What Will Trump Do About The Central-Bank Cartel?

Tyler Durden's picture

Submitted by Thorstein Polleit via The Mises Institute,

The US is by far the biggest economy in the world. Its financial markets — be it equity, bonds or derivatives markets — are the largest and most liquid. The Greenback is the most important transaction currency. Many currencies in the world — be it the euro, the Chinese renminbi, the British pound or the Swiss franc — have actually been built upon the US dollar.

The world is effectively on a US-dollar-standard, and the US Federal Reserve (Fed) has risen to the unofficial status of the world’s central bank. The rise of the Greenback has to a large extent been propelled by international banking, which has basically “dollarized” in terms of its lending and issuing activities.

The Fed Sets Global Policy

The Fed’s policy not only determines credit and liquidity conditions in the US, but does so in many financial markets around the world as well. For instance, movements of long-term US interest rates regularly have effects on credit and equity markets in, say, Europe and Asia. The Fed’s actions are the blueprint for monetary policymaking in many countries around the world.

The graph shows the Fed’s supply of newly created US dollar liquidity sent to other central banks around the world. It also shows the so-called “euro cross currency basis swap,” which can be interpreted as a “stress indicator”: If it drops into negative territory, it means that euro banks find it increasingly difficult to obtain US dollar credit in the free market place. The Fed’s injection of new US dollar balances into the financial system has helped to reduce the euro currency basis swap. Since late 2016, however, it has started to venture again into negative territory — potentially signaling that euro banks are again heading for trouble.

The financial and economic crisis 2008/2009 has increased further the dependency of the world’s financial system on the US dollar. As early as December 2008, the Fed provided so called “liquidity swap agreements.” Under the latter the Fed is prepared to lend newly created US dollars to other central banks around the globe.

For instance, the European Central Bank (ECB) can obtain US dollars from the Fed and lend the funds on to shaky domestic banks in need for US dollar funding. In other words: Liquidity swap agreements can easily replace foreign currency funding in the market place by foreign currency credit provided by central banks.

Meanwhile, all major central banks around the world — the European Central Bank, the Bank of Japan, the Chinese central bank, the Bank of England, and the Swiss National Bank — have joined the liquidity swap agreement club. They also have agreed to provide their own currencies to all other central banks — in actually unlimited amounts if needed.

It is no wonder, therefore, that credit default concerns in financial markets have declined substantially. Investors feel assured that big banks won’t default on their foreign currency liabilities — as such a credit event is considered politically undesirable, and central banks can simply avoid it by printing up new money.

Moving Toward a Worldwide Central Bank

The close cooperation and coordination among central banks under the Fed’s tutelage amounts to an international cartelization of central banking — paving the way toward a single world monetary policy run by a yet to be determined single world central bank. Such a development is, or course, in the very interest of those in favor of establishing a single world government.

How will President Donald J. Trump and his administration deal with the cartelization in central banking? Mr. Trump doesn’t seem to be an “internationalist,” seeking to build a new world order by political and military means. If that is so, he will sooner or later have to come to grips with the Fed’s policies — most notably with its liquidity swap agreements.

The Fed’s policy has made the world’s financial system addicted to ever greater amounts of US dollars, easily accessible and provided at fairly low interest rates. From this the US banks benefit greatly, while average Americans bear the brunt: they pay the price in terms of, for instance, boom and bust and an erosion of the purchasing power of the US dollar.

What Trump Should Do 

If the Trump administration really wishes to live up to its campaign promise “Make America great again,” there is no way of getting around addressing Fed policy. A first step in that direction is the idea to subject the US central bank to public scrutiny (“Audit the Fed”), bringing to public attention the scope of the Fed’s interventions into the world’s banking system.

Of course, the liquidity swap agreements in particular can be expected to be heavily defended by central bankers, bank representatives, big business lobbyists, and mainstream economists as being indispensable for financial system stability. And for sure, a sudden withdrawal from this practice would almost certainly deal a heavy blow to financial markets.

If push comes to shove, it could even make the worldwide credit pyramid, built on fiat money, come crashing down. However, the really important argument in this context is that the continuation of the practice of central bank cartelization will eventually result in a despotic regime: and that is a single world fiat currency regime.

Of course, change for the better doesn’t come from politics. It comes from better ideas. For it is ideas that determine human action. Whatever these ideas are and wherever they come from: They make humans act. For this reason the great Austrian economist Ludwig von Mises (1881 – 1973) advocates the idea of the “sound money principle”:

The sound-money principle has two aspects. It is affirmative in approving the market's choice of a commonly used medium of exchange. It is negative in obstructing the government's propensity to meddle with the currency system.1

Mises also explains convincingly the importance of the sound money principle for each and every one of us:

It is impossible to grasp the meaning of the idea of sound money if one does not realize that it was devised as an instrument for the protection of civil liberties against despotic inroads on the part of governments. Ideologically it belongs in the same class with political constitutions and bills of right.

Mises’s sound money principle calls for ending central banking once and for all and opening up a free market in money. Having brought to a halt political globalism for now, the new US administration has now also a once in a lifetime chance to make the world great again — simply by ending the state’s monopoly of money production.

If the US would move in that direction — ending legal tender laws and giving the freedom to the American people to use, say, gold, silver, or bitcoin as their preferred media of exchange — the rest of the world would most likely have to follow the example. That said, Mr. Trump could really make a real change, simply by embracing Mises’s sound money principle.

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DownWithYogaPants's picture

Don't bet on nothing.  The jaw dropping transparency of the deep state / central banker masters of the universe opposition to Trump may lead to a case where Trump says "fuck you too take that".   He has the bust of Andrew Jackson in the oval office.  That's a message to the Fed bankers I believe.

turnball the banker's picture
turnball the banker (not verified) DownWithYogaPants Feb 13, 2017 9:53 PM

The bust of AJ is smoke for people like you

Manthong's picture

 

“What Will Trump Do About The Central-Bank Cartel?”

Suggestions:

·         Firing squad

·         Boiling oil

·         Pool of piranha

·         Pit with starving lions

·         Gallows

·         Vat of acid

·         Flamethrower

And my favorite…

·         Naked, bound and slathered with honey on fire ant mound.

BullyBearish's picture

With all the goldmansux guys whispering constantly in his ear, there is NO WAY, if he's not now a globalist, he won't become one...

turnball the banker's picture
turnball the banker (not verified) Feb 13, 2017 9:33 PM

The show will keep rolling on

dubaibubble's picture

death to the money-lenders !

 

make America far less Joo-wish again

WTFRLY's picture

Whatever, Trump is Joo World Order approved, GTFO

LetThemEatRand's picture

"Having brought to a halt political globalism for now, the new US administration has now also a once in a lifetime chance to make the world great again — simply by ending the state’s monopoly of money production."

I agree with most of the article, but not the sentence quoted above.  Trump has Isreal's cock so deep in his throat that it can taste what Trump had for dinner.  Isreal is at the heart of the concept of globalism from a military perspective, and I hear they have some central banking interests too.   Trump has also backed down on any question about one China policy, and he is threatening Iran.  His cabinet is a who's who of Goldman alum.   Let's not confuse what we want Trump to do, with what he's done so far.

nmewn's picture

Wow, how many days has he been in office now, like 25...and you got him gurgling Chi-Com & Israelis cum?

So wistful for Hillary Crony so soon? ;-)

LetThemEatRand's picture

I am wistful for the candidate Trump, not so enamored of the President Trump.  Just out of curiosity, how long in your mind does he need to be in office before I can start criticizing his actions in office?

nmewn's picture

You could have started on day one as far as I'm concerned because just like when you voted for Obama I knew what you were then.

So criticize all you want just like you defended a statement like "You didn't build that!" from the mouths of Fauxchohantas and Obama or when you piled on Ted Cruz because his fucking wife worked for Goldman...really?

No LTER your lack of subtlety has shown through for a long time with me...beginning with Marx's ten planks...you can't disguise what you are but at least you are honest about it when cornered.

Just like Bernie.

LetThemEatRand's picture

Yeah, every eight years or so I am suckered into voting for hope and change, thinking the "outsider" is going to change the system.  I should learn.  I'm still proud of my votes for Ross Perot and Ron Paul, but then again they never had the chance to show whether they were for real.

I haven't given up on Trump yet, but I'm not going to cheerlead him when he acts contrary to his promises.  

nmewn's picture

I on the other hand, I am going to cheer lead all the way because I knew wtf I was doing. I told you and anyone who would listen then, if we will not have law as bequeathed to us by the Constitution and the BoR's there we will have nothing.

No gun-salt-sugar bans, no thought-speech-text police, no arugula in public school cafeterias, no ObamaFones, no nuns seeking out ObamaCare because none do, no cronies with their taxpayer provided algae pools, e-z bake ovens for birds & windmills and no green cards for Silicon Valley CEO's.

It will burn. 

So...why the long face...can't you handle fire? ;-)

Mustafa Kemal's picture

"no arugula in public school cafeterias"

??? At first I didnt get it, but now I think you might need more roughage. Its liberating.

" if we will not have law as bequeathed to us by the Constitution and the BoR's there we will have nothing."

You drive a hard bargain, I guess we will have nothing then.

"So...why the long face...can't you handle fire? "

Burning is my least favorite ways to go, but actually Im not concerned with that at all. Im more concerned with my children and the children of my countrymen.

Do you have children?


nmewn's picture

I do and even at that tender age they are not stupid enough to think governments & nations survive by old parchments with ink on them...they survive by violence and the threat of violence.

" if we will not have law as bequeathed to us by the Constitution and the BoR's there we will have nothing."

You drive a hard bargain, I guess we will have nothing then.

I reckon so.

BigFatUglyBubble's picture

His cabinet appointees will be there for a lot longer than 25 days. 

dubaibubble's picture

maybe or like on The Apprentice

 

they will hear "You're Fired"

BigCumulusClouds's picture

Nearly everyone knows the name of the man who first wrote about communism, and a few know the name of the family who perfected central banking, but hardly any know the name of the founding father who gave the USA sound money in 1789; nor have they heard of his great work, A Caveat Against Injustice.

East Indian's picture

Excellent work. Still relevant, 265 years later; and will be relevant as long as a promissary note - an instrument of debt - is accepted as money. 

 

Money should always be a tangible proof of past work.

Promissary notes are promise of future work, not proof of past work. Promissary notes should not be transferable either. As long as they are transfereable, they will circulate as money. 

Paul Kersey's picture

"What Will Trump Do About The Central-Bank Cartel?"

Best guess:

Well, here are the institutions that control the U.S. Central Bank, aka the FRBNY Primary Dealers list:

Bank of Nova Scotia, New York Agency
BMO Capital Markets Corp.
BNP Paribas Securities Corp.
Barclays Capital Inc.
Cantor Fitzgerald & Co.
Citigroup Global Markets Inc.
Credit Suisse Securities (USA) LLC
Daiwa Capital Markets America Inc.
Deutsche Bank Securities Inc.
Goldman, Sachs & Co.
HSBC Securities (USA) Inc.
Jefferies LLC
J.P. Morgan Securities LLC
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Mizuho Securities USA Inc.
Morgan Stanley & Co. LLC
Nomura Securities International, Inc.
RBC Capital Markets, LLC
RBS Securities Inc.
Societe Generale, New York Branch
TD Securities (USA) LLC
UBS Securities LLC.
Wells Fargo Securities, LLC

So perhaps Trump can take six powerful folks from one of those TBTF banks, like Goldman Sachs, for instance, and put them in his administration so that they can run the U.S. economy. Oh, wait, he's already done that. Anyone who is paying attention to the international makeup of these Primary Dealers and their respective banks can see that there really is a central bank cartel.

So what should Trump do instead? Well, for openers, he could pull all U.S. support and involvement from the IMF and the World Bank. That might not break up the central bank cartel, but it would come pretty close to castrating it.

Yen Cross's picture

 

 

  Politicians had better wake up, or run for the hills.  Take the carpet bagging PRESS with you.

coast1's picture

I like dave from the x22report, but he had an interview with "fed insider"   so I got interested and listened to it...I had to turn it off after ten minutes....the insider is a total fed shill....Then I looked at the comments on the video, and they all agred...Glad it just wasnt me..

WHy am I saying this here?  because I have gone back and forth in regards to Trump bringing in GS people....and many other things he is doing..And alex jones is out there supporting him no matter what Trump does...Sick of this all, maybe Trump will do whatever he is told like past presidents so his family doesnt get killed, or Trump was a set up all along... Ales says "Trump is brinigng jobs back"  ...I dont see it, all just talk...And even if he gets 10k jobs back, wtf does that do?   Other countries are selling U.S. debt and I dont even know who is buying them....Everything is a matrix....In closing, isnt it funny how the democrats call Trump bad names, but the bad names are bogus...I do not think Trump is racist, or hitler, or all the other things the libtards label him...Trump has other issues that should be brought up, and the libtards are too stupid to even recognize it. 

 

blue51's picture

Yes, sir. I lasted about 6-7 minutes listening to that " Fed Insider " . The Fed did a shitty job coaching her , to spew that  crap .

Mustafa Kemal's picture

"Trump has other issues that should be brought up, and the libtards are too stupid to even recognize it."

True that. I have yet to find someone on the left that is concerned with any of his real flaws. Until the left sees some redeeming qualities in the deplorables, there is no hope for a good resolution I fear.

JailBanksters's picture

Trump will do exactly the same as all the previous presidents.

Smile and pretend it will sort itself out, unless ....

The Club FED is implicated in a 911 Gold Heist, we can only hope.

 

restelle's picture

Trump will LOVE the central, as per SCRIPT...

globalintelhub's picture

we cover this in our book - a must read www.splittingpennies.com

TwelveOhOne's picture

It's available on Kindle Unlimited, just like serial spammer GraveDancer's book is.  While I have KU, I haven't looked at either book.  I think this user participates more in the discussion than GraveDancer, but this comment seems to be fairly content-less.

Razor Burn'd Capitalist's picture

Do?

 

What can be done?

This ship sailed in Jamica even made an accord out of it.

Who's got enough gold to fade this shit? 

Ask the Swiss..

 

Check mate with a Bishop

Reaper's picture

Audits are too slow. Auditors are easily corrupted. The FBI could seize and/or Congress subpoena records of all cash expenditures by the Fed to foreign entities and internal US. The sheeple will support ending a Fed which prints money for foreigners. $4 trillion dollars in Fed assets corrupts absolutely. End the Fed and take back the $4 trillion in assets obtained with the people's money. $4 trillion dollars without any external oversight is an irresistible moral hazard,

restelle's picture

GOD ultimately DECIDES, PERIOD.

Find Jesus and THEN you will find GOD.

 

 

Mustafa Kemal's picture

"GOD ultimately DECIDES, PERIOD."

Insha allah 

OrangeyTheAssHat's picture
OrangeyTheAssHat (not verified) Feb 13, 2017 9:56 PM

Jerk off into a flower pot while being pissed on by Russian Transvestite prostitutes?

captain-nemo's picture

Can someone please explain with understandable words what this “liquidity swap agreements” is and how it works?  A few practicable examples how it works and how it is being used will do fine.

BigFatUglyBubble's picture

It's just a mechanism to extend the ponzi scheme.  Banks don't have to worry about being aggressive and over-leveraging themselves because another bank will take up the slack.  It's all anchored in the USA's Imperial Military Cock n' Nuts.  Thus we have such distorted values of everything and the exponentially biggest bubble in the history of the world.  It's going to get book of revelation biblical soon. 

captain-nemo's picture

Thanks .  I get it that it's an important piece of the ongoing ponzi sceeme , but i still would like to understand whats really going on, cause no one seems interested in letting ordinary people in on this deal.

The way it seems to work (as far as i see it now),  the liquidity swap agreement is just a method the central banks have come up with to whitewash endless dollar printing, and prevent this dollar printing from having any impact on the currency rates.

If for example the bank of England was to ask the FED for 10 billion (newly printed) fake dollars today, the transfer won't have any impact on the official currency rates.  

Does this explain why the dollar keeps being so strong? Because even if America is printing trillions of fake dollar annually, and then sell them (whitewash them) to the world according to this agreement, the official dollar rate will remain the same. It's basically a way to whitewash the printing of an endless stream of fake dollar and lend them out to the other central banks for free.

 

It would still be nice if someone could explain more.   

Spectre's picture

I have been a  big Trump fan until he refilled the financial swamp with Goldman Fucks.  Central Banking activities will not change !  Kick the can down the road again.

 

It's Bullshit !

Spectre's picture

I have been a  big Trump fan until he refilled the financial swamp with Goldman Fucks.  Central Banking activities will not change !  Kick the can down the road again.

 

It's Bullshit !

hvl626's picture

If Trump did not comply with the dictates of Goldman, how long would it take for Goldie to bankrupt Trump ?

 

Trump is up to his eyeballs in debt to Wall Street bankers.  Greeks can tell you WS has no mercy for debtors. 

monad's picture

ICE seems to be pretty good at getting the drop on lots of felons all at once. Here today, gone tomorrow.

jomama's picture

He ain't gonna do fucking shit. He's owned by the global banking cartel.

Also, TD, it's shameful you didn't post anything about what Steven Miller said today.

Are clicks really the most important thing?

 

Mustafa Kemal's picture

Stephen Miller, Trump advisor:

"The end result of this, though, is that our opponents, the media and the whole world will soon see as we begin to take further actions, that the powers of the president to protect our country are very substantial and will not be questioned."

 

"Will not be questioned"

 Mmmmmmm. This is not sounding good.

adr's picture

You can't make 14 quadrillion dollars in derivatives with a dollar backed by gold. 

You can't inflate the value of a company that makes a shitty phone to $700 billion with a currency backed by a gold standard. 

In fact none of the great Wall St financialization would have been possible if the US didn't abandon the gold standard. 

The gold standard kept the dollar honest. This also kept American factories running. There simply wasn't enough gold in existence to finance globalization and the destruction of the American middle class. 

That is why the Rothschild family set goal #1 to destroy the dollar gold peg so they could inflate their fortunes a thousand fold. 

Every pain America has felt over the past fifty years is due to destroying the dollar the way the bankers destroyed the Weimer Republic prior to WWII. We have suffered crippling inflation, but the defacto world currency status of the dollar has prevented hyperinflation. 

Only the destruction of the moneychangers and sound currency can save us. But that requires destroying hundreds of trillions of fake wealth globally. The Monaco yact club set isn't going to give it up willingly. 

captain-nemo's picture

thanks. It explains a lot.

sinbad2's picture

Rothschild did not destroy the dollar gold peg, the Vietnam war and Lyndon Baines Johnson did.

JohninMK's picture

Yes, but who controlled Johnson?