The trend of the end of the dollar hegemony continues to slowly creep through the world's financial systems (no matter how many mainstream media 'king dollar' stories we see). The Swiss National Bank and the People’s Bank of China reached a currency swap agreement this week. While this is not a huge trend changer in the near-term, it demonstrates the continued rising roled of China as the largest economy and to be the next financial capital of the world when Europe and the USA blow themselves apart with defaulting socialism.
Working for the government was always pitched as somehow being better guaranteed than risky private corporations. However, the problem with government pensions has been they promised whatever sounded nice, with zero accountability. The presumption that tax revenue was an endless pit is one of those fallacies that nobody ever investigates. The ramifications of what happens in Detroit will ripple through the entire debt structure nationally for if this will be the new game plan to follow, why should people buy any government debt whatsoever if not even bankruptcy laws apply? As we said – he who makes the laws never goes to jail for breaking them.
This idea that we live in a world where government cares about us is just the biggest propaganda ever. Everyone one will only pursue their own self-interest. The OECD has interesting come out and warned that if governments are unable to stop the transfer of wealth to a small financial elite, the displeasure of the dispossessed middle class could easily turn and go against the prevailing governmental systems.
The British government has just invested in water cannons because they are fearing the rising tide of civil unrest as austerity is forcing the reduction of state workers and their pensions. The British unions called for strikes nationwide. Teachers, firemen and civil servants joined the calls and and took the streets demonstrating for higher wages and pensions. Just where is this money supposed to come from they really have no idea. They merely argue to take it from someone else no matter what and give it to them. Simply put, it is the rising cost of government that is out of control and no level of tax increase can reverse this trend.
Martin Armstrong warns that 50% of the municipal governments in Germany are on the verge of bankruptcy. This is part of the reason they are looking for bail-ins and even Merkel has determined they cannot allow any referendums fearing the people will vote against the EU. The Bremen state government has now imposed a spending freeze today. The reason has been the unexpected expenditure and revenue shortfalls in the total amount of 60 million euros. Politicians cannot see that this system is doomed. They keep looking for everything possible to raise more and more taxes. It is just amazing who disconnected government are from the reality of the economy. Everything is geared to move toward the confiscation of wealth not reforming the system.
"To make this perfectly clear, extreme views on the left or the right end up meeting in the same back parking lot where they agree the people are the great unwashed and are too stupid to see they need to be manipulated and controlled." The people behind the curtain do not change with the change between left and right up in front of the curtain. It is always about power regardless of the side of politics.
This battle has been fought many times in history. "This is why you see politicians doing everything possible to kill democracy for that falls whenever socialistic/communism rises. That collapses the economy sucking in everything like a black-hole and then the pendulum swings back and you get freedom once again..."
This week was very busy with economic data. For the most part, the majority of the data came basically inline with expectations. However, the internals of the various reports were much less encouraging. The most noteworthy report, and the least important from an investment standpoint, was the monthly employment report which came in at 288,000 jobs for the month. As with the bulk of other reports, the more important details were lost to the headlines... full-time employment relative to the working age population has remained primarily stagnant since the financial crisis and actually fell in the latest month. This is a key reason why economic growth continues to struggle.
The most dangerous organization is the now French led IMF with Christine Lagarde at the helm, which has presented a concept report in which 'debt cuts for over-indebted states are uncompromising' and are to be performed more effectively in the future by defaulting on retirement accounts held in life insurance, mutual funds and other types of pension schemes, or arbitrarily extending debt perpetually so you cannot redeem. Yes you read correctly, The new IMF paper describes in great detail exactly how to now allow the private sector, which has invested in government bonds, will be expropriated to pay for the national debts of the socialist governments. This far-reaching plan for the expropriation of savers, investors and retirees clearly shows the reality of socialism.
"Why shouldn't the rich pay more taxes?" Simply put, there are not enough billionaires to pay the bill for everyone else. The problem is not that the rich do not pay enough, it is that government takes too much from the economy as a whole.
The greatest problem we have is misinformation. People simply do not comprehend why and how the economic policies of the post-war era are imploding. This whole agenda of socialism has sold a Utopian idea that the State is there for the people yet it is run by lawyers following their own self-interest. Even confiscating all the wealth of the so-called rich will not sustain the system. Consequently, we just have to crash and burn and start all over again.
"Does society ever wake up?"
The world is a very complicated place, and the Middle East is a particularly difficult region to try to get your head around. Between decades of colonialism, gigantic oil reserves, governments that are essentially feudal kingdoms, and the never-ending and always shifting Western government propaganda that often changes the targets of demonization on a whim, it’s no wonder people are so confused. The following provides a perspective based on what we have seen so far, and more importantly, ask readers to ask their own set of questions. What is happening is very bad, and it is the direct result of the idiotic children calling the foreign policy shots in Washington D.C. Ever since 9/11, everything about the status quo’s decision making has been irrational and dangerous.
"We are seeing the most dangerous trend ever. There is an agenda behind the curtain and that is to sustain government at all costs and that includes everything you own."
Unions have been the real plague of society. There is not much they have not really destroyed... The problem is that the only way to pay these unions is to raise taxes. This is the poison pill that will destroy Western Society. This hunt for taxes will destroy the economy and will not save the day in the end game. Just do the math.