European Central Bank

"The nightmare for the Riksbank board is maybe something like this: they are gathered in the south of Sweden, looking out over the Baltic Sea, when they see a giant wave of money coming in from the euro zone and try to fight it with a hose."

Over the next six months, Barcelona’s left-wing city council plans to roll out a cash-less local currency that has the potential to become the largest of its kind in the world. While the socialist mayor's official reasoning is 'to boost economic opportunities for local businesses', perhaps there are somewhat less altruistic motives behind the move, such as encouraging people to embrace cashless currencies. It appears the war on cash has moved from one of words to actions (as it is likely no coincidence that most of the local community currencies that have been launched so far are in purely digital format, as would Barcelona’s.)

Gold in euros rose sharply to the highest in three months after the European Central Bank signaled it will likely engage in more QE and may even move to negative interest rates. Draghi's comments are gold bullish - particularly in euro terms.

• China's central bank cuts rates for sixth time since November (Reuters)
• Global stocks hit two-month high on dovish Draghi message (Reuters)
• $6.5 Billion in Energy Writedowns and We're Just Getting Started (BBG)
• Alphabet, formerly Google, sets share buyback, shares jump (Reuters)
• Hurricane Patricia, Stronger Than Katrina, Nears Mexico (BBG)
• TVA Cleared to Start First New U.S. Nuclear Power Plant in Nearly 20 Years (WSJ)

In what amounts to a slap in the face for a coalition of Leftist lawmakers who are opposed to the austerity programs that some believe are responsible for painful economic adjustments, Portugal has reappointed PM Pedro Passos Coelho. This sets the country up for an intractable political stalemate and will serve to embed an enormous amount of uncertainty in markets going forward.

Global Capitalism is trapped in its own Prisoner’s Dilemma; fourty four years after the end of the Bretton Woods System global central banks have manipulated the cost of risk in a competition of devaluation leading to a dangerous build up in debt and leverage, lower risk premiums, income disparity, and greater probability of tail events on both sides of the return distribution. Truth is being suppressed by the tools of money. Market behavior has now fully adapted to the expectation of pre-emptive central bank action to crisis creating a dangerous self-reflexivity and moral hazard. Volatility markets are warped in this new reality routinely exhibiting schizophrenic behavior. The tremendous growth of the short volatility complex across all assets, combined with self-reflexive investment strategies, are creating a dangerous ‘shadow convexity’ that will fuel the next hyper-crash.

As the world places its 'life' in the hands of a few unelected members of ivory tower trusting them to centrally plan the global utopia, that faith may be shattered by Bank of Italy Governor Ignazio Visco. As Bloomberg reports, Visco and seven other people were place under investigation according to chief prosecutor. While the statement does not list allegations, court documents reveal alleged corruption, fraud, and abuse of office.

"Instead of processing a net value, the person processed a gross figure. This meant the trade had “too many zeroes”, said one of the people."

And as everyone knows, "too many zeroes", is the technical term for you royally fucked up.

• Great News: China’s GDP Growth Beats Forecasts as Stimulus Supports Spending (BBG)
• Oh wait, maybe not: China GDP: Deflategate Comes to Beijing (WSJ)
• Actually, definitely not: Shanghai rebar falls to record low after weak China GDP (Reuters)
• But who cares: European Shares Gain on Earnings as Bonds Drop, Metals Decline (BBG)

There is a war, a currency war, and the war is, ultimately, on Americans. Rather than living under a sound currency, modern Americans live under an economic despotism. There are monopoly men who tightly control the money, and are all the more insidious in their subtlety, and quietness in the shadows. In many respects, Americans have fallen far, and hard, from the liberty they once had.

In the beginning of 2008, a US dollar could buy only €0.65 euros. Today, on average through 2015, one US dollar can buy €0.91 euros. With European demographics getting more challenging by the year, and deflation stalking the eurozone, problems don’t seem to be going away for the euro. The crises in Ukraine and Greece continue on without much resolved, and the ECB is continuing on with its QE program. Meanwhile, the Refugee Crisis has created another political distraction that has its own challenges for the people of Europe. Will the shrinking euro be able to revert its course, or is Europe doomed to become the next Japan?

"Europe has seen nothing like this for 70 years – the visible expression of a world where order is collapsing. The millions of refugees fleeing from ceaseless Middle Eastern war and barbarism are voting with their feet, despairing of their futures. The catalyst for their despair – the shredding of state structures and grip of Islamic fundamentalism on young Muslim minds – shows no sign of disappearing. Yet there is a parallel collapse in the economic order that is less conspicuous: the hundreds of billions of dollars fleeing emerging economies, from Brazil to China, don’t come with images of women and children on capsizing boats."

Austerity: Also known as “sado-fiscalism”. A forlorn attempt to stave off government bankruptcy.

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Keynesians: Economists “who hear voices in the air (and) are distilling their frenzy from some academic scribbler of a few years back” (John Maynard Keynes).

The market is prone to temporary fits of shared enthusiasm – for emerging-market debt, for Internet stocks, for residential mortgage-backed securities, for Greek government debt. Traders need not wait to see when or whether the profits materialize. IBGYBG, they say – I’ll be gone, you’ll be gone. There are numerous routes to bezzle and febezzle...  traders borrowed money from the future. And then the future came, as it always does, turning the bezzle into a bummer.

Governments and their central bank creations usurped market-based monetary and banking systems to serve the plundering purposes of kings, princes, parliaments, and special interest groups who all wanted to hold the magical hand of the monetary printing press. Print up money (or its digital substitutes and surrogates in more modern times) and you can have access to all the hard work of others without the reciprocal effort. The monetary social engineers' century-long legacy in the arena of money and banking has been the booms and busts of the business cycle. The time has come to end the tragic and disruptive reign of monetary central planning.