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Top UK Hedge Fund Manager Admits: "Central Banks Made The Rich Richer"
With each passing day, the lies and fictions we have been exposing since 2009 - from HFT, to the truth about QE, to the ultimate downfall of central banks through their own actions - are being debunked ever faster, called out and/or confirmed by increasingly more "serious" people, those who have benefited and been protected by the lie itself.
Case in point, an Op-Ed by Paul Marshall, CIO of Marshall Wace, one of the London's and Europe's largest hedge funds, with an AUM of $22 billion (so he probably knows what he is talking about) which is a tour de force of slamming the countless lies shoved down the population's throat every single day just so the rich can get richer.
From "Central banks have made the rich richer", first posted in the FT:
Labour’s new shadow chancellor has got at least one thing right. Amid the brickbats thrown at John McDonnell, there is a nagging failure to acknowledge the validity of one part of his critique of the money-creation programmes of the four leading central banks. Quantitative easing, as this policy is known, has bailed out bonus-happy banks and made the rich richer.
It is a surprise that the UK opposition party and other leftwingers have not made more of this. Maybe they thought it was too complicated. It isn’t really, and it might appeal to voters’ sense of justice far more effectively than threats to raise the top rate of income tax or to introduce a financial transactions tax (which Mr McDonnell also supports).
Public pronouncements about the objectives of QE are deliberately shrouded in central bank speak. Depreciation of the yen is quite obviously an indirect effect of large-scale Japanese money printing — but it would not do for Shinzo Abe, the Japanese prime minister, or Haruhiko Kuroda, the Bank of Japan governor, to say so plainly. That would be politically toxic in the American heartlands. Nor would Mario Draghi, president of the European Central Bank, acknowledge that he is artificially distorting the bond markets so that the debt-ridden governments of peripheral Europe can continue to enjoy a low cost of capital (the eurozone’s very own Ponzi scheme). But that is what he is doing.
Instead, central bankers talk about two main objectives of QE. The first is to maintain the supply of money to the banking system, to prevent a contraction in credit from leading to a seizure of 1930s proportions.
The second is to stimulate what they call the “portfolio channel” via the purchase of sovereign bonds. Government bonds provide the risk-free rate for financial markets, off which everything else is priced. If you suppress the risk-free rate by buying debt, you boost the price of all other assets, from credit to equities to property.
Banks have been the biggest beneficiaries, with their 20- or 30-times leveraged balance sheets. Asset managers and hedge funds have benefited, too. Owners of property have made out like bandits. In fact, anyone with assets has grown much richer. All of us who work in financial markets owe a debt to QE.
But wait, it gets better, because the inevitable next step, helicopter money, direct Treasury monetization and absolute currency debasement, is just around the corner once demands for "QE for the masses" become the next big thing (as Macquarie predicted last week).
It is no surprise that the left is angry about this, nor that they are looking for other versions of QE that do not so directly benefit bankers and the rich. Instead of increasing the money supply by buying sovereign bonds from banks, central banks could spread the love evenly by depositing extra money in every person’s bank account. In the UK, QE increased the money supply by £375bn, or about £5,800 per person. If this money had been distributed evenly it might have been frittered away on consumption rather than making a few rich people richer and bailing out the banks. But it might have been fairer.
Mr McDonnell and Jeremy Corbyn, the new Labour leader, advocate a second approach: targeting QE at infrastructure projects. The central bank would buy bonds direct from the Treasury on the understanding that the funds would be used to improve housing and transport infrastructure. The timing is flawed; the Bank of England deems further QE unnecessary, and any large money creation now would risk stoking inflation. But if the idea were kept as something to implement the next time the country faces a financial crisis, it would carry quite a lot of respectability.
Some object that creating money to spend on infrastructure would undermine the central bank’s independence by forcing it to buy direct from the Treasury. Yet monetary policy has already extended well beyond its technocratic bounds into the realms of wealth distribution. QE had clear wealth effects, which could have been offset by fiscal measures. All political parties should acknowledge this. So should those of us who want free markets to retain their legitimacy.
Coming to every "New Normal" banana republic near you...
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they can lick my sweaty balls
Whaaat?
I am shocked.
I mean, not about the title of the article………………..
But about a financial speculator that are worried about workers.
lol...someone stop me before I make even moar!
Courtesy of, central banks AND their governments ;-)
"All of us who work in financial markets owe a debt to QE."
No... "We The Sheeple" are the ones who will be owing the debt.
To paraphrase "I'm killing you".
Bach,
When may Sheep Safely Graze?
Ahhhh... one of my more tranquil compositions. Here is an orchestral rendition (although I am biased to the chorale version).
https://www.youtube.com/watch?v=TYjqnlc7MRw
I have my Led Zeppelin moments, but there is nothing to match the soothing peace that the Master offers.
Yeah, If this were a little faster and heavier, its a No Qaurter. Or keep it slow and with the right beat it may be Tea For One (my favorite!).
Hots On For Nowehere is one of the most neglected cuts from Presence. Great synchopation and drive.
https://www.youtube.com/watch?v=Vu5aQa4X9g0
Good stuff. And with all of the rare Neil Preston photos too! Presence vs. ITtOD was used to be a toss up as to which was their best production of all 9. ...time sides me with ITtOD. I'm gonna crawl like tea for one. Hot dog was the new Hots on for nowhere.
J S Bach
It's much worse than that because debt is not the real problem.The by-product of that is the real issue:
Overpopulation and resource depletion. There are NO solutions for these.
No, debt is indeed the real problem. They have printed 20 Trillion worldwide in anticipation of growth that never happened. All indices are going down, some in a danerous way. Every dollar of that 20 Trillion that was printed represents taxpayer debt. And it carries interest. So we will continue to pay the rich for the privilege of depositing 20 Trillion in their bank accounts. That is the problem, in a nut shell.
Was it in anticipation of growth or in exchange for the growth?
"Overpopulation and resource depletion. There are NO solutions for these."
Sure there are...
Stop vaccinating and encouraging third world rabbits to reproduce... and live a more simple life. Agrarianism and responsibility are noble concepts.
A smart parasite must be concerned about the health of its host.
"financial speculation" ?
Please , It's not speculation when the fed destroys a market in benefits of the biggest players and other special interests , Speculation always implies risks by definition, and responsability for that risk . Being rewarded without taking any risks is theft , and should be treated as crime and punished accordingly
The act of trading and taking risks following price discovery was a noble endeavor , before it was corrupted by criminals...
Fuck him in the neck.
That doesn't even sound fun to do man. Really... I need at least 1 hole....
To bad almost nobody realises that all the money those fuckers made has to be repaid by the servs.
For every billionaire, hundreds of thousands of peoples live where destroyed.
For all those billions in profits, millions of people will lose pensions in the future.
Kids that grow up now won't have a future because it was stolen by the happy few that had the connections to the inside info hours to days in advance.
And all the people are thinking when they do hear the truth is how they might become billionaires before they get in the market and lose all their money.
I've seen how the really rich live and also how they think and see other people. And believe me, everybody would be disgusted as they see themselves as GODS and way supperior to the average people. And why not, because whenever a person meets those gods, they go down on their knees in the hope they will get something from them... which never happens.
Nonsense. These folks are just enjoying the ability to get paper and even if they arr quick about spending it in the future no one will have to repay anything.
Read The Death of Money by Adam Fergusson. paper wealth eventuallu outgrows real wealth and then become worthless. We are in the period now where people are just starting to see that even though the stack of paper is huge it really won't be able to buy more real things than exist.
Jamie Dimon is the perfect example.
His point about being richer was a correct window into that world:
Having the money makes him better than everyone else.
And they control getting the money, so stop thinking that you are going to become like them cause you will not.
And there goes the american dream, to become rich like the asshole who controls you....
The article insinuates that the lesson wil be learned 'next time' there is a global financial collapse caused by dirty politicians being owned by the private central banks. If all in the world was the same as the 20th century then at 45 I would be dead by the time another global collapse happened.
That is the point of the model and how it works. So in another 70-80 years anybody with a brain would be dead. Just like the 1930's.
In any event, the model conquered the globe. Like all empires an iron fist can keep it going for a short time. This banking empire is not like Rome it is a mix or iron and clay.
There won't be a next time. Maybe the BIS the central bank of central banks knew this because the Internet and instant flow of information. The model was certain to be uncovered and widely distributed and so they got one last ginourmous looting in. The price me be nukes flying but hey, they'll be safe in bunkers and New Zealand right?
"In nomine Patris et Filii, Spiritus Sancti."
(In the name of the Father, the Son, and the Holy Spirit/Ghost.)
Yes, and it's going to take all three of them to get us out of this mess.
a deum qui letificat...
Praying seems to be a way to make yourself feel useful while doing nothing.
Praying to the deities of WS achieves the same thing.....
Better to kill all and scrape up all the remains with a squeegee
Okay, they are starting to come out of the woodwork a decade or two too late and being truthy. Sounds like a crash this way comes.
one exception to this:
those with gold and silver are poorer ( in dollar terms); for now
Yellen was 100% correct...you need assets!!!
It is entirely the fault of the poor (and semi-rich but not quite rich enough middle and lower upper class well off) that they did not catch the buzz of free-ish money.
Next time you peasants be ready.
Actually, when the dust settles many of these dollar rich folks willl be dirt poor if they don't bail on paper in time.
like a true hedge fund maggot he wants MOAR
In the history of the world, with the progress of civilization – the foundational culture of the Greeks, the beginnings of a liberty government by the Romans, the continuous pressure against the monarchies with revolution, the Magna Carta -- there finally came the breakout to the New World, a freedom claimed by the Pilgrims and forged by Sam Adams, Jefferson, Patrick Henry and George Washington, producing a new nation conceived in liberty with government of the people, by the people, for the people. It was a moral liberty and an economic miracle that exploded in the 1800s. But it was a rich target for the Bolsheviks, aka the bankers, who in 1910 planned a secret attack on America’s prosperity.
Central planning, a central bank, stole America’s -- stole civilization's -- future. And the years since 1914 have been a continuous chokehold on the American economy with Western civilization culminating in ZIRP and NIRP for the people and QE riches for the oligarchs.
"The issue which has swept down the centuries
and which will have to be fought sooner or later
is the people versus the banks." – Lord Action
Better stock up on more than popcorn…you’re going to need your pitchfork.
Fed Has Lost Control-Bill Holter (Video)
By Greg Hunter On September 20, 2015 Market Analysis USAWatchdog.com
Financial writer Bill Holter contends the recent announcement of the Federal Reserve not to raise rates means the “Fed has Lost Control.” Holter explains, “Whatever the Fed does is wrong. The reason I say that is because no matter what they do, they can’t fix what they have already done. There is no policy at this point that can repair where we are at this point as far as debt ratios, derivative outstanding and the money supply exploding. Nothing that they do now can fix it. The only thing that remains is a reset.”
In the reset, Holter contends, “All debt will be impaired. . . . A reset is going to be a shutdown of the system. Everything will stop. When you are talking about bonds being impaired, you are probably going to see that start or begin in the derivatives market. The derivatives is the tail that has been wagging the dog for years. Derivatives are leverage, and you can use that leverage to control prices. If they can put $1 down and control $100, you can pretty much control the price of an asset, and that’s what they have done. They have supported stocks. They pushed interest rates down and supported bonds. They have suppressed gold and silver prices. They were able to paint a picture using derivatives with 100 to 1 or more of leverage, and when they lose control, that derivative chain between bank A, B, C and D is going to snap. When it snaps, the music stops and everything is going to stop. Once something does break, I don’t think it will take much more than 48 hours for you to wake up in the morning and find that nothing works. Your credit card doesn’t work. Your debit card doesn’t work. You go to your bank and the ATM doesn’t work, and nothing is going to work. The entire financial system will shut down. The reset will be the reopening. It’s not the closure that will kill you, it’s going to be the reopening. In the reopening, everything is going to be revalued. How long will it take to reopen? I have no idea. It could be a week, two weeks, one month, two months or six months. Who knows, but the financial landscape is going to look different, and values will be unrecognizable.”
http://usawatchdog.com/fed-has-lost-control-bill-holter/
There won't be a "reset," will there? Demoraliztion and the reestablishment of Virtue doesn't come and go like rebooting a computer. This "reset" happens over the course of generations and centuries. Good luck pinpointing your location in it as it cascades over the ages.
OC - What JR posted 100% correct. Its like the old joke:
Q: How did you go bankrupt?
A: Slowly at first, then suddenly
derp
I guess that's a small improvement on Saxobank's effort.
We knew this though.
So what are you going to do about it?
He left out the fact that ZIRP has raped savers, impoverished retirees and destroyed the future viability of countless pension plans—all in order to enrich the already insanely rich.
Don't forget that price discovery is now ruined and proper long-term planning is almost impossible, too. Bubbles blur the vision almost entirely.
Are you telling me that Mr Marshall didn't know this when QE 1 was announced? Fuck you Marshall... all your mea culpas don't mean shit. You are as guity as Berrnanke.
But, according to Dimon we've all got iPhones. So we got that going for us.
I admit taking your money from QE. It's true. But...
FUCK!! I don't feels sorry for it!!
Now get lost!! I got billion dollar to settle..