

The Guardian reported:

The billionaires and corporate oligarchs meeting in Davos this week are getting worried about inequality… even the architects of the crisis-ridden international economic order are starting to see the dangers. It’s not just the maverick hedge-funder George Soros, who likes to describe himself as a class traitor. Paul Polman, Unilever chief executive, frets about the “capitalist threat to capitalism”. Christine Lagarde, the IMF managing director, fears capitalism might indeed carry Marx’s “seeds of its own destruction” and warns that something needs to be done.

The scale of the crisis has been laid out for them by the charity Oxfam. Just 80 individuals now have the same net wealth as 3.5 billion people – half the entire global population. Last year, the best-off 1% owned 48% of the world’s wealth, up from 44% five years ago. On current trends, the richest 1% will have pocketed more than the other 99% put together next year. The 0.1% have been doing even better, quadrupling their share of US income since the 1980s.

These billionaires are not concerned with a fair or truly equitable world, of course. But they may well be concerned about having pushed the system beyond the brink, and triggering global collapse or unrest as a result of things gone way too far.

On top of a bloated super-surveillance police state that is still expanding in the age of Big Data and continuing terrorism, it is a “wealth grab on a grotesque scale” that has stood out the most in 2015.

In 2015, it has become obvious that inequality has become just plain cynical, unsettling and, perhaps, downright revolutionary… and even the insulated, egocentric billionaires have taken notice.

Meanwhile, the Telegraph compiled a set of compelling reasons to think the world has fallen back into crisis, with a global economic meltdown perhaps looming overhead.

Charts compiled from 2014 data showed gloomy numbers in everything from stunted growth, mounting deflation, collapsing oil prices (and with it a collapsing Russian economy), conspicuously low central bank interest rates, mounting debt in Europe and the UK, new waves of the Euro-crises in Greece, Italy and Spain, and shortcomings in previous forecasts for growth by the IMF.

In short… well, things are not looking so great.

Along with the other factors mentioned above, this chart, published by the London Telegraph, shows what has happened to Americans as they struggled to tread water and keep afloat after 2008. For the United States, there have been some signs of improvement, but mostly for those already on top. And the general decline in the global rankings of economic freedom and civil liberties does not complement the widening inequality, either.

It illustrates the dramatic shift from the post World War II years of economic expansion to where we stand now…

As Neil Irwin reported for the NY Times:

Who benefits from rising incomes in an expansion has changed drastically over the last 60 years. Pavlina R. Tcherneva, an economist at Bard College, created a chart that vividly shows how.

Back in the 1940s, ’50s and ’60s, most of the income gains experienced during expansions — the periods from the trough of one recession until the onset of another — accrued to most of the people. That is to say, the bottom 90 percent of earners captured at least a majority of the rise in income.

With each expansion in sequence, however, the bottom 90 percent captured a smaller share of income gains and the top 10 percent captured more.

Post-WWII and the Burgeoning Middle Class

It’s not that things were ever perfect, but… here’s a glimpse into how most Americans – the “average” American in the middle or lower class was doing, overall, half a century or so ago. With a strong manufacturing and industrial sector, many had the opportunity for a good paying job, a home and some semblance of upward mobility. Not all was rosy, but by the numbers, things were on an even enough keel.

In short, the chart begins in 1949, when the income growth for most Americans outweighed that of the top 10% by a factor of four to one.

The trend gradually declined, moving from 80% of income growth in the bottom 90% in 1949-1953 to just 55% in the years 1975-79.

During those years, most Americans steadily enjoyed relatively high wages and general prosperity.

Energy Crisis and Stagflation of the 1970s

The 1970s represented a turning point, however, with several stages of the oil crisis hitting in 1973 and 1979. Foreign policy led to OPEC hiking energy prices; Americans in turn saw rationing and a rise in the cost of living; middle class wealth and job opportunity took a dive.

The beginning of deindustrialization meant that, more and more, Americans weren’t producing actual goods; manufacturing was in decline, and many good jobs were soon shipped over seas.

Meanwhile, wealth on a global stage flowed through the petrodollar, which was, in turn, recycled on Wall Street, making speculators and banking houses – not good and production – the center of the economic universe.

Deregulation and Unfettered Speculation in the 1980s and 1990s

Thus, the increases in income as wealth changed dramatically in the following decades, starting in the year 1982 and continuing to 2000 and the end of the century.

During the presidencies of Republicans Ronald Reagan and George Bush and Democrat Bill Clinton, income growth patterns flipped from their post-war patterns, with the top 10% suddenly outpacing everyone nearly 3-to-1, and regular folks seeing a noticeable decrease in their earnings.

In short, the middle class in decline. And things were getting even worse for those at the bottom.

The deregulation atmosphere of the 80s represented a complete upheaval of the post-war middle class boom.

As Wall Street’s predatory capitalism became the law of the land, a full 80% of income growth went to those at the top, while middle and lower class wealth suddenly staggered to a 29% share.

The 90s continued this trend, with income growth for the bottom 90% dropping to 27%.

This fast-paced era of “free market” (crony) capitalism – as defined and enhanced by Wall Street – only set the stage for what was to come, however.

The Walls Come Down: End of Glass Steagall and Rise of Derivatives Intro 21st Century

For those looking back after the 2008 financial collapse, these are the years in which the Glass Steagall Act, which had separated commercial and investment banking since the 1930s, was repealed with the handiwork of Clinton’s Treasury Secretary Robert Rubin and Larry Summers, Rubin’s deputy and successor.

Meanwhile, since the mid-90s, the derivatives market was opened up for big business, despite the warnings of such regulators as Brooksley Born, then head of the Commodity Futures Trading Commission (CFTC).

Under these important developments, the cynical years of the George W. Bush presidency – initiated by a Supreme Court decision, and not by the electoral process – became even worse.

Income growth for most people ground to a halt, with the total income growth for the lower and middle classes reaching only 2% (meaning most had no meaningful rise in income at all).

Meanwhile, income growth for the top 10% soared to 98% of all increases. America’s richest took it straight to the bank, in an era of massive speculation during a huge housing bubble that would soon come crashing down.

Much has been said about the 2008 financial crisis, but the “too big to fail” banks were signposts for an opportunistic class of Americans who had profited by their own rules when opportunity was dwindling for most people.

After the brink, when taxpayers bailed out the banks, things became even worse for average Americans who found themselves in the so-called “bottom 90%.”

During the Obama years, when many Americans perceived America’s first black president as redistributing vast amounts of wealth to the lower classes, income dropped sharply, with negative growth for 90% of Americans for the first time since World War II.

There was no such leveling out, but a sharpening of the growing disparity nationwide. Obama is a corporatist, not a socialist.

During the period since 2009, when most Americans saw an average drop of 16% in income, the top 10% increased their wealth by a mind-boggling 116%. Their earnings more than doubled, while the average population struggled with less and less. Things reached a point of total us vs. them…

The Occupy Wall Street crowd called it the 1%, but it is much worse than that. The issue is a tiny, tiny few (numbering only a few thousand) who now effectively own it all.

They make the rules, they break the rules, and, well, they just rule. Period.

Could the picture be any clearer?

This video shows how America’s perception of the wealth gap underplays the reality, and compounds the problems, and further reveals that in reality, the bottom 40% in the United States have, well, next to nothing to show for themselves in terms of economic wealth:

As for the Middle Class – currently dead, in limbo or alternately M.I.A., columnist Harold Meyerson argues:

The extinction of a large and vibrant American middle class isn’t ordained by the laws of either economics or physics. Many of the impediments to creating anew a broadly prosperous America are ultimately political creations that are susceptible to political remedy. Amassing the power to secure those remedies will require an extraordinary, sustained, and heroic political mobilization. Americans will have to transform their anxiety into indignation and direct that indignation to the task of reclaiming their stake in the nation’s future.

Perhaps that means the Middle Class could be once again revived, if ever sanity reentered the picture, if the bums were kicked out and those guilty of outright treason in the financial and political arenas were finally rounded up and held accountable.

But don’t hold your breath… just hold onto what you’ve got, if you can.

Thanks to Mac Slavo from www.shtfplan.com

By Greg Hunter On January 28, 2015 In

By Greg Hunter’s USAWatchdog.com

Lord Christopher Monckton says the “climate change” issue is really a way to gain control of the world.  Lord Monckton, former award winning journalist who was once an advisor to Margaret Thatcher, contends, “This is a story that has been grossly, I mean grossly, oversold.  They have exaggerated beyond all reason.  Just this week, I’ve had a major paper published in the Science Bulletin of the Chinese Academy of Science which gives the reasons why they got it wrong.  We went into their wretched climate models and took them apart.  We’ve found what they did wrong, and we exposed it. The left have gone ballistic.”

Lord Monckton goes on to say, “What seems to be happening is the communist, in particular the hard left, have taken up these climate cudgels in a very big way, and they are the ones that are really driving this agenda.  Why are they doing this?  That is the first question.  The reason, of course, is they have long wanted to set up what used to be called the socialist international.  It’s a single giant global communist tyranny.  Of course, you get Obama, whose father was communist.  His chief mentor was communist.  His rhetoric is communist.  He has taken this up in a big way.  The State of the Union Address was really rather pathetic. . . . I never thought I’d see the United States electing a communist as President.”  Lord Monckton also points out, “These people are totalitarian.  These are people who want global government. They want to be part of a regime of total control. . . . This is what the hard left has always wanted.  It was the same in Hitler’s Germany. . . .Now, you got the communist party in the United States, but now they are calling it the Democrats.”found what they did wrong, and we eThe co-founder of Greenpeace, Patrick Moore, has made public statements that say there is “no scientific proof” humans are the cause of global warming.  Lord Monckton, who knows him personally, says, “Patrick Moore has made a very moving speech about how he tried to set up a genuine environmental organization.  Its intention was to make the world a better place, to leave a smaller environmental footprint on the world. . . . He is heartbroken.  I can’t tell you how sad he is at the perversion of the organization he founded.  Goofy teenagers are giving it money and going around collecting money, not realizing that what they are actually collecting money for is not an environmental organization anymore.  It is a communist front.  It is there solely to bring in a world government to put its people in charge, using the environment just as Hitler used it as the excuse for additional totalitarian control.  Let’s not forget, it was Hitler who first founded the green movement and first used the environmental movement, not for the basis for genuine concern about the environment, but as a basis for getting control over every detail over people’s lives so they couldn’t argue back.  That’s what this is really all about. . . .  I get criticized all the time as to why I don’t just stick to the science.  I say somebody has to tell the truth, not only about the science, but also about the politics.

Lord Monckton believes there is climate change, but he does not believe man has anything to do with it.  Lord Monckton says science will ultimately back up that claim.  Why the recent push on climate change that is also called global warming?  Lord Monckton says, “I think they are panicking because they know that this process  . . . cannot be kept going for very much longer because . . . it’s been 25 years since the UN produces a report saying we were all doomed, and since then, the rate of warming has been half of what they predicted and well below their entire range of estimates.”  Also, former Vice President Al Gore predicted the polar ice caps would be melted by now.  Just the opposite has happened, as Lord Monckton points out, “If you took the Artic and the Antarctic together, global sea ice was the greatest it’s been throughout the 35 years of the satellite era.  It is greater than it has ever been before.”

Lord Monckton closes by saying, “God Bless America, and in light of what’s to come, if we don’t stop it, God Bless us all.”

Join Greg Hunter for an in-depth interview with Lord Christopher Monckton.

(There is much, much more in the in-depth video interview.)

After the Interview:

Lord Monckton says he is simply a “seeker after truth.” If you would like to read Lord Monckton’s peer reviewed research paper on the Chinese Academy of Sciences website, click here.  Lord Monckton says if he’s correct, this may ultimately prove to the world that man-made global warming is a false narrative, and there is no need for taxes and regulation to combat it.

In the aftermath of last week’s black swan announcement by the Swiss and on the heels of the ECB’s announcement that they are going to inject $1.3 trillion of stimulus into Europe’s beleaguered banking system and bond market, today former U.S. Treasury official, Dr. Paul Craig Roberts, warned King World News that the whole world is staring at the barrel of a gun as global collapse looms.

Eric King:  “The ECB just made the announcement that they are planning to inject $1.3 trillion in stimulus into the European banking system and bond markets.  What is this really all about?”

Dr. Paul Craig Roberts:  “Eric, we now have the yen being printed in vast quantities.  The Fed has supposedly stopped printing the U.S. dollar but it really hasn’t because during the period of quantitative easing the banks received $2.6 trillion.  All that money is available and will continue to be used to buy bonds.  Of course the Fed itself has $4.5 trillion on its balance sheet and as it receives interest payments it will also continue to buy bonds.

So you have quantitative easing in Japan, in the United States, and now we have it once again in Europe.  So the three large currencies — yen, dollar, and euro — are being created at an alarming rate….

“The effect of this  is that it forces other countries to print money so that their own currencies don’t soar in value relative to the yen, dollar, and euro, which would undermine their export markets and economies.  One country has already broken ranks from these insane policies.  The Swiss realized that they could not possibly keep the peg intact, so they abandoned that last week in the announcement that shocked the world.

Whole World Staring Down The Barrel Of A Gun

So we have a situation where the United States, the EU, and Japan have the whole world staring down the barrel of a gun.  They are forcing inflation on the entire world.  You have to ask yourself:  Why do the United States, Japan, and the EU have a right to do this and who benefits?  Well, the answer is that the elite benefit from this policy.  This a way of further enriching a tiny amount of people at the expense of everybody else in the world.  This is all about enriching the elite.  That’s all this is about, and the rest of the population in the world is paying for it.”

Terrifying Warning

Eric King:  “Today Egon von Greyerz, the man who predicted collapse of the euro against the Swiss franc just 52 days ago, made the frightening prediction of total global collapse.  Greyerz said that all of the central banks are bankrupt and that’s why the world’s financial system will not survive and a total global collapse is in front of us — your thoughts on this ominous warning from Greyerz.”

Dr. Roberts:  “He is right that we are facing a global collapse.  Central banks have paid 100 cents on the dollar for assets that may not even be worth one cent on the dollar.  What’s also driving the world to economic collapse is the fact that the central banks are recklessly printing unprecedented amounts of fiat money to keep their global Ponzi scheme going.

Horrific Situation

So you have these unprecedented amounts of fiat paper money hanging over the global economy.  This vast amount of paper money has not been matched by real economic production.  It’s the implication of that horrific circumstance that will also cause the global collapse.  

What would it have meant if Switzerland had continued to hold the currency peg?  It would have meant the Swiss would have ended up with a much larger money supply then the entire annual Gross National Product of Switzerland.  The implications of that are hard to fathom.  It would have meant that there were more Swiss francs in existence than could be used to buy up all the annual goods and service produced by Switzerland.

Mega-Catastrophe To Destroy Average Citizen

And there is a complicity by the elite who are caught up in this unprecedented global money printing scheme.  They are all caught up in the corruption.  But at some point people will realize this is worse than a Ponzi scheme.  They will realize this insane policy has the world headed for collapse.

All of this corruption is overwhelming to sensible people.  So the central banks are only serving the interests of the elite and that is where the collapse will come from.  There is no connection between the monetary policy in the United States, Europe, and Japan, and the people.  In fact, the elite have the entire world headed for a mega-catastrophe that is sure to financially destroy the average person and send the world into total chaos.” ***ALSO JUST RELEASED: Man Who Predicted Collapse Of Euro Against Swiss Franc Makes Second Terrifying Prediction CLICK HERE.

Source:  http://kingworldnews.com/paul-craig-roberts-whole-world-staring-barrel-gun-global-collapse-looms/

The Forthcoming CSI Event

By JC Collins

When President Obama stated last night in his State of the Union Address that the “shadow of crisis has passed” it perfectly set the stage for the next phase of the CSI, or Cultural and Socioeconomic Interception.  The CSI is a prolonged and multi-scripted methodology which is implemented over years and decades to engineer specific adjustments to the collective awareness of  mass populations.

The economic manipulation from external forces in the years leading up to the French Revolution, and the script which shifted the blame onto the the monarchy, is one such example of the CSI procedure.  Another is the recent representation of Russia and Putin in the western media as the aggressor in the Ukraine situation.  The script is rolled out through the mass media in segmented flashes with just enough time in between to lull the viewer into a state of apathy and acceptance.

The CSI is not one single event, or a false flag incident, such as the Reichstag Fire in Nazi Germany or  the Great Fire of London in 1666, but is a series of acutely engineered scripts which are melded together by the single false flag events.  See post The First False Flags – Money Changers and the Great Fire of London in 1666, for a more detailed explanation of the CSI.

Back in the beginning of 2014 I began to explain how a method of the Hegelian Dialectic was going to be used in transitioning the world from the unipolar USD based financial system to the multilateral SDR based financial system.  It was stated that the process of “problem, reaction, solution” would herd and manipulate the mass populations of the world into accepting the supra-sovereign governance of the global institutions.

Each region of the world has different and unique circumstances which require different and unique modifications to the CSI process.  These micro scripts are intended to consolidate within the larger macro script as the full transition begins to manifest in the broader economy.

The micro CSI scripting is unfolding at a furious pace over the last few months, with increasing frequency in the last few weeks.  The script of the economic recovery in America is the most obvious CSI which has been presented to the masses, and with the State of the Union speech last night, along with the “shadow of crisis has passed” phrase, we can determine that the recovery CSI has now been closed.

This analysis is extremely important because the macro CSI which has been slowly unfolding since the financial crisis of 2008, mainly from the emerging economies, such as the BRICS countries, and the Euroasian Trade Union, as well as some of the international institutions, has been promoting the script of systemic imbalances which have been caused by the USD reserve structure.

The script calls for a multilateral monetary framework to replace the unipolar USD framework.  The shift away from a USD system, and the imbalances which have been created over the decades, such as exchange rate volatility and account deficits, will no doubt cause some dramatic lows and highs across the financial world.  Some of the highs and lows are clearly visible today as the USD appreciates and drives further depreciation into any currency that is pegged to it.

As the multilateral continues to be implemented, this existing exchange rate structure will begin to fracture, as we witnessed last week with the Swiss franc, and the dollars held in the foreign reserve accounts of central banks around the world will be converted or exchanged for alternative liquidity, such as SDR bonds.

The recovery CSI has given the American banking and industry interests, represented in the colorful composition of the Democratic and Republican parties, the ability and confidence to shift-blame the massive deflation in the international financial system on external entities.

The script will read something like “external factors outside of American control have reversed the recovery and hard work of average Americans”.  This script will focus mass awareness away from the coming internal governance measures, (required to integrate America into the multilateral system) and focus the confused and disappointed apathy of the masses onto whatever foreign and external source that is built into the macro script.

Any internal emotion will be swallowed in whole by manufactured racial tension and other methods of civil unrest.

The melding of the “American recovery” CSI script and the macro multilateral CSI script will require an “event” of undetermined characteristics and methodology.  Now that the “recovery” script has been closed, we can expect to see this “event” take place at any time.

The “event” could be a geopolitical false flag, or some form of “sudden” crisis in the global financial system, or a combination of both.  The candidates vary from an expansion of proxy wars in Ukraine and Syria, a sudden crisis between North and South Korea, or a fragmentation of the euro currency and consolidation of the European Union into the Euroasian Trade Union, and any other number of possibilities.

Perhaps an engineered global revolution with the end result clearly defined as a multilateral framework which “will reduce systemic corruption and correct financial imbalances”.

The intent of this post is not to scare or fear monger, which is why I carefully choose the words and language I use, but to bring awareness to the CSI process and how it is being implemented throughout mass populations around the world. It requires abstract thinking and the ability to recognize repeating patterns across the socioeconomic and geopolitical spheres.

The World Economic Forum and the IMF today called for a “central bank of oil”, which is code for regulating the oil pricing mechanism and ultimately using the SDR as the unit of account for not just oil, but all other commodities. This CSI scripting fits perfectly with what we have been discussing for the last year in regards to the multilateral transition.  So far our analysis has been correct on both the methodology and scripting practices of the transition.

All central banks around the world are implementing their own micro CSI script for the purpose of shifting upward into the macro CSI script.  This also includes Russia and China, both of which have been the most vocal about the need for the multilateral framework.

We are all like the people of France in the years and months leading up to the French Revolution.  Please don’t accept any scripting which promotes the idea of the source of the problem becoming the solution to the problem.  The French had no idea what hit them.  We do.    – JC

This is how it is done, has always been. Notice how “Everybody” knew AHEAD of time. That’s why all these “Congressional Hearings” on TV are a joke meant to entertain Mickey Mouse and a few sheeple.

January 20, 2015 JC Collins

It has become common knowledge in the mining industry here in Canada that the large oil companies began holding strategy sessions over a year ago to address this downturn in the market.  The “sustainable cost reduction strategies” were slow in coming at first but are now being developed and implemented from one day to the next.

The industry is witnessing layoffs in the tens of thousands with more to come.  For each energy sector job lost there will be 4 or more service industry jobs lost as well.  This spider web of cause and effect will mean a slow down in the broader economy with reduced revenues for everything from local pubs and restaurants, to clothing stores and regional manufacturers.

The planning sessions which  began a year ago tell us that this market turn was not happenstance.  The communication lines between the heads of the energy companies and trans-border banks have intersected with the mandates of the international institutions which are engineering and implementing the economic transition to a multilateral framework.

The deflation which we have discussed throughout the last year is now descending in full force.  This deflation is allowing for a massive contraction of the money supply to facilitate the transformation of each segment of the international monetary system.

Massive deflation leads to massive liquidation for the purpose of increasing cash balances.  As everything from real estate to commodities decrease in valuation we are witnessing a large liquidation of physical assets, such as mining and construction equipment, recreational vehicles, televisions, and everything else that companies and individuals can sell for cash in hand.

This increase in cash balances can be considered an increase in the quality of money. An increase in the quality of money will likely facilitate the transformation of our current fiat based money system to a commodity based system. Quality of money based on commodities as opposed to fiat issuance will lead to an eventual flood of savings from stocks and bonds to savings accounts.

The danger in this natural progression of quality capital from stocks and bonds to saving accounts is underscored by the bail-in threat posed by the larger institutions and governments.  But it is these same banking and investment institutions and governments which deflation will harm the most.  Though innocent “losers” will be sacrificed during the deflationary period, the imbalances in the system which have been built over the decades, when corrected, will ensure that corruption will be dramatically reduced, if only for a few years before the imbalances begin to manifest in the system once again.

The imbalances as defined in the Triffin Paradox, or more appropriately, the USD global reserve system, has allowed for a gross misalignment and mutation of the global monetary structures.  These imbalances have manifested throughout the international architecture as large stock market increases, unsustainable energy costs, such as oil, as well as real estate valuations, and easy access to capital.

The deflation which is now taking place will level these imbalances and allow for the rise of high quality capital. This quality capital will make the transition to a commodity based multilateral monetary structure more efficient and timely.

Every monetary policy which has been implemented by the central banks and financial institutions since the crisis of 2008 has been  for the purpose of holding back deflation.  Now that those tools, such as QE, are being retracted from the system, we are witnessing the deflation which is required to correct the imbalances and allow for the transition to the multilateral structure.

The storyline is also beginning to be distributed amongst the global media outlets that monetary stimuli by central banks is no longer working and that the accountability and mandates of the central banks will need to be more aligned with the macro economic mandates of the multilateral institutions.

In the post The Globalization of Central Banks we reviewed how the architecture of central banks will be consolidated within this larger mandate.  No longer will domestic growth be the only objective of central banks.  The larger imbalances created within the international monetary structure by promoting only domestic monetary policies will no longer be allowed.

Managing Director of the International Monetary Fund Christine Lagarde has again called for the implementation of a multilateral framework, and the financial and geopolitical strategies which are now unfolding support this process.

The recent moves by Russia and its central bank are remarkable when considered as methods of disengaging from the USD system. Converting the USD held in its foreign reserve accounts for rubles is diversifying the global monetary structure, and is more about facilitating the multilateral transition and reforming the monetary framework as opposed to replacing the existing USD framework.

The geopolitical move by Russia to change the natural gas routes into Europe is primarily concerned with decreasing the violence in Ukraine by removing the need for that particular strategic position.  The attempts of America to maintain economic and geopolitical control over regions of the world which it has controlled under the USD system, such as Europe and Saudi Arabia, as well as Korea, among others, are fraught with the dysfunction of continuing unsuccessful isolationist policies.

The coup yesterday which took place in Yemen is very telling of the geopolitical positioning which has been allowed to take place.  Think of it like a company having to reduce its operating costs.  The CEO and CFO of the company state that $2 billion has to be cut from the operating budget and the internal policies of the company have to be adjusted to facilitate joint venture projects in regions of the world which are normally outside of it’s existing growth structure.

Each division within the company is responsible for their own cost reductions and policy adjustments. Yet each division is primarily focused on an industry sector which can no longer operate independently from the larger whole.

The larger monetary mandates which are being handed down by the Bank for International Settlements are being implemented much like an international corporation would transform itself while attempting to grow as it becomes a part of a multilateral framework.

The flex allowed in the transition has been taken advantage of by western interests as America attempts to stop Europe from being ripped away from its strategic influence.  The inevitable fragmentation of the euro, and potentially even the European Union, should be obvious to most at this point.  European countries will position themselves with their eastern trade partners as represented in the Eurasian trade union, with the United Kingdom ultimately maintaining its allegiance with the North American continent.

The moving parts of this transition, along with the implementation schedule, is difficult to capture in one single post, but the gears keep moving and deflation pushes deeper.  The fact that gold and the USD are both appreciating together is the harbinger of the multilateral.  The fundamentals of the monetary system are now being directed by the multilateral structure as it begins to push up from underneath the ruinous imbalances of the fragmenting USD system.   – JC

http://philosophyofmetrics.com/2015/01/20/the-gears-are-grinding-down/#more-2045

Source:  http://nypost.com/2015/01/17/50000-wall-street-jobs-cut/

There’s blood on the Street.

In a wild swing of the ax that has shocked many pundits, Wall Street’s biggest banks have slashed nearly 50,000 jobs, and bonuses and expense money are being cut as profit opportunities dry up.

And there’s no easy way out, analysts say, because the Fed’s quantitative easing that once rescued the financial system with trillions of cheap dollars is — at least for now — history.

But while some analysts were unnerved by the carnage announced by banks last week during their earnings calls, the warning signs were there before — from lower trading and commodities revenues to currency risks and long-term interest rates that have trended lower.

The fourth quarter saw thousands more workers fired. Total reductions for 2014 were about 20,000 at Brian Moynihan’s Bank of America; 10,000 at Citigroup led by Michael Corbat; and 10,000 at Jaime Dimon’s JP Morgan. Morgan Stanley reports on Tuesday.

Many job losses were already flagged — attributed, for example, to a decline in servicing of delinquent loans as banks cleared troubled mortgages. But analysts also see brutal cost-cutting.

“Look, I think head count in the banking industry is likely to decline,” said CLSA investment group bank analyst Mike Mayo. “And if this environment remains, headcount would get significantly reduced.”

By Mayo’s calculations, bank revenues are the weakest in eight decades, a shocking throwback to the Great Depression.

And the carnage is ongoing as global growth slows and commodity prices and currency movement roil the markets.

“I think there have been heavy potential and paper losses at this point. Clearly, nobody bet properly on oil — nobody thought it was going to be below 50 a barrel,” said Tim Quast, president of market analytics firm ModernIR.

Even mighty Goldman Sachs didn’t escape last week’s destruction. Although the firm reported fourth-quarter earnings a tad better than forecast on Friday, that came from painful expense-shearing as revenues, hurt by a plunge in bond trading, posted a nauseating double-digit decline. Declines in bond activity also rocked JPMorgan, Citigroup and Bank of America.

Military experts are making an explosive new claim about Barack Obama.

And what they’re revealing now could blow the lid off a scandal many would call TREASON …

January 15, 2015 JC Collins 46 Comments

Many for so long have proclaimed the end of the dollar and a collapse of the USD system. Though the dollar will be adjusted downward at some point in the initial implementation of a multilateral system, its sustainability in a broader monetary framework will be a fundamental corner stone to correcting the imbalances which originated from the USD system itself.

The USD monetary system is based on using the domestic currency of the United States as the global reserve unit of account.  This arrangement has created systemic imbalances in the international financial framework which has lead to inherent risks in all segments of the system, such as trade, credit, exchange rates, inflation/deflation, commodities, capital flows, and geopolitical power shifts.

Some of these imbalances have been extremely prominent in the last days as oil continues its dramatic depreciation, the Swiss removed the francs peg to the euro, (as the euro was depreciating against the appreciating dollar), Russia converting a portion of its foreign reserves into rubles, and geopolitically Russia has diverted natural gas flows into Europe from the transit points in Ukraine to transit points in Turkey.

On a more macro level, the Bank of China (Hong Kong) has stated that the inclusion of the RMB into the SDR basket of currencies will accelerate international monetary reform which will help build stability in the system.  This stability will be constructed around using the SDR as the global unit of account in place of the USD.

We have covered the importance of the RMB to the SDR supra-sovereign reserve system, along with the BRICS Development Bank, in the post The SDR Purpose of BRICS.

One of the least understood segments of the USD imbalances are the derivative trades.  These trades are a method of hedging against the risk which is inherent in the USD system.  As in all trades or exchanges, there are two ends, a gain end and a lose end.  The derivatives are meant to take the risk out of trade for trans-border businesses and other financial institutions, along with large private investors.

Each trade needs to be cleared though a clearing house and the risk of systemic failure because of the potential loses are building.  The current policies and institutions handling the clearing process are incapable of dealing with this systemic risk.

Supra-sovereign and trans-border institutions and entities such as banks and hedge funds, which are structured around national and domestic frameworks, cannot provide the international policy changes required to address the risk associated with derivatives.

As such, a single and unified international policy is required.

The development and implementation of the multilateral monetary framework is capable of addressing this risk more effectively than the USD system.  By denominating derivatives in SDR, both virtual aspects of the unit of account and derivatives will align, allowing for a more unified policy response to the risk.

SDR denominated derivatives will fundamentally reduce the exposure by functioning above the constraints of national fiat currencies, which are heavily influenced by the multi-trillion dollar non-sovereign dominated Forex markets.  The SDR, held by sovereign central banks, will help stabilize the international supra-sovereign response required to reduce the derivatives risks and enact the unified policies.

The clearing of derivatives will also have to be handled in a broader multilateral framework as well.  The establishment of clearing entities, or banks, perhaps with only one or two acting as the mandated clearing houses, can facilitate the reduction of systemic risk to the international monetary framework.

Derivative contracts that are considered high risk can be fragmented into clearable (low risk) and unclearable (high risk) segments.  This disaggregation of illiquid derivative contracts will ensure the overall credit risk, or exposure, is reduced or eliminated on the cleared portion of the contract, while the risk associated with the uncleared portion is reduced in the markets.

The clearing house, in this case the Federal Reserve, will be accountable to provide liquidity for the uncleared “high risk” segments at valuations which are compatible with the margins of the defaulting members and contracts.  This process would reduce the chances of default with the least amount of systemic risk to the broader international monetary structure.

There are many moving pieces to the transition from the USD structured system to the multilateral SDR framework.  The risk associated with derivative clearing is one of the more important factors which will require a unified policy framework which operates above the limited policies which exist at the national and domestic level.

The USD will not collapse and the SDR will be implemented as the international unit of account.  No one currency or country has the ability or policy framework to deal with the challenges presented in correcting the imbalances which have developed from the USD system.  China, Russia, or any other grouping of countries, are not interesting in replacing the USD as the international unit of account.  The response to the systemic imbalances which exist will require the unified approach to policies and procedures which only the multilateral framework can provide.

Anyone pumping and promoting the collapse of the dollar does not fully understand the multilateral framework or the trans-border nature of the associated risks inherent in the USD system. – JC

http://philosophyofmetrics.com/2015/01/15/the-fed-sdr-denominated-derivatives/#more-2035

January 16, 2015

Peter Schiff tells it like it is.  Guess who his father was.