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Paul Volcker Proposes A New Bretton Woods System To Prevent "Frequent, Destructive" Financial Crises

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One of the conventional justifications by tenured economists for a fiat currency regime, especially as a replacement for a gold, or other hard currency, standard, is that the financial system has been far more stable under a non-gold standard regime.

While we have frequently shown that this assessment is flawed, the interpretation of the data is always a matter of opinion, and usually breaks down based on ideological conviction: be it Keynesian or Austrian. However, one person whose view carries significant weight among the Keynesian school of thought is none other than former Fed chairman Paul Volcker. Which is why we found it surprising that it was Volcker himself who, on May 21 at the annual meeting of the Bretton Woods Committee, said that "by now I think we can agree that the absence of an official, rules-based cooperatively managed, monetary system has not been a great success. In fact, international financial crises seem at least as frequent and more destructive in impeding economic stability and growth." We can, indeed, agree.

However, we certainly disagree with Volcker's proposal for a solution to this far more brittle monetary system: a new Bretton Woods.

Because if there is one place where our view radically diverges with that of the Chairman emeritus of the Group of 30 and not to mention former Fed chairman, it is in the arena of institutional oversight of finance and economics: whereas he and his ilk want more deference to an "official, rules-based managed monetary system", we believe that this merely sows the seeds of yet another system's own destruction as it hindres efficient markets, fair price discovery and by definition results in a manipulated market whose purpose is to serve a given policy objective du jour, and in doing so pushes it ever further from an equilibrium point and raises the likelihood of even greater, and more violent crashes.

However, since it is the fate of the current centrally-planned regime to become even more centralized following its next inevitable crash, we can only sit back and muse at Volcker's tongue-in-cheek prediction of what will almost certainly come next.

His full speech is presented below:

REMARKS BY PAUL A. VOLCKER AT THE ANNUAL MEETING OF THE BRETTON WOODS COMMITTEE WASHINGTON, DC – MAY 21, 2014 (pdf)

A NEW BRETTON WOODS???

Weeks ago, Dick Debs overcame my reluctance to participate in still another public meeting. And once that commitment was made, the inevitable question followed: ”Paul, we need a title for your remarks”.

Well, what could I say that could be new or provocative amid all the conversations about the markets, financial reforms in all their variety, or even the Volcker Rule itself?

Well, given the sponsorship of this meeting, what popped out of my mouth was, “What About a New Bretton Woods???” – with three question marks.

The two words, “Bretton Woods”, still seem to invoke a certain nostalgia – memories of a more orderly, rule-based world of financial stability, and close cooperation among nations. Following the two disasters of the Great Depression and World War II that at least was the hope for the new International Monetary Fund, and the related World Bank, the GATT and the OECD.

No one here was actually present at Bretton Woods, but that was the world that I entered as a junior official in the U.S. Treasury more than 50 years ago. Intellectually and operationally, the Bretton Woods ideals absolutely dominated Treasury thinking and policies. The recovery of trade, the opening of financial markets, and the lifting of controls on current accounts led in the 1950’s and 60’s to sustained growth and stability.

Even then there were recurrent stresses and strains, but the sense of a strong commitment to the new system prevailed: the potential resources of the IMF were enlarged, a network of swap agreements was created, and there was even some Treasury borrowing in foreign currencies! Today’s “quantitative easing” had a smaller-scale precedent in the early 1960’s. “Operation Twist”, was designed to keep long-term interest rates low as short-term rates were raised, at least in part to protect the dollar. Even more striking was the introduction of a variety of controls by the United States on the export of capital.

With prices stable in the United States, which still had a sizable current account surplus, the use of the dollar convertible into gold at the center of the system was seldom questioned.

Those essential conditions had changed by the time I returned to the Treasury in 1969, right on the front line in the conduct of monetary affairs. The ill-conceived Vietnam conflict and its fiscal and political consequences shook the financial ground. An insidious intellectual shift was also becoming important. Robert Triffen had persuasively pointed out the ultimate dilemma in building a monetary system and the provision of international liquidity on the base of a single national currency. The invention of the Special Drawing Rights was a response to that critique, but the limited provision of SDR’s and sense of commitment was not enough to suppress the spreading concerns.

More broadly, the rationale of a regime of “fixed but adjustable” exchanges rates came into question. Later, those doubts were reinforced by a larger intellectual framework. The mantra of “efficient markets” and “rational expectations” seemed to suggest a stable and effective framework for a financial system, domestic or international, would not be dependent on – indeed should be independent of – official rules and structure.

Whatever the intellectual shift, by the early 1970’s it became increasingly apparent that there needed to be a realignment – to my mind a substantial realignment – of the exchange rate relationship between the U.S. dollar and other leading currencies, most importantly at that point the Japanese yen. The suspension of gold convertibility of the dollar as a transitional means of inducing the realignment, however controversial at the time, became inevitable.

Efforts to reconstruct the Bretton Woods system, either partially at the Smithsonian or more completely in the subsequent negotiations of the Committee of 20, ultimately failed. The practical consequence, and to many the ideological victory, was a regime of floating exchange rates. Somehow, the intellectual and convenient political argument went, differences among national financial and economic policies, shifts in competitiveness and in inflation rates, all could be and would be smoothly accommodated by orderly movements in exchange rates.

The need to subject national policies to external influence could be greatly reduced and national economic sovereignty maintained.

Any need for controls, for official intervention in currency markets, even for stockpiles of national reserves would be greatly reduced, and even eliminated. In fact, the “system” (or as many would label it “non-system”) could proceed effectively even without enforcing a common approach to floating. De facto, a hybrid system – a lot of floating, some fixing, some “do as you please” - developed with little role for the IMF itself in managing the “system”. In fact, the occasional efforts to achieve cooperation in managing exchange rates – strikingly in the well-publicized agreements at the Plaza and the Louvre in the 1980’s - were in response to national initiatives, with the IMF essentially a by-stander.

By now I think we can agree that the absence of an official, rules-based cooperatively managed, monetary system has not been a great success. In fact, international financial crises seem at least as frequent and more destructive in impeding economic stability and growth.

The United States, in particular, had in the 1970’s an unhappy decade of inflation ending in stagflation. The major Latin American debt crisis followed in the 1980’s. There was a serious banking crisis late in that decade, followed by a new Mexican crisis, and then the really big and damaging Asian crisis. Less than a decade later, it was capped by the financial crisis of the 2007-2009 period and the great Recession. Not a pretty picture. At the least, we have been reminded that while free and open capital markets may be needed to support vigorous growth, they are also prone to crisis. The more complex, interrelated and free from official restraints, the greater the collective risk.

For years, the benefits were reflected in the enormous growth and the reduction in poverty of emerging economies. The contrasting concerns are reflected in the slowing of growth and productivity in the industrialized world.

We can all recite a rather long list of culprits contributing to the financial crisis: excessive leverage, outlandish compensation, failures in regulatory oversight, simple greed, and on and on. What I want to raise is what seems to be a neglected question. Amid all the market and institutional excesses, all the regulatory omissions, most of all, the legitimate questions about the underlying failures of national economic policies, has the absence of a well-functioning international monetary system been an enabling (or instigating) condition? Specifically, did the absence of international oversight, of discipline in financing, of exchange rate management permit – even encourage – unsustainable imbalances in international payments and in domestic economies to persist too long?

Many have pointed, for instance, to the huge imbalances at the beginning of this century in international payments between the United States on one side and China and Japan on the other – the largest economies in the world. Those imbalances were easily financed. The result was that a high degree of liquidity at low interest rates could be maintained in the United States, despite the virtual disappearance of domestic savings. The sub-prime mortgage phenomenon was an outgrowth. At the same time, exceptionally high levels of savings and investment in China supported exports without working toward a more balanced economy, including the domestic consumption that would be necessary to sustain Chinese growth in the years ahead.

Where was an effective adjustment mechanism? Was the “exorbitant privilege” of the dollar as a reserve currency also a “dangerous temptation” to procrastinate - an impediment to timely policy adjustments, risking eventual breakdown?

The current travails of the Eurozone (the equivalent of an absolute fixed exchange rate regime) carry interesting lessons. A single currency with the free flows of funds among the member states simply could not substitute for the absence of a unified banking system and incentives for disciplined and complementary national economic policies.

That is all a long introduction to a plea – a plea for attention to the need for developing an international monetary and financial system worthy of our time.

Implicitly, bits and pieces of needed reform are being recognized by strong efforts to standardize commercial bank capital requirements and, for the first time, to introduce liquidity standards. The need for official oversight and surveillance beyond the commercial banking system is well recognized, even if much remains to be done to develop and standardize practices. There is effort underway to achieve a common approach toward the resolution of failing financial institutions of systemic importance; it is hard to perceive of any successful resolution process that proceeds only nationally.

In the midst of crisis, in 2008 and 2009, an intellectual consensus was reached within the G-20 about the need for forceful fiscal and monetary policies. More or less coordinated official intervention in markets took place on an enormous scale. Cooperation among central banks helped deal with pressures on exchange markets. The provision of ample liquidity by the key national central bankers is still taking place as we meet. But those measures don’t really count as structural reforms.

Now, new questions have been raised about the sensitivity of markets in small and emerging economies to even small policy adjustments by the Federal Reserve. While the concerns and complaints of some officials in those countries at the time may seem exaggerated, the volatility of short-term capital flows does raise important issues. And, there can be no doubt that major changes in circumstances and policies in industrialized countries do inevitably have world-wide repercussions.

Well, even if you agree with my concerns, you will reasonably ask where the analysis leads. What is the approach (or presumably combination of approaches) that can better reconcile reasonably free and open markets with independent national policies, maintaining in the process the stability in markets and economies that is in the common interest?

That is a question I cannot answer today with a sense of conviction and practicality. What I do know is that governments do not have before them the necessary analysis and well-conceived approaches that could command attention and support.

The creation of the G-20 at the exalted level of Presidents and Prime Ministers has been a political accomplishment. The agreed changes in IMF governing structure are important in achieving a sense of political legitimacy for its governing structure and decision-making. But that is not enough – it means little without substantive agreement on the need for monetary reform and practical approaches toward that end.

We are a long way from that. But what can be done now is to lay the intellectual ground work for approaches that can, for instance, identify and limit prolonged and ultimately unsustainable imbalances in national payments. We should be able, within a broad range, to manage exchange rates among major currencies in a manner that discourages the extreme changes that are inconsistent with orderly adjustment. We can and should consider ways and means of encouraging – even insisting upon – needed balance of payments equilibrium.

Nor would I reject some re-assessment of the use of a single national currency as the dominant international reserve and trading vehicle. For instance, do we want to encourage or discourage so important a development as regional trade and currency areas?

A new Bretton Woods conference? We are long ways from that. But surely events have raised, whether we want to admit it or not, some fundamental questions that have been ignored for decades.

We may have escaped a repeat of the Great Depression of the 1930’s. Happily, despite all the political turmoil in parts of the world, we have also escaped, narrowly escaped, a financial collapse destructive of major economies and needed cooperation. But obviously, that is not enough.

All that has happened reinforces what we typically affirm: a strong, innovative and stable financial system is fundamental to open trade and to the prosperity of all nations. Participation in such a beneficial system that has become truly international implies certain responsibilities.

Walter Bagehot long ago set out succinctly a lesson from experience: “Money will not manage itself”. He then spoke from the platform of the Economist to the Bank of England. Today it is our mutual interdependence that requires a degree of cooperation and coordination that too often has been lacking on an international scale.

Can we not, in approaching that challenge, restore something of the spirit and conviction that characterized the planning, the negotiation and the management of the Bretton Woods System that I once knew 50 years ago? Our host today, the Bretton Woods Committee lights the candle, but we have a long way to go.

 

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Sun, 06/01/2014 - 19:39 | 4815405 Cattender
Cattender's picture

NOOOOO!!!!! Just PRINT More Money out of thin air... it's Working!

Sun, 06/01/2014 - 19:51 | 4815421 Pinto Currency
Pinto Currency's picture

 

So the central planners including David Rockefeller's special assistant Paul Volcker promoted removing gold as money from the global economy 45 years ago and they got what they wanted.

Now things are crashing and he says the central planners need to get togetther to make a better plan - this time it will work!

Perhaps get out of the way and let the market choose gold and silver as money as it has for 3,000 years without the help of these egghead central planners.

It's happening now already.

And as for that quote from the economist at the BofE “Money will not manage itself”.  Oh yes it will.  It does not need central bankers to blow bubbles and bail out banks.  It just won't be as much fun for these looters in tall towers.

Sun, 06/01/2014 - 19:54 | 4815432 max2205
max2205's picture

Great....a new plan to screw us over for the next 100 years.....shut it down!

Sun, 06/01/2014 - 20:04 | 4815454 tmosley
tmosley's picture

So this is the setup for Jim Willie's dollar partition, I guess.  One foreign facing Republic Dollar that is redeemable in gold, one domestic facing dollar that ain't redeemable for shit.  For the partition to be complete, look for strict currency controls to come into play.

Sun, 06/01/2014 - 20:09 | 4815459 MeMadMax
MeMadMax's picture

It's regulation and the moronic keynesian way of thought, that got us into this sinking boat in the first place....

Sun, 06/01/2014 - 20:17 | 4815488 economics9698
economics9698's picture

It seems to be really hard for these egotistical ethnocentric assholes to admit they don’t do shit but finance wars and feed the rich.

Sun, 06/01/2014 - 20:47 | 4815530 taraxias
taraxias's picture

Fuck you Paul Volcker, you fiat lover banker scum, honest money gold hating piece of shit. 

Sun, 06/01/2014 - 20:57 | 4815568 OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

In the photo, the smoke kinda looks like a beard and makes him look like Karl Marx

Sun, 06/01/2014 - 22:07 | 4815753 Tabarnaque
Tabarnaque's picture

These guys are so full of shit that nobody takes them seriously anymore. His proposal echos the desperate proposal of England shortly before they lost the World Reserve Currency status at the end of WWII. Funny how history comes into full circle sometimes.

 

Sun, 06/01/2014 - 20:46 | 4815538 shovelhead
shovelhead's picture

Ethnocentric?

Au contraire,

The color of the wallet they steal from matters not a whit.

Sun, 06/01/2014 - 20:01 | 4815448 rubiconsolutions
rubiconsolutions's picture

Novel concept: How about if we just get rid of "systems" which control what money is and how it's brought into existence?

Sun, 06/01/2014 - 20:05 | 4815455 AlaricBalth
AlaricBalth's picture

The actual name of the conference held in Bretton Woods, New Hampshire was the United Nations Monetary and Financial Conference. The origin of economic globalization had its genesis at Bretton Woods, led by JM Keynes. The formation of the IMF was also a result of this conference.

Mon, 06/02/2014 - 00:30 | 4815992 bunnyswanson
bunnyswanson's picture

http://philosophyofmetrics.com/2014/02/18/sdrs-and-the-new-bretton-woods...

 

Karen Hudes (World Bank Whistle Blower):

" The Bretton Woods institutions were taken over by the Banking Cartel.  Do you blame a bus that was hijacked or the hijackers?  We are now using the Bretton Woods institutional framework to take down the Banking Cartel.  Here is what the Bretton Woods are now up to, taking back the world's gold for the world: https://s3.amazonaws.com/khudes/Twitter5.28.14.pdf ?"

 

https://www.youtube.com/watch?v=H5h1i-7qt88 (comment made on thread of video clip with Greg Hunter). 

Mon, 06/02/2014 - 07:37 | 4816273 Pinto Currency
Pinto Currency's picture

 

The lesson is: do not centralize power.

Not only can it not be administered properly, it will invariably be corrupted and taken over by the money power acting against the society.

Sun, 06/01/2014 - 22:05 | 4815746 alexcojones
alexcojones's picture

I've heard about this thing called "Gold."

Endangered species, right? Keeps itself hidden away? Few people have ever seen it, right?

AC not PC

Sun, 06/01/2014 - 22:41 | 4815820 BrosephStiglitz
BrosephStiglitz's picture

The kind of rhetoric in the article that Volcker suggests actually annoys me a great deal more than QE, or any of the other retarded nonsense that I see going on in the world.  Mainly because of the sheer hypocrisy.

The reason Bretton-Woods failed in the first place was because the US couldn't stick to its own rules.  Now they want to reinstitute it?  Hm.  Wonder how that will go?

Fuck off Volcker.

Mon, 06/02/2014 - 06:54 | 4816216 Cacete de Ouro
Cacete de Ouro's picture

The Bretton Woods Committee and the Group of Thirty are both Rockefeller front organisations. Volcker is a David Rockefeller agent, as one commentator says above.

The Bretton Woods Committee and The Group of Thirty both operate from the same office in Washington DC, the same exact suite.

Suite 200 1726 M Street and both organisations SHARE THE SAME EXACT FAX NUMBER

The Bretton Woods Committee
1726 M Street, NW, Suite 200
Washington, DC 20036
Telephone: (202) 331-1616
Fax: (202) 785-9423

The Group of Thirty | 1726 M Street NW, Suite 200, Washington, DC 20036 USA | Phone : 202-331-2472 | Fax: 202-785-9423 | E-mail: info@group30.org

Geoffery Bell ex Schroders started the Group of Thirty after David Rockefeller told him to start it. Everybody knows this.

Open your Eyes sheeple!

Sun, 06/01/2014 - 19:47 | 4815423 COSMOS
COSMOS's picture

I see him smoking and I heard that he rolled the tobacco in crisp 1000 dollar bills and smoked them.  That is life when you can print you salary and money for all your expense accounts.  The pension and health care I am sure are exceptional.

Sun, 06/01/2014 - 19:50 | 4815424 dexter_morgan
dexter_morgan's picture

tobacco? from the sounds of his idea maybe it was wacky tabaky

Sun, 06/01/2014 - 21:39 | 4815693 NickVegas
NickVegas's picture

For some reason, they quit printing large bills. Electronic ledger for easy printing at a keystroke. How much time they will save printing will only add to our overall wealth as a debt slave society.

Mon, 06/02/2014 - 02:00 | 4816084 chrissjg
chrissjg's picture

I don't think he would smoke out of dollar bills... Thats gotta be horrible for your throat/lungs..

Sun, 06/01/2014 - 19:41 | 4815406 LetThemEatRand
LetThemEatRand's picture

Volcker knew that the system was going to implode, and as an insider of that system, he saved it from destruction by raising interest rates.  So he's smarter than The Bernanke and his dog Yellen.  But he's still a central bank douche.

Sun, 06/01/2014 - 19:42 | 4815413 7.62x54r
7.62x54r's picture

Ermmmm ... a Cocker Spaniel is smarter than those two.

Sun, 06/01/2014 - 19:45 | 4815418 Tasty Sandwich
Tasty Sandwich's picture

That was a different world.

Raising rates would destroy the system now.

Sun, 06/01/2014 - 19:53 | 4815430 LetThemEatRand
LetThemEatRand's picture

Agreed.  And the system is going to implode anyway.  But now they are positioned to deal with us Walking Dead when the shit hits the fan (homeland security, NSA, militarized police, etc).

Sun, 06/01/2014 - 20:14 | 4815480 Tasty Sandwich
Tasty Sandwich's picture

Yeah, the system is doomed no matter what.

I suppose your scenario is possible, and they have made preparations.

However, I lean more toward the view that the local, state, and federal governments will be paralyzed and simply cease to function.  Once the police realize their pensions are gone, they will have little incentive to follow orders.

Sun, 06/01/2014 - 20:58 | 4815572 Caviar Emptor
Caviar Emptor's picture

There are always private armies in every age. Without pensions the incentive becomes what you can take from the citizens

Sun, 06/01/2014 - 19:40 | 4815409 nmewn
nmewn's picture

Yep, here it comes:

"Specifically, did the absence of international oversight, of discipline in financing, of exchange rate management permit – even encourage – unsustainable imbalances in international payments and in domestic economies to persist too long?"

We need a one world fiat currency to properly manage you sheeples labor & economies. Trust us, we'll get it right this time.

Yeah, fuck you.

Sun, 06/01/2014 - 19:45 | 4815419 kill switch
kill switch's picture

I agree FUCK YOU!!!!!!!!!!!!!!!!!!!!!

Sun, 06/01/2014 - 19:47 | 4815422 New_Meat
New_Meat's picture

Bretton Woods is now run by Omni Hotels.

Paul, there is no fucking way that any "New Bretton Woods" will work out.

don't cha' know.

- Ned

Sun, 06/01/2014 - 19:56 | 4815428 dexter_morgan
dexter_morgan's picture

Central Planning. Utopias. Lot of hot air for just a 'new' idea of how to steal any remaining wealth the upper .01% doesn't already have. Same old same old central planning crap.

https://www.youtube.com/watch?v=SHhrZgojY1Q

wrong. we likely will get fooled again.Meet the new boss - same as the old boss.

Sun, 06/01/2014 - 19:54 | 4815431 Winston Churchill
Winston Churchill's picture

Action/reaction/solution.

Shame Putin and Xi doublecrossed you.I'm sure that is the real topic under

discussion in Copenhagen.

Moral of the story; never trust a fellow psychopath.

Sun, 06/01/2014 - 21:02 | 4815586 Caviar Emptor
Caviar Emptor's picture

Yes. East vs West currency blocks. Timing of the speech was jus as China and Russia agree to trade without dollars

Sun, 06/01/2014 - 20:00 | 4815441 nevadan
nevadan's picture

Hey Paul, I have an idea.  How about a system where banks who abuse leverage are eviserated and their parts sold to the highest bidder, and bankers who participate in fraudulent activities go to prison? 

Sun, 06/01/2014 - 20:41 | 4815526 Chupacabra-322
Chupacabra-322's picture

Now there's a Novel idea. However, its a Criminal system, owned by Criminals & run by Criminals.

Sun, 06/01/2014 - 19:58 | 4815442 DOGGONE
DOGGONE's picture

SHOW this
http://patrick.net/forum/?p=1230886
instead of HIDING it!

Sun, 06/01/2014 - 19:58 | 4815443 Atomizer
Atomizer's picture

Volcker, shakes my head in disbelief. What were you smoking when you were writing financial policies?

 

You're a fucking idiot who contributed to this monetary planning mess.

Sun, 06/01/2014 - 20:03 | 4815452 Reaper
Reaper's picture

Which government appointed masterminds will make the new central plan for the world? The ones we have now or a new batch?

Sun, 06/01/2014 - 20:14 | 4815477 Atomizer
Atomizer's picture

The ones that i mention quite often. This is not going to end well. They do want a new holocaust to offset obligations. Sick fucking people running the establishment.

Sun, 06/01/2014 - 20:07 | 4815456 Latitude25
Latitude25's picture

This whole meltdown is rapidly moving beyond the control of Western Central planners.  Without Russia, China Brazil, India etc. what control do these wankers actually have?

Sun, 06/01/2014 - 21:07 | 4815605 analyzer_66
analyzer_66's picture

uh lets see, they control the military, they control interest rates, they have congress in their back pockets so anytime they need to write a new law to benfit themselves or eliminate one (Glass-Steagall) they can.  They also control the printing presses, the stock, bond and commodity markets, the derrivative markets, the elections, and add onto that, they control the NSA which monitors and records all your phone calls and emails.  They also control something called freedom, in a place formerly known as The Free World, which now, more closely resembles "Oceania" from George Orwell's book 1984.

Mon, 06/02/2014 - 01:56 | 4816079 palmereldritch
palmereldritch's picture

Also, they control the detonators

http://www.youtube.com/watch?v=AxOOoxfIvGI

 

Sun, 06/01/2014 - 20:08 | 4815458 johny2
johny2's picture

the plans of tbe man and the mice...

 

the actions of each of us are noted, and surelly it all balances out somehow and sometime. enjoy your luxuries, Paul Valcker, you may later find out you sold your soul cheaply.

Sun, 06/01/2014 - 20:09 | 4815460 pauhana
pauhana's picture

The Creature from Bretton Woods?

Sun, 06/01/2014 - 20:11 | 4815467 Joebloinvestor
Joebloinvestor's picture

He must be French.

There, the solution for a failing socialist state was to elect a bigger socialist.

Sun, 06/01/2014 - 20:11 | 4815471 10mm
10mm's picture

What ever its  gonna be, it will fuck you and me. 

Sun, 06/01/2014 - 20:14 | 4815479 Quinvarius
Quinvarius's picture

He used the term "Bretton Woods" for as reason.  Anyone who has looked at the situation knows fiat currency plus modern banking means the end of civilization.

Sun, 06/01/2014 - 23:05 | 4815853 ForWhomTheTollBuilds
ForWhomTheTollBuilds's picture

I have now finished reading the article, but earlier saw only the headline on my phone and had to entertain myself with that.

 

My initial thought from the headline only was that this guy sees the writing on the wall wrt the BRICS nations and is trying to get the current leaders to understand that if the west wants a say in the next system, the time to come up with a coherent plan is now since there are others working on alternatives.

 

But yeah, your read is good too.  Im not sure what Im looking forward to more, hearing about the role Gold plays in the new system or hearing that everyone in he financial press and acedemia always knew it would come to that because a single fiat currency serving as the basis for world trade settlement is ridiculous.

 

For my part I think Rickards has probably got the best mix of idealism plus dispassionate analyst leanings.  Fiat money will live on, but those who hold their wealth in the form of central bank liabilities and govt bonds will pay dealy for their blind faith when the system is next "tweaked".  Maybe for them, the financial cost is worth the peace of mind they get from believing someone is out there taking care of them?

Mon, 06/02/2014 - 00:04 | 4815858 ForWhomTheTollBuilds
ForWhomTheTollBuilds's picture

Further to your idea, he draws special attention to the the delinking of gold being a "suspension" rather than something like "removal" and also covers failed attempts to undo the suspension and histories view that this is some great victory.

 

This all makes me wonder if we arent really close to the day things finally become non-functional.

Mon, 06/02/2014 - 11:25 | 4815485 RaceToTheBottom
RaceToTheBottom's picture

With Banksters you are going to have criminal acts.  They go together.

 

Split the banks into utilities and gamblers.  

Stop treating gamblers like they are utilities.

Let them relish in their risk games and above all, do not bail them out

Sun, 06/01/2014 - 20:17 | 4815487 Incubus
Incubus's picture

Bretton woods wont save shit.

 

THe entire system needs to come to a crash.

 

The Suits need to hang from lamp posts.

 

 

Sun, 06/01/2014 - 20:37 | 4815521 Atomizer
Atomizer's picture

Save a lamp post, use the taxpayer endowed CCTV camera to hang them.

The Obsolete Man

 

Sun, 06/01/2014 - 20:25 | 4815501 John McCloy
John McCloy's picture

Good morning Mr. Volcker. We have arrived to install your new hot tub.

Sun, 06/01/2014 - 20:59 | 4815576 shovelhead
shovelhead's picture

Real money, real marketplace. No fractional fiat fuckery from a central bank or any other.

That was easy.

Next problem?

Sun, 06/01/2014 - 21:00 | 4815583 flash338
flash338's picture

Was he just promoting SDR's without saying SDR??

Sun, 06/01/2014 - 21:40 | 4815695 Atomizer
Atomizer's picture

Don't worry about it. Lagarde will look like a IMF banana republic. Give us time.   

Mon, 06/02/2014 - 02:04 | 4816087 palmereldritch
palmereldritch's picture

They key is to say it without rolling the R like a pirate!

Mon, 06/02/2014 - 08:39 | 4816405 Raging Debate
Raging Debate's picture

Flash338 - Yes he says he promoted them in the 60's and still does. He is also stating he believes a reserve currency peg nation is a bad idea. He is correct. That model lasts 80 years and the latter 40 there is far more dillution of the currency and prone to political misbehavior.

I agree with Volker about trade rebalancing specifically with China. That should have happened by 2005 or at least a period of detente. That is where greed came into play, the imbalance was profitable to banking and investors particularly senior politicians. China becoming the reserve currency was a feature of this system and actions, NOT a bug.

I disagree with Volker that there was no international supervision. You have BIS and CFR. That they followed self-interest and did not supervise is what is now resulting in global stagnation. The nations under them including the USA broke social contracts and abridged the rule of law. This kind of two-teired political system occurs when bankers conquer the world, appoint suboordinates and ignore democratic process leaving the citizenships in the dust. It results in no growth which is where we are at now. Now, there is concern, because the rich outside of a few connected super wealthy can't grow and the .001 spending cannot offset the rest.
All the liquidity sloshing around has mostly gone into commodities here in the USA driving up prices while the hot flow of money into China pushed inflation up far faster than wages (which wages did rise dramatically in China as the declined in the USA).

What is the solution to the corruption? Reinvest WHEN the rule of law is restored. China is the defacto peg according to the IMF so study up on Britain and USA 80 year cycles of being the peg and invest accordingly. Volker may lament there being a peg (so do I) the baton has already been passed to China. See China's anti-corruption push in banking. The USA needs something similar and Holder's DoJ isn't going to cut it.

The market should set interest rates, not quasi governments run
by Central Bankers. Last, the lords don't want any form of legitimate debate from the citizenship which is dumb because in the end it is the citizens that ultimately repair the damage done from the looting. If I was them I would do this and tie in tech platform for citizens to submit plans and let them get to it
while getting government out of the way.

Mon, 06/02/2014 - 09:32 | 4816535 Chief Kessler
Chief Kessler's picture

What's with the surge of incredibly high quality posts and posters here on the hedge??? I enjoy the reading and free education but am rather suspicious, at the same time.

Mon, 06/02/2014 - 13:19 | 4817314 RMolineaux
RMolineaux's picture

Don't worry, Chief.  This site has grown organically from within due to the able managment of the Durdens and their expertise in matters statistical, along with their willingness to present the truth as they see it, without fear or favour.

Sun, 06/01/2014 - 21:06 | 4815598 Caviar Emptor
Caviar Emptor's picture

Me Volker never "saved" anything. That is the hokum they fed us in order to glorify central bankers into deities. Has the flow of oil not resumed inflation would have persisted.

Sun, 06/01/2014 - 21:06 | 4815601 10mm
10mm's picture

How old is this guy. Another roach after a nuke fallout. 

Sun, 06/01/2014 - 21:15 | 4815622 Yen Cross
Yen Cross's picture

  So much hostility!  I like it.

 Honestly, these public "Templar"leaks are getting old. The aristocrats are hanging carots/carrots for the flies.

  Roll the guillotines Bitchez/

Sun, 06/01/2014 - 21:15 | 4815623 RMolineaux
RMolineaux's picture

I have given this item the top rating.  It was meant to apply to Volcker's excellent presentation.  I was disappointed to see that Tyler, in his intraductory remarks, limited himself to trotting out all the old libertarian bromides instead of offering a workable alternative. 

Ever since Nixon free-floated the dollar, taking it off the modified gold standard of Bretton Woods, the dollar has become the universal reserve currency.  This status permitted the US to embark on total fiscal indiscipline, while ignoring the legitimate interests of other nations.  The result is that the rest of the world is now seeking every opportunity to work against US monetary domination.   The maintenance of a stable monetary system based on the free cooperation of all participants is in the interest of all, especially the US, which has only been harmed by its role as the sole reserve currency.

Sun, 06/01/2014 - 21:32 | 4815667 Yen Cross
Yen Cross's picture

  @ RMolineaux

   This paragraph fits nicely into the "Jekyll Island " charter.

 
Even then there were recurrent stresses and strains, but the sense of a strong commitment to the new system prevailed: the potential resources of the IMF were enlarged, a network of swap agreements was created, and there was even some Treasury borrowing in foreign currencies! Today’s “quantitative easing” had a smaller-scale precedent in the early 1960’s. “Operation Twist”, was designed to keep long-term interest rates low as short-term rates were raised, at least in part to protect the dollar. Even more striking was the introduction of a variety of controls by the United States on the export of capital.

An Introduction To, Swaps

Sun, 06/01/2014 - 21:45 | 4815708 r00t61
r00t61's picture

I am disappointed to see that user "RMolineaux" rolls out all of the standard state worshiping, freedom denying Central-Planning canards to support his inane thesis that monetary systems are used for anything but for disgustingly corrupt bankers and their government lapdogs to engage in institutionalized parasitic rentier-skimming of the highest efficiency.

Mon, 06/02/2014 - 08:55 | 4816443 Raging Debate
Raging Debate's picture

RMineaux - The solution has been to pass the reserve currency baton to where growth looks the most promising nation. The peg nation also becomes in charge for security of global trade, specifically energy. China has begun that role as we see with Vietnam and the oil rig.

The solution is a basket of currencies and SDR, free floating exchange rates based on the market. But it is mankinds tendency to compete, a group always wants to rule the world. There needs to be better channeling of our competetive nature in general. Morals need to improve but in evolution that relearning happens by pain. Bretton Woods emerged after the horrors of WW2, not before it.

Mon, 06/02/2014 - 09:36 | 4816544 Chief Kessler
Chief Kessler's picture

Pass the reserve currency baton to China . Does that mean we can keep our Navy? Oh well, true libertarians think we should just go full turtle and pull it all into the shell, like a swim in ice cold water, schawink, and it's gone.

Mon, 06/02/2014 - 14:50 | 4817597 Raging Debate
Raging Debate's picture

Chief Kessler - If history ryhmes then yes the budget will be cut for the Navy like Britain did in the early 1930's. The Libertarians may cheer but most won't realize why this happens.

Mon, 06/02/2014 - 09:07 | 4816481 bustdrs
bustdrs's picture

yeh, right you re there RM. Stable it is.

Until somebody cant pay.

Margin for error on 600trillion of derivs=fuck all.

great system

Sun, 06/01/2014 - 21:35 | 4815658 Atomizer
Atomizer's picture

There  is a hagel pissing match going down. Monatary reform has become the next wet dream. It will be interesting to see how it unfolds in the next few weeks. Can't say any more. Keep your eyes glued. 

Sun, 06/01/2014 - 21:35 | 4815687 Paracelsus
Paracelsus's picture

Let's see:

Bretton-Woods stated that the worlds currencies would be thrown into a basket where they could float up and down (5%?) while anchored to the US Dollar,which would be firmly anchored to Gold at $80 an ounce with convertability allowed but a Gentlemans agreement that no state would ever actually exercise that option.

Right.Then we took over a nasty little war in Asia that the French were losing and which we had been paying for at least about ten years or more.Time to print like a MOFO.Then the French sent a Cruiser to trade some of their Dollars for the shiney stuff and Nixon had to close the window (a technical default of the US Debt).Since then we have all been floating with no anchor.Meanwhile all the blue collar manufacturing (read Union) positions have gone overseas,EXCEPT DEFENSE RELATED MANUFACTURING AND/OR AEROSPACE.Relax,we will all have jobs in the Finance industry.Someone remind me again why all those fine young people got blown to bits.Strange how people get upset when States want more distance and autonomy from DC decision-making.....   

Sun, 06/01/2014 - 23:21 | 4815692 Radical Marijuana
Radical Marijuana's picture

"but we have a long way to go"

We are going backwards faster!!!

The basic problems are that Neolithic Civilization social pyramid systems are based on thousands of years of backing up lies with violence. Bretton Woods meetings were AFTER World War, (or the Second European Civil War). Those meetings were collections of the triumphant professional liars and immaculate hypocrites, who at that time were operating through the impossible ideals manifested through the United Nations, and so forth.

Absolutely any possible future "solutions" based on private banks still making the public "money" supply out of nothing as debts are guaranteed to necessarily be more of the same runaway enforced frauds. However, any other system that was not more bullshit would have to admit the deeper nature of the real problems, which is politically impossible within systems that already were based on thousands of years of the biggest bullies' bullshit social stories dominating civilization.

The established monetary systems have been fundamentally fraudulent accounting, that were used to enable the strip-mining of the planet's natural resources at an exponential rate. That drives one level of the deeper problems, which is that is reaching its turning points of diminishing returns. Theoretically, that requires that human ecologies and industrial ecologies adapt to those changing environmental factors, and especially stop deliberately ignoring and discounting the destruction of the natural ecologies.

Of course, that is practically impossible, since the established systems are based on the history of successful warfare based on deceits, and successful finance based on frauds. Our problems are now trillions of times worse than ever before in human history, and are automatically getting worse, faster. Not only is it a gross understatement to state "we have a long way to go" as if the goal is fixed, and we could approach it, but also, we have longer and longer to go, every day, because we are falling behind and going backwards, faster and faster.

BOTH "the interpretation of the data ... be it Keynesian or Austrian" share the same basic bullshit, whereby economics is able to deliberately ignore ecology. The paradoxes are that human civilizations are general energy systems, which share the traits of all energy systems, however, in the case of humans, that means that civilization is controlled by its most labile components, and things happen along the path of least action, which means that human civilizations are controlled by the most dishonest and violent people, and that events follow the path of least morality.

The basic truisms are that money is measurement backed by murder, and the debt controls depend upon the death controls. That has become globalized electronic frauds, backed by the threat of the force of atomic bombs. Of course, that entire economic system is run by professional liars and immaculate hypocrites, with organizations such as the United Nations being superlative examples of that situation, because such organizations were set up by the banksters, for their evil ulterior purposes, whereby impossible ideals actually make the opposite happen.

Former Fed chairman Paul Volcker was one of the representatives working for the members of the ruling classes, who specialized in operating the established systems of debt slavery, (backed by wars based on deceits.) Since those debt slavery systems have already generated numbers which are debt insanities in most of the world, with a few places not quite yet there also heading that way, the entire world system of debt slavery is heading towards provoking death insanities.

The previous Bretton Woods agreements were only possible due to the previous episodes of death insanities having exhausted themselves, which enabled the triumphant survivors, who prevailed through those conflicts, to agree upon what they wanted, while nobody else could stop them. Of course, that system of more globalized enforced frauds has since then been able to grow, while engaged in the runaway strip-mining of the planet's natural resources. The Bretton Woods agreements facilitated more social polarization and destruction of the natural world, to operate faster, because it was actually the formalization of systems of organized lies, operating robberies, achieved after the war had worked through the demonstrable realities of how the best organized gangs of criminals could continue to operate the established world systems in the ways that they wanted to.

The central features of any new system of human and industrial ecologies, which would be able to sustain surviving natural ecologies, MUST be their death controls. The PROBLEM is how to operate human murder systems after the development of weapons of mass destruction! At present, the established systems are still able to mostly cruise on the autopilot of the huge inertial momentum of long established psychological and political habits, in the form of the MAD central combined features of the current money/murder systems, which are Money As Debt, and Mutual Assured Destruction. Both have become criminally insane, but both are deeply entrenched.

The established systems continue to be able to get away with deliberately ignoring the basic fact that money is measurement backed by murder. Therefore, nobody who addresses the problem of monetary reforms is required to directly address the related issues of how to reform the murder systems, or how to operate different death controls. That deliberate ignorance is a primary feature of how the absurdities of all currently significant schools of economics, including BOTH the Keynesian AND Austrian, get to deliberately ignore ecology, and do not have to understand human energy systems in the ways that all energy systems should be. Rather, the ways that the history of the physical steam engines and social debt engines developed continued to happen within the biggest bullies' bullshit world view, in which everything was understood backwards.

The patterns of "frequent and destructive financial crises" are due to the basic way that the financial systems are based on enforced frauds, where those who have the legal power to make "money" out of nothing to gamble with have every incentive to try to do that as much as possible. However, it is nostalgic nonsense to think that somehow having money backed by commodities could actually deal with the deeper problems, because backing money by commodities only changes the basic way that fiat money is measurement backed by murder to become money is the measurement of commodities, still backed by murder.

The ONLY way to tame the frequent and destructive financial crises would be to regularize the death controls. The ONLY way to have a monetary system which was sounder and more honest would be to have a murder system operating death controls which were sounder and more honest. Obviously, as we rush at an exponential rate towards having high-graded ourselves to hell, by making "money" out of nothing as debts, to "pay" for strip-mining the planet's natural resources, we are hitting limits of diminishing returns on every front regarding those phenomena. Therefore, theoretically, we should be going through radical transformations of our human and industrial ecologies, in order to cope with those environmental limits.

Nothing that was a "monetary reform" within the established systems could possibly be sufficient. Only a "monetary revolution," which faced the basic facts that money is necessarily measurement backed by murder, could be sufficient to respond to the actually existing problems. However, since the real world is already almost totally controlled by systems of legalized lies, backed by legalized violence, in which its real death controls operate through the maximum possible deceits, backing up its debt controls operating through the maximum possible frauds, any kind of New Bretton Woods Meetings, would be another convention of professional liars and immaculate hypocrites. Their problem today is that there is NOT background agreement amongst those who just survived and prevailed through a world war death insanity orgy. Instead, there is nothing remotely close to any possible recognition of the nature of the bigger and deeper problems, which is why "we have a long way to go!"

To deal with globalized electronic frauds, backed by the force of atomic bombs, would require profound intellectual scientific revolutions, which would make it theoretically possible to start to deal with the problems of human civilization more scientifically. However, since the ACTUAL situation is due to the paradoxes of the ancient history of successful warfare having been based on deceits, and the more recent history of successful finance being based upon frauds, which are the basic facts which those operating those systems will surely continue to deliberately ignore and deny, our problems continue to get way worse, faster!

Realistically speaking, the ACTUAL resolutions of our problems are practically guaranteed to be debt insanities, going through death insanities, BEFORE any better resolutions of those problems have a chance to emerge. Indeed, that is just as demonstrably probable as the degree to which virtually nobody will face the facts which I have outlined in my comments above. Since the world is being controlled by systems of legalized lies, backed by legalized violence, rational evidence and logical arguments are practically irrelevant.

Instead, any future meetings such as Volcker proposes are guaranteed to be attended by the same crew of professional liars and immaculate hypocrites, while such meetings would be protested by the same crews of controlled opposition groups. For human civilization to make a greater use of information, and resolve its problems through a higher consciousness, manifesting through better death controls systems, to back up better debt controls systems, is a proposal which might as well be on the Dark Side of the Moon, as far as the general human ability currently exists to even perceive those problems, much less resolve them in any genuinely better ways. Despite the FACTS that we DO have globalized systems of electronic frauds, backed by the force of atomic bombs, the ONLY way that those are operated now is by the currently combined money/murder systems constantly become MORE MAD!!!

Mon, 06/02/2014 - 02:18 | 4816096 MEAN BUSINESS
MEAN BUSINESS's picture

"The accumulating effects of cutting the whole environment up into pieces of private property is killing the holistic life of the planet at the present time, since we tend to thereby destroy the natural ecologies" - Radical Marijuana 20APR14

The United Nations appears in Bizzarro Mirror World to be a unitary mechanism but in fact institutionalizes division by cutting the whole up into pieces of private property. Are The Small Island States not the symbol of murder victims in Copenhagen at COP 15? I think I will begin referring to it as The Divided Nations. 

As events are moving at faster and faster rates, I remain foolishly optimistic that D.N.F.C.C.C. COP 21 in Paris, now less than 18 months away, will see the biggest bullies bullshit exposed to the whole world. Progress would be Team Fortress N.A. / N.A.T.O. vs the rest of the world so that by the post-AR6 Conference Of Parties around 2020, we might see a truly United Nations. I can't wait to hear Obama's bullshit on emissions later today!

 

p.s. thanks for your reply on "the greater meaning of free speech". I totally agree and understand why you say it's an impossible ideal in Bizzarro Mirror World (BMW!). I would love to see that language somehow incorporated into the preamble to the Paris Protocol!


Mon, 06/02/2014 - 05:30 | 4816174 Radical Marijuana
Radical Marijuana's picture

Well, MEAN BUSINESS, I have to confess that I too somehow manage to also "remain foolishly optimistic." Somehow it seems almost to be "human nature" to be able to hold on to irrational hopes. After all, as the original "Pascal's Wager" can be paraphrased that there is nothing to be gained from not attempting to hold on to irrational hopes, in order to nevertheless have some hope, despite there being no way to hold on to any reasonable hopes.

http://en.wikipedia.org/wiki/Pascal%27s_Wager

Of course, I already believe that Energy is Spirit, and therefore, I tend to already believe that there will be preservation spirit equally to the degree that I believe in the principle of the conservation of energy. Since I base my entire philosophy on the concept of Subtraction, I tend to love paradoxical political experiments. In a way, I classically believe that we already are in the best possible universe, despite a slightly more sophisticated understanding of that due to having been more forced to develop recognitions of the perceptions about how and why the human world has ended up being dominated by the maximum possible deceits and frauds. In a sense, the conservation of energy, as a sort of signature of spirit, is already doing the best it can, to have resolved the chronic political problems inherent in the nature of life through the history of deceitful wars and fraudulent finance.

To the degree that human beings are able to build a model of their world, with a model of themselves within their model of the world, then, to that extent, there must necessarily be an emerging artificial selection, which is derived from natural selection. In that way, we are constantly surfing on the waves of evolutionary ecologies.

Since I believe that the Subtraction is never absolute, I also think that the Robbery is never finished. Despite still believing that our civilization is pumping itself up towards some unprecedented social storms, those are still just storms in the ocean of energy, because even the story of our own lives is just another story. It seems to me, in an infinitely subtle way, the storyless-Story, of the story telling itself, shall continue, even if we may well look at the world and perceive that it is winding itself up to an unprecedented degree of suffering, due to the deliberate ignorance caused by developing globalized systems of electronic frauds, backed by atomic bombs.

Since I tend to believe, as much as I am even able to understand whatever I may be discussing, that post-modernizing science is reconverging with ancient mysticism, I also tend to find that all the ways that various old-fashioned religious people managed to maintain irrational hopes in order to survive tends somewhat more obtusely to apply to me too. Although I feel sad that we really do appear to be in a phase of great extinctions of life forms, largely caused by human beings, however, I am not thereby made infinitely sad, since I am also aware of the high level of scientifically verified probabilities that there have been previous episodes of serious mass extinctions of life on planet Earth before.

I tend to wish that human beings would make a greater use of information, through a higher consciousness, however, as I am suggesting, although I am NOT any kind of classic kind of "Christian," nor any other sort of old-fashioned religious fanatic, but nevertheless, I have discovered that my kind of relatively more scientific up-bringing and world view still delivers to me a sort of similar psychology, whereby I am able to hold on to irrational hopes, because, from a more transcendental or more sublimely philosophical point of view, both energy, or spirit, still appear to be able to flow on, despite how totally tangled up in almost infinite tunnels of deceits and frauds those may well become.

To put that another way, although the pessimists have almost all the rational evidence and logical arguments on their side, regarding how criminally insane civilization has currently become, irrational optimists still may feel better about that. I do not think that kind of attitude prevents one from continuing to try to do something, rather than do nothing at all. I continue to attempt to do something, rather than nothing, because, with my own kind of philosophical song and dance, I too "remain foolishly optimistic," maybe not about the realistic medium term future of the particular civilization that I happen to be currently living in, but more generally regarding notions that I believe in an infinity of infinite universes.

Wed, 06/04/2014 - 06:50 | 4822459 trader1
trader1's picture

i see someone has been reading his leibniz! ;-)

https://www.youtube.com/watch?v=65I54uUO-Io

Wed, 06/04/2014 - 23:02 | 4825614 MEAN BUSINESS
MEAN BUSINESS's picture

@trader1 & RM: trader1, cool dude in the vid. Perhaps Neil Peart too: The Garden/Clockwork Angels/2012

"In this one of many possible worlds, all for the best, or some bizarre test?

It is what it is – and whatever
Time is still the infinite jest...

@RM: hubble brought us a new view as per kurzweilai.net today: 

 

Hubble captures most comprehensive picture ever of the Universe

 

Sun, 06/01/2014 - 22:02 | 4815738 BeetleBailey
BeetleBailey's picture

Paul Volcker???

Volcker????

That guy owes me money!!!!!

All the way back from 1981......the fucker!

Sun, 06/01/2014 - 23:30 | 4815905 QQQBall
QQQBall's picture

Well at least the FED has convinced many here that they actually control rates. Just wait.

Sun, 06/01/2014 - 23:59 | 4815945 teslaberry
teslaberry's picture

hahahaha

 

bring out the last person ever to be told to raise interest rates by the most powerful banking clans in the wetsern world in order to demand a new global currency. 

 

seriously, what's the one thing people would expect from volcker-----a recommendation to RAISE INTEREST RATES. 

THE FACT THAT HE'S NOT SAYING THAT---MAKES ONE PERHAPS A BIT SCARED THAT THERE CAN BE NO RAISING OF INTEREST RATES WITHOUT A MAJOR CATASTROPHE. 

Mon, 06/02/2014 - 01:03 | 4816033 Vendetta
Vendetta's picture

sounds like the fuckining, just like the last fuckining

Mon, 06/02/2014 - 01:07 | 4816038 luckylongshot
luckylongshot's picture

The current system is both fraudulent and a ponzi scheme. It has acted like a conveyor system transferring the public wealth to the Rothschilds for decades. If we are going to make changes it should be to reverse the flow and stop the criminals from continuing their theft of our wealth rather than keeping it going.

Mon, 06/02/2014 - 01:58 | 4816080 palmereldritch
palmereldritch's picture

 Order of chaos for table 33!

Mon, 06/02/2014 - 02:36 | 4816108 Aussiekiwi
Aussiekiwi's picture

A NEW BRETTON WOODS???

Any new agreement will simply be to give the Banks more exclusive control over everything and to enshrine in law that they will always be bailed out by the tax payer, it will be the opposite of what is intended, a bit like the Patriot act has nothing to do with Patriotism but is actually about removing your rights and Freedom.

Mon, 06/02/2014 - 06:39 | 4816208 tradewithdave
tradewithdave's picture

Aka Mervyn King's "Divorced Currency Model"... Clearly depicted on the new Benjamin's.

3? Answered with 3D accounting... Credit, Debit and now Prebit. Unable to pre-pay means unable to play.

"Bits" and pieces comment reminds me of Larry Summers "sides with history". Bitcoin and sidechains like Ethereum.

www.tradewithdave.com

Mon, 06/02/2014 - 06:50 | 4816215 Last of the Mid...
Last of the Middle Class's picture

Untrained monkeys could look at the data from the Fed's intervention over the last 6 years and come up with a better solution. This is socialism and tyranny in its purest form. One solution, print more and make the .01% wealthier is the only answer to all of the problems of a failing managed economy. All of this is insane doubletalk, an entmoot of insanity. Why doesn't he say we're just going to print more rally's and be done with it.

Mon, 06/02/2014 - 07:32 | 4816262 AdvancingTime
AdvancingTime's picture

It appears the central banks of the world have made the crux of their existence a balancing act. You can almost imagine these bankers standing atop a fence. On one side lays a field of inflation and on the other a deep pit of deflation. A new round of easing by central banks to combat a slowdown in growth may again be in the cards but do not be surprised if this time it is less successful. The magic of this policy is losing its luster. More on this subject in the article below.

http://brucewilds.blogspot.com/2013/11/central-banks-try-to-balance-on-f...

Mon, 06/02/2014 - 07:41 | 4816279 AdvancingTime
AdvancingTime's picture

We  are all interconnected for better or worse. A bad apple can spoil the whole basket. Welcome to the world our leaders have designed or allowed to form. Whether by design or merely as a byproduct of globalization we have weaved a web of financial transactions that circle the globe. Over the last several years as money was printed by the central Banks it was not contained in the countries where in was printed. This money flowed across borders influencing and distorting markets and prices across the world. 

Some people have been calling for a "world currency" for years. the saying "one should never let a good crisis go to waste" means that a meltdown with high levels of fear would present a perfect opportunity and catalyst to advance this agenda down the field. Remember many people with agendas have a lot to gain when a major shift in the currency markets takes place. More on this subject in the article below.

http://brucewilds.blogspot.com/2014/02/contagion-may-lead-to-new-world-c...

Mon, 06/02/2014 - 07:45 | 4816286 fancyfree
fancyfree's picture

Why does anyone think Paul Volcker is entitled to any credence?  When Volcker had a chance at bat, he fluffed.  His report on the World Bank Institutional Integrity Office, that persecuted any world bank staff member who reported wrongdoing, was a real piece of work:   https://www.commondreams.org/newswire/2010/04/06-3

 

Mon, 06/02/2014 - 08:03 | 4816306 Pee Wee
Pee Wee's picture

"So, what we need is to un-pop the balloon, put humpty dumpty together, call the horse in the barn, unring the bell, and enforce the law." -- Volker

How long can savers and productive capital be ass-raped by institutionalized fraud Inc?  That has nothing to do with anything.

The Volker legacy is the same as the rest - Fascism.

Next, time to blame the computers and automatic IRA contributions because there are no people in this dump -- "no one saw it coming." 

Mon, 06/02/2014 - 09:50 | 4816539 RaceToTheBottom
RaceToTheBottom's picture

As statist as Volker may be, he is 100% more than Greenspam and the Bernank.   Ol Yeller is nothing more than a Bernank echo...

But really all they are doing is throwing others off of the few remaining lifeboats.

Do NOT follow this link or you will be banned from the site!