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Europe's Biggest Bank Dares To Ask: Is The Fed Preparing For A "Controlled Demolition" Of The Market
Why did we focus so much attention yesterday on a post in which the IMF confirmed what we had said since last October, namely that the BOJ's days of ravenous debt monetization are coming to a tapering end as soon as 2017 (as willing sellers simply run out of product)? Simple: because in the global fiat regime, asset prices are nothing more than an indication of central bank generosity. Or, as Deutsche Bank puts it: "Ultimately in a fiat money system asset prices reflect “outside” i.e. central bank money and the extent to which it multiplied through the banking system."
The problem is that the BOJ and the ECB are the only two remaining central banks in a world in which Reverse QE aka "Quantitative Tightening" in China, and the Fed's tightening in the form of an upcoming rate hike (unless the Fed loses all credibility and reverts its pro-rate hike bias), are now actively involved in reducing global liquidity. It is only a matter of time before the market starts pricing in that the Bank of Japan's open-ended QE has begun its tapering (followed by a QE-ending) countdown, which will lead to devastating risk-asset consequences. The ECB, which is also greatly supply constrained as Ewald Nowotny admitted yesterday, will follow closely behind.
But while we expanded on the Japanese problem to come in detail yesterday, here are some key observations on what is going on in both the US and China as of this moment - the two places which all now admit are the culprit for the recent equity selloff, and which the market has finally realized are actively soaking up global liquidity.
Here the problem, as we initially discussed last November in "How The Petrodollar Quietly Died, And Nobody Noticed", is that as a result of the soaring US dollar and collapse in oil prices, Petrodollar recycling has crashed, leading to an outright liquidation of FX reserves, read US Treasurys by emerging market nations. This was reinforced on August 11th when China joined the global liquidation push as a result of its devaluation announcement, a topic which we also covered far ahead of everyone else with our May report "Revealing The Identity Of The Mystery "Belgian" Buyer Of US Treasurys", exposing Chinese dumping of US Treasurys via Belgium.
We also hope to have made it quite clear that China's reserve liquidation and that of the EM petro-exporters is really two sides of the same coin: in a world in which the USD is soaring as a result of Fed tightening concerns, other central banks have no choice but to liquidate FX reserve assets: this includes both EMs, and most recently, China.
Needless to say, these key trends covered here over the past year have finally become the biggest mainstream topic, and have led to the biggest equity drop in years, including the first correction in the S&P since 2011. Elsewhere, the risk devastation is much more profound, with emerging market equity markets and currencies crashing around the globe at a pace reminiscent of the Asian 1998 crisis, while in China both the housing and credit, not to mention the stock market, bubble have all long burst.
Before we continue, we present a brief detour from Deutsche Bank's Dominic Konstam on precisely how it is that in the current fiat system, global central bank liquidity is fungible and until a few months ago, had led to record equity asset prices in most places around the globe. To wit:
Let’s start from some basics. Global liquidity can be thought of as the sum of all central banks’ balance sheets (liabilities side) expressed in dollar terms. We then have the case of completely flexible exchange rates versus one of fixed exchange rates. In the event that one central bank, say the Fed, is expanding its balance sheet, they will add to global liquidity directly. If exchange rates are flexible this will also mean the dollar tends to weaken so that the value of other central banks’ liabilities in the global system goes up in dollar terms. Dollar weakness thus might contribute to a higher dollar price for dollar denominated global commodities, as an example. If exchange rates are pegged then to achieve that peg other central banks will need to expand their own balance sheets and take on dollar FX reserves on the asset side. Global liquidity is therefore increased initially by the Fed but, secondly, by further liability expansion, by the other central banks. Depending on the sensitivity of exchange rates to relative balance sheet adjustments, it is not an a priori case that the same balance sheet expansion by the Fed leads to greater or less global liquidity expansion under either exchange rate regime. Hence the mere existence of a massive build up in FX reserves shouldn’t be viewed as a massive expansion of global liquidity per se – although as we shall show later, the empirical observation is that this is a more powerful force for the “impact” of changes in global liquidity on financial assets.
That, in broad strokes, explains how and why the Fed's easing, or tightening, terms have such profound implications not only on every asset class, and currency pair, but on global economic output.
Liquidity in the broadest sense tends to support growth momentum, particularly when it is in excess of current nominal growth. Positive changes in liquidity should therefore be equity bullish and bond price negative. Central bank liquidity is a large part of broad liquidity and, subject to bank multipliers, the same holds true. Both Fed tightening and China’s FX adjustment imply a tightening of liquidity conditions that, all else equal, implies a loss in output momentum.
But while the impact on global economic growth is tangible, there is also a substantial delay before its full impact is observed. When it comes to asset prices, however, the market is far faster at discounting the disappearance of the "invisible hand":
Ultimately in a fiat money system asset prices reflect “outside” i.e. central bank money and the extent to which it multiplied through the banking system. The loss of reserves represents not just a direct loss of outside money but also a reduction in the multiplier. There should be no expectation that the multiplier is quickly restored through offsetting central bank operations.
Here Deutsche Bank suggests your panic, because according to its estimates, while the US equity market may have corrected, it has a long ways to go just to catch up to the dramatic slowdown in global plus Fed reserves (that does not even take in account the reality that soon both the BOJ and the ECB will be forced by the market to taper and slow down their own liquidity injections):
Let’s start with risk assets, proxied by global equity prices. It would appear at first glance that the correlation is negative in that when central bank liquidity is expanding, equities are falling and vice versa. Of course this likely suggests a policy response in that central banks are typically “late” so that they react once equities are falling and then equities tend to recover. If we shift liquidity forward 6 quarters we can see that the market “leads” anticipated” additional liquidity by something similar. This is very worrying now in that it suggests that equity price appreciation could decelerate easily to -20 or even 40 percent based on near zero central bank liquidity, assuming similar multipliers to the post crisis period.
Some more dire predictions from Deutsche on what will happen next to equity prices:
If we only consider the FX and Fed components of liquidity there appears to be a tighter and more contemporaneous relationship with equity prices. The suggestion is at one level still the same, absent Fed and FX reserve expansion, equity prices look more likely to decelerate and quite sharply.
The Fed’s balance sheet for example could easily be negative 5 percent this time next year, depending on how they manage the SOMA portfolio and would be associated with further FX reserve loss unless countries, including China allowed for a much weaker currency. This would be a great concern for global (central bank liquidity).
Once again, all of this assumes a status quo for the QE out of Europe and Japan, which as we pounded the table yesterday, are both in the process of being "timed out"
The tie out, presumably with the “leading” indicator of other central bank action is that other central banks have been instrumental in supporting equities in the past. The largest of course being the ECB and BoJ. If the Fed isn’t going doing its job, it is good to know someone is willing to do the job for them, albeit there is a “lag” before they appreciate the extent of someone else’s policy “failure”.
Worse, as noted yesterday soon there will be nobody left to mask everyone one's failure: the global liquidity circle jerk is coming to an end.
What does this mean for bond yields? Well, as we explained previously, clearly the selling of TSYs by China is a clear negative for bond prices. However, what Deutsche Bank accurately notes, is that should the world undergo a dramatic plunge in risk assets, the resulting tsunami of residual liquidity will most likely end up in the long-end, sending Treasury yields lower. To wit:
... if investors believe that liquidity is likely to continue to fall one should not sell real yields but buy them and be more worried about risk assets than anything else. This flies in the face of recent concerns that China’s potential liquidation of Treasuries for FX intervention is a Treasury negative and should drive real yields higher.... More generally the simple point is that falling reserves should be the least of worries for rates – as they have so far proven to be since late 2014 and instead, rates need to focus more on risk assets.
The relationship between central bank liquidity and the byproduct of FX reserve accumulation is clearly central to risk asset performance and therefore interest rates. The simplistic error is to assume that all assets are treated equally. They are not – or at least have not been especially since the crisis. If liquidity weakens and risk assets trade badly, rates are most likely to rally not sell off. It doesn’t matter how many Treasury bills are redeemed or USD cash is liquidated from foreign central bank assets, US rates are more likely to fall than rise especially further out the curve. In some ways this really shouldn’t be that hard to appreciate. After all central bank liquidity drives broader measures of liquidity that also drives, with a lag, economic activity.
Two points: we agree with DB that if the market were to price in collapsing "outside" money, i.e. central bank liquidity, that risk assets would crush (and far more than just the 20-40% hinted above). After all it was central bank intervention and only central bank intervention that pushed the S&P from 666 to its all time high of just above 2100.
However, we also disagree for one simple reason: as we explained in "What Would Happen If Everyone Joins China In Dumping Treasurys", the real question is what would everyone else do. If the other EMs join China in liquidating the combined $7.5 trillion in FX reserves (i.e., mostly US Trasurys but also those of Europe and Japan) shown below...
... into an illiquid Treasury bond market where central banks already hold 30% or more of all 10 Year equivalents (the BOJ will own 60% by 2018), then it is debatable whether the mere outflow from stocks into bonds will offset the rate carnage.
And, as we showed before, all else equal, the unwinding of the past decade's accumulation of EM reserves, some $8 trillion, could possibly lead to a surge in yields from the current 2% back to 6% or higher.
In other words, inductively reserve liquidation may not be a concern, but practically - when taking in account just how illiquid the global TSY market has become - said liquidation will without doubt lead to a surge in yields, if only occasionally due to illiquidity driven demand discontinuities.
* * *
So where does that leave us? Summarizing Deutsche Bank's observations, they confirm everything we have said from day one, namely that the QE crusade undertaken first by the Fed in 2009 and then all central banks, has been the biggest can-kicking exercise in history, one which brought a few years of artificial calm to the market while making the wealth disparity between the poor and rich the widest it has ever been as it crushed the global middle class; now the end of QE is finally coming.
And this is where Deutsche Bank, which understands very well that the Fed's tightening coupled with Quantiative Tightening, would lead to nothing short of a global equity collapse (especially once the market prices in the inevitable tightening resulting from the BOJ's taper over the coming two years), is shocked. To wit:
This reinforces our view that the Fed is in danger of committing policy error. Not because one and done is a non issue but because the market will initially struggle to price “done” after “one”. And the Fed’s communication skills hardly lend themselves to over achievement. More likely in our view, is that one in September will lead to a December pricing and additional hikes in 2016, suggesting 2s could easily trade to 1 ¼ percent. This may well be an overshoot but it could imply another leg lower for risk assets and a sharp reflattening of the yield curve.
But it was the conclusion to Deutsche's stream of consciousness that is the real shocker: in it DB's Dominic Konstam implicitly ask out loud whether what comes next for global capital markets (most equity, but probably rates as well), is nothing short of a controlled demolition. A premeditated controlled demolition, and facilitated by the Fed's actions or rather lack thereof:
The more sinister undercurrent is that as the relationship between negative rates has tightened with weaker liquidity since the crisis, there is a sense that policy is being priced to “fail” rather than succeed. Real rates fall when central banks back away from stimulus presumably because they “think” they have done enough and the (global) economy is on a healing trajectory. This could be viewed as a damning indictment of policy and is not unrelated to other structural factors that make policy less effective than it would be otherwise - including the self evident break in bank multipliers due to new regulations and capital requirements.
What would happen then? Well, DB casually tosses an S&P trading a "half its value", but more importantly, also remarks that what we have also said from day one, namely that "helicopter money" in whatever fiscal stimulus form it takes (even if it is in the purest literal one) is the only remaining outcome after a 50% crash in the S&P:
Of course our definition of “failure” may also be a little zealous. After all why should equities always rise in value? Why should debt holders be expected to afford their debt burden? There are plenty of alternative viable equilibria with SPX half its value, longevity liabilities in default and debt deflation in abundance. In those equilibria traditional QE ceases to work and the only road back to what we think is the current desired equilibrium is via true helicopter money via fiscal stimulus where there are no independent central banks.
And there it is: Deutsche Bank saying, in not so many words, what Ray Dalio hinted at, namely that the Fed's tightening would be the mechanistic precursor to a market crash and thus, QE4.
Only Deutsche takes the answer to its rhetorical question if the Fed is preparing for a "controlled demolition" of risk assets one step forward: realizing that at this point more QE will be self-defeating, the only remaining recourse to avoid what may be another systemic catastrophe would be the one both Friedman and Bernanke hinted at many years ago: the literal paradropping of money to preserve the fiat system for just a few more days (At this point we urge rereading footnote 18 in Ben Bernanke's "Deflation: Making Sure "It" Doesn't Happen Here" speech)
While we can only note that the gravity of the above admission by Europe's largest bank can not be exaggerated - for "very serious banks" to say this, something epic must be just over the horizon - we should add: if Deutsche Bank (with its €55 trillion in derivatives) is right and if the Fed refuses to change its posture, exposure to any asset which has counterparty risk and/or whose value is a function of faith in central banks, should be effectively wound down.
* * *
While we have no way of knowing how this all plays out, especially if Deutsche is correct, we'll leave readers with one of our favorite diagrams: Exter's inverted pyramid.
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Only if China doesn't think... Selling USD/UST en masse to demand physical delivery of gold (reserve asset ... Base money) causing gold to soar in USD terms and reliquifying Chinese economy via RMB rising did to China's gold holdings. We're forcing China and everyone to drop the pegs / neomercantilist policies at the expense of our people and producers...
Yen, you're one of most thoughtful posters here. Consider that the world is de-financializing... But not the way the "TBTJ" banks wanted to for their proposes, but the way that maximizes US leverage into the future. When the USD breaks, we are best positioned because of our high degree of self sufficiency (especially with Canada).
Only if China doesn't think... Selling USD/UST en masse to demand physical delivery of gold (reserve asset ... Base money) causing gold to soar in USD terms and reliquifying Chinese economy via RMB rising did to China's gold holdings. We're forcing China and everyone to drop the pegs / neomercantilist policies at the expense of our people and producers...
Yen, you're one of most thoughtful posters here. Consider that the world is de-financializing... But not the way the "TBTJ" banks wanted to for their proposes, but the way that maximizes US leverage into the future. When the USD breaks, we are best positioned because of our high degree of self sufficiency (especially with Canada).
" (At this point we urge rereading footnote 18 in Ben Bernanke's "Deflation: Making Sure "It" Doesn't Happen Here" speech)"
The funny thing is that inflation and deflation complete a cycle. 100% of financial bubbles inflate, then deflate. Bernanke had no power to change the immutable laws of math. Bernanke had no power to make 1+1 = 3.
The Atlantic magazine declared on its cover, that Bernanke was "The Hero". Not even close. The virtuous phase of a cycle gives way to the vicious phase. After the crash in 2008, Greenspan was no longer called The Maestro. The laws of math exposed Greeenspan for what he really was. The same fate awaits Bernanke.
LIFE without the stock market... time to think about it. https://www.youtube.com/watch?v=e1tUjqZjBjE
foduro kuyona arana miyo maeni Watashitachi nani kakeki kitoyu no daro
umi sae kitto warete sokoni michiwo tsukuru
domo arigato mr. roboto
Is this predictive programming from the bank?
no im just an analyst, forex ninja and retired music industry.
Enough jokes!
The problem is that the BOJ and the ECB are the only two remaining central banks in a world in which Reverse QE aka "Quantitative Tightening", makes sensical pricing practical.
In China, considering the Fed's tightening in the form of an upcoming rate hike (unless the Fed loses all credibility and reverts its pro-rata hike bias), are now actively involved in reducing global liquidity.[inflated o/s swaps] Look at O/S rates when futers open Sunday
It is only a matter of time before the market starts pricing in [risk]that the Bank of Japan's open-ended QE has begun it's uncontrollable 'spiral into hell'.
Look at the GBP, EUR as primary currencies. How can you have liquidity without major pricing?
SO, as Tyler stated, so succinclty last week. Central banks are running out of fiscal control.
Central banks can monetize MOAR debt, or face the fact that demand hasn't met expectations, and write off the losses.
Lot's of mad pension holders?
Yes! Yes! A thousand times Yes!
i do alot of my accounting and even my theoretical math on chinese abacus.. when the maret crashes.. even if electronic banking and internet go down.. ill still be able to manage complex business numbers fast and efficiently.
THINK CONTINUITY OF CIVILIZATION.. survivalists will with redundant plans and mechanisms will endure worse case scenarios
I've found that the best people act like Borris.
Borris is the person I become when the odds are stacked against me. ;)
go BORIS... U can doo it
I love you man.
One week and four days.
We all have to start somewhere?
Are you Angel [angel}Rivera in disguise?
Won't an earthquake clear the memory on your abacus?
lend until reckless bubble forms. bubble pops. nyc banks buy bubble debt instruments at 10 to 40 percent of par. fed then buys same debt from nyc banks at par. huge gains for the HOLIDAY bonus pool.
use 'crisis' to drop interest rate for nyc banks -- who then use that paper to buy up assets/equity from above smoking hole in the ground
rinse/repeat
OF COURSE demolitions are baked in. wtf?
Smart move by those Central Banks that are getting their gold back and accumulating stockpiles of reserves like Russia and China.Don't forget one thing,The Fed is desperate,they need to create inflation at any cost in order to make Obama's new $20 Trillion of debt to eventually look like peanuts.Gold does its best during inflationary cycles and you can bet that The Fed will get their greedy way.Whatever it takes,America comes first,everybody else doesn't count.We all know that the phase of deflation must take place before The Fed lets the Genie out of the bottle.Once out,you can't control him.
you mean ELITE american paper pushers come first in fed plans... if enough traders sent correct signals the fed could be bet right into a pinebox, where old corpses belong. they depend on your BELIEFS that their magic sigils on special papers objectively mean anything. HOCUS POCUS
has anyone heard anything more accurate on the Tianjin explosions recently?
it was fascinating to learn how important that city is for China and Global Corporations ...
last I heard initial insurance payouts would be over $2 billion u.s. ... quite a mess, wonder where they'll dump all the damaged containers and wasted car shells ....
Irrelevant
Sell insurance co. stocks, or short them.
I think everyone is underestimating the power of the Fed's doomsday device. The Fed does not need to worry about gold because the Fed can wipe out the Euro and compel the Europeans to adopt the USD. The Fed and US regulators at any time can wipe out Deutsche Bank becuse of DB's criminal activites. And by doing so, the Fed completely destroys the European economies and wipes out the Euro. This would cause a massive flight to the USD and USD denominated assets. This would be very damaging to the US but it would be far more so to the Eurozone. It's a war of attrition and the Fed and US regulators are capable of handing out more punishment than they receive. Checkmate
Yes.
This was planned.
The progressed US Sun is in Pisces since 2006 and will remain there until about 2036.
Pisces dissolves and now Neptune the ruler of Pisces will conjunct the US progressed Sun.
Along with that Pluto the destroyer opposes the US natal Sun in Cancer and square Uranus.
It is the color revolution, blacklivesmatter.
They are trying to start a civil war and a failed state like they did in Libya, Syria, Ukraine right here at home.
This is why the government bought all those weapons and ammo...
ASTRONOMICAL accounting. think about it. take the wind out of the monster. get out of decimal accounting. go sexigesimal;)
http://ghiorzi.org/sexagesi.htm
The negro in chief is following orders from club of Rome to execute Agenda 21. Then the pope will arrive to make everyone feel guilty in not complying to the erroneous fact of stealing wealth and not addressing our solar minimum sun phase.
No bullshit, just have a look with your own eyes.
http://www.clubofrome.org/
The Pope has his own bank. And it needs an audit.
Climate change is their big deal, yet not a word about Fukushima. They won't even report radiation levels.
Good banks, bad Fed is the only way out of this mess that keeps the 1% still in power.
https://soldierforliberty.wordpress.com/2009/10/20/maurice-strong-man-be...
Yuk Yuk, This be the best gosh darn day I ever had.
Where's the gator filets?
We'le see how team Kuroda & Abe deals with next Tuesday.
I think the Tylers are "spot on".
US Military realizes the optimal path for de-dollarization, should it happen is de-financialization... Controlled collapse through strong USD where our domestic self sufficiency carries us through as dominant. Not what the Banksters has planned for NWO...
The US military hasn't figured anything out. They just go shoot at what the president tells them to shoot at. And the president determines who to shoot at based on who banks tell him to shoot at. The military, although honorable, is entirely based on knuckleheadedness. Just blindly listen to what some other guy tells you to do because the other guy has a higher title. Hahahahaha. You've got to be kidding me. The military still hasn't figured out Iraq, Syria and ISIS.
Have you ever interacted with SENIOR people in our military? The best strategic planning capability in the world resides within DOD.
Its going to be ugly, but its got aways to play out. US will ultimately have to try to wipe its unpayable debt with a currency reset or war. As the QE lie is not working. China sees this and sells back treasuries bonds for yuan or gold (delivered). Smart. Russia sells its US $ oil money for Gold (delivered). Double win as US $ overvalued Gold undervalued. Double smart.
The bankers must repay us; helicopter money works.
The "Network of Global Corporate Control" stole "many thousands of trillions" of dollars from us, which amounts to millions of dollars each for every person on the planet.
http://divinecosmos.com/
https://www.youtube.com/watch?feature=player_detailpage&v=lyXi1efbYrk#t=863
There is no Japanese problem, there is no 'homeland' problem at all for that matter - the challenge is global.
When people become so entranced - they're pretty much doomed. Sorry to be the down dude.
I will make myself extremely unpopular with gold bugs, but what the heck.
There cannot be a return to the "gold standard", for the simple reason that global GDP/trade is too massive to be "backed by gold" ... I mean just the legit movement of goods, never mind derivatives and other "financial instruments".
I have listened to discussions on Greg Hunters blog and others, where a consensus seems to be that gold (physical) would have to be repriced at $50,000 per ounce at least, in order to back World trade, because above ground gold is in short supply and Peak Gold discovery was over a century ago.
Some might think that gold at $50,000 per ounce is good and that their fortunes are made if they hold a few ounces, BUT in what form are those ounces?
If gold got repriced at $50,000 per ounce, then a one ounce coin would be useless as a medium of exchange and gold is NOT money unless minted as coinage with an essentially fiat face value.
Gold was never a common monetary metal, compared with silver, copper, nickel and various other metals used for coinage/money/currency/legal tender.
It might make sense for sovereign governments to amass tons of gold - as a way of dumping the petro-dollar - but NOT for trading, because it is ludicrous to imagine shipping/flying however many tons of gold bullion to buy oil, or any other commodity.
Russia, China and other countries might be buying gold just to divest USD, but with zero intent to set up a gold-backed monetary system.
If gold was "the answer" then the Roman Empire would still be with us or, failing that, the Spanish Empire which plundered S America
The plundered gold inflated the money supply.
I have been saying the same to all those who think Russia and China are going to a gold standard.
Math and reality - it's a bitch
"Gold standard"?. Nope, gold backed yes. One ounce coin useless to do shopping: Yes. With Bitgold you can pay .001 of a gram just by email. That might work. No need to carry it around. No storage costs. Access to fiat using their debit-card. Why the bleep not?.
Gold bugs are not interested in a gold standard. Gold bugs want to use gold for money, no paper involved. Because they are Gold Bugs, not Paper Bugs.
I simply paid everything off. Then I stocked up on Pb, Au, and silver coins. The military trained me in counterinsurgency/asymmetric warfare.I spend 90% of my time overseas. I have enough passports to return to the USSA. We are going to have another civil war, so get prepared if you are a patriot. We are going to take a Big Hit but we can survive.
If you have ever studied the American War of Northern Aggression, you know that the South will survive.
Liberty!
Because it's really hard to kill people that live on RC Cola and Moonpies.
It gives them the constitution of a cockroach with a mean Rebel Yell.
Double tapping the brain pan will still work.
Traitor.
Not likely - on any of this.
I think a free for all might be a better description for what is coming.
China markets open when? Friggen red everywhere...
everyone relax they got a "Plan" this:
"G20 finance ministers and central bank chiefs pledged Saturday to act decisively to shore up stuttering global growth and refrain from unsettling currency moves after China's controversial devaluation last month.
Related StoriesIn a communique at the end of a two-day meeting in the Turkish capital Ankara, economic supremos from the world's top 20 economies said global growth was falling short of expectations, despite strengthening activity in some economies.
While avoiding any direct mention of China, the statement contained a clear pledge not to resort to competitive currency devaluations to give an unfair advantage to domestic exports.
"Global growth falls short of our expectations. We have pledged to take decisive action to keep the economic recovery on track and we are confident the global economic recovery will gain speed"
All pegs break. China will go to full float. That's when all hell breaks loose. Hahahahaha.. Can't wait
"Don't take any wooden nickels."
"Legal Tender For All Debts Public And Private".....except when nobody can or will accept it. "No, No, you have to use the Government issued card. They wont let me take anything else.", "But it wont pay the full price of the item." ,"Then I guess you can't buy the item"...."Will you take a case of Wild Turkey for it?"....."Done."
This could be the reason for the witch hunt against ciggies.
Too universal as a trade good.
Tyler, can you PLEASE add a command or something for us readers to be able to choose comments with highest votes to appear at the top. It would help out quite a bit! Or implement something as DISQUS where these things are already implemented.
You like Facebook?
What has FB to do with this? There already exist an option for newest/oldest comments.
I guess you could add this at the bottom of the long list of possibilities. I doubt the people behind the curtain have a plan for a collapse except for themselves. Just like war the plans go out the window the first day and then you react to immediate circumstances. I do believe they will try and stay afloat until it falls apart under them. Whatever happens I too will react to circumstances.
It's all about feudalism. Govts can all their systems anything they want (socialism, communism, oligarchy, whatever), but at the end of the day when the economic system is imploding, the elites (call them oligarchs, lords, whatever) will position themselves to drive the sytem down faster and more severely to grab more for themselves. Big banks, the military industrial complex, Big Oil, pharma and agribusiness giants want the Fed to implode the global currency system because they are best positioned to grab the spoils in the chaos.
Everybody wants to believe the Fed is incompetent in their policies because it's easier to accept incompetence because it helps people sleep at night. People just figure that the incompetents will learn or will get replaced by better people. Those who believe the Fed is incompetent are themselves incompetent. When you look at their track record and the affects of their actions, the correct conclusoin is that they are EVIL, not incompetent. The results of their policis are well known yet they continue with them. Their policies are purposely destructive. This of course is a lot harder to swallow because it certainly does not help people sleep at night. But just because it's uncomfortable does not make it untrue. They KNOW WHAT THEY ARE DOING. They are the agents of feudalism and they are succeeding because the public believes they are only incompetent rather than evil. Big mistake.
In the end, Janet will simply sit on the PRINT button 24/7 like a mother hen, hoping to hatch a new plan just as soon as the deflation of assets stops. In the meantime, she might order out for pizza. That's about as elaborate a plan as you can expect of these clucks; which is why the 'old plan' always ends the same way.
Parenthetically though, it's clear that this time will be different in the truly apocalyptic, historic scope of the incipient disaster that's been created.
The reason for the Controlled Demolition is simple. The petroUSD is dying and so with it will go the USA unless there is another strategy to bring the world back to the USD and preserve the USA's virtuous cycle of ponzi. The alternate strategy is to wreck as many other major currencies out there and force these nations into the USD or even bettter, to force nations into adopting the USD as their currency. I believe Deutsche has figured this out and they are warning the world of the plan without expressly saying what is exactly on their minds for fear of US govt reprisal. Let's face it DB is engaged in some sketchy shit and can be prosecuted under RICO for any number of criminal racketeering offenses. At the same time DB's base is Europe and the top target for the Fed is the Euro. Kill the Euro and the Eurozone nations will be unable to cope. Germany may be able to reestablish the DM but the others are up shit's creek. They would all have to go to the USD and abandon one central bank with which they have no influence for another central bank with which they will also have no influence. FX is a market share game. The US is losing market share through low oil prices. The way back to USD hegemony is through a currency war of attrition. Kill the g-20 currencies and save he USD. Save the USD and save the USA.
This IS how things are. It all comes down to the USA winning and the rest of the world losing, or the opposite.
There is no way for a global economy without somebody winning and somebody losing.
As GW Bush said," you're either with us or against us". Nothing has changed.
Exactly. There is no such thing as "allies". There are only "common interests". And when there are no longer common interests, there is "self interest". The USA is clearly in self interest mode. We will fuck everyone to save ourselves even if in saving ourselves we end up worse off than before so long as the rest of the world fares even worse than we do. The reality is that we are in a world of RELATIVE MISERY. In the land of the blind, the one-eyed man is king.
The USA will be fine. The USA Oligarchs will be ruined.
The Fed's mantra will be "we had to pop the bubble to save our economy...CNBS will further the narrative...Obama will sing the praises of The Fed and how it just created newly affordable housing...and the sheep will bleat with delight.
Exters Pyramid clearly ends on Gold.
The Federal Reserve has no gold, and its power base does not rest on gold in any sense but its suppression as an alternative currency.
So will it attempt a "controlled demolition" in a fit of suicidal angst or perhaps in the vain hope that the whole world will be brought down with it at the same time?
Hahahahahaha! Ya gotta love the smell of twaddle in the morning...
How long till US mint stops gold eagles? That will be the first sign of confiscation to come.
Fiat money is and will fail because its based on a system of everyone spending more money than they have money.
How can a world pay back 100 trillion dollars if they spend 200 trillion dollars and only have 50 trillion dollars?
Answer: It cant. The whole system was flawed from the beginning but the money masters refused to believe it. Now, here we are at the precipice, if not jumping waiting to be pushed over.
https://youtu.be/QYLLFpNn4lM
Not flawed. Purposeful.
How can a world pay back 100 trillion dollars if they spend 200 trillion dollars and only have 50 trillion dollars?
Earn 150 trillion more than the 200 trillion they spend and pay back as they earn.
And don't say they have only 50 trillion. If there is 100 trillion that needs to be paid back, that means they have promised to pay back 100 trillion (i.e. they have created exactly that much money which represents in-process trading promises).
Imagine yourself as Copernicus about 500 years ago. You "know" that the Earth is "not" the center of the everything with everything else rotating around it. You "know" the discrepency the motion of the planets reveals and how it's easily resolved by a solar centric model. You "know" the more and more complicated math of the epicycles the "brains" at the time are using to describe what they clearly don't understand. You "know" they are working with the wrong model.
It's pretty frustrating. I hope this time it doesn't take us 400 years to see the light ... like it did back then. And remember, the problem wasn't really seeing the light. It was the interests whose ox was gored by the obvious truth.
Usury is obsolete.
Russian officials propose bill to grant every citizen one hectare of farm and forest land to use for self-sufficiency
Read more: WHAT REALLY HAPPENED | The History The US Government HOPES You Never Learn! http://whatreallyhappened.com/#ixzz3kzeiRFXt
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Meanwhile in the USA they are fining people who have solar and live off the ''grid''
They fine people for having gardens. and even harvesting rain water from their roofs.
Bunch of incoherent, fancy, gibberish. Your article is nonsense. I seems that you don't understand money creation nor the fed. Most bankers don't btw.
Decrease in global liquidity? Really? And how can this be when governments and central banks can print their own money. THe world is swashed with it. Without it most governments would not survive.
The problem that many foreign nations have is that the majority of their populations do not produce anything of value thanks to welfare, heavy taxes, and regulations. And as a result of this, their governments must import. They choose to import US goods in order to give/subdue their dependent populations and increase their power. But unfortunately for them, the american consumer is not buying, which means less us dollars for them and no way to improt in order to satisfy demand. It's called mercantile economics which cannot work without inflation (plunder) and exports.
And btw, what interest rates will the fed rise? No one mentions this. Shall they raise the discount window, especially while banks have excessive reserves? YOu think they will raise the actual federal funds rate? No, this is a function of interbank lending (supply and demand). This is why it is called a target. ANd banks are not borrowing from each other.How about answering these questions:
How can the fed decrease liquidity if the feds sellable balance sheet is smaller than the excess reserves of the big banks?
Why should banks borrow from other banks if the fed is paying interest on these excess reserves which keeps banks from lending and thus lowers the actual federal funds rate?
How can more people borrow more money if restrictions are no lossened? However how can restrictions be loosened any more and not be a one time welfare payment followed by massive default again?
Any fed target rate increase is meaningless and the actually rate remains low because of supply and demand.
You people have no idea of what your talking about. It is all mass delusion.
What are needed are tax and regulation cuts.