Guest Post: A Short History Of Currency Swaps (And Why Asset Confiscation Is Inevitable)

Tyler Durden's picture

Submitted by Martin Sibileau of A View From The Trenches blog,

I want to offer today an historical perspective on the favorite liquidity injection tool: Currency swaps. These coordinated interventions are not a solution to the crashes, but their cause, within a game of chicken and egg. But I’ve just given you the conclusion. I need to back it now…

To read this article in pdf format, click here: May 5 2013

With equity valuations no longer levitating but in a different, 4th dimension altogether, and credit spreads compressing... Which fiduciary portfolio manager can still afford to hedge? Any price to hedge seems expensive and with no demand, the price of protection falls almost daily. The CDX NA IG20 index (i.e. the investment grade credit default swap index series 20, tracking the credit risk of 125 North American investment grade companies in the credit default swap market) closed the week at 70-71bps. The index was at this level back in the spring of 2005. By the summer of 2007, any credit portfolio manager that would have wanted to cautiously hedge with this index would have seen a further compression of 75% in spreads, completely wiping him/her out.

It is in situations like these, when the crash comes, that the proverbial run for liquidity forces central banks to coordinate liquidity injections. However, something tells me that this time, the trick won’t work. In anticipation to the next and perhaps final attempt, I want to offer today an historical perspective on the favorite liquidity injection tool:  Currency swaps. These coordinated interventions are not a solution to the crashes, but their cause, within a game of chicken and egg. But I’ve just given you the conclusion. I need to back it now…

How it all began

Let me clarify: By currency swaps, I refer to a transaction carried out between two central banks. This means that currency swaps cannot be older than the central banks that extend them. On the other hand, foreign exchange swaps between corporations may date back to the late Middle Ages, when trade began to resurface in the Italian cities and the Hansastädte. Having said this, I believe that currency swaps were born in 1922, during the International Monetary Conference that took place in Geneva. This conference marked the beginning of the Gold Exchange Standard, with the goal of stabilizing exchange rates (in terms of gold) back to the pre-World War I.

According to Prof. Giovanni B. Pittaluga (Univ. di Genova), there were two key resolutions from the conference, which opened the door to currency swaps. Resolution No. 9 proposed that central banks “…centralise and coordinate the demand for gold, and so avoid those wide fluctuations in the purchasing power of gold which might otherwise result from the simultaneous and competitive efforts of a number of countries to secure metallic reserves…

Resolution No. 9 also spelled how the cooperation among central banks would work, which “…should embody some means of economizing the use of gold maintaining reserves in the form of foreign balance, such, for example, as the gold exchange standard or an international clearing system…

In Resolution No. 11, we learn that: “…The convention will thus be based on a gold exchange standard.” (…) …A participating country, in addition to any gold reserve held at home, may maintain in any other participating country reserves of approved assets in the form of bank balances, bills, short-term Securities, or other suitable liquid assets…. when progress permits, certain of the participating countries will establish a free market in gold and thus become gold centers”.

Lastly, gold or foreign exchange would back no less than 40% of the monetary base of central banks. With this agreement, the stage was set to manipulate liquidity in a coordinated way to a degree the world had never witnessed before. The reserve multiplier, composed by gold and foreign exchange could be “managed” and through an international clearing system, it could be managed globally.

How adjustments worked under the Gold Standard

Before 1922, adjustments within the Gold Standard involved the free movement of gold. In the figure below, I show what an adjustment would have looked like, as the United States underwent a balance of trade deficit, for instance:

May 5 2013

Gold would have left the United States, reducing the asset side of the balance sheet of the Federal Reserve. Matching this movement, the monetary base (i.e. US dollars) would have fallen too. The gold would have eventually entered the balance sheet of the Banque of France, which would have issue a corresponding marginal amount of French Francs.

It is worth noting that the interest rate, in gold, would have increased in the United States, providing a stabilizing/balancing mechanism, to repatriate the gold that originally left, thanks to arbitraging opportunities. As Brendan Brown (Head of Economic Research at Mitsubishi UFJ Securities International) explained (here), with free determination of interest rates and even considerable price fluctuations, agents in this system had the legitimate expectation that key relative prices would return to a “perpetual” level. This expectation provided “…the negative real interest rate which Bernanke so desperately tries to create today with hyped inflation expectations…”

There is an excellent work on the mechanics of this adjustment published by Mary Tone Rodgers and Berry K. Wilson, with regards to the Panic of 1907 (see here). The authors sustain that the gold flows that ensued from Europe into the United States provided the liquidity necessary to mitigate the panic, without the need of intervention.  This success in reducing systemic risk was due to the existence of US corporate bonds (mainly from railroads) with coupon and principal payable in gold, in bearer or registered form (at the option of the holder) that facilitated transferability, tradable jointly in the US and European exchanges, and within a payment system operating largely out of reach from banksters outside of the bank clearinghouse systems. The official story is that the system was saved by a $25MM JPM-led pool of liquidity injected to the call loan market.

How adjustments worked under the Gold Exchange Standard

During the 1920s and particularly with the stock imbalances resulting from World War I, the search for sustainable financing of reparation payments began. Complicating things, the beginning of this decade saw the hyper inflationary processes in Germany and Hungary. By 1924, England and the United States rolled out the Dawes Plan and between 1926 and 1928, the so called Poincaré Stabilization Plan in France. The former got Charles G. Dawes the Nobel Prize Peace, in 1925.

As the figure below shows, against a stable stock of gold, fiat currency would be loaned between central banks. In the case of a swap for the Banque de France, US dollars would be available/loaned, which were supposedly backed by gold. The reserve multiplier vs. gold expanded, of course:


With these transactions central banks would now be able to influence monetary (i.e. paper) interest rates. The balancing mechanism provided by gold interest rate differentials had been lost. As we saw under the Gold Standard before, an outflow of US dollars would have caused US dollar rates to rise, impacting on the purchasing power of Americans. Now, the reserve multiplier versus gold expanded and the purchasing power of the nation that provided the financing was left untouched. The US dollar would depreciate (on the margin and ceteris paribus) against the countries benefiting from these swaps. Inflation was exported therefore from the issuing nation (USA) to the receiving nations (Europe). The party lasted until 1931, when the collapse of the KreditAnstalt triggered a unanimous wave of deflation.

How the perspective changed as the US became a debtor nation

Fast forward to 1965, two decades after World War II, and currency swaps are no longer seen as a tool to temporarily “stabilize” the financing of flows, like balance of trade deficits or war reparation payments, but stocks of debt. By 1965, central bankers are already worried with the creation of reserve assets, just like they are today; with the creation of collateral (see this great post by Zerohedge on the latter).

Indeed, 48 years ago, the Group of Ten presented what was called the Ossola Report, after Rinaldo Ossola, chairman of the study group involved in its preparation and also vice-chairman of the Bank of Italy. This report was specifically concerned with the creation of reserve assets. At least back then, gold was still considered to be one of them. In an amazing confession (although the document was initially restricted), the Ossola Group explicitly declared that the problem “…arises from the considered expectation that the future flow of gold into reserves cannot be prudently relied upon to meet all needs for an expansion of reserves associated with a growing volume of world trade and payments and that the contribution of dollar holdings to the growth of reserves seems unlikely to continue as in the past…”

Currency swaps were once again considered part of the solution. Under the so called “currency assets”, the swaps were included by the Ossola Group, as a useful tool for the creation of alternative reserves. Three months, during a Hearing before the Subcommittee on National Security and International Operations, William McChesney Martin, Jr., at that time Chairman of the Board of Governors of the Federal Reserve System, acknowledged a much greater role to currency swaps, in maintaining the role of the US dollar as the global reserve currency.

In McChesney Martin’s words: “…Under the swap agreements, both the System (i.e. Federal Reserve System) and its partners make drawings only for the purpose of counteracting the effects on exchange markets and reserve positions of temporary or transitional fluctuations in payments flows. About half of the drawings ever made by the System, and most of the drawings made by foreign central banks, have been repaid within three months; nearly 90 per cent of the recent drawings made by the System and 100 per cent of the drawings made by foreign central banks have been repaid within six months. In any event, no drawing is permitted to remain outstanding for more than twelve months. This policy ensures that drawings will be made, either by the System or by a foreign central, bank, only for temporary purposes and not for the purpose of financing a persistent payments deficit. In all swap arrangements both parties are fully protected from the danger of exchange-rate fluctuations. If a foreign central bank draws dollars, its obligation to repay dollars would not be altered if in the meantime its currency were devalued. Moreover, the drawings are exchanges of currencies rather than credits. For instance, if, say, the National Bank of Belgium draws dollars, the System receives the equivalent in Belgian francs; and since the National Bank of Belgium has to make repayment in dollars, the System is at all times protected from any possibility of loss. Obviously, the same protection is given to foreign central banks whenever the System draws a foreign currency.

The interest rates for drawings are identical for both parties. Hence, until one party disburses the currency drawn, there is no net interest burden for either party. Amounts drawn and actually disbursed incur an interest cost, needless to say; the interest charge is generally close to the U.S. Treasury bill rate…”

My graph below should help visualize the mechanism:

May 5 2013 3


Essentially, with these currency swaps, foreign central banks that during the war had shifted their gold to the USA, became middlemen of a product that was a first-degree derivative of the US dollar, and a second-degree derivative of gold.

On September 24th 1965, someone called this Ponzi scheme out. In an article published by Le Monde, Jacques Rueff publicly responded to this nonsense, under the hilarious title “Des plans d’irrigation pendant le déluge” (i.e. Irrigation plans during the flood). He minced no words and wrote:

“…C’est un euphénisme inacceptable et une scandaleuse hyprocrisie que de qualifier de création de “liquidités internationales” les multiples operations, tells que (currency) swaps…” “C’est commetre une fraude de meme nature que de présenter comme la consequence d’une insuffiscance générale de liquidités l’insufficance des moyens dont disposent les Etats-Unis et l’Anglaterre pour le réglement de leur déficit exterieur”

My translation: “…It is an unacceptable euphemism and an outrageous hypocrisy to qualify as creation of “international liquidity” multiple transactions, like (currency) swaps…”…“…In the same fashion, it is a fraud to present as the consequence of a general lack of liquidity, the lack of means available to the USA and England to settle their external deficits…”

Comparing the USA and England to underdeveloped countries, Rueff added that these also lack external resources, but those that are needed cannot be provided to them but by credit operations, rather than the superstition of a monetary invention disguised as necessary and in the general interest of the public (i.e. rest of the world).

With impressive prediction, Rueff warned that the problem would present itself in all its greatness, the day these two countries decide to recover their financial independence by reimbursing with their dangerous liabilities (i.e. currencies). That day, said Rueff, international coordination would be necessary and legitimate. But such coordination would not revolve around the creation of alternative instruments of reserve, demanded by a starving-for-liquidity world.  That day would be a day of liquidation, where debtors and creditors would be equally interested and would share the common responsibility of the lightness with which they jointly accepted the monetary difficulties that are present….Sadly, Rueff’s call could not sound more familiar to the observer in 2013…

How adjustments work today, without currency swaps

Until the end of the Gold Exchange Standard, even if the reserve multiplier suppressed the value of gold (like today), gold was still the ultimate reserve and had in itself no counterparty risk. After August 15th, 1971, when Nixon issued the Executive Order 11615 (watch announcement here), the ultimate reserve was simply cash (i.e. US dollars) or its counterpart, US Treasuries. And unlike gold, these reserve assets could be created or destroyed ex-nihilo. When they are re-hypothecated, leverage grows unlimited and when their value falls, valuations dive unstoppable. Because (and unlike in 1907) the transmission channel for these reserves today is the banking system, when they become scarce, counterparty risk morphs into systemic risk.

When Rueff discussed currency swaps, he had imbalances in mind. In the 21st century, we no longer have time to worry about these superfluous things. Balance of trade deficits? Current account deficits? Fiscal deficits? In the 21st century, we cannot afford to see the big picture. We can only see the “here and now”. Therefore, when we talk about currency swaps, the only thing we have in mind is counterparty risk within the financial system. The thermometer that measures such risk is the Eurodollar swap basis, shown below (source: Bloomberg). As the US dollar became the carry currency, the cost of accessing to it became the cornerstone of value for the rest of the asset spectrum, widely known as “risk”.

In the chat below, we can see two big gaps in the Eurodollar swap basis. The one in 2008 corresponds to the Lehman event. The one in 2011 corresponds to the banking crisis in the Eurozone that was contained with a reduction in the cost of USDEUR swaps and with the Long-Term Refinancing Operations done by the European Central Bank. In both events, the financial system was in danger and banks were forced to delever. How would the adjustment process have worked, had there not been currency swaps to extend?

 May 5 2013 4


In the figure below, I explain the adjustment process, in the absence of a currency swap. As we see in step 1, given the default risk of sovereign debt held by Eurozone banks, capital leaves the Eurozone, appreciating the US dollar. We see loan loss reserves increase (bringing the aggregate value of assets and equity down). As these banks have liabilities in US dollars and take deposits in Euros, this mismatch and the devaluation of the Euro deteriorates their risk profile

Eurozone banks are forced to sell US dollar loans, shown on step 2. As they sell them below par, the banks have to book losses. The non-Eurozone banks that purchase these loans cannot book immediate gains. We live in a fiat currency world, and banks simply let their loans amortize; there’s no mark to market. With these purchases, capital re-enters the Eurozone, depreciating the US dollar. In the end, there is no credit crunch. As long as this process is left to the market to work itself out smoothly, borrowers don’t suffer, because ownership of the loans is simply transferred. This is neutral to sovereign risk, but going forward, if the sovereigns don’t improve their risk profile, lending capacity will be constrained.

In the end, an adjustment takes place in (a) the foreign exchange market, (b) the value of the bank capital of Eurozone banks, and (c) the amount of capital being transferred from outside the Eurozone into the Eurozone.

May 5 2013 5

How adjustments work today, with currency swaps

Let’s now proceed to examine the adjustment –or better said, lack thereof- in the presence of currency swaps. The adjustment is delayed. In the figure below, we can see that the Fed intervenes indirectly, lending to Eurozone banks through the ECB. Capital does not leave the US. Dollars are printed instead and the US dollar depreciates. On November 30th, of 2011, upon the Fed’s announcement at 8am, the Euro gained two cents vs. the US dollar. As no capital is transferred, no further savings are required to sustain the Eurozone and the misallocation of resources continues, because no loans are sold. This is bullish of sovereign risk. The Fed becomes a creditor of the Eurozone. If systemic risk deteriorates in the Eurozone, the Fed is forced to first keep reducing the cost of the swaps and later to roll them indefinitely, as long as there is a European Central Bank as a counterparty for the Fed, to avoid an increase in interest rates in the US dollar funding market. But if the Euro zone broke up, there would not be any “safe” counterparty –at least in the short term- for the Fed to lend US dollars to. In the presence of a European central bank, the swaps would be bullish for gold. In the absence of one, the difficulty in establishing swap lines would temporarily be very bearish for gold (and the rest of the asset spectrum).

May 5 2013 6

Final words

Over almost a century, we have witnessed the slow and progressive destruction of the best global mechanism available to cooperate in the creation and allocation of resources. This process began with the loss of the ability to address flow imbalances (i.e. savings, trade). After the World Wars, it became clear that we had also lost the ability to address stock imbalances, and by 1971 we ensured that any price flexibility left to reset the system in the face of an adjustment would be wiped out too. This occurred in two steps: First at a global level, with the irredeemability of gold: The world could no longer devalue. Second, at a local and inter-temporal level, with zero interest rates: Countries can no longer produce consumption adjustments. From this moment, adjustments can only make way through a growing series of global systemic risk events with increasingly relevant consequences. Swaps, as a tool, will no longer be able to face the upcoming challenges. When this fact finally sets in, governments will be forced to resort directly to basic asset confiscation.

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Burt Gummer's picture

Already closed my 401K and Retirement Accounts.

kaiserhoff's picture

Governments may well confiscate assets, but the eventual solution to swaps will be for governments to declare "force majeure" and void contracts, as they did with the CDS and the takeover of AIG in 2008.

Let's not give the fuckers any additional credibility or ideas.



american eyedol's picture

take warrens and jamies assetts not fn mine

ratso's picture

The last sentence conclusion was far from proven in this exposition.  He simply assumed the conclusion and said it as if it was a fact.

SafelyGraze's picture

central bankers engaging in currency-swapping

it used to be relegated to obscure fetish sites

now it has gone mainstream

Pinto Currency's picture

Quote: "Swaps, as a tool, will no longer be able to face the upcoming challenges. When this fact finally sets in, governments will be forced to resort directly to basic asset confiscation."


In the current paradigm, perhaps.

Gold revaluation and remonetization is a solution - but not popular with the large banks and the politicians whom they own.

Manthong's picture

confiscating certain Pb assets might present a problem for some folks

giggler123's picture

Assets include housing and what better since most people were driven to buy their own.

lasvegaspersona's picture


you're the dirty rat that got 'my' handle.

I wonder who got UZI4U  Nevada plate? I tried but it was taken.

I have watched Tremors in all forms many times...even the cheesey TV series. I love that Michael Gross played the TV dad of Michael J Fox and was the ultimate liberal PBS station manager. He was great as Matix in In the Line of Duty...the reinactment of the mid 80 FBI slaughter in Miami.

August's picture

Good choice. 


finished the process four months ago, ang it feels good (once the big check to "United States Treasury" clears).

LawsofPhysics's picture

What Assets? < snicker snicker >

Room 101's picture

Exactly.  What assets?  I guess retirement accounts would be first, but after that what's left? 

krispkritter's picture

Beans, bullets, and bullion.

ihedgemyhedges's picture

And a woman who knows how to cook, works her ass off in a garden and likes to screw..........married 19 years here, so need some help in finding a woman with those 3 traits........

Winston of Oceania's picture

Your home, furnishings and finally your labor in that order and all by compulsion. The looters are here and you can't spend an extra trillion a year without someone paying; prepare for subjugation.

Croesus's picture

Yep. I lost my ass(ets) in a tragic boating accident.

bunnyswanson's picture

based on the principles of Jean Jacques Rousseau, to place restrictions on lifestyles and consumption patterns of "the affluent middle class" in order to shift resources to less affluent peoples.

...Says America and other countries must END:

  • Private Ownership of Land
  • "excessive" Population?
  • Air Conditioning
  • Single-family homes
  • Suburbs
  • Consumption of meat

The life within the country itself disguised as an attempt to slow down climate change.  Agenda 21 is all about the climate.  Yet, you'll not find an article published by the UN Agenda 21 focusing on the biggest environmental diasaster of all times, Fukushima.  Nor have I found mention of the rain forests in the Amazon.  I believe Agenda 21 is the trojan horse which will be used to vacate Americans from the property through high taxes, rezoning and property deemed as blighted due to flood zones if near a body of water or in the path of weather patterns that result in devastation of property, requiring insurance pay outs.

"The concept of national sovereignty has been an immutable, indeed sacred, principle of international relations. It is a principle which will yield only slowly and reluctantly to the new imperatives of global environmental cooperation. It is simply not feasible for sovereignty to be exercised unilaterally by individual nation states, however powerful. The global community must be assured of environmental security." -Maurice Strong at the 1992 Earth Summit.


Svendblaaskaeg's picture

"I believe Agenda 21 is the trojan horse..."

Bingo! - the Mother of all trojan horses

Buckaroo Banzai's picture

This is interesting and all, but if we're going to talk about how the financial landscape changed in the early 20th century, we must include the demise of the Real Bills system right before WW1

Divine Wind's picture



Excellent piece. Thanks for posting.

taraxias's picture

I'm I the only one who stopped reading after "according to Prof. Giovanni B. Pittaluga" and jumped straight to the comments?

I'm sure this is a good article, but can someone put up an executive summary of it please? Some of us actually do have a life.



ebworthen's picture

Responsible citizens will bear the counter-party risk cross for the legerdemain and skullduggery of central banks, banksters, and corrupt governments.

seek's picture

TPTB prefers to hide such thefts. What's new is the immediate financial need will override the desire for stealth, and people tend to not react well when they notice it.

ebworthen's picture

"So what's new?"

125% Debt/GDP ratio, unpayable $16+ Trillion of debt, HFT Algo Robot trading, no gold standard, house of cards food system, nuclear weapons.

Kirk2NCC1701's picture

Just saw Iron Man 3. This seems pretty tame by comparison.

Watching the 6 pm news, nothing about Syria.

You guys are such drama queens.


Dr. Sandi's picture

Foxnews will run a 30 second summary Monday morning.

q99x2's picture

Heavens to Murgatroid bitchez. Asset confiscation and bearish on gold. I'm going jogging.

yogibear's picture

"When this fact finally sets in, governments will be forced to resort directly to basic asset confiscation."

Cyprus was a test.  

There is always a "Next Caper" for the banksters.  Dump the bankster losses with TARP and then take from the Citizen instead of forcing the banksters to eat the losses.

ebworthen's picture

Moving tangible assets like Gold?  But they are so HEAVY!

Easier to move tanks and ships and cannon fodder around the world and use binary digits of ethermoney!

DarthVaderMentor's picture

The first trial run of asset confiscation was successfully tested and completed almost a decade ago. Very few of the sheeple, even on Wall Street noticed the confiscation. It was called the conversion of defined benefit pension plans to defined contribution plans also known as "Cash Balance Plans" which were then converted to IRAs, 401K's, etc. It was a complete and total theft of about 40-60% of the private industry employee pension funds via the use of "socialistic actuarial science" experts. Notice that CONgress and the Federal Pension system are still Defined Benefit Plans because they know the magnitude and value of the size of the theft, in particular during a ZIRP environment. The theft freed up funds for the banksters to do the CDS bubble and set up the sheeple for the second round of confiscation via the elimination of IRA/401(k) accounts. It also created the securities industry we know today, with the sheeple chained to having to invest in Wall Street financial products and getting nickel and dimed by brokers, lawyers, investment banks and yes, even bloggers like ZH who make their living off sheeple seeking the truth about the theft! 

They already stole half or more of the money and no one, (except a few IBMers who were trampled at the SCOTUS by Justice Roberts) even noticed or did anything about it.

Supernova Born's picture

Brilliant stuff.

The propaganda of the banksters is doing a damn good job keeping quite a few in their Individual Registered Accounts and away from gold.

The largest windfall for the thieves remains IRAs/401(k)s. That 10% early withdrawal penalty is like keeping a death row inmate in a cell made out of Lincoln Logs.

The IBM'ers shafting brings to mind the question once more...what is the pile of bones in Justice Robert's closet?

Winston Churchill's picture

Rumour has it that the adoption of his two young children was less than Kosher,

let alone legal.Appears that someone has the full Hoover on him.


gtcoogee's picture

I dont comment on articles much.  This is worth reading.  I hope those of you who have read it send it along.

Manipuflation's picture

Not that I want it but there will be a fight.  I am enjoying my family while I still can.  I love them dearly.  I think about my children and I become concerned.  Extremely concerned.  My two year old son has no fucking chance other than that his mother is a Russian national.  At least he speaks Russian already.  The gift of clear communication with each other should not be underestimated.

debtor of last resort's picture

I believe the only chance for the west is a collapse of the monetary system. It will be tough, many won't survive. But empty headed consumerism is like living in a zoo with bankers and ceo's looking at you all day, determing what you will eat tonight. There's communist as well as capitalist blood, the future will be bright. Things will be real again, like physical gold leaving the shores of papertown. Watch out for boating accidents.

Croesus's picture

+1,000 for the Black Pill!

"Hey Shit Lips".......LMFAO!


TrustWho's picture

...sorry, there are no innocents. The people with power have caused great pain in there effort to hold onto power. Yes, many ignorant people associated with the power wielding psychopaths may claim ignorance, but ignorance of the law does not grant you freedom from the law.

The fall of the Roman Empire always amazed me. The average and median person was much worse off post versus pre; yet society chose to be worse off by whatever unknown mechanism, but they chose to be worse off than witness the abuse by the elite. In the end, another elite help power at a much lower quality of life level. There is something about great abuse by the powerful elite that requires change at great cost.

Sorry, the cure can NOT be found through the keyboard and blood must and will be spilled. As always, the people who can muster the most kinectic energy and apply it in the most effective way will win. Women, children, minorities and old will suffer the most!


willwork4food's picture

They're already working on that. Militarization of police forces, marshall law in Boston over a couple patzies they planted and the billions of hollow points they purchased.

They know something is coming and I'm betting it sure aint' a moslem.

Nimby's picture

"As always, the people who can muster the most kinectic energy and apply it in the most effective way will win. Women, children, minorities and old will suffer the most!"

Which is why the sooner this happens the better.  I'm not getting any younger!

As for who can muster the most kinectic energy: I think you will see what used to be called militias emerge as things begin to crumble.  Those communities that can muster will survive in the short-run and thrive in the long-run.  Those that can't, won't do either.  

Only then will we have a true return to federalism. 

smacker's picture

Thanks. Nice site, interesting perspectives.

W T F II's picture

Like "Church Lady" used to say on SNL..."Isn't THAT Special.."..?

Great pre-text for locking it all down, isn't it..?


When the music stops, and there is a rush for the remaining chairs by the world economy " playah's ", I hope for one thing only.

That Bernanke is forced to sit on the one with the big fake plastic horse cock strapped to the seat area.

A fitting reward for his efforts to fuck all of the rest of us up the economic ass.

tradewithdave's picture

Get rid of the inventor of swaps... how convenient.

Stinko da Munk's picture

Swaps, eh? Let me tell you. When it comes to banks you can swap the face of one for the ass of the other and you still cannot tell the difference.

defender's picture

If the author reads the comments - please, PLEASE try to make a graph that is readable.  If it isn't understandable by someone that hasn't read the entire book that you used to justify the graph, then the graph shouldn't be used.

Confundido's picture

Yeah...I have the same issue. This is what works for me: I read the pdf version. The link is at the beginning.

lasvegaspersona's picture

the 1922 International Monetary conference was held in Genoa...just like the one in 1445.

for a great article and perspective: