Money Flow Trading Method along with Risk Management

https://www.dollarcollapse.com/matth...mic-implosion/

Matthew Piepenburg: The Fed’s Strong USD Policy: A recipe for systemic implosion

Guest Post by Matthew Piepenburg from his blog on GoldSwitzerland.com:
From Main Street USA to the village corners and central banks of Europe, Japan and elsewhere, the Fed’s strong USD policy is backfiring—big time. Just ask the Brits…

Having spent years creating the inflation (QE1 to unlimited QE, Repo bailouts, massive money supply expansion, and an historical wealth transfer from an inflated, Fed-driven stock market), the Fed will be cleaning up its own inflation mess on the backs of the U.S. working class and its other global “allies” while blaming the CPI inflation on Putin, Covid and climate change.

How’s that for rigged to fail?

But that’s just the beginning, and it’s not just about the USA.

Engineering a Recession Powell Can’t Control
By raising rates into what we all know is a recession, Powell, who delusionaly pretends to be Volcker re-born, wants to solve the inflation he helped create by engineering a demand-crippling recession which he thinks he can control, but can’t and won’t.

And this will be the mother of all recessions, as there is an historical and concomitant debt (and hence currency) crisis in every corner of the globe ($300T+) as well as every corner of the nation ($90T+), from the toxic corporate bond market and over-strapped households to a grotesquely bloated ($30T+) government debt market.

Keep It (Horribly) Simple
It’s all horribly simple, in fact.
If debt is the everywhere-driver of the economy and markets, then any significant increase in the cost of that debt will destroy every corner of that economy and those markets, from zombie enterprises to negative yielding US Treasuries.

Powell’s hawkish stance will lead to anything but a “contained recession,” which the Fed will be no less effective “containing” as they were in “containing” their so-called “transitory inflation.”

Rising rates will cripple nearly every asset but the artificially inflated USD until all savings are gone, most citizens are hand-out dependent, and most markets and currencies are on their knees.

At that point, Uncle Sam will either default on the IOU’s (Treasury bonds) which no one will want, or the Fed will pivot to more mouse-click money to buy/support his debt addiction, following the recent example in the UK.

And since the US is too arrogant to fail/default (TAF), the Fed’s only stupid choice left among a long history of stupid, will be a gold-boosting QE pivot.
When?

Yes, An Inevitable Pivot
So, again, when will Powell pivot?
After the pain, politics and panics have reached levels the US and global economy and markets haven’t seen since the FDR era, Powell will throw in the towel and pivot.

In the interim, the US (as well as global) middle class can thank Greenspan, Bernanke, Yellen and Powell for all the pain ahead, as it is the direct (and I mean direct) result of years of unprecedented drunken free money and bloated debt, the hangover for which is going to be a record-breaking B!c7%…

A Treasury Market on the Cliff’s Edge
Investors are forgetting that not only is Hawkish Powell raising rates into a debt bubble, he’s slowly tightening the Fed’s balance sheet, which just means dumping more Treasury supply into a demand-less sovereign bond market.

And this supply stream means bonds will fall even further and hence their yields (and interest rates) will keep rising, thereby by adding massive insult to an already fatally injured credit/debt market.

I feel that when UST’s start to tank en masse, Powell’s fantasy of being the next Volcker will end and the pivot toward money printing will be fast and furious—sending precious metals to record highs.

But until then, buckle up.

Powell’s Master Dollar Plan—Foreign Suckers
For now, Powell’s plan is to let rates, yields and hence the dollar rise, in the hopes that the Greenback will be the only place left for global investors (suckers) to hide, which is where they are indeed beginning to hide.
https://i0.wp.com/goldswitzerland.co...24%2C409&ssl=1

It’s only a matter of time, however, before foreign investors, nostalgic for the days of former US glory, realize that such glory is gone, and that the only way UST’s will ever be “risk-free-return” is if the Fed prints more debased money to buy them, which is not Powell’s current practice.

In essence then, foreigners aren’t hiding in “risk-free-return,” but drowning in “return-free-risk” as even 3-4% yields on the US 10Y Treasury yield a negative -5% return when adjusted for inflation, despite it being under-reported by 50%.

Remember when I said the Fed has no good options left? I meant it. It’s either tighten and risk systemic collapse, or ease and destroy the currency.
Pick your poison.

Furthermore, and ironically, the USD (i.e., world reserve currency) is highly illiquid, despite being mouse-clicked for years. For this USD scarcity, and the immense pressure it is putting on USD-denominated debt holders and sovereign financial partners, we can thank that other poison known as the quadrillion-dollar derivatives market, of which I’ve already written.

Losing Faith in Uncle Sam’s IOU’s
At some point, Americans, as well as the rest of the world, will realize that the US is not what she used to be, and neither are her IOU’s.
For the first time in almost a century, faith in Uncle Sam will reach a nadir and precious metals their apex. But faith, as I’ve also written, is a hard financial indicator to time.

This is not “gold-bug” posturing but hard math and political reality colliding with the lessons of current and past history.

Take the Pathetic Example of Japan
The Fed’s rate hikes have pushed Tokyo and its Yen to its knees.
The Bank of Japan, unlike the controllers of the world reserve currency (i.e., the Fed), flatly cannot afford to raise rates and pay its JGB’s (i.e., IOU’s) at the same time.

Net result?

The Bank of Japan is printing Yen like gangbusters and keeping inflation deliberately above interest rates.
Yet even in this openly negative-real-yield nightmare, the Japanese 10Y didn’t trade for 2 days.

Meanwhile, as the Yen dropped to 50-year lows, Japan was forced for the first time in nearly three decades to prop its currency by making a direct intervention in the FOREX, which entails selling a batch of the UST’s it had on reserve.

This explains why the TLT (US Treasury ETF) lost 3% on the same day. Meanwhile, US junk bonds (as measured by the LQD ETF), fell to lows not seen since the COVID lows.
https://i0.wp.com/goldswitzerland.co...29%2C346&ssl=1

Tanking junk bonds, by the way, are typically leading indicators for tanking equity markets.
Just saying…

And Then There’s the EU…
Japan, of course, won’t be the last nation to reach such desperate levels, and as more UST’s are dumped/sold, debt costs in the US will only get more, not less painful, regardless of what the Wizard of Powell does from DC/Oz.

Again, just ask the Bank of England and its recent, headline-making pivot to more QE. No shocker at all there…

Foreigners own over $18T is USD assets, including bonds, real estate and dollars. Once the distressed selling starts, it goes from slow to rapid very quickly, which means pain levels for Main Street American debtors will rise equally fast.

Other nations “friendly” to the US are feeling equal pain from Powell’s hawkish Fed and strong USD.

Germany, for example, is seeing yields on its two-year bonds above 2% for the first time since 2008, an otherwise once anemic rate which it literally can’t afford.

As yields in the EU rise as a result of its US “ally’s” policies, the EU starts to quiver and shake, as this means the EU’s interest rates rise too.

But with debt-soaked countries like Italy teetering towards Frankenstein levels, Powell is pushing the EU into a national security (currency and debt) trap as well as political crack-up.

Again, what will EU nations do?

They’ll likely turn Japanese and start dumping US Treasuries and dollars to keep the lights on from Paris to Portugal.

Even in China, big firms are already selling USD assets and commercial real estate (over $20B since 2019) at an increasingly alarming rate.

Powell’s Strong Dollar Policy is Backfiring
In short, Powell’s strong USD policy, like the West’s sanctions against Putin, are openly backfiring as America’s “allies” bend under the oppressive ripple effects and weight of an artificially strong USD—and all of this as the EU heads into a winter with less energy from the East.

Then again, the Fed is always at least two to three steps behind its own learning curve.

As a political rather than independent bank, they can only rely on words and distortions rather than math and honesty when speaking to a public which they have mis-served since the day of their official (and Wall-Street-leaning) birth in December of 1913.

These converging currency, debt and energy patterns look like the weather map of a perfect storm.

In short, foreign currencies, suffocating under the weight of Powell’s strong USD, will continue to tank as global bond markets continue to dry up and hence implode.

Unless the Fed reverses course on its strong USD policy (and pivots to more QE/Mouse-click “magic”), global markets face a legitimate risk of systemic collapse.

But then again, more mouse-click money just means a currency crisis. Again: Pick your poison.

For all of these reasons, I remain steadfast that global currency and sovereign debt markets cannot and will not last long under Powell’s current strong USD policy.

Unless the Fed pivots to more pathetic QE (and hence a weaker, debased USD), the systemic risk discussed above will become systemic implosion.

For now, the ball (or dollar) is in Powell’s court, and he’s got a weak serve.

Guest Post by Matthew Piepenburg from his blog on GoldSwitzerland.com.

https://www.kitco.com/news/2021-05-0...FC-vE.facebook

News Bites

Roubini: The Fed is 'cornered'; will either lose control of inflation or crash markets

https://www.kitco.com/ind/KitcoNews/.../Kitco-Inc.png

Kitco News Friday, May 07, 2021, 15:11

(Kitco News) - While inflationary fears are picking up, the markets have not demonstrated a readiness to accept higher interest rates. In fact, rising nominal treasury yields over the past few months have, on several occasions, prompted market selloffs.

This predicament puts the Federal Reserve in a tough position, said Nouriel Roubini, CEO of Roubini Macro Associates and professor at the NYU Stern School of Business, because should the Fed raise interest rates to try to control inflation, the market may see a return of 2013's "taper tantrum".

"Either the Fed, at that point, keeps on saying things are temporary, inflation expectations start to rise, they control the short end of the yield curve, but then long rates can rise in nominal and real terms, that's one risk. Then, inflation gets out of control. Or, like in 2013, they have to backpedal and say no, there is a problem with inflation and we have to start tapering sooner than we said, we need to start raising rates sooner than we said, and we could have a repeat of what happened in 2013," Roubini told Michelle Makori, Kitco's editor-in-chief.


In 2013, when the Fed announced a reduction in its pace of Treasury bond purchases, U.S. Treasury yields soared on the announcement.

A repeat of this scenario could have serious implications for all markets, if not the broader economy, Roubini said, noting that the fixed income sector is particularly at risk.

"So either way is risky. Either you're behind the curve, you're going to cause inflation, or if you don't want to be any more behind the curve, and then you signal, 'I'm going to tighten', then you could have a bond market and a credit market crash that could really weaken the economy, if not stall it. It's damned if you do, damned if you don't," he said.


On inflation expectations, Roubini agreed with Treasury Secretary Janet Yellen's assessment that interest rates would have to rise to prevent inflation from "overheating."

Yellen made this statement at an economic event hosted by the Atlantic magazine earlier this week but quickly retracted her statement after markets tumbled by saying that she doesn"t think inflation will be a significant problem.

"I think that she was telling the truth when she expressed her own first concern that maybe there could be overheating that might lead to inflation to overshoot what the Fed does, therefore the Fed [will have] to raise rates," Roubini said.

For more details, including what Nouriel Roubini thinks about central bank independence and the Biden Administration's spending, click the link and watch the video above.

For Kitco News
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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities, or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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1. Post 9,982

https://wolfstreet.com/2022/10/05/ho...2008-and-1986/

Housing Bubble Woes: Mortgage Demand Plunges, Rates Near 7%, Spread Between Mortgage Rate & 10-Year Treasury Yield Blows Out Most since Dec. 2008 and 1986

by Wolf Richter • Oct 5, 2022 •

But even these highest-since-2007 mortgage rates are still far below the highest-since-1981 inflation.

By Wolf Richter for WOLF STREET.

In the week ended September 30, demand for mortgages to purchase a home plunged by 13%, seasonally adjusted, from the already beaten-down levels in the prior week, according to the Mortgage Bankers Association today. Compared to the same week last year, purchase mortgage applications dropped by 37%.

They fell through the lows during the lock-downs and hit the lowest level since October 2015! Purchase mortgage applications are an indication of housing demand over the next few weeks.
The weekly drop was in part caused by Hurricane Ian, and in part by the spike in mortgage rates into the 7% range:
https://wolfstreet.com/wp-content/up...A-purchase.png

Applications for mortgages to refinance an existing mortgage plunged by 18% compared to the prior week, seasonally adjusted, and by 86% from a year ago, to the lowest level since January 2000. No homeowners in their right minds are going to refinance an old 3% or 4% mortgage with a new 7% mortgage, except to extract emergency cash, which will cost them dearly, and they might be able to accomplish the same for a lot less with a HELOC. So the HELOC business, which has totally died down since the Financial Crisis, should perk up again.

The mortgage refi business is crucial for the mortgage lenders. The largest mortgage lenders in the US – Rocket Companies, which owns Quicken Loans, United Wholesale Mortgage, which owns United Shore Financial, and Loan Depot, all have cut staff by thousands of people each, and their stocks have crashed. The entire industry is trimming back to survive. Some mortgage lenders already filed for bankruptcy. Others have shut down (read: Mortgage Lender Woes)
https://wolfstreet.com/wp-content/up...-refinance.png

The daily measure of the average 30-year-fixed mortgage rate by Mortgage News Daily hit 7.08% on Tuesday last week. It then dropped back, and today jumped again, hitting 6.95%.

Freddie Mac’s weekly measure, released today, based on mortgage rates early this week, jumped by 41 basis points from the prior week, to 6.7%, the highest since 2007 (red line in the chart below). A year ago, it was 3.0%.

Since mid-August, when the summer bear-market rally ended, the average 30-year fixed mortgage rate spiked by 171 basis points.

The average 15-year mortgage – if you can handle the payment at the current prices – spiked by 52 basis points from the prior week to 5.96% (green line), the highest since October 2008, according to Freddie Mac data.

But wait: even these much higher-than-last-year mortgage rates are still far below the rate of inflation, with CPI inflation over 8%. But mortgage rates are catching up.
https://wolfstreet.com/wp-content/up..._30yr_15yr.png

The spread blows out.
The 30-year fixed mortgage rate runs roughly in parallel with the 10-year Treasury yield, but higher. This makes sense because most mortgages get paid off much sooner than in 30- years, as people refinance the mortgage or sell the home. The average lifespan of a 30-year mortgage is less than 10 years, according to Rocket Mortgage.

The difference between the 30-year fixed mortgage rate and the 10-year Treasury – the “spread” – at today’s mortgage rate per Freddie Mac, has widened to 2.92 percentage points, matching the multi-year high on December 31, 2008, during the Financial Crisis, just one week. To get to a wider spread, we have to go back to 1986.

This chart shows the weekly 10-year Treasury yield (green) and the weekly 30-year fixed mortgage rate (red). Note how to what extent the mortgage rates have out-spiked the somewhat lethargic 10-year Treasury yield:
https://wolfstreet.com/wp-content/up...asury-long.png

The chart below shows the spread (the difference) between the 10-year Treasury yield and the 30-year fixed mortgage rate. The spread tends to widen or narrow drastically when yields are in upheaval, when one rate moves a lot faster than the other – with some interesting implications:
https://wolfstreet.com/wp-content/up...sury-long_.png

The spread will normalize as the 10-year yield catches up.
The spread has widened this year because the 10-year Treasury yield has been slow in moving higher. It always reacts much more slowly to changes in monetary policies than short-term yields. The one-year yield has spiked by nearly 400 basis points since late last year, as the Fed embarked on its rate-hike cycle. But the 10-year yield has come up only about 200 basis points over the same period. And the yield curve inverted over the same period, with short-term yields higher than long-term yields.

So the mortgage market has taken its cues of where rates are going from short-term yields, while the 10-year yield was dilly-dallying around.

But the Fed’s QT has now kicked in at full pace, and this will allow the 10-year yield to drift higher. As the 10-year yield comes up faster than mortgage rates, and makes up lost ground, as QT continues, and as the Fed pauses its rate hikes next year in the 4% to 5% range to watch what happens with inflation, the spread will narrow back into the normal-ish range of about 1.5 to 2 percentage points to – just a guess – a 7.5% mortgage rate and a 5.8% 10-year yield?

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Mises Wire: We Are Not the Government, but America Is No Longer Anything More than the Government

by Bryan Lutz ◆ October 5, 2022

Guest Post by Connor Mortell from the Mises Wire blog on Mises.org:
“We must, therefore, emphasize that “we” are not the government; the government is not “us.” The government does not in any accurate sense “represent” the majority of the people.”

Murray Rothbard wrote this in his popular Anatomy of the State. His point still stands to this day. The state cannot be said to represent “us” in any accurate or serious way. It may be even more true today than ever before. However, what is murkier today is who “us” even is. If “we” are not the government, then who are “we?”

“We” would logically reference what Rothbard described as separate from the state, the nation:
Everyone is necessarily born into a family, a language, and a culture. Every person into one or several overlapping communities, usually including an ethnic group, with specific values, cultures, religious beliefs, and traditions. He is generally born into a “country.”

While this would make sense as who “we” are, I struggle to believe this—in any meaningful way—describes anything that brings “us” as Americans together.

Taking Rothbard’s descriptors piece by piece, almost none of them still apply. Everyone is born into a family which includes ethnic groups, but America has long been known as a melting pot with any number of ethnic heritages among its people, so it would be nonsense to say this played a role in bringing together the American nation. Generally speaking, there is a common language across America, however, it is merely the language of our former rulers—the British. If this drew us together as a nation, then we’d be equally drawn to Australia.

As for the “overlapping communities” we have almost no such communities drawing Americans together. Ethnic groups and cultures we’ve already addressed vary widely within America. Specific values have never been less cohesive than they are today. In the state of Texas, the average person likely believes that an abortion is committing murder against a child. In the state of California, the average person believes that an abortion is a sacred right for women.

In the state of New York, it was quite recently believed that going out without a mask was posing imminent harm to vulnerable people. At the same time, in the state of Florida it was almost ridiculous in many places to wear a mask. To pretend these groups have shared values is simply something of the past.

Religious beliefs do not hold as a common thread considering the country was founded in part on the freedom of religion. From that, many traditions diverge among the people. In fact, even the few traditions that are common among the residents of America are extremely varied across regions. While we are born into a specific place and are somewhat geographically together, we’ve expanded far beyond any real sense of vicinity.

Having expanded this far, in what way is a Floridian really any closer to an Oregonian than a Canadian? A New Yorker is far closer to a Canadian than a Texan.

The only detail that holds true of this definition of a nation is that each person is born into a “country,” but what does that really say?

What this says is that “American” only means one thing: a citizen of the United States government. Nothing more. Sure, “we” are not our government, and our government is not “us.” But “we” really doesn’t apply to any substantial group of people anymore other than the group of people subject to this government that does not represent us. A Floridian or a Texan or a New Yorker has a very real culture that makes them a “we.”

But it’s been a long time since America meant the land of the free, the home of the brave or since political leaders have referred to the bill of rights or to the declaration of independence (unless it benefited their “cause.”). “We” as Americans are no longer a cohesive group. And that should not necessarily be looked at as a negative. Those of us that fall under the mantle of American can take this and recognize that there still exist many nations and cultures among us, we don’t need to fight to preserve one that no longer exists.

Guest Post by Connor Mortell from the Mises Wire blog on Mises.org.

Imploding credit — the consequences

https://www.goldmoney.com/research/i...gmrefcode=gata

Oct 6, 2022·Alasdair Macleod

There is a growing realization that the world faces a combination of persistent inflation of prices and a recession at the same time. The factors driving both are visibly intensifying. Those of us versed in the cycle of bank credit are aware that it is the contraction of bank balance sheets which is driving the recession, while it is continuing currency debasement driving inflation.

Neo-Keynesian in the establishment think the current position is contradictory, that current rates of price inflation will decline back to their 2% target in a recession, and interest rates can then be reduced to stimulate economic activity.

The key to understanding why prices can continue to rise in a recession requires a fuller understanding of the role of credit in an economy and what it represents. Its role is far greater than commonly thought, with considerably more than several quadrillions of dollar equivalents outstanding. All economic activity and wealth are credit. This article sketches out the various types of credit, and how credit equates to our collective wealth.

It also requires us to differentiate between a currency which is anchored to gold specie and one without a specie anchor. The former imposes a discipline on the state of non-intervention, while the latter encourages intervention. It is that intervention which leads to fiat currencies and all credit based upon it finally collapsing.

The importance of credit
That the monetary authorities do not understand credit might seem unbelievable. But evidenced by their actions, it is the only explanation for their mistakes. Clearly, as well as credit they don’t understand the importance of money, having banished gold from its role of anchoring the purchasing power of credit. The vested interest of replacing gold with currency, to obtain for governments the benefit of unfettered debasement, is ignored or forgotten by today’s state-educated economists and commentators. Disregarding what drove the dollar off the Bretton Woods standard in the first place, the establishment in the broadest sense can no longer distinguish between credit and legal money.

Currency and credit debasement started with a vengeance in the 1930s, when the dollar was devalued by re-pegging it to gold at $35 per ounce from $20.67 — only that Americans were banned from owning it at any price. Currency and credit expanded from then on.

US M3 money supply had peaked at $55.2bn in 1929, fell to $41.52 in 1933 (eerily similar to money supply prospects today), before rising to $692bn when Bretton Woods was suspended in 1971. That’s a multiple of 12.6 times while the dollar was anchored to gold at $35 per ounce. Since then, credit expansion has been far more dramatic at nearly 32 times, and we have seen the gold price increase from $35 to $1725 currently. It is better described as dollar currency and credit losing purchasing power relative to legal money by 98%.

Today, we are acutely aware that prices for energy, food, and consumer goods generally are rising while the economic outlook is deteriorating. Economists call the former inflation and the latter a recession. While it is natural to believe that these conditions are driven entirely by exogenous factors, such as supply chain disruptions and rising interest rates globally, this analysis is too simplistic. It is the massive, government-led expansion of credit which has debased the currency that is the underlying problem.

This is tacitly admitted by economists and statisticians who believed that excessive monetary expansion was a one-off action to deal with the covid crisis and associated problems. But now, the hesitancy in markets is attributable to the growing realization that further expansion of currency and credit is required to face new challenges. Governments are debasing their currencies in a new round to allow individuals and businesses to accommodate soaring energy prices, which were the consequence of earlier debasement. Collectively, some market participants are now signalling, “Fool me once, shame on you. Fool me twice, shame on me”.

I remarked above that the contraction of M3 between 1929 and 1933 is eerily similar to what we face today. It needs explaining. In the years before the Wall Street crash (which started in September 1929) the Fed had begun to intervene in markets. In 1923, the Federal Open Market Committee was established with Benjamin Strong the Fed’s Governor as chairman (the title change from Governor to Chairman was made in the banking Act of 1935). From then on, the Fed began to conduct monetary policy.[i]

Accordingly, the Fed made substantial open market purchases in 1924 and 1927, which suppressed bond yields and therefore market interest rates, to ward off recessions. The latter particularly fueled mounting stock market speculation as bank credit expanded due to increased credit demand supplied at suppressed interest rates. In 1928, the Fed’s FOMC took fright and reversed its expansionary policies by buying up government securities and raising its discount rates. The following year the market peaked, and the unwinding of the speculative bubble drove the Dow Jones Industrial Index down 89% by mid-1932.

While there are differences today, the similarity to current global monetary and market conditions are striking. The principal dissimilarity is that Strong believed in the gold standard, and guided FOMC policy in that context. But for the first time, the Fed intervened in the economy storing up trouble for the end of the decade. Today, FOMC interventions are far more pervasive, with similar distortions for financial markets but without the sheet-anchor of money —legally that is gold — securing confidence in the currency. We have yet to fully realize the consequences today, with the Dow Jones Industrial Index having lost only 21% so far.

The contraction of bank credit between 1929—1933 is the most important feature of that time. The withdrawal of credit for speculation in the stock market was undoubtedly what fueled the Wall Street crash because withdrawal of credit forced speculators to sell their stocks. If they were not unsecured or secured against physical property, bank loans were secured on stocks. Falling values accelerated the decline as banks liquidated the collateral they held in financial assets, a point famously made by contemporary economist Irving Fisher. The start of these conditions is apparent today in the contraction of bank credit for stock speculation, shown in Figure 1.

https://gm-media-library.s3.eu-west-...a568836f1b.png

The psychology of markets informs us that credit contraction of margin loans is driven not by happy profit takers, but by the effect of falling collateral values and banks foreclosing on positions. It is a process that has much further to go.

This brief analysis of the role of bank credit illustrates its financial and economic importance. Not only did its contraction in 1929—1932 undermine financial asset values, but it also plunged the agricultural economy into depression. It is estimated that about 9,000 banks failed, wiping out $140bn in deposits[ii]. On the asset side of bank balances sheets fire sales of farms and assets of small businesses failed to cover bank loans, but their owners were impoverished and left without a living. The lesson for today is that despite all the regulations designed to make banks safe, severe credit contraction still leads to widespread bank failures.

The experience of the 1930s spawned two very different conclusions. Austrian economists, being the most sophisticated extension of classical theorists, pointed out that the depression was the result of bank credit expansion in the 1920s unwinding, while a new breed of statist economist supported Herbert Hoover and Franklin Roosevelt’s view that the failure was essentially of free markets and the solution was in the hands of government. Both presidents were keen interventionists.

Intervention by the state became the foundation of Keynesian-ism, while the Austrians were widely ignored. However, many Neo-Austrians argue that the business cycle can be eliminated if the cycle of bank credit is removed entirely. As to whether this course is practical requires an understanding of credit in its wider form. Bank credit is a small subset of overall credit, albeit an important one.

The nature of credit in the economy
Everything is bought and sold on credit. Legally, money is only gold coin, with silver and copper coin in secondary roles. They have been expunged from general circulation — even coins are now debased tokens — so no money is involved in transactions today.

Banknotes issued by the central bank are credit, debts of the issuer in favor of the bearer. From the days when banknotes were exchangeable for gold coin at the holder’s option, we regarded notes as money, or more correctly money substitutes. And most of us still do. But in a world of fiat currencies, they are only credit and must not be confused with money.

We know that added to banknotes, deposit accounts held at a bank are also credit, credit given by the depositor to the bank in return for a right of action against the bank. The bank owes the money to the depositor. And always, the other side of credit is debt. In accordance with double-entry bookkeeping, the amount of currency and credit in any country is the sum of all the debts due to every individual and business in it. If there is no debt, there is no currency. Debt is therefore synonymous with wealth because all credit is wealth.

The first use of circulating credit was to represent money, that is gold, in paper form. It multiplied it considerably, firstly in the form of banknotes and then as banking developed in bank accounts exchangeable for banknotes and gold. Convertibility into gold for the public ended in most nations following the First World War; but it continued until 1933 in the United States. Since then, bank deposits have only been convertible into banknotes, and even that have become restricted by anti-money laundering and tax avoidance rules imposed by bank regulators. But bank deposits remain freely transferable into other bank accounts by notation.

Today, we are familiar with bank deposits, banknotes, and metallic tokens. The total of these elements makes up money supply statistics, so named for historical reasons though no money is involved. But as we shall see, broad money M3 or M4 are only a small part of total credit in an economy.
The whole economy runs on credit. When you buy a rail ticket, a theater ticket, or any other token or promise ahead of the delivery of a service or goods, you are a creditor until the service is discharged or the goods delivered. In law, you have a right of action against whomever you have prepaid for goods or services. And when a tradesman provides a service to you, he is your creditor until you discharge the debt to him. He has a right of action against you, which is discharged when you pay him what he is due.

In every obligation or contract the party who has the right to enforce the performance of the duty is the creditor, and the party whose duty it is to perform it is the debtor. A credit is the right to compel a person to pay or do something. Hence, large amounts of credit are payable, not in any material substance or money, but in personal services.

There are innumerable other cases where persons enter into agreements to perform services. These contracts to perform services are as much obligations as are obligations to deliver material substances. Therefore, credit can purchase services exactly in the same way as money, currency, or a transfer from a bank deposit. Credit is a purchasing power which can deliver anything that currency can. Credit is a current right to a future payment. And the true function of credit is to bring to the economy the present value of future profits.

Every aspect of our economic and social relations with our fellow human beings is not just based on credit but is credit itself. And credit, insofar as we require to measure it, is based on legal tender. Consequently, the value of all human activities in a modern economy is entirely dependent on trust in the currency.
As stated above, there is a clear distinction between credit and money, the latter only being metallic gold, and formally metallic silver and metallic copper as well. However, money and credit used to be of the same nature. What has changed is the absence of money. Credit is no longer anchored to money by being exchangeable for it. Being no longer anchored to money, credit is now anchored to currency, a form of credit still judged to be superior to bank credit. We can see therefore that there is a hierarchy of credit, loosely as follows:

1. Central bank banknotes. Bank notes issued by a central bank are the highest form of credit, into which all other forms of credit can be exchanged. As a consequence of central banks buying bonds in recent years, there has been an expansion of central bank credit in favour of commercial banks, recorded as reserves on central bank balance sheets. These reserves are accorded the same risk status as bank notes but are not credit in public circulation.
2. Bills of exchange, commercial and government treasury bills, accommodation bills and trade finance not tied to property itself (such as bills of lading and dock warrants), and other negotiable instruments are all credit, ranking with or just below central bank liabilities. While these are always settled through bank deposits, they are frequently between non-bank counterparties so are additional to bank credit.
3. Bank credit is the most common form of circulating credit, ranking behind banknotes but outnumbering them by over ten times or considerably more in many jurisdictions. As well as the central bank’s credit risk, bank credit bears the risk of individual banks and a wider systemic risk. Additionally, there is unrecorded bank credit created by the activities of shadow banks, which in today’s financialised economies are estimated to be up to half as much again or even more.
4. The counterpart of non-bank obligations which become due under the terms upon which they were granted. It includes all financial transactions agreed for future settlement from the time of dealing to a future specified time. It also includes prepayments, when a broker takes payment on account, and owes a right of action until a transaction is completed and the property in an investment is delivered.
5. Other than paid margins and deposits, derivatives both in regulated and over-the-counter markets. More on the treatment of derivatives follows below.
6. We can also include the property in all investments, financial and tangible, the possession of which is the right to a future income stream paid in credit.
7. Personal credit in the form of rights of action in connection with the acquisition and disposal of goods and services which are not settled immediately. Personal credit transactions are by far the largest quantity of unrecorded credit, mostly settled by novation of bank deposits. The level of an individual’s personal credit is shown by the willingness of others to accept deferred payments for services and goods, and personal obligations are often discharged in cash or by barter.

With respect to derivative transactions, there are forms of credit not readily recognized as such which come in two forms, which we can name credit and latent credit obligations. Being commitments to deliver a commodity or financial instrument at a future date, futures are credit, while options and warrants are latent credit being a right to an action, instead of a right of action. Forwards and swaps are credit, being future commitments to deliver in total.

Dividing the Bank for International Settlements statistics into over the counter and regulated market derivatives categories shows that the financial system has generated an extra $581 trillion of credit, and $104 trillion of latent credit for a total of $685 trillion. These figures are culled from large dealers in thirteens countries, with a triennial survey covering more. Therefore, the OTC element ($541 trillion of credit and $50 trillion of latent credit) is incomplete and the true figure is somewhat larger. The capitalization of equity markets adds a further $100 trillion, ownership of the property in an equity investment being the right to a future income stream. It compares with global debt of over $305 trillion (Institute of International Finance — May 2022), and a global GDP estimated at $96.3 trillion (Statista —for 2021). The property in fixed assets is similarly credit.

Therefore, it is an error to think of credit as simply being comprised of currency and bank credit. These two categories are merely circulating credit, part of total global credit exceeding quadrillions of dollars equivalent. All this credit is capable of being measured or realized in fiat currencies and is dependent on their stability. Loss of a currency’s stability has considerable consequences, not just for the foreign exchanges or the stability of bank deposits, but undermines the very basis of human existence.

These astronomic figures illustrate the overriding importance of credit to society. But they also hint at the far-reaching effects of changes in the rate of interest. On rising interest rates, debt values fall, and derivative values change, benefiting some banks and creating losses for others. The present value of prospective discounted income streams from equities and property are adversely affected, at least initially because dividend streams and rentals are slow to adjust. These effects are, or should be, understood by economists. But the effects are even more extensive, driving down wealth because wealth is credit and credit is synonymous with marketable values of all debt.

The consequences of interest rate management
It is a common error to believe that economic outcomes can be managed through the artificial manipulation of interest rates. From our analysis of credit in the widest sense, it becomes obvious that when changes in interest rates are not set by markets but steered by statist committees, they have a profound effect on our collective wealth. With currency and bank credit being the tip of a far larger iceberg, the consequences of interest rate mismanagement for booms and busts are far greater than recorded by government statistics.

But statist distortions imposed upon credit markets are always temporary in nature, being reversed when control is eventually lost, and markets reimpose themselves. Consequently, when interest rate suppression eventually fails a crisis follows, and the damage done by earlier statist intervention is revealed.
It is in this light that we must consider the situation today, which comes after decades of declining interest rates. It is incorrect, however, to assume that this decline was not a market trend. It was a market trend set against a background of the replacement of the sheet-anchor of legal money by the fiat dollar, demand for which was boosted by its role as the reserve currency, its hegemony, and its dominant role in settling international transactions. Consequently, in fiat form the dollar held its value more than might otherwise have been expected.

The expansion of debt, which is synonymous with credit and therefore national wealth, has been far greater than the numbers recorded in official statistics, as the hierarchical list above attempts to show. And now that the trend of declining interest rates has ended, rising interest rates are leading to far wider wealth destruction than reflected in rising bond yields and falling equity prices. That the trend of rising interest rates has much further to go is clear, given the instability of currencies reflected in inexorably rising prices, and the gap between the true time preference for holders of currencies and their reflection in current state-suppressed interest rates. The dollar’s value in terms of its purchasing power in these changed circumstances must be our current focus because its purchasing power is imparted to all dollar credit, and through its reserve relationship with the other major fiat currencies, to all credit based upon them as well.

Interest rate policies ignore the wider effect on credit. But given that the gap has opened up between central bank interest rates and where they should perhaps be, we can say that the destruction of wealth, being synonymous with the quantity of credit and valued by present values of future income streams, has barely started. And as we have surmised, global credit exceeds quadrillions of dollars, so an underestimation of its destruction is not a trivial matter. In a deep recession, even the creditworthiness of all economic actors will be called into question, so that even personal credit in return for rights of action will be adversely affected.

Commercial bank credit is bound to follow this trend. The maintenance of bank credit levels is fundamental to underwriting bond and stock market values. Yet being easiest to action, the liquidation of financial assets held both on bank balance sheets and off bank balance sheets in the form of collateral is merely the initial phase of contracting bank credit. And as derivative obligations become closed down or mature, they will not be renewed. The only exceptions are asset liquidity, such as treasury bills, short-term maturity government bonds, and reserve deposits at the central banks, held in accordance with Basel 3 bank regulations.

After a prolonged period of decline, rising interest rates now threaten the survival of zombie corporations and all business plans based on the belief that financing costs would not rise. Therefore, a second phase of bank credit contraction aimed at non-financial sectors is already under way but is bound to accelerate as non-performing loans threaten to overwhelm the banks. Mortgage interest payment arrears will mount.

It will be impossible for undercapitalised banks to survive these conditions intact. And as the commercial banking cohort continues to contract their credit obligations, there are bound to be bank failures threatening to undermine the entire banking system. Major central banks themselves already find that the losses on bonds acquired through quantitative easing have pushed their balance sheets into negative equity, a worsening situation as bond yields continue to rise.

By managing interest rates, mainly by forcing them lower than they would otherwise be if set by markets, central banks have unwittingly created the conditions for a global credit contraction on a massive scale. They are now at a crossroads. Either they discharge one of their primary functions, and that is to ensure the integrity of the financial system. Or they seek to discharge another primary function, and that is to prevent a collapse in their currencies’ purchasing power. The choice is now that black and white.

The consequences of removing the specie anchor
We now turn to the consequences of the most momentous decision in the last century taken by America as leader of the free world: the abandonment of gold standards and the introduction of the pure fiat dollar.

Under a credible gold standard, central banks were called upon to act as lenders of last resort if required to rescue the banking system from a general contraction of credit. So long as the gold standard’s credibility held, it did not have to face the consequences of expanding its currency commitments. Admittedly, other than preserving the integrity of the banking system, neither monetary policy nor government action attempted to manage and intervene in the broader economy when proper gold standards applied.

Generally, slumps were mercifully short as credit excesses were rapidly unwound and stability returned. The last such slump in America was in 1920, yet by late-1921 it was over. It was not the business of governments to intervene. Today, virtually every economic activity is regulated by governments, and they attempt to micromanage markets outcomes.

Though few of us seem to realize it, the free expression of individuals satisfying their needs and wants is heavily tampered with. And depressive portions of their income and spending are removed in taxation, and their wealth is stripped from them by currency debasement. In truth, the economic environment bears no relation to that before America’s forgotten depression of 1920, and more particularly before the First World War.

Today, the monetary anchor of gold is absent, and fiat currencies are volatile in their purchasing power. The difference between the two is clearly illustrated in the chart in Figure 2.
https://gm-media-library.s3.eu-west-...29dd535949.png

The common factor is crude oil. Priced in gold, since 1950 oil has been remarkably steady, and anyone dealing in oil priced in gold could confidently regard all price subjectivity to be confined to oil. Priced in dollars, the price variability has been in the currency rather than the commodity, which is not how it should be. Nevertheless, accounting conventions encourage dealers in crude oil to think the volatility is in oil, and not the currency.

This has important implications for how we should view a credit system anchored to a fiat currency, compared with specie. It tells us that since 1950, and more particularly from the early seventies, through booms and recessions if a credible gold standard had continued from where the Bretton Woods agreement left off (it was “temporarily suspended” by President Nixon in August 1971), the purchasing power of the dollar would have varied, but by considerably less than it has as a fiat currency.

There’s more. Figure 2 shows that not only was the oil price in gold considerably less volatile, but measured in dollars it has risen by 33 times, from $2.57 to $87 currently with considerable volatility. The steadiness in the oil price in gold — it has in fact fallen 30% in seventy-two years — tells us that it is the dollar which has lost purchasing power while the oil price has fallen slightly, not risen 33 times as the dollar indicates.

Critics of this conclusion have to surmount the legal position. Gold is money, and dollar currency is not. The best the dollar currency can be is a gold substitute on the basis that it can be exchanged for gold at a fixed price, but even in rudimentary form that was abandoned by President Nixon when he suspended the post-war Bretton Woods agreement.

Figure 3 shows how the four major currencies have fared since the beginning of that decade, indexed to the last day of 1969.
https://gm-media-library.s3.eu-west-...399af8209e.png

Since that date, measured in legal money the dollar currency has lost nearly 98% of its purchasing power, the euro (back calculated before 2000) 98.7%, sterling 99.2%, and the yen 94.8%. The majority of minor currencies have fared considerably worse.

Clearly, this has important consequences for credit — the currencies themselves and deposit accounts held at the banks, which are the circulating media we all use for our daily transactions. Most of the time we are happy to go along with the myth that in any transaction we should view the currency objectively and the items being purchased subjectively. In other words, we can agree with a seller that a dollar is a dollar and any difference of opinion about the price is reflected entirely in the item or service being exchanged.

That would certainly be true if the currency was tied to specie, but as shown in Figure 2 above, when it is not a credible substitute for specie, nearly all the volatility is in the currency. Furthermore, Figure 3 shows that retaining balances in fiat currencies is extremely costly over time. The reality of the situation is not understood by either the pubic or the foreign exchanges, the latter being totally absorbed in variations in values between fiat currencies, all of which are declining.

We now need to consider the implications of these findings. The contraction of bank credit which has only recently begun, is so far only evidenced in liquidation of financial securities. Given the exceptional balance sheet leverage at the peak of the current bank credit cycle, with Japanese and Euro zone global systemically important banks (G-SIBs) having balance sheet to equity ratios averaging over twenty times, the contraction phase of the cycle promises to be extremely severe. Under a gold standard, the shortage of credit initially causes interest rates to rise, hastening the liquidation of Mal investments and the reallocation of capital to sounder enterprises. The purchasing power of specie-linked currencies rises, consistent with a slump in business activity, before stabilizing as credit conditions normalize. Figure 4 below shows the the UK’s composite price index covering a century of the UK’s gold coin standard (introduced in 1817), illustrating the price effect of the bank credit cycle. The general price level did vary, but over the century was broadly unchanged. The volatility declined sharply after 1864 when the Bank of England joined the commercial banks’ clearing system. As the sole issuer of bank notes, this not only made clearing considerably more efficient, but the effect was to tie commercial bank credit more closely to the Bank of England, which issued the bank notes exchangeable into gold coin.

https://gm-media-library.s3.eu-west-...e1fe039c87.png
The stability afforded by these arrangements is wholly lacking today. The contraction of bank credit, which under a gold standard led to higher interest rates initially, is bound to be met in current circumstances by central banks endeavoring to suppress rates in an attempt to stave off a deepening recession, to rescue the commercial banking network from systemic failure, and to maintain financial asset values. These are primary, mandated responsibilities of a central bank.

After decades of declining interest rates, deteriorating credit conditions are brought about by a new trend of rising interest rates. Holders of fiat currencies are currently offered deposit rates which are still far from compensating them for loss of purchasing power, currently assessed at about ten per cent for consumer prices. Instead of valuing the possession of credit in the form of bank deposits, they have every incentive to eliminate their losses as much as possible by buying goods that they may need in future. Early in this process, consumers and businesses will simply be aware that prices are rising, and there is little sign of the situation ameliorating. That is a fair description of the current position.

At some point, there will be a growing realization that it is not prices rising, but their fiat currency’s purchasing power declining. When the import of the graphs in Figures 2 and 3 above is widely understood, that the objective value is in the goods and not the currency, a fiat currency is doomed.
We must conclude our examination of credit by stating that a currency credibly linked to specie generally retains its purchasing power, despite fluctuations in bank credit. Without that link, the currency eventually fails completely. After fifty-one years of no specie link at all, we appear to be rapidly approaching that end.


[i] See The Fed’s Formative Years 1913-1929 by David Wheelock: https://www.federalreservehistory.or...ormative-years
[ii] Reported in Farming in the 1930s — Wessels Living History Farm

https://wolfstreet.com/2022/10/06/ba...ero-this-week/

Bank of England Explains Why Intervention Wasn’t Pivot to QE, But Effective Effort to Halt Death Spiral Triggered by Tax-Cut Panic in Gilt Market: Bond Purchases Near Zero this Week

by Wolf Richter • Oct 6, 2022 •

Underlying pension fund issues can now be dealt with in an orderly fashion.

By Wolf Richter for WOLF STREET.

Bank of England Deputy Governor for financial stability Jon Cunliffe, in a letter to UK Parliament on Wednesday, confirmed that the BOE had stepped into the UK government bond market last week to stop a panic that had turned into a self-propagating death spiral, that was threatening to blow up £1 trillion in gilts-based derivatives that pension funds were using to achieve their investment goals.

Panics can be triggered when someone cries “fire” in a crowded theater. In this case, the panic the UK government bond market was triggered by the new government’s ill-conceived series of announcements over a two-week period, culminating with the release of the official plan on Friday September 23, topped off with comments by finance minister Kwasi Kwarteng on Sunday, September 25. They detailed tax cuts for corporations and the wealthy that would have to be funded by large amounts of new debt, just when interest rates were already rising in response to inflation that had hit 10% and had become the number one economic problem that would have to be dealt with by pushing up interest rates further.

The bond market rebelled against the new government’s debt-doesn’t-matter policies in this environment by selling bonds and driving up yields. And suddenly debt mattered.

And the whole thing took on a life of its own. The plunging prices of long-dated gilts – their yields spiked – caused investment banks to send out margin calls to defined-benefit pension funds that had used £1 trillion in “liability driven investment” (LDI) funds. These are derivatives based on long-dated gilts. The pension funds then had to sell gilts into the already panicky market, to meet those margin calls, which caused gilt prices to fall further, which caused further margin calls, etc., hence the death spiral.

Cunliffe, in a letter sent to Treasury Select Committee chairman Mel Stride, told UK Parliament that the BOE had first fielded concerns on Friday, September 23, when the mini-budget with the tax-cut announcement was released, and when yields spiked violently.

On the evening of September 27, after the 30-year gilt yield spiked by 67 basis points during the day, following the spikes of prior days, LDIs warned the BOE that the funds might fail, Cunliffe said.

“Measured over a four day period, the increase in 30 year gilt yields was more than twice as large as the largest move since 2000, which occurred during the ‘dash for cash’ in 2020,” he said.

“It was more than three times larger than any other historical move. Gilt market functioning was severely stretched, particularly at the long end of the curve,” he said.

“The Bank was informed by a number of LDI fund managers that, at the prevailing yields, multiple LDI funds were likely to fall into negative net asset value. As a result, it was likely that these funds would have to begin the process of winding up the following morning,” Cunliffe wrote.
“In that eventuality, a large quantity of gilts, held as collateral by banks that had lent to these LDI funds, was likely to be sold on the market, driving a potentially self-reinforcing spiral and threatening severe disruption of core funding markets and consequent widespread financial instability,” he wrote, reported by MarketWatch.

BOE staff worked during the night on Tuesday, September 27, to design an intervention by the BOE that would avert the crisis, in “close communication” with the U.K. Treasury.

Following the announcement of the BOE intervention plans on Wednesday, September 28, at 11 am local time, the 30-year gilt yield plunged by over 100 basis points.
“Had the Ban

k not intervened on Wednesday 28 September, a large number of pooled LDI funds would have been left with negative net asset value and would have faced shortfalls in the collateral posted to banking counter-parties. [Defined benefit] pension fund investments in those pooled LDI funds would be worth zero,” said Cunliffe.
“This would have resulted in even more severely disrupted core gilt market functioning, which in turn may have led to an excessive and sudden tightening of financing conditions for the real economy,” said Cunliffe.

The risks of leverage from LDI funds had been considered by the BOE before the panic, he said, but the repricing ahead of the BOE’s intervention “far exceeded historical moves.” If gilt yields had risen more slowly, pension funds could have unwound their portfolios in an orderly fashion, without triggering the death spiral.

So the panic has settled down. This wasn’t a “pivot” to QE, but a brief intervention to halt a death spiral, and it did that effectively.
The BOE plans to end the program on October 14, as initially announced. The BOE has purchased only £3.66 billion in bonds since the program started last Wednesday, with only £22 million purchased on Monday, zero on Tuesday and Wednesday, and £154 million today, after it purchased only £1.2 billion per day on average last week – far below the up to £5 billion per day amount that the BOE had initially announced. And the BOE is still planning to start QT by selling gilts on October 31. So far, this was a highly effective way to stem a panic that had taken on a life of its own, without actually buying much:
https://wolfstreet.com/wp-content/up...2022-10-06.png

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3 comments for “Bank of England Explains Why Intervention Wasn’t Pivot to QE, But Effective Effort to Halt Death Spiral Triggered by Tax-Cut Panic in Gilt Market: Bond Purchases Near Zero this Week”
phleep
Oct 6, 2022 at 2:01 pm
The BoE found itself held hostage to the momentum and world it had created. The only tool in hand was a pivot: a relapse into the drug that was the problem. That is a sad potential for the USA as well, though we are not as parochial and small.

https://www.theburningplatform.com/2...m/#more-280583



The Rise of the Global South and the Foundation of a New Currency System

Guest Post by Chris MacIntosh

https://internationalman.com/wp-cont...22/09/curr.jpg

“The issue of creating an international reserve currency based on a basket of currencies of our countries is being worked out,” Vladimir Putin said at the BRICS business forum.

So there you have it.

You may recall that Russia has been cut off from the SWIFT system. Now if you’re a consumer of Western legacy media, you’d likely not have heard a word on it, but the fact is that Russia was largely prepared for this and has already developed and is now using the SPFS the Russian equivalent of SWIFT, developed by the Central Bank of Russia since 2014.

If you weren’t paying attention at the time, we were, and I can tell you that after the The West threatened to disconnect Russia from the SWIFT system was when they urgently began building SPFS. This is an alternative for international payments which, in their own words, will… “cut reliance on the Western financial system.”

In the meantime, Russia is taking steps to strengthen the alliance between BRIC nations, including re-routing trade to China and India.

“We are actively engaged in reorienting our trade flows and foreign economic contacts towards reliable international partners, primarily the BRICS countries,” Putin said in his opening video address to the participants of the virtual BRICS Summit.

That this is hardly reported in the Western MSM is both hilarious and rather frightening. Perhaps the sheeple don’t deserve to know they’re on the Titanic and the only life boats are already spoken for by the 1%.

In any event, underpinning this trade with the USD is problematic not only for Russia, but any country which may now (or in the future) disagree with the US.

This lesson was taught earlier this year, after Russia found $300b of its USD currency reserves to have been stolen. As such, any alternative currency must be removed from any Western influence in the trade.

The USD is backed by “the full faith and credit” of the US government, which is to say… debt. This debt-based system is problematic for the US, which a lot of people focus on. That is true, however in the short term it is a bigger problem for those in the system that are not the US.

Why?

Because the US has seignior-age, while others don’t. That means the eradication of the USD system for many actually involves paying off the debts. That is bullish for the USD, and that very bullishness itself creates a feedback loop which causes more bankruptcies (particularly in Emerging Markets). But this also creates a situation where, when seeing the inevitability of outcome, many countries will find the relative benefits of a BRICs currency system, especially when not penalized for defaults on the old (Western US led) system.


Practical example of this on a smaller scale: Let’s say, you own a $1m property in Japan, and you have a mortgage of $800k on it. You’re servicing this OK with income in Yen. Then the Yen blows out, causing rates to rise, and your ability to service collapses. You know that even if you spend every last penny on your mortgage payments, you’re still going to lose your house. Your bank has a long history of threatening behavior and kicking folks out of their home.

They’re also the only bank in town, and if you get on the wrong side of them – well you’ll never get a loan again. Now… imagine you could declare bankruptcy, but simultaneously nationalize your house and tell this bank to get stuffed.

That today is the international situation. Now naturally that bank won’t be happy with you and won’t extend any credit again, maybe ever, but another bank has seen this coming and opened down the road. It has literally suggested that you do this and they have promised not to penalize you for defaulting on your mortgage. What do you do?

We’re in the early stages of this, though it is moving very quickly now. What is worth considering is that this new BRICs based currency system hasn’t got the debt based system in place, where participants are tied to it like serfs. They need something new and it needs to be non coercive. A carrot, not a stick.
And this is where the following is so important to understand.

This new currency system will be backed by “stuff”.
After all, it is what the BRICs are known for.

This is from a Russian news site.

“Russia proposes a new international standard for trading in precious metals: the Moscow World Standard (MWS) which will become an alternative to the London Bullion Market Association (LBMA) which systematically manipulates precious metals markets to depress prices. According to Russia’s Finance Ministry, this new, independent international structure is necessary for “normalizing the functioning of the precious metals sector” and its creation is”critically important.”

Here we are.

The foundation of a new currency system is being built together with trade being conducted outside of Western financial institutions and centers.

-----------------------------------------------------

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https://www.whatdoesitmean.com/index4055.htm


October 5, 2022

“Some Sons of bitches That Doesn’t Get The Word” Now Controls Fate Of World

By: Sorcha Faal, and as reported to her Western Subscribers

A forewarning new Security Council (SC) report circulating in the Kremlin today first noting President Putin signed into law this morning four unification treaties with the Donetsk and Lugansk People’s Republics, as well as the Kherson and Zaporozhye Regions, that earlier were unanimously endorsed by the Federation Council, the upper house of the Russian parliament, were ratified on Monday by the State Duma, the lower house of parliament, after they were certified as lawful by the Constitutional Court over the weekend, says in response to questions if the “Special De-Nazification Operation” to liberate Ukraine will now change to a total war counter terrorism operation to protect the Russian Federation, top Kremlin spokesman Dmitry Peskov noted that determining the status of hostilities is the prerogative of the Supreme Commander, and stated: “To date, no such decisions have been made, we are talking about a special military operation that continues”.

For Supreme Commander Putin to determine the status of hostilities, this report explains, leading experts have just assessed: “NATO faces a dilemma…

Member states are divided on how to proceed regarding Ukraine…Nine countries want membership for Ukraine immediately, 21 disagree…Then there is the issue of what exactly Ukraine is today…Is NATO willing to 'liberate' the regions that are joining Russia?”—an assessment joined with Russian Diplomat Konstantin Vorontsov informing the United Nations General Assembly yesterday: “The United States is increasing the deliveries of weapons to Ukraine, providing its military with intelligence information, ensuring the direct participation of its fighters and advisers in the conflict...This not only prolongs hostilities and leads to new casualties, but also brings the situation closer to the dangerous line of a direct military clash between Russia and NATO”—immediately after which Russian Ambassador to the United States Anatoly Antonov issued a final warning to the socialist Biden Regime: “The administration’s decision to continue pumping the Kiev regime with heavy weapons only secures Washington’s status as a participant of the conflict... The supply of military products by the US and its allies not only entails protracted bloodshed and new casualties, but also increases the danger of a direct military clash between Russia and Western countries…We perceive this as an immediate threat to the strategic interests of our country...We call on Washington to stop its provocative actions that could lead to the most serious consequences”.

Immediately recognizing these liberated regions as now being part of the Russian Federation, this report continues, was the Democratic People's Republic of Korea (DPRK), that’s most commonly known in the West as North Korea, and suggested the United States refrain from interfering in the internal affairs of other nations while accusing it of applying “gangster-like double standards”—is a North Korea the West keeps referring to as a Stalinist nation, but couldn’t be further from the truth—in factual reality, North Korea is ruled over by its leaders who are devoutly loyal to the late world renowned American Christian evangelist Reverand Billy Graham—is a bizarre factual reality that enabled Reverend Billy Graham supported President Donald Trump to keep the peace with North Korea—even though Reverend Franklin Graham, the son and heir of Reverend Billy Graham, sparked rage in the West after he encouraged prayers for President Putin, it caused Pyongyang to begin using a new formula to characterize the North Korea-Russia relationship it described as “tactical and strategic collaboration”—and that quickly followed President Putin writing a letter to North Korea vowing “strategic and tactical co-operation, support and solidarity" between the two countries adding they both "had been put on a new high stage, in the common front for frustrating the hostile forces military threat and provocation”.

The importance of noting North Korea, this report details, is because on Sunday, the French newspaper Le Figaro warned: “Russian hypersonic missile systems are more advanced than anything being fielded by the North Atlantic Alliance today...Russia’s hypersonic weaponry as its main strategic asset, is capable of flying at incredible speeds and maneuvering while in flight...And is a weapon deploy-able as a part of a multiple independently targetable reentry vehicle payload aboard Russian intercontinental nuclear ballistic missiles”—a warning followed less than 24-hours later when Japan went on high alert and ordered evacuations after North Korea fired a missile directly over their nation—expert analysis then revealed: “The missile flew about 2,800 miles, the longest distance ever traveled by a North Korean missile...The intermediate-range missile was fired from Mupyong-ri, near North Korea’s central border with China, according to the South Korean military...It was launched at 7:22 a.m. and landed in the Pacific Ocean 22 minutes later, Japan’s chief cabinet minister, Hirokazu Matsuno, said...It crashed about 1,864 miles — or 3,000 kilometers — east of the archipelago, outside Japan’s exclusive economic zone, which extends 200 nautical miles from its shores”—is an analysis that showed this North Korean missile traveled at the near high-hypersonic speed of 7,636.36 miles per hour (12,289.1 kilometers per hour) no NATO or Western weapon could defend itself against—and in response to North Korea showing it has unstoppable nuclear armed capable hyper-sonic missiles, yesterday South Korea launched one of its ballistic missiles, that immediately exploded on its launch pad.

Prior to North Korea proving its hyper-sonic missile power, this report notes, the Nord Stream 1 and Nord Stream 2 pipelines 51% owned by Russia and 49% owned by Germany providing natural gas to the energy starved European Union were attacked in a blatant act of war—an act of war world-renowned economics Professor Jeffrey Sachs of Colombia University factually declared was committed by the United States, then Bloomberg News immediately cut him off—after this act of war it saw British Defense Chief of Staff Admiral Tony Radakin warning: “Moscow could use space-based weaponry to target Western infrastructure...We saw an example of that at the tail end of last year, when Russia exploded an object in space which created immense debris…Russia has nuclear capabilities…Russia has underwater capabilities”—but whose warning failed to mention Russia’s newest anti-aircraft missile defense system S-500 Prometheus that has already been put into mass production, that along with being able to shoot down every NATO and American stealth war plane, it can also obliterate satellites in low earth orbit.

Among those knowing the full war fighting capabilities of Russia, this report continues, is former CIA Director and retired US Army General David Petraeus, who on Sunday declared that the Russian military is “on the precipice of collapse”, and assessed: “No amount of shambolic mobilization, which is the only way to describe it, no amount of annexation, no amount of even veiled nuclear threats can actually get Putin out of this particular situation...He is losing, and the battlefield reality he faces is, I think, irreversible”—is an actual lunatic declaration and assessment that was swiftly followed by United States Army Secretary Christine Wormuth grimly announcing that the US Army failed to hit its recruiting goals this year, falling 15,000 soldiers short of its 60,000 target—then it was reported: “According to officials, the Marine Corps, which usually goes into each fiscal year with as much as 50% of its recruiting goal already locked in, has only a bit more than 30%...And the Air Force and the Navy will only have about 10% of their goals as they start the new fiscal year...The Air Force usually has about 25%”—as to why the American military is “on the precipice of collapse”, it’s documented in articles like “US Army Recruitment Falters – Misses Goal By 25% As Woke Ideology Takes Over”, “Army Cuts Off More Than 60,000 Unvaccinated Guard and Reserve Soldiers from Pay and Benefits” and “Biden Declared The Pandemic Over, But Unvaxxed Air Force Pilots Are Still Grounded”—but most critically being kept hidden from the American people about their military forces, is that the socialist Biden Regime has turned them into a massive internal spy operation to target their own citizens, as best documented in chilling articles like “Rights Groups Say the Pentagon Is Buying Its Way Around the Fourth Amendment”, wherein it’s beyond shockingly revealed: “Twenty-two civil rights groups including the American Civil Liberties Union, Demand Progress, and the Electronic Frontier Foundation have signed a letter accusing the Pentagon and the executive branch of exploiting a legal loophole to surveil Americans absent congressional oversight or approval from the courts”.

For reasons only future mental health professionals and historians will be able to explain, this report details, so-called United States military experts that couldn’t defeat rice farmers in Vietnam or goat herders in Iraq and Afghanistan, while killing millions of innocent civilians and laying waste to everything in sight, keep seeing defeat in Russian military tactics of using troops to evacuate civilians, then falling back to entrenched positions, exactly like they’re now doing in the Kherson region—as it pertains to the more than 200,000 people called up for partial mobilization that have already arrived in the Russian Armed Forces, these so-called United States military experts fail to notice they aren’t combat forces, rather they are all highly-trained weapons specialists—and is a fact known to the very few honest Western media sources that have just sent out warning articles like “Russian Submarine With 'Nuclear Tsunami' Technology Vanishes” and “Nuclear Weapons Convoy Sparks Fears Putin Could Be Preparing Test To Send ‘Signal To The West’”.

In the latest example of leftist Western media lunacy, this report notes, the Editorial Board of the Washington Post just released their article “Putin Threatens Nuclear War. The West Must Deter Disaster”, wherein these idiots assess: “Each step might be detected and provide the United States and its allies time to react…Early warning would — and should — trigger intense diplomatic and other pressure on Mr. Putin to stop before setting off a nuclear catastrophe”—but whose leftist idiots at the Washington Post failed to notice the Arms Control Association announcement issued back in March, wherein it warned that President Putin, on 27 February, ordered Russian nuclear forces to move to the heightened alert status of a “special regime of combat duty”, which means there will be no “early warning” or anything to “detect” when total war begins.

In a just concluded conversation between Russian geopolitical analyst Oksana Boyko and Senior Fellow Sourabh Gupta at the Institute for China-America Studies, this report continues, it saw them assessing: “Western media are awash with articles on how gravely the Kremlin has miscalculated its strategy in Ukraine, failing to achieve a blitzkrieg and having to adjust its military operation on several occasions…And yet Russia is readying to welcome back its historical lands, with the overwhelming support of the people who live there, while keeping its budget and development goals mostly intact, which can’t be said about its Western adversaries…Has Vladimir Putin miscalculated the Western response or has the West miscalculated Putin’s moves?”—and is an assessment most critical to notice because it’s concurred with by world-renowned American foreign policy expert Walter Russell Mead, who, in his just published warning open letter “Putin’s Nuclear Threat Is Real”, most factually observed about President Putin:
The conflict isn’t only about Ukraine. He’s waging a global war on the U.S.-led order.

Mr. Putin sees global politics today as a struggle between a rapacious and domineering West and the rest of the world bent on resisting our arrogance and exploitation.
The West is cynical and hypocritical, and its professed devotion to “liberal values” is a sham.

The West is not a coalition of equals; it represents the domination of the “evil Anglo-Saxons” over the Europeans and Japan.

Mr. Putin sees this American-led world system as the successor to the British Empire, and he blames the Anglo-Saxon or English-speaking powers for a host of evils, from the Atlantic slave trade to European imperialism to the use of nuclear weapons in World War II.

As the world stands at the abyss of a total global nuclear war President Putin will not back down from against the godless Western colonial powers, this report concludes, well worth remembering today is world-renowned British-American foreign journalist Michael Dobbs, who wrote the definitive book on the last time our world stood staring into the abyss of total nuclear war entitled “One Minute to Midnight: Kennedy, Khrushchev, and Castro on the Brink of Nuclear War”, wherein it factually cites Soviet Premier Nikita Khrushchev sending the dire message to American President John Kennedy: “I’m not interested in the destruction of the world, but if you want us all to meet in hell, it’s up to you”, but most ominously reveals:
Contrary to popular belief, the biggest danger of nuclear war in October 1962 did not arise from the so-called eyeball-to-eyeball confrontation between Khrushchev and Kennedy but from their inability to control events that they themselves had set in motion.

Khrushchev never authorized the shooting down of an American U-2 spy plane over Cuba by a Soviet missile on Oct. 27, 1962, the most dangerous day of the crisis.
Kennedy was unaware that another U-2 strayed over Russian airspace the same day, triggering Soviet air defenses.

“There’s always some son of a bitch that doesn’t get the word”, was how Kennedy put it later.

[Note: Some words and/or phrases appearing in quotes in this report are English language approximations of Russian words/phrases having no exact counterpart.]

https://www.whatdoesitmean.com/dbt21.jpg

October 5, 2022 EU and US all rights reserved. Permission to use this report in its entirety is granted under the condition it is linked to its original source at WhatDoesItMean.Com. Freebase content licensed under CC-BY and GFDL.

[Note: Many governments and their intelligence services actively campaign against the information found in these reports so as not to alarm their citizens about the many catastrophic Earth changes and events to come, a stance that the Sisters of Sorcha Faal strongly disagree with in believing that it is every human being’s right to know the truth. Due to our mission’s conflicts with that of those governments, the responses of their ‘agents’ has been a longstanding misinformation/misdirection campaign designed to discredit us, and others like us, that is exampled in numerous places, including HERE.]

[Note: The WhatDoesItMean.com website was created for and donated to the Sisters of Sorcha Faal in 2003 by a small group of American computer experts led by the late global technology guru Wayne Green (1922-2013) to counter the propaganda being used by the West to promote their illegal 2003 invasion of Iraq.]
[Note: The word Kremlin (fortress inside a city) as used in this report refers to Russian citadels, including in Moscow, having cathedrals wherein female Schema monks (Orthodox nuns) reside, many of whom are devoted to the mission of the Sisters of Sorcha Faal.]

“Sleepwalkers” Leading The World To War Love The Planet And Hate Humanity

“There’s No Getting Around The Pain Box—You Are Going To Face The Storm”

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-

October 6, 2022

https://www.whatdoesitmean.com/index4056.htm

France Rejects Biden As West Waits For Second Coming Of Trump

By: Sorcha Faal, and as reported to her Western Subscribers

A compelling new Security Council (SC) report circulating in the Kremlin today first noting President Putin this morning appointed acting heads of the four new Russian regions who will govern until elections are held according to Russian law, says he then issued an order placing the Zaporozhye Nuclear Power Plant, the largest nuclear facility in Europe, under Russian management.

Speaking on the Soloviev Live show yesterday, this report notes, it saw Chairman Colonel-General Andrey Kartapolov of the State Duma Defense Committee saying the Ministry of Defense (MoD) should stop hiding information from citizens and be more truthful in its reports, with him forcefully arguing: “No more lies...We’ve talked about this before...RT Editor-in-Chief Margarita Simonyan has spoken about this in length but, apparently, this has not reached the ears of some individual leaders...Reports from the Soviet Information Bureau during the early months of the Nazi invasion of the USSR in 1941 provided more information than what is being said in the Ministry of Defense reports today...In every report they said that somewhere we are retreating, somewhere we are stubbornly repelling the attacks of a superior enemy, somewhere we have left settlements...Russia is also in danger today and the enemy is already on Russian land...None of this information is being reported by official sources and people learn about these things from governors, telegram channels and military correspondents...The reports from the Ministry of Defense practically do not change their content...The Russian people are not stupid and can see that they are not being allowed to learn even a portion of the actual truth...This can lead to a loss of credibility”.

In response to the arguments made by Chairman Colonel-General Kartapolov, this report continues, Security Council Members note the socialist indoctrination he received during his most formative early years in the Soviet Military sees him failing to understand that in a free and open society like exists in the Russian Federation, people are expected “learn about things from governors, telegram channels and military correspondents” along with what the MoD reports—most specifically because in the present instance, the “Special De-Nazification Operation” to liberate Ukraine is actually just a small part of the total threat matrix both Kremlin and MoD leaders have to make life and death decisions about on an hourly basis.

Included in the total threat matrix Kremlin and MoD leaders are currently facing, this report explains, Russia has just been called upon by Africa to help free its peoples from the socialist Western colonial powers enslaving them—today Russia is on high alert monitoring the situation on the Korean Peninsula where the United States military has just stationed a nuclear weapons armed aircraft carrier strike group off the coast of South Korea in retaliation for a recent missile launch by the North Korea, and comes at the same time the Chinese military is rehearsing sinking American aircraft carriers with hypersonic missiles—today Russia is on high alert monitoring the United States deployment into the Atlantic Ocean of a massive nuclear armed aircraft carrier strike group loaded with 9,000 troops—is a massive deployment of American military joined this morning by Israel placing its forces on standby combat alert—all of which is occurring the day after Supreme Socialist Leader Joe Biden was caught on a hot mic ominously threatening: “No one fucks with a Biden”—is a Socialist Leader Biden, both as vice president and as a presidential candidate, who proposed an alternative nuclear declaratory formulation known as “sole purpose”, meaning that the sole purpose of American nuclear weapons is to deter nuclear use against it or its allies and would never be used in a first strike—then in March, it was horrifyingly revealed to the world: “President Joe Biden has walked back from his longtime preferred policy of “no first use” of nuclear weapons, according to his administration’s 2022 Nuclear Posture Review”.

As to the MoD informing the Russian peoples about the special operation, this report notes, on 21 September, it saw Defense Minister Sergey Shoigu revealing: “Our losses to date are 5,937 dead...Initially, the Armed Forces of Ukraine amounted to between 201,000 and 202,000 people, and since then they have suffered losses of around 100,000, with 61,207 killed and 49,368 others wounded”—and as to why Ukrainian losses are so staggeringly high, Crimean Cossack assault battalion commander Anton Sirotkin heart breakingly revealed their tactics: “Their method of action is as follows: first they abandon mobilized soldiers, in fact, those who are not trained, not fired upon, they also probe for weaknesses, and then mercenaries and motivated national battalions move in...The mobilized resource is obtained between a rock and a hard place...Many Ukrainian soldiers from among the mobilized are looking for an opportunity to surrender...But behind them are the national battalions, mercenaries in the form of detachments, they are clearly given to understand that they have families and children left on the territory of Ukraine, in fact they are hostages of the situation”.

Unlike the socialist Western colonial powers that show no mercy when wiping out ill-trained and ill-equipped indigenous peoples, this report continues, the MoD changed tactics in the special operation to minimize the wholesale slaughter of ordinary Ukrainians forced to sacrifice their lives, and instead focused on the elimination of the Nazi nationalist forces directing this genocide—a change of tactics enabling the MoD to report today: ”The Russian armed forces pushed back the Ukrainian military from the line of defense in all directions”—“Russian troops liberated the village of Zaitsevo in the DPR, liquidated more than 120 Ukrainian soldiers”—“The entire territory of the Kremennaya region in the LPR is under the control of the Russian allied forces of the republics of Donbass”—“Russian artillerymen destroyed two Ukrainian batteries of the Grad MLRS in a day...In addition, strikes by operational-tactical and army aviation, missile troops and artillery hit eight command posts of Ukrainian troops, 63 artillery units in firing positions, manpower and military equipment of the enemy in 173 districts per day”—“Russian Aerospace Forces destroyed three pontoon crossings of the Armed Forces of Ukraine in the Kherson and Nikolaev regions”—“Russian Aerospace Forces shot down two Ukrainian MiG-29 and Su-24 aircraft”—“Russian missile forces destroyed more than 280 military units of the Armed Forces of Ukraine in the Kherson and Nikolaev regions”—“Russian aviation forces destroyed up to 60 Ukrainian soldiers and two tanks in the DPR”—and in total, since the beginning of the special military operation, Russian military forces have destroyed the following Ukrainian targets: 315 aircraft, 157 helicopters, 2,160 unmanned aerial vehicles, 379 anti-aircraft missile systems, 5,412 tanks and other armored combat vehicles, 862 combat vehicles of multiple launch rocket systems, 3,452 field artillery guns and mortar, as well as 6,316 units of special military vehicles.

In seeking an end to the needless bloodshed in a conflict Ukraine never had a hope of winning, this report concludes, Security Council Member Valentina Matviyenko today pleaded: “Let us, the parliament of Russia and the parliament of Ukraine, sit behind the negotiating table today, at the G20 parliamentary platform...Let’s try to understand each other and find solutions...We are saying it again – we are in favor of negotiations, of dialogue, of a peaceful political solution to this crisis...Let’s start talking”—a plea coming at the same time America’s most watched newsman Tucker Carlson of Fox News warned the criminal socialist Biden Regime is leading the world into World War III—a warning quickly joined by world-renowned American historian philosopher Noam Chomsky—are warnings heeded by French President Emmanuel Macron, who tomorrow will convene for the first time the 44-nation European Political Community, but told the socialist Biden Regime the United States was not welcome—is a French rejection of Socialist Leader Biden that follows top German lawmaker Petr Bystron exclaiming to cheering crowd of over 100,000 peoples in Prague: “Donald Trump’s populism is sweeping the world!”—and was an exclamation of truth for a world fearing the coming abyss of total nuclear war joined by the article “The West Is Waiting For The Second Coming Of Trump”, wherein it most factually observed: “There is only one statesman in all of Western civilization who can save that very civilization from its accelerating decline and ruin...This man's name is Donald Trump...There is nothing unusual in such a situation: world history is full of examples of the appearance of a "person from the outside" in situations where the existing political elite was completely unable to cope with systemic crises”. [Note: Some words and/or phrases appearing in quotes in this report are English language approximations of Russian words/phrases having no exact counterpart.]

https://www.whatdoesitmean.com/ttb28.jpg

October 6, 2022 EU and US all rights reserved. Permission to use this report in its entirety is granted under the condition it is linked to its original source at WhatDoesItMean.Com. Freebase content licensed under CC-BY and GFDL.

[Note: Many governments and their intelligence services actively campaign against the information found in these reports so as not to alarm their citizens about the many catastrophic Earth changes and events to come, a stance that the Sisters of Sorcha Faal strongly disagree with in believing that it is every human being’s right to know the truth. Due to our mission’s conflicts with that of those governments, the responses of their ‘agents’ has been a longstanding misinformation/misdirection campaign designed to discredit us, and others like us, that is exampled in numerous places, including HERE.]

[Note: The WhatDoesItMean.com website was created for and donated to the Sisters of Sorcha Faal in 2003 by a small group of American computer experts led by the late global technology guru Wayne Green (1922-2013) to counter the propaganda being used by the West to promote their illegal 2003 invasion of Iraq.]
[Note: The word Kremlin (fortress inside a city) as used in this report refers to Russian citadels, including in Moscow, having cathedrals wherein female Schema monks (Orthodox nuns) reside, many of whom are devoted to the mission of the Sisters of Sorcha Faal.]

“Sleepwalkers” Leading The World To War Love The Planet And Hate Humanity
“There’s No Getting Around The Pain Box—You Are Going To Face The Storm”

Return To Main Page

https://www.zerohedge.com/geopolitic...nst-deep-state

Vladimir Putin's Battle Cry Against The Deep State

https://zh-prod-1cc738ca-7d3b-4a72-b.../picture-5.jpg
by Tyler Durden
Thursday, Oct 06, 2022 - 11:00 PM

Authored by Oscar Silva-Valladares via The Ron Paul Institute for Peace & Prosperity,

The recent ceremony of accession of four Ukrainian regions to Russia brought a speech from President Putin that outlined the reasons behind Russia’s current struggles, the character and identify of its foes and, more importantly, laid the groundwork for Russia’s next level of confrontation with the West beyond the ongoing military conflict in Ukraine. In his speech, Putin clearly defined the present fight as a worldwide battle in which Russia plays a leading role against the Deep State that ultimately runs the West and which uses all available tools - including military, economic, cultural, and social – in its attempt to preserve uni-polar world domination.
https://assets.zerohedge.com/s3fs-pu...?itok=JPmocoCC

Putin’s words were directed to three distinctive audiences: the collective West, the Global South and Russia. He went back to Middle Ages history to remind the origins and impact of Western resource exploitation and colonialism in the Americas, Asia and Africa through imperialistic wars, racism, and slavery.


He touched upon the military exploits of the 20th century led primarily by the US and its allies and its impact in Germany and Japan at the end of the Second World War, Korea in the 1950s, Vietnam in the 1960-70s and its latest failed adventures in Iraq, Libya, Syria, and Afghanistan. He also highlighted the dire days of Russia during the 1990s and the Western powers’ attempts to turn it into a dismembered and passive cheap natural resources outlet. Putin’s message to Russians had nationalistic and religious tones, touching on the defense of traditional family values as a call to arms against the threat caused by dwindling population growth. He also named US monetary printing as one of the key tools used by the Western establishment to achieve its self-preservation and supremacy goals, reminding that paper doesn’t feed nor warms human beings.

It would be tempting to see this speech narrowly as just another manifestation of Russia’s position in the big geopolitical battles, but what Putin has done is setting international rivalry in deep historical and cultural terms which have an undoubted appeal across the globe. Critics will see Putin’s benign characterization of Russia as a cynical ploy that hides the country’s role, through its commanding post in the Soviet Union, in the subjugation of Eastern European countries after World War II, but nevertheless the Global South will see things differently.

Putin’s scathing attack against the West is a multi-headed weapon as it rallied to the conservative segments of a population dismayed by globalism imposing a deeply disturbing agenda that goes against traditional views on family, marriage and sex, but it also has leftist tones, as his criticism also goes against the same globalism that is worsening wealth disparity, and even a libertarian appeal as he referred to the imposition of states of emergency, media control and sanctions on other societies as examples of Western made totalitarianism. Putin’s primary target was the Anglo-Saxon establishment, mainly the US and Great Britain, and he attempted to build a wedge within the West as he focused on sovereignty, a cry with resonance in countries like Hungary and Italy, and on traditional anti-war sentiments in Germany and Japan by remembering the horrors of the World War II bombings in Dresden, Hamburg, Cologne, Hiroshima, and Nagasaki.

An immediate consequence of Putin’s rhetorical escalation will be increased US pressure on the Global South to follow anti-Russian sanctions. To successfully counter this menace, and as Russia needs its continuous support, it will have to combine ideology with pragmatic and tangible support in terms of access to critical energy and food resources to the poorer countries. The recent abstentions of China, India and Brazil on a UN Security Council resolution calling for condemnation of the Ukraine referendum no doubt were driven by these countries’ expectations on Russia’s future actions.

Following the end of the Cold War and the collapse of the Soviet Union, and as it gradually abandoned socialism, Russia lost the powerful ideological appeal that it had during decades in the Global South and in the West’s anti-establishment segments. The most remarkable aspect of Putin’s recent speech is bringing back ideological confrontation into the forefront. This new battle looks to present the West’s defense of democracy, freedom, and sovereignty as hollow and hypocritical. A combined message of anti-colonialism and conservatism is a powerful tool but Putin’s indirect and subtle appeal to people power as the only way to finally counter the Deep State is even stronger. Putin’s identification of the Deep State as humanity’s foe may be his ultimate ideological legacy, something avoidable if the US would have resigned itself to be just a normal country and to focus primarily on its people’s prosperity.

https://www.dollarcollapse.com/whos-...on-since-1976/

Who’s really running Biden White House? Patrick Wood has the answer: Clue — it’s the same folks who’ve been pretty much running every administration since 1976

by Bryan Lutz ◆ October 8, 2022

https://i0.wp.com/www.dollarcollapse...24%2C485&ssl=1

Guest Post by Patrick Wood from the blog on LeoHohmann.com:
The Trilateral Commission is the gatekeeper of the modern technocracy movement, and technocracy is ground zero for the global totalitarian (beast) system. This organization was co-founded 50 years ago by David Rockefeller and Zbigniew Brzezinski. Trilateralists are the ones today who are pushing the war on carbon, the war on food and the coming world war between Russia-China and U.S.-NATO. Their overall agenda represents a war on humanity and, as such, receives inspiration from the very depths of hell.

By Patrick Wood

The Trilateral Commission is the gatekeeper of the modern technocracy movement, and technocracy is ground zero for the global totalitarian (beast) system. This organization was co-founded 50 years ago by David Rockefeller and Zbigniew Brzezinski. Trilateralists are the ones today who are pushing the war on carbon, the war on food and the coming world war between Russia-China and U.S.-NATO. Their overall agenda represents a war on humanity and, as such, receives inspiration from the very depths of hell.

By Patrick Wood
Since the Carter Administration in the 1970s, members of the Trilateral Commission have dominated every president since, both Democrat and Republican, to establish their self-proclaimed goal of a New International Economic Order. For all who think the Commission is over-the-hill, you need to get a grip on what is actually happening.

Here are the top 10 Trilaterals controlling Biden. (Trilateral Commission current or former members are in bold type.)

Joe Biden is surrounded by TEN current and former members of the Trilateral Commission. They have become like a personal guard and policy controllers for virtually everything that Biden has pursued since his inauguration. Since the Trilateral Commission membership is global – only one third are Americans – these 10 interlopers collectively represent the interests of the global hegemony that is trying to destroy America.
First, foreign policy is locked down by Secretary of State Tony Blinken and his Deputy Secretary of State Wendy Sherman.
Then there is Biden’s National Security Advisor Jake Sullivan. The NSA is the gatekeeper of what reaches the president’s attention. During the Carter administration, Trilateral co-founder Zbigniew Brzezinski was the NSA.
Three of the most important ambassadorships are occupied by Trilaterals:

1. Mark Brzezinski, U.S. Ambassador to Poland.

1. Nicholas Burns, U.S. Ambassador to China (who also served in the Clinton and George W. Bush administrations).

1. Ken Juster, U.S. Ambassador to India (who by the way also served in the Trump administration as deputy assistant to the president for International Economic Affairs).

China and India are the two most influential powerhouses of Technocracy in the world. And yes, Mark Brzezinski is the brother of MSNBC broadcaster Mika Brzezinski and son of the late Zbigniew Brzezinski. Are you surprised that Poland is currently in talks with the US about hosting nuclear weapons? Who do you suppose came up with that idea? The Brzezinski family was originally from Poland, so they have a deep history there (the Poles and Russians have a deep-seated hatred for each other going back centuries).
Domestic policy?

1. Susan Rice, director of the Domestic Policy Council, is the dominant force who creates and oversees Biden’s domestic policy. Remember “Benghazi Sue”? She was President Obama’s National Security Advisor when the disastrous attack on Benghazi occurred in 2012 – then she infamously claimed the attack was over some totally idiotic video released in California.

Monetary policy?

1. How about the vice-chairman of the Federal Reserve Board of Governors, Lael Brainard, If Fed Chairman Jerome Powell seems a little confused and bewildered at times, she is right there as his right-hand policy-maker.

1. David Lipton, first deputy managing director of the International Monetary Fund, is there to coordinate global monetary policy.

Environmental policy?

1. John Podesta has recently been appointed senior advisor to the president for Green Energy Innovation and Implementation. This means he is in charge of spending the $370 billion on green programs that was authorized by Biden’s Inflation Reduction Act of 2022. Podesta was the original architect of environmental policy while serving in the Clinton administration. He also served as Hilary Clinton’s 2016 campaign manager.

To recap: foreign policy, domestic policy, environmental policy, and monetary policy are all dominated by current or former members of the Trilateral Commission. Cognitively challenged Joe Biden is nothing more that the home-boy puppet of this globalist cartel.
It’s time to stop seeing only what you think you know and start knowing what you can clearly see.
Guest Post by Patrick Wood from his blog on LeoHohmann.com.

https://www.zerohedge.com/markets/ma...t-going-happen

Markets Are Expecting The Fed To Save Them – It's Not Going To Happen

https://zh-prod-1cc738ca-7d3b-4a72-b.../picture-5.jpg

by Tyler Durden

Saturday, Oct 08, 2022 - 09:25 PM

Authored by Brandon Smith via Alt-Market.us,

I have said it many times in the past but I’ll say it here again: Stock markets are a trailing indicator of economic health, not a leading indicator. Rising stock prices are not a signal of future economic stability and when stocks fall it’s usually after years of declines in other sectors of the financial system. Collapsing stocks are not the “cause” of an economic crisis, they are just a delayed symptom of a crisis that was always there.
https://assets.zerohedge.com/s3fs-pu...?itok=AfNWKAaM

Anyone who started investing after the crash of 2008 probably has zero concept of how markets are supposed to behave and what they represent to the rest of the economy. They have never seen stocks move freely without central bank interference and they have only witnessed brief glimpses of true price discovery.


With each new leg down in markets one can now predict every couple of months or so with relative certainty that investor sentiment will turn to assumptions that the Federal Reserve is going to leap in with new stimulus measures. This is not supposed to be normal, but they can’t really help it, they were trained over the past 14 years to expect QE like clockwork whenever markets took a dip of 10% or more.

The problem is that conditions have changed dramatically in terms of credit conditions and price environment and it was all those trillions of QE dollars that ultimately created this mess.
Many alternative economists, myself included, saw this threat coming miles away and years ahead of time. In my article ‘The Economic End Game Continues’, published in 2017, I outlined the inevitable outcome of the global QE bonanza:
“The changing of the Fed chair is absolutely meaningless as far as policy is concerned. Jerome Powell will continue the same exact initiatives as Yellen; stimulus will be removed, rates will be hiked and the balance sheet will be reduced, leaving the massive market bubble the Fed originally created vulnerable to implosion.

An observant person…might have noticed that central banks around the world seem to be acting in a coordinated fashion to remove stimulus support from markets and raise interest rates, cutting off supply lines of easy money that have long been a crutch for our crippled economy.”

The Fed supports markets through easy money that feeds stock buybacks, and it’s primarily buybacks that kept stocks alive for all these years. It should be noted that as indexes like the S&P 500 plunged 20% or more in in the first six months of 2022, buybacks also decreased by 21.8% in the same time period.

That is to say, there seems to be a direct relationship between the level of stock buybacks and the number of companies participating vs the decline of stocks overall.

And why did buybacks decline? Because the Fed is raising interest rates and the easy money is disappearing.

If buybacks are the primary determinant of stock market prices, then the participation of individual investors is mostly meaningless. Stocks cannot sustain on the backs of regular investors because regular investors don’t have enough capital to keep markets afloat. Companies must continue to buy their own shares in order to artificially prop up prices, and they need cheap Fed money to do that. Stocks are therefore an illusion built only on the whims of the Fed.

And the reason for the Fed’s dramatic shift away from stimulus and into tightening? One could argue that it’s merely the natural end result of inflationary manipulation; that central banks like the Fed were ignorant or arrogant and they weren’t thinking ahead about the consequences. Except, this is false. The Fed knew EXACTLY what it was doing the whole time, and here’s the proof…

Way back in 2012 before Jerome Powell became Fed Chairman, he warned of a market crisis if the central bank was to hike rates into economic weakness after so many years of acclimating the system to easy money and QE. During the October 2012 Fed meeting Powell stated:
“…I think we are actually at a point of encouraging risk-taking, and that should give us pause. Investors really do understand now that we will be there to prevent serious losses. It is not that it is easy for them to make money but that they have every incentive to take more risk, and they are doing so. Meanwhile, we look like we are blowing a fixed-income duration bubble right across the credit spectrum that will result in big losses when rates come up down the road. You can almost say that that is our strategy.”

In other words, Powell and all other Fed officials knew ten years ago what was going to happen. They knew that they were creating a massive financial bubble and that when they raised rates that bubble would collapse causing serious economic damage. Yet, they kept expanding the bubble, and now with Powell as chairman, they are popping the bubble. No one honest can claim that the central bankers were “blind” or ignorant. This is an engineered crash, not an accidental crash.

If the crash is deliberate then it is a means to an end, and there is no reason for the Fed to intervene to save markets at this time. Some people will argue that this puts a target on the Fed as a saboteur of the economy, and they wonder why the central bankers would put themselves at risk? Because they have a rationale, a way out, and it’s called “stagflation.”

Price inflation coupled with negative GDP is the basis for a stagflation environment. The only other factor that is missing in the US today is rising unemployment, but this problem will arrive soon as numerous companies are slated to start layoffs in the winter. Stagflation is the Fed’s perfect excuse for continuing to raise interest rates despite plunging stocks. If they don’t hike rates then price inflation runs rampant and GDP declines anyway. If they return to QE then an inflationary calamity ensues.

In order to “save us,” they have to hurt us. That’s the excuse they will use.
It’s a Catch-22 event that they created, and I believe they created it with a purpose. But let’s imagine for a moment that the Fed has the best interests of the economy at heart; would a pivot back to QE change anything?

Not in the long run. Rising inflation is going to crush what’s left of the system anyway. Supply chain problems will only get worse as costs rise. To return to stimulus would indeed put a target on the central bankers. It’s better for them to pretend as if they are trying to fix the problem rather than continue with policies that everyone knows are draining pocket books.

Stocks saw a brief rebound this past week for one reason and one reason only – Rumors of a Fed pivot were spread and investors were hoping for a stop to rate hikes or a glorious return to stimulus measures. We will see many short rebounds in stocks like this over the next year, each one initiated by rumors of a reversal in policy. It’s not going to happen.

Will the Fed stop rate hikes? Sure, probably when the Fed funds rate is between 4% to 5%. Will that mean a reversal is on the horizon? No, it won’t. And it won’t mean that the Fed is done with rate hikes. They could start hiking again a few months down the road as price inflation persists.

Will the Fed return to QE? I see no reason why they would. Again, they are fully aware of the damage they have done with the QE bubble and the popping of that bubble. They would not have hiked rates in the first place unless they wanted a crash.

Consider this: What if the goal of the Fed is the destruction of the middle class? What if they are using the false hopes of small time investors in a return to QE? What if they are luring investors into markets with rumors of a pivot, tricking those investors into pumping money back into markets and then triggering losses yet again with more rate hikes and hawkish language? What if this is a wealth destruction steam valve? What if it’s a trap?

I present this idea because we have seen this before in the US, from 1929 through the 1930s during the Great Depression. The Fed used very similar tactics to systematically destroy middle class wealth and consolidate power for the international banking elites. I leave you with this admission by former Fed Chairman Ben Bernanke on the Fed’s involvement in causing the Great depression through rate hikes into weakness…

“In short, according to Friedman and Schwartz, because of institutional changes and misguided doctrines, the banking panics of the Great Contraction were much more severe and widespread than would have normally occurred during a downturn.

Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again.” – Ben Bernanke, 2002

Is the Fed really sorry? Or are they just repeating the same strategy they used 90 years ago while acting as if they are unaware of the eventual outcome?

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After 14 long years of ultra-loose monetary policy from the Federal Reserve, it’s no secret that inflation is primed to soar. If your IRA or 401(k) is exposed to this threat, it’s critical to act now! That’s why thousands of Americans are moving their retirement into a Gold IRA. Learn how you can too with a free info kit on gold from Birch Gold Group. It reveals the little-known IRS Tax Law to move your IRA or 401(k) into gold. Click here to get your free Info Kit on Gold.

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New World Order v Status Quo

Order v Status Quo

Guest Post by Martin Armstrong

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We all have opinions. In times like these, the personal opinion does not help very much for as Julius Caesar said, people believe what they want to believe.

Those who want to believe in the end of the world will assert that the NWO will succeed. Those who want to believe in the opposite will do so all on their own.

My opinion is not the foundation of the forecast by our computer. So you will see people attack me and say I am wrong all because they merely assert that their opinion is better than mine. What they fail to grasp here is the forecast is not based on my personal opinion or beliefs. They are irrelevant. We have been the largest institutional adviser in the world BECAUSE clients KNOW this is NOT my opinion.

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That said, even when Marxism was the rallying cry back in 1917, it did not merely take control passively. Over 200 million died in civil wars trying to stop communism in both Russia and in China. Anyone who thinks that this NWO will simply seize control of everything in the middle of the night peacefully neither understand history, nor human nature. There is no way this NWO will simply seize control of the entire world.
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This very proxy war using Ukraine as the spearhead to overthrow Russia is part of this agenda. These people are counting on Putin being overthrown, Russia being defeated, and it will simply collapse and being taken over by the West. It is the very same theory of the Neocons about the Middle East to overthrow the dictators and the people will cheer and hand them some sort of ticker-tape parade as if they were liberated from a foreign invader like Hitler when they are the foreign invader. That too is a deranged self-delusional theory that they just want to believe.
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They have demonized Putin and that is part of the strategy. The downside is that the average person then applies that to all Russians as we are seeing in many places. Even on eBay, there are people who want all Russians banned. Go to many bars and you will see that any Russian vodka has been withdrawn.


The hatred against all Russians is reaching a serious level in society. Even the Czech Republic has ordered the seizure of all assets belonging to any Russian whatsoever. Ukraine long considered the most corrupt government in Europe if not the world, has been confiscating the assets of any Russian as well. They had PayPal seizing money from people for spreading “misinformation” about COVID.
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This idea of a NWO will fail. The status quo is collapsing and we will be entering civil chaos next year and eventually World War III. This is not going to be a mere walk in the park. We are looking at another Sovereign Debt default just as took place in 1840 and then 1931. For those who do not know their history, the US paid off all its debt in 1834. Andrew Jackson’s Bank War to destroy the Bank of the United States led to private banks issuing their own money.
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That led to what collectors call the Broken Banknote period following the Panic of 1837. That led to Sovereign Debt defaults at the State level. The US austerity at the federal level contributed to the subsequent Civil War thanks to Jackson’s war on the banks. This merely exasperated the regional tensions between North & South where the position against slavery in the North predicated on religious beliefs was actually undermining the economy of the South which then manifested into the age-old battle between federalism and state’s rights which continues to the day for other reasons that were heightened with COVID.
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If you just look at Britain and Liz Truss’s approach to this economic crisis, the new British government has become a symbol of a global political crisis. These fools have created shortages with COVID and then they have been cheering Ukraine on to try to cause the collapse of Russia without a second thought about what would the world economy be like even if that happened. We have people at the helm of governments who are incompetent and believe only what the teleprompters tell them to believe. Anyone who thinks this NWO will simply slip into place without a fuss is simply delusional. There is going to be sheer chaos on the street next year. Biden’s administration is ONLY concerned about ending fossil fuels. They want a total ban on all offshore drilling. They have no plan to even provide an alternative when it would take at least a 400% increase in the power grid just for electric cars. Then there is heating homes in the winter nobody seems to think about.

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https://mises.org/wire/feds-real-mandate

The Fed's Real Mandate

1. https://cdn.mises.org/styles/slidesh...?itok=vbAkX78q

Tags The Fed Inflation Unemployment

10/07/2022

Mark Thornton

The Federal Reserve has a legal dual mandate to minimize unemployment and price inflation. The current “dual” between the two mandates is to reduce price inflation by increasing interest rates to increase unemployment and kill businesses to choke off aggregate demand. This has been the most important economic and investment issue this year and this dual minimization procedure has dominated Fed policy for at least three-quarters of a century.
This is odd given that the Fed is in the business of creating money, the cause of price inflation, and it is responsible for all the largest surges in unemployment since its founding in 1913. Employing an army of monetary economists, macro theorists, and statisticians, the Fed appears to be pursuing its quixotic quest of the Phillips curve sweet spot of minimizing inflation and unemployment.

The real mandate of the Fed is serving its masters, the political elites, by financing government spending and debt, bailing out cronies, and supporting the political process, including the Fed’s own interests. Everything else, including the inflation and unemployment rates are derivative of the primary mandate. The so-called dual mandate is just subterfuge to protect the Fed’s “confidence game.”

The Quest of the False Mandate
In The Fed Explained: What the Central Bank Does, we learn how control of the Fed is “decentralized.” This might sound good to some supporters of the free market. However, any hint of decentralization, such as the importance of District Banks, is long gone and the remnant is merely a diversion or historical curiosity. Of the twelve votes on the Federal Open Market Committee (FOMC) there are only four of twelve rotating District Bank presidents voting, plus the President of the New York Fed. The central Board of Governors in Washington DC has seven voting members who are appointed by the President and confirmed by the Senate and has nearly twice the voting power over interest rate decisions. Plus, the Chairman (Powell) has the power of the bully pulpit and is the consensus builder on the FOMC.

We are also told of the balancing of public and private (banks’) interests controlling the Fed and some free-market supporters latch onto the influence of the private sector as an effective check on the Fed’s enormous economic power. Big banks do work directly with the Fed in “open market operations” and interact in the day-to-day business of banking regulation. Commercial banks have some voting power within the District Banks. However, this influence is contingent on political goals and even the big banks can be pawns in the Fed’s political chess game. Their shares are “nonnegotiable” and are nothing like shares in private corporations. Banking interests are clearly derivative, and the Fed has thrown such interests overboard when necessary, such as with the Savings and Loan Crisis or Lehman Bros. In any case, the union of public and private interests is the ultimate source of corruption and can be the greatest threat to human liberty. Such private interests are clearly not a bulwark of liberty.

It is true that the Federal Reserve Act of 1913 was established and intended to be a cartel device for the banks and some banks are better protected than others. Marx and Engels (1848) called for the establishment of central banks and thereafter Americans were increasingly duped by socialist ideology. This socialist influence was an important force during the so-called Progressive Era (1890–1920). History textbooks make the Federal Reserve Act appear to be the result of a coalition of popular interests. However, the big banks and their academic technocrats controlled by political elites, created and controlled the legislative campaign with their “independent” National Monetary Commission.

A final and critical canard about the Fed is its “independence.” We are told that the Fed must be independent of political power to carry out its mandates and be effective. In this vein, if the Fed were to succumb to political pressures, then it would continually increase the money supply and suppress interest rates below market determined levels, especially before elections. This they tell us would destabilize the economy and might lead to hyperinflation the way it does under dictatorships where central banks do not have independence. I’m sure the Fed would love to be independent, but they are controlled by powerful office holders who are in turn controlled by the elites. As Ryan McMaken reminds us, “Fed independence is a fairy tale academic economists like to tell their students” and they are biased toward the inflationary mandate.

The sturdiness of the False Mandate is also bolstered by the ever-expanding duties and powers of the Fed. The original mandate of the Fed spoke of macroeconomic stability and an elastic currency to promote maximum employment and low inflation. The mandate also spoke to stable prices and the purchasing power of the dollar. These roles have been updated to include such things as “moderate” long-term interest rates, but the Fed has other duties concerning the banking and financial industry, maximizing the long run productive capacity of the economy, and even growth in money supply aggregates. Some in Congress even want the Fed to act on issues such as economic inequality and global warming. Despite these added duties, it is the false dual mandate that provides cover for the Fed. In addition to covering its tracks in the short run, the Fed’s expanding power and duties also illustrates Ludwig von Mises’s theory of the mixed economy and progressive interventionism—the ever-increasing need for power to address past errors of policy.

Revealing the Real Mandate
In recent years the Fed has become increasingly interventionist along with its ever-expanding mission creep and the necessity of solving problems of its own making. As a result, the Fed’s veneer of science in the service of the public good has worn thin. For example, once upon a time, the Fed dealt with only short-term government securities. These US Treasury debts were only of the shortest duration, borrowings for ninety days or less under the “bills only” doctrine. The idea was to manage short term rates so that longer term rates could be minimized.

Of course, the Fed has increased its domain to include longer term government debts of any duration, including thirty-year bonds. In recent years, it has also become the dominant holder of mortgages and other secularized instruments. Mortgages now make up a huge proportion of its balance sheet and it has become the big player on the supply side of the US mortgage market. Then there are the trillions of quantitative easing (QE). They are not even sure how QE works, but it bailed out the political elites who were able to exchange their risky assets with their friends at the Fed and earn risk free interest on their excess reserves. All of this did nothing good for the general public and set up the current collapse.

With a massive inflationary wave behind them, the Fed now speaks of reducing its balance sheet and of reversing its QE policies, selling massive amounts of government debt and mortgages back into the market. Their plan increases interest rates on government debt, mortgages, and everything else with the goal of reducing price inflation. This quantitative tightening (QT) has thus far only reduced the overall Fed balance sheet from about $9 trillion in May to about $8.85 trillion today.

With a potential powder keg of an election upon us and financial markets already in turmoil, the Fed’s timid tightening policies make sense. In addition to barely budging on QT, they have only raised the federal funds rate from 0 percent to 2.3 percent in 2022 when a “normal” federal funds rate is probably about 3 percent and an “inflation fighting” rate is much higher. They are causing real economic pain, but their greatest efforts have been in terms of “moral suasion” that is not moral or true persuasion, but simply a devious deception: disingenuous speeches and public comments threatening draconian interest rate hikes to gas light a higher dollar and help stave off ongoing price increases, at least until election day.

The real mandate of the Fed is rigging the political system in favor of the political elites. It is not a scientifically driven policy, but rather an effort to misdirect its own impact as the fault of the free market. The Fed is a political institution that is the primary cause of price inflation, cyclical unemployment, and economic crises! Over time the world has been taken off the gold standard and put on an ever more dangerous course of boom-and-bust economic cycles.

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Author:
Contact Mark Thornton

Mark Thornton is a Senior Fellow at the Mises Institute and the book review editor of the Quarterly Journal of Austrian Economics. He has authored seven books and is a frequent guest on national radio shows.

https://www.whatdoesitmean.com/index4059.htm

October 9, 2022

“God Appointed” Putin And “General Armageddon" Plan “Judgment Day” In “War Without Rules”

By: Sorcha Faal, and as reported to her Western Subscribers

A thought-provoking new Security Council (SC) report circulating in the Kremlin today first noting President Putin signed a decree on enhancing security measures for the Crimea bridge as well as for the energy bridge and the gas pipeline connecting the peninsula with mainland Russia, says shortly afterwards the Kerch Strait Bridge was reopened to very limited road and rail traffic, the Transport Ministry announced that suburban train traffic across the bridge will be restored at 7 p.m. on Sunday, while the Grand Service Express reported 13 trains have already crossed the bridge—and as it pertains to the act of war truck bomb sabotage on the Crimea bridge yesterday morning, the Russian Investigative Committee (SLEDCOM) revealed the vehicle was owned by a Russian national identified as Samir Yusubov, who denied involvement claiming that he is not even in Russia right now, and the truck was used by his “uncle” – his father’s cousin, Makhir Yusubov – who reportedly works in freight transportation…

The man also said that his ”uncle” took transport orders from a website, without providing any further details—then the Russian business daily RBK claimed that the driver might have been unaware of what the truck was carrying, and he supposedly received a fertilizer transport order, it reported, citing a security source who added that the driver was allegedly “kept in the dark”.

With the Russian Federation now under total war attack by the godless socialist Western colonial powers, this report notes, His Holiness Patriarch Kirill of Moscow and All Russia declared to the Christian world that President Putin's “reign over Russia had been mandated by God”, and proclaimed directly to him: “God put you in power so that you could perform a service of special importance and of great responsibility for the fate of the country and the people entrusted to your care”—is a Holy Proclamation that follows Security Council Deputy Chairman Dmitry Medvedev warning the socialist Western colonial powers about an attack on the Crimea bridge: “If something like this happens, for all of them there will instantly come the “Day of Judgment”, very fast and toilful, it will be very difficult to hide”—a “Day of Judgment” for the godless socialist Western colonial powers that began within hours of the act of war against the Crimea bridge when President Putin gave total war command to General of the Russian Army Sergei Surovikin, who was given the nickname “General Armageddon” by his colleagues—and immediately upon “General Armageddon” assuming total war command, the Federal Assembly State Duma of the Russian Federation officially announced: “The terrorist attack on the Crimean Bridge is no longer just a challenge, but a declaration of war without rules”.

Upon an order issued by “General Armageddon”, this report continues, the Ministry of Defense (MoD) announced a few hours ago that Ukraine has deployed some 40,000 troops and hardware to the border with the Lugansk People’s Republic, then revealed that the offensive of Ukrainian troops along the front has bogged down, a revelation quickly confirmed by independent military analysts—after which “General Armageddon” received information from local officials in the Zaporozhye Region revealing: “The Kiev regime has accumulated an unthinkable number of mercenaries on the line of contact…We know about representatives from more than 30 different countries”—a revelation followed by the leftist Washington Post reporting that Russian military forces have begun “reducing Zaporozhye to rubble” in what they say Ukrainian President Vladimir Zelensky branded as “absolute evil”—a report quickly joined by the German national railway company Deutsche Bahn revealing that “an act of sabotage” had affected its radio communications network bringing rail traffic in the northern part of the nation to a standstill and stopped trains to and from Denmark and the Netherlands, immediately after which, several thousand protesters assembled outside the Reichstag, a historic government building in Berlin that houses the lower house of the German parliament, to show their disapproval of the government's policies and calling on the authorities to lift sanctions against Russia—all of which makes it no wonder why political observers, journalists, and academics the world over are now warning: “The extraordinary attack on the Crimean Bridge takes the security crisis over Ukraine to a dangerous new level, with both sides likely to expand attacks against civilian infrastructure that is now fair game”.

Fully knowing the implications of the “Day of Judgment” against the godless socialist Western colonial powers now being planned by President Putin and “General Armageddon”, this report details, last evening before a rally of tens-of-thousands of his supporters, it saw President Donald Trump warning the American peoples: “We must demand the immediate negotiation of a peaceful end to the war in Ukraine, or we will end up in World War III and there will be nothing left of our planet”—then it saw President Trump most gravely revealing: “The Democrats are locking up their political opponents, spying on their political rivals, silencing dissent and using the full force of government law enforcement and the media, the fake media, to try and crush our movement…Every freedom-loving American needs to understand the time to stand up to this growing tyranny is right now in this election”
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Marching in Nazi-lockstep with the socialist Biden Regime, this report notes, it has seen Ukraine already banning all opposition parties and imprisoning all who oppose them—today it sees Ukraine preparing to enact a new law on full control over the media to finally finish off freedom of speech—is a Ukraine that went to war with America’s richest man Elon Musk this week when he proposed a peace deal and said “I’m not a fan of World War III”—quickly after which it was reported: “Ukrainian soldiers say Elon Musk’s satellites stopped working during some battles with Russians...Outages of the Starlink communications system have led to a “catastrophic” loss of communication between Ukrainian troops as they battled Russian forces”.

In the insightful geopolitical treatise “How the West Brought War to Ukraine: Understanding How US and NATO Policies Led to Crisis, War, and the Risk of Nuclear Catastrophe” recently released by American academic Dr. Benjamin Abelow, this report concludes, he most factually assessed: “Even from a blinkered American perspective, the whole Western plan was a dangerous game of bluff, enacted for reasons that are hard to fathom. Ukraine is not, by any stretch of the imagination, a vital security interest of the United States…In fact, Ukraine hardly matters at all…In contrast, for Russia—with its 1,200-mile shared border and its history of three major land-route invasions from the West, the most recent of which, during World War II, caused the death of roughly 13 percent of the entire Russian population—Ukraine is the most vital of national interests”—and is a factual assessment worthy of notice because in Dr. Abelow’s interview with world-renowned Russian journalist Oksana Boyko, it was beyond chillingly observed: “A decade ago, when historians were revisiting the origins of the First World War, the term “sleepwalking” became very trendy in describing how divergent factors and self-interested actors tangled together to produce one of the biggest catastrophes in human history…As the world enters yet another period of global strife, are we still somnambulating, or are we being deliberately led into an abyss?”. [Note: Some words and/or phrases appearing in quotes in this report are English language approximations of Russian words/phrases having no exact counterpart.]

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October 9, 2022 EU and US all rights reserved. Permission to use this report in its entirety is granted under the condition it is linked to its original source at WhatDoesItMean.Com. Freebase content licensed under CC-BY and GFDL.

[Note: Many governments and their intelligence services actively campaign against the information found in these reports so as not to alarm their citizens about the many catastrophic Earth changes and events to come, a stance that the Sisters of Sorcha Faal strongly disagree with in believing that it is every human being’s right to know the truth. Due to our mission’s conflicts with that of those governments, the responses of their ‘agents’ has been a longstanding misinformation/misdirection campaign designed to discredit us, and others like us, that is exampled in numerous places, including HERE.]

[Note: The WhatDoesItMean.com website was created for and donated to the Sisters of Sorcha Faal in 2003 by a small group of American computer experts led by the late global technology guru Wayne Green (1922-2013) to counter the propaganda being used by the West to promote their illegal 2003 invasion of Iraq.]
[Note: The word Kremlin (fortress inside a city) as used in this report refers to Russian citadels, including in Moscow, having cathedrals wherein female Schema monks (Orthodox nuns) reside, many of whom are devoted to the mission of the Sisters of Sorcha Faal.]


“Sleepwalkers” Leading The World To War Love The Planet And Hate Humanity

“There’s No Getting Around The Pain Box—You Are Going To Face The Storm”

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The Nazirite/Nazarite vow is taken by individuals who have voluntarily dedicated themselves to God. The vow is a decision, action, and desire on the part of people whose desire is to yield themselves to God completely. By definition, the Hebrew word nazir, simply means “to be separated or consecrated.” The Nazirite vow, which appears in Numbers 6:1-21, has five features. It is voluntary, can be done by either men or women, has a specific time frame, has specific requirements and restrictions, and at its conclusion a sacrifice is offered.

First, the individual enters into this vow voluntarily. The Bible says, "Speak to the Israelites and say to them: 'If a man or woman wants to make a special vow, a vow of separation to the LORD as a Nazirite’” (Numbers 6:2). This shows that it is individuals who take the initiative to consecrate themselves to the Lord. There is no divine command involved. While generally done by the individual by his own choice, two individuals in the Old Testament, and one in the New Testament, were presented to God by their parents. Samuel and Samson in the Old Testament (1 Samuel 2:8-28; Judges 13:1-5), and John the Baptist in the New Testament received the Nazirite vow from birth (Luke 1:13-17).

Second, both men and women could participate in this vow, as Numbers 6:2 indicates, “a man or woman.” The Nazirite vow was often taken by men and women alike purely for personal reasons, such as thanksgiving for recovery from illness or for the birth of a child. However, under the Mosaic law, the vow or oath of a single woman could be rescinded by her father, and that of a married woman by her husband (Numbers 30).

Third, the vow had a specific time frame, a beginning and an end as these two statements indicate: “Throughout the period of his separation he is consecrated to the LORD... Now this is the law for the Nazirite when the period of his separation is over” (Numbers 6:8, 13a). So, the Nazirite vow usually had both a beginning and an end.

Fourth, there were specific guidelines and restrictions involved with the Nazirite vow. Three guidelines are given to the Nazirite. Numbers 6:3-7 tells us that he/she was to abstain from wine or any fermented drink, nor was the Nazirite to drink grape juice or eat grapes or raisins, not even the seeds or skins. Next, the Nazirite was not to cut his hair for the length of the vow. Last, he was not to go near a dead body, because that would make him ceremonially unclean. Even if a member of his immediate family died, he was not to go near the corpse.

Numbers 6:13-20 shows the procedure to follow to complete the vow. A sacrifice was made (vv.13-17), the candidate’s hair was cut and put on the altar, and the priest did the final task of completing the sacrificial process, which ended the vow (v. 20). This section concludes with the statement, “This is the law of the Nazirite who vows his offering to the LORD in accordance with his separation, in addition to whatever else he can afford. He must fulfill the vow he has made, according to the law of the Nazirite”(6:21).

Although the Nazirite vow is an Old Testament concept, there is a New Testament parallel to the Nazirite vow. In Romans 12:1-2 Paul states, “Therefore, I urge you, brothers, in view of God’s mercy, to offer your bodies as living sacrifices, holy and pleasing to God—this is your spiritual act of worship. Do not conform any longer to the pattern of this world, but be transformed by the renewing of your mind. Then you will be able to test and approve what God’s will is—his good, pleasing and perfect will.” For Christians, the ancient Nazirite vow symbolizes the need to be separate from this world, a holy people consecrated to God (2 Timothy 1:9; 1 Peter 1:15).

Hi Mr Bruce, long time no see, how are you doing? You still my Mentor because I learnt lots of things from you. Would you mind updating me your " Money Flow Method With Risk Management ". Thanks and take care

https://www.bloomberg.com/news/artic...ailing-at-once

The Most Powerful Buyers in Treasuries Are All Bailing at Once

1. Fed, foreign governments, commercial banks all stepping back
2. More pain for bond investors may be in store amid buyer void

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The Federal Reserve more than doubled it’s debt portfolio in the two years through early 2022.
Photographer: Ting Shen/Bloomberg
By
Liz McCormick,
Garfield Clinton Reynolds, and
Michael Mackenzie

October 10, 2022 at 7:00 a.m. EDT

Everywhere you turn, the biggest players in the $23.7 trillion US Treasuries market are in retreat.


From Japanese pensions and life insurers to foreign governments and US commercial banks, where once they were lining up to get their hands on US government debt, most have now stepped away. And then of course there’s the Federal Reserve, which a few weeks ago upped the pace that it plans to offload Treasuries from its balance sheet to $60 billion a month.

If one or two of these usually steadfast sources of demand were bailing, the impact, while noticeable, would likely be little cause for alarm. But for every one of them, all at once, to pull back is an undeniable source of concern, especially coming on the heels of the unprecedented volatility, deteriorating liquidity and weak auctions of recent months.

The upshot, according to market watchers, is that even with Treasuries tumbling the most since at least the early 1970s this year, more pain may be in store until new, consistent sources of demand emerge. It’s also bad news for US taxpayers, who will ultimately have to foot the bill for higher borrowing costs.
“We need to find a new marginal buyer of Treasuries as central banks and banks overall are exiting stage left,” said Glen Capelo, who spent more than three decades on Wall Street bond-trading desks and is now a managing director at Mischler Financial. “It’s still not clear yet who that will be, but we know they’re going to be a lot more price sensitive.”
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To be sure, many have predicted Treasury-market routs over the past decade, only for buyers (and central bankers) to swoop in and support the market. Indeed, should the Fed pivot away from its hawkish policy tilt as some are wagering, the brief rally in Treasuries last week may be just the beginning.
But analysts and investors say that with the fastest inflation in decades hamstringing the ability of officials to loosen policy in the near term, this time is likely to be much different.

‘Massive Premium’
The Fed, unsurprisingly, represents the largest loss of demand. The central bank more than doubled it’s debt portfolio in the two years through early 2022, to in excess of $8 trillion.

The sum, which includes mortgage-backed securities, could fall to $5.9 trillion by mid-2025 if officials stick with their current roll-off plans, Fed estimates show.
While most would agree that lessening the central bank’s market-distorting influence is healthy in the long run, it nonetheless is a stark reversal for investors who have grown accustomed to the Fed’s outsized presence.

“Since the year 2000, there has always been a big central bank on the margin buying a lot of Treasuries,” Credit Suisse Group AG’s Zoltan Pozsar said during a recent live episode of Bloomberg’s Odd Lots podcast.

Now “we’re basically expecting the private sector to step in instead of the public sector, in a period where inflation is as uncertain as it has ever been,” Pozsar said. “We’re asking the private sector to take down all these Treasuries that we are going to push back into the system, without a glitch, and without a massive premium.”
Read more: JPMorgan Is Worried About Who’s Going to Buy All the Bonds

Still, if it was just the Fed -- with its long-telegraphed balance-sheet runoff -- reversing course, market angst would be much more limited.
It’s not.

Prohibitively steep hedging costs have essentially frozen Tokyo’s giant pension and life insurance companies out of the Treasury market as well. Yields on US 10-year notes have plunged well into negative territory for Japanese buyers who pay to eliminate currency fluctuations from their returns, even as nominal rates have soared above 4%.

Hedging costs have surged in tandem with the dollar, which has climbed more than 25% this year versus the yen, the most in Bloomberg data going back to 1972.

As the Fed has continued to boost rates to tame inflation in excess of 8%, Japan in September intervened to support its currency for the first time since 1998, raising speculation the country may need to actually start selling its hoard of Treasuries to further prop up the yen.
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And it’s not just Japan. Countries around the world have been running down their foreign-exchange reserves to defend their currencies against the surging dollar in recent months.
In fact, emerging-market central banks have trimmed their stockpiles by $300 billion this year, International Monetary Fund data show.
Read more: World Currency Reserves Shrink by $1 Trillion in Record Drawdown

That means limited demand at best from a group of price-insensitive investors that traditionally put about 60% or more of their reserves into US dollar investments.

Banks Bail
Over the past decade, when one or two key buyers of Treasuries has seemingly backed away, others have been there to pick up the slack.
That’s not what’s occurring this go around, according to JPMorgan Chase & Co. strategist Jay Barry.

Demand from US commercial banks has dissipated as Fed policy tightening drains reserves out of the financial system. In the second quarter, banks purchased the least amount of Treasuries since the final three months of 2020, Barry wrote in a report last month.
“The drop in bank demand has been stunning,” he noted. “As deposit growth has slowed sharply, this has reduced bank demand for Treasuries, particularly as the duration of their assets have extended sharply this year.”
It all adds up to a bearish undertone for rates, Barry added.
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The Bloomberg US Treasury Total Return Index has lost about 13% this year, almost four times as much as in 2009, the worst full year result on record for the gauge since its 1973 inception.

Yet as the structural support for Treasuries gives way, others have stepped in to pick up the slack, albeit at higher rates. “Households,” a catch-all group that includes US hedge funds, saw the biggest jump in second-quarter Treasury holdings among investor types tracked by the Fed.
Some see good reason for private investors to find Treasuries attractive now, especially given the risk of Fed policy tightening tipping the US into a recession, and with yields at multi decade highs.

“The market is still trying to evolve and figure out who these new end buyers are going to be,” said Gregory Faranello, head of US rates trading and strategy for AmeriVet Securities. “Ultimately I think it’s going to be domestic accounts, because interest rates are moving to a point where they’re going to be very attractive.”

John Madziyire, a portfolio manager at Vanguard Group Inc., said large pools of excess savings held at US banks earning next to nothing will prompt “people to shift into the short-end of the Treasury market.”

“Valuations are good with the Fed getting closer to the end of its current hiking cycle,” Madziyire said. “The question is whether you are willing to take duration risk now or stay in the front-end until the Fed reaches its policy peak.”

Still, most see the backdrop favoring higher yields and a more turbulent market. A measure of debt-market volatility surged in September to the highest level since the global financial crisis, while a gauge of market depth recently hit the worst level since the onset of the pandemic.
“The Fed and other central banks had for years been the ones suppressing volatility, and now they’re actually the ones creating it,” Mischler’s Capelo said.

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