The debt bomb just got bigger

The amount of debt worldwide is more than all of the bank accounts in the world, and the current financial situation in Cyprus is the inevitable next phase: Confiscation.

All pretense is now gone that central or global bankers can ‘securitize’ growth by packaging and repackaging debt; by hypothicating and rehypothicating debt; by regulating and rergulating debt. Since the bond market rally began in the early 1980s (yes, it’s that old) each crisis has been met by central and global bankers – the IMF, EU and ECB, to name a few – and their Wall St. and City of London brethren with an increase in debt, and an extension of the debt’s maturity.

The result has been – as of 2007 – the biggest mountain of on-balance sheet and off-balance sheet debt in history: A staggering $220 trillion in debt in America’s $14-trillion economy alone (when you include all public, private and contingent liabilities of unfunded entitlement programs). Deals in the global debt derivatives market now stand in excess of $1 quadrillion, riding above a global GDP of approximately $60 trillion.

But starting in 2007, and then becoming spectacularly apparent in 2008 with the Lehman collapse, the ability of the world’s taxpayers to pay either the interest or principal on this debt has hit a brick wall. And for several years now, governments around the world have tried the same old tricks of ‘extend and pretend.’ Repackage and extend the maturity, and pray that tax receipts start picking up enough to pay some of the debt off. It didn’t work. The debt bomb just got bigger. Now in Cyprus we see the inevitable next phase: Confiscation.

To pay off the debts that were incurred to finance the biggest wealth grab in history, we see in Cyprus, as well as central and global banking institutions around the world, a trend to just reach in and grab people’s money from their ‘insured’ bank accounts. We should have figured out this was coming when JP Morgan (read: Jamie Dimon) reached in and illegally stepped ahead of customers at MF Global and grabbed over $1 billion, with the help of his crony pal Jon Corzine.

Have we learned our lesson yet? They have more debts to pay than there is money in all the bank accounts in the world. This means that chances are, you – whoever you are, and whatever country you live in – will have a sizable percent of your savings stolen by banksters.

Since the crisis hit (and for several years leading up to it) we’ve been recommending on ‘Keiser Report’ to put as much money as you can in gold and silver. Our advice then and now is: The only money you should keep in a bank is money you’re willing to lose.

Source

It’s Not a “Fiscal Cliff” … It’s the Descent Into Lawlessness

by George Washington

12/24/2012

The “fiscal cliff” is a myth.

Instead, what we are facing is a descent into lawlessness.

Wikipedia notes:

In many situations, austerity programs are imposed on countries that were previously under dictatorial regimes, leading to criticism that populations are forced to repay the debts of their oppressors.

Indeed, the IMF has already performed a complete audit of the whole US financial system, something which they have only previously done to broke third world nations.

Economist Marc Faber calls the U.S. a “failed state“.   Indeed, we no longer have a free market economy … we have fascism, communist style socialism, kleptocracy, oligarchy or banana republic style corruption.

Let’s look at some specific examples of our descent into lawlessness.

Lawless Looting and Redistribution of Wealth

The central banks’ central bank – the Bank for International Settlements- warned in 2008 that bailouts of the big banks would create sovereign debt crises … which could bankrupt nations.

That is exactly what has happened.

The big banks went bust, and so did the debtors.  But the government chose to save the big banks instead of the little guy, thus allowing the banks to continue to try to wring every penny of debt out of debtors.

Treasury Secretary Paulson shoved bailouts down Congress’ throat by threatening martial law if the bailouts weren’t passed. And the bailouts are now perpetual.

Moreover:

The bailout money is just going to line the pockets of the wealthy, instead of helping to stabilize the economy or even the companies receiving the bailouts:

• Bailout money is being used to subsidize companies run by horrible business men, allowing the bankers to receive fat bonuses, to redecorate their offices, and to buy gold toilets and prostitutes

• A lot of the bailout money is going to the failing companies’ shareholders

• Indeed, a leading progressive economist says that the true purpose of the bank rescue plans is “a massive redistribution of wealth to the bank shareholders and their top executives”

• The Treasury Department encouraged banks to use the bailout money to buy their competitors, and pushed through an amendment to the tax laws which rewards mergers in the banking industry (this has caused a lot of companies to bite off more than they can chew, destabilizing the acquiring companies)

And as the New York Times notes, “Tens of billions of [bailout] dollars have merely passed through A.I.G. to its derivatives trading partners”.

***

In other words, through a little game-playing by the Fed, taxpayer money is going straight into the pockets of investors in AIG’s credit default swaps and is not even really stabilizing AIG.

Moreover, a large percentage of the bailouts went to foreign banks (and see this). And so did a huge portion of the money from quantitative easing.  Indeed, the Fed bailed out Gaddafi’s Bank of Libya), hedge fund billionaires, and big companies, but turned its back on the little guy.

A study of 124 banking crises by the International Monetary Fund found that propping up banks which are only pretending to be solvent often leads to austerity:

Existing empirical research has shown that providing assistance to banks and their borrowers can be counterproductive, resulting in increased losses to banks, which often abuse forbearance to take unproductive risks at government expense. The typical result of forbearance is a deeper hole in the net worth of banks, crippling tax burdens to finance bank bailouts, and even more severe credit supply contraction and economic decline than would have occurred in the absence of forbearance.

Cross-country analysis to date also shows that accommodative policy measures (such as substantial liquidity support, explicit government guarantee on financial institutions’ liabilities and forbearance from prudential regulations) tend to be fiscally costly and that these particular policies do not necessarily accelerate the speed of economic recovery.

***

All too often, central banks privilege stability over cost in the heat of the containment phase: if so, they may too liberally extend loans to an illiquid bank which is almost certain to prove insolvent anyway. Also, closure of a nonviable bank is often delayed for too long, even when there are clear signs of insolvency (Lindgren, 2003). Since bank closures face many obstacles, there is a tendency to rely instead on blanket government guarantees which, if the government’s fiscal and political position makes them credible, can work albeit at the cost of placing the burden on the budget, typically squeezing future provision of needed public services.

In other words, the “stimulus” to the banks blows up the budget, “squeezing” public services through austerity.

Numerous top economists say that the bank bailouts are the largest robbery and redistribution of wealth in history.

Why was this illegal?   Well, the top white collar fraud expert in the country says that the Bush and Obama administrations broke the law by failing to break up insolvent banks … instead of propping them up by bailing them out.

And the Special Inspector General of the Tarp bailout program said that the Treasury Secretary lied to Congress regarding some fundamental aspects of Tarp – like pretending that the banks were healthy, when they were totally insolvent.  The Secretary also falsely told Congress that the bailouts would be used to dispose of toxic assets … but then used the money for something else entirely.  Making false statements to a federal official is illegal, pursuant to 18 United States Code Section 1001.

So breaking the rules to bail out the big, insolvent banks, is destroying our prosperity.

Lawless Justice System

A strong rule of law is essential for a prosperous and stable economy, yet the government made it official policy not to prosecute fraud, even though criminal fraud is the main business model adopted by the giant banks.

The perpetrators of the biggest financial crime in world history, the largest insider trading scandal of all time, illegal raiding of customer accounts and blatant financing of drug cartels and terrorists have all gotten away scot-free without any jail time.

There are two systems of justice in America … one for the big banks and other fatcats, and one for everyone else.

While Iceland prosecuted its top criminal bankers, and thus quickly got through its financial problems and now has a vibrant economy, the American government has done everything it can to cover up fraud, and has been actively encouraging criminal fraud and attacking those trying to blow the whistle.

The rule of law is now as weak in the U.S. and UK as many countries which we would consider “rogue nations”.    See this, this, this, this, this, this, this, this, this, this and this.

This is a sudden change.  As famed Peruvian economist Hernando de Soto notes:

In a few short decades the West undercut 150 years of legal reforms that made the global economy possible.

Moreover, U.S. government personnel are on the take.  They have become so corrupt that regulators are literally sleeping with industry prostitutes … while they pimp out the American people.

The corruption of government officials is staggering, and the system of government-sponsored rating agencies had at its core a model of bribery.

We’ve gone from a nation of laws to a nation of powerful men making one-sided laws to protect their own interests … in secret. Government folks are using laws to crush dissent. It’s gotten so bad that even U.S. Supreme Court justices are saying that we are descending into tyranny.

It’s not a “fiscal cliff” … it’s an attempt to rape America … just like Greece and Ireland have been plundered.

Economics professor Randall Wray writes:

Thieves … took over the whole economy and the political system lock, stock, and barrel. They didn’t just blow up finance, they oversaw the swiftest transfer of wealth to the very top the world has ever seen. They screwed workers out of their jobs, they screwed homeowners out of their houses, they screwed retirees out of their pensions, and they screwed municipalities out of their revenues and assets.

Financiers are forcing schools, parks, pools, fire departments, senior citizen centers, and libraries to shut down. They are forcing national governments to auction off their cultural heritage to the highest bidder. Everything must go in firesales at prices rigged by twenty-something traders at the biggest and most corrupt institutions the world has ever known.

Economics professor Michael Hudson agrees … saying that the banks are trying to roll back all modern laws and make us all serfs.

Professor Hudson explained in 2008:

You have to realize that what they’re trying to do is to roll back the Enlightenment, roll back the moral philosophy and social values of classical political economy and its culmination in Progressive Era legislation, as well as the New Deal institutions. They’re not trying to make the economy more equal, and they’re not trying to share power. Their greed is (as Aristotle noted) infinite. So what you find to be a violation of traditional values is a re-assertion of pre-industrial, feudal values. The economy is being set back on the road to debt peonage. The Road to Serfdom is not government sponsorship of economic progress and rising living standards, it’s the dismantling of government, the dissolution of regulatory agencies, to create a new feudal-type elite.

Indeed:

Foreign Policy magazine ran an article entitled “The Next Big Thing: Neomedievalism“, arguing that the power of nations is declining, and being replaced by corporations, wealthy individuals, the sovereign wealth funds of monarchs, and city-regions.

Indeed, this isn’t the “Great Recession”, it’s the Great Bank Robbery. The big banks have pillaged and looted the rest of the world.

A lawless justice system is ruining the economy.

Lawless Central Bank

The non-partisan Government Accountability Office calls the Fed corrupt and riddled with conflicts of interest.   Nobel prize winning economist Joseph Stiglitz agrees, saying that the World Bank would view any country which had a banking structure like the Fed as being corrupt and untrustworthy. The former vice president at the Federal Reserve Bank of Dallas said said he worried that the failure of the government to provide more information about its rescue spending could signal corruption. “Nontransparency in government programs is always associated with corruption in other countries, so I don’t see why it wouldn’t be here,” he said.

Moreover, the Fed has broken the law by withholding information from Congress, letting unemployment rise in order to keep inflation low, and otherwise exceeding its authority under the Federal Reserve Act.

Acting in a lawless and unaccountable fashion is hurting the economy.

Lawless Attack on Democracy

The ability of the people to participate in their government’s decision-making is vital for a nation’s prosperity. But we no longer have democracy or a republican form of government in America.

The big banks own Washington D.C. politicians, lock stock and barrel.  See this, this, this and this.  Two leading IMF officials, the former Vice President of the Dallas Federal Reserve, and the the head of the Federal Reserve Bank of Kansas City, Moody’s chief economist and many others have all said that the United States is controlled by an “oligarchy” or “oligopoly”, and the big banks and giant financial institutions are key players in that oligarchy.

Laws are being passed in secret, and not even Congress knows what’s going on.

In other words, not only the justice system, but the entire system of American representation has been corrupted, thus harming the economy.

Lawless Infringement of Freedom

Personal freedom and liberty – and freedom from the arbitrary exercise of government power – are strongly correlated with a healthy economy, but America is descending into tyranny.

Authoritarian actions by the government interfere with the free market, and thus harm prosperity.

U.S. News and World Report notes:

The Fraser Institute’s latest Economic Freedom of the World Annual Report is out, and the news is not good for the United States. Ranked among the five freest countries in the world from 1975 through 2002, the United States has since dropped to 18th place.

The Cato institute notes:

The United States has plummeted to 18th place in the ranked list, trailing such countries as Estonia, Taiwan, and Qatar.

***

Actually, the decline began under President George W. Bush. For 20 years the U.S. had consistently ranked as one of the world’s three freest economies, along with Hong Kong and Singapore. By the end of the Bush presidency, we were barely in the top ten.

And, as with so many disastrous legacies of the Bush era, Barack Obama took a bad thing and made it worse.

But the American government has shredded the constitution, by subjecting us to indefinite detention, taking away our due process rights, deploying drones above our heads, spying on all Americans, and otherwise acting in attacking our freedoms.

Indeed, rights won in 1215 – in the Magna Carta – are being repealed.

Economic historian Niall Ferguson notes, draconian national security laws are one of the main things undermining the rule of law:

We must pose the familiar question about how far our civil liberties have been eroded by the national security state – a process that in fact dates back almost a hundred years to the outbreak of the First World War and the passage of the 1914 Defence of the Realm Act. Recent debates about the protracted detention of terrorist suspects are in no way new. Somehow it’s always a choice between habeas corpus and hundreds of corpses.

Of course, many of this decades’ national security measures have not been taken to keep us safe in the “post-9/11 world” … indeed, many of them started before 9/11.

And America has been in a continuous declared state of national emergency since 9/11, and we are in a literally never-ending state of perpetual war. See this, this, this and this.

In fact, government has blown terrorism fears way out of proportion for political purposes, and “national security” powers have been used in many ways to exempt big Wall Street players from the rule of law rather than to do anything to protect us.

So lawlessness infringement of our liberty is destroying our prosperity.

Lawless Initiation and Prosecution of War

It is well-documented that war destroys the economy.

Top U.S. government employees lied us into war, and used illegal torture, assassinations and other crimes of war in prosecuting the wars they unnecessarily started. They were – at a minimum – criminally negligent for failing to stop 9/11 (and see this).

In the name of fighting our enemies – the U.S. has directly been supporting Al Qaeda and other terrorist groups for the last decade. See this, this, this, this and this.

Our use of torture has also created many more terrorists than it has prevented.

Security experts – including both conservatives and liberals – agree that waging war in the Middle East weakens national security and increases terrorism. See this, this, this, this, this, this, this and this.

Indefinite detention, drone-strikes on innocent civilians, occupation of foreign countries, and most of America’s other tactics in the “war on terror” increase terrorism.

Terrorism feeds the cycle of war … and is thus harming our economy. (and because terrorism spooks people, they spend less, which further harms the economy).

So lawlessness in starting and prosecuting war is destroying our prosperity.

Postscript:  We’re not facing a “fiscal cliff”.  We’re facing a descent into lawlessness.  Stopping the fraudulent schemes, endless bailouts and imperial adventures is the place to start.

Source

Related articles

• Descent Into Lawlessness (theburningplatform.com)

Directed History of Coming Depression Grinds On

Wednesday, May 09, 2012 – by Staff Report

Never Mind Europe. Worry About India …The economic slowdown in India is one of the world’s biggest economic stories, but it is commanding only a modicum of attention in the United States … It may not even look like a slowdown because by developed standards, India’s growth — estimated by the International Monetary Fund at 6.9 percent for 2012 — is still strong. But a slowdown it is: the economy has decelerated from projected rates of more than 8 percent, and negative momentum may bring a further decline. The government reported year-over-year growth in the October-through-December quarter of only 6.1 percent. What is disturbing is that much of the decline in the growth rate is distributed unevenly, with the greatest burden falling on the poor. If the slower rate continues or worsens, many millions of Indians, for another generation, will fail to rise above extreme penury and want. The problems of the euro zone are a pittance by comparison. – New York Times

Dominant Social Theme: Hmm, it seems the BRICs are having problems.

Free-Market Analysis: We’ve been banging on about a worldwide slump for years now, ever since it occurred to us that once Europe and the US “went out” in 2008, from an economic standpoint, the BRICs were all that was left.

And the BRICs are more like the proverbial straw hut these days.

China, of course, has certain problems but it’s Brazil and India that are the countries attracting the most attention.

Brazil is in the news (from our standpoint) because of a coming devaluation in Argentina that may have a significant impact on the dollar economy of both Brazil and the “Switzerland of South America,” Uruguay.

Now India is beginning to receive mainstream news coverage as well. This is only to be expected.

The elites that want to run the world are seemingly building a worldwide economic depression – a fact that cannot be gainsaid if one understands that the world’s economy is an entirely artificial one these days.

There are now, after about 100 years, perhaps 150 central banks in existence – and this gives the tiny handful of dynastic elites that control them tremendous power.

Such monopoly central banking – printing money from nothing – allows the elites that control these banks to create tremendous booms and then busts that centralize more and more power in fewer and fewer hands.

That seems to be what’s going on now. It suits the purpose of the power elite to create a further global slump that will then result in further global governance and even a single worldwide currency (now apparently being planned).

The world is basically a three-legged stool, supported by Europe, the US and the BRICs at this point. The world’s economy will stumble and fail along with the BRICs, if that’s what is happening. And it seems to be.

Of course, the elites work quietly in the background. They naturally don’t want to admit to an engineered takedown of the world.

But their bought-and-paid-for media can be plenty vocal when given the opportunity. Perhaps that’s what is going on now.

We noticed it a while ago regarding China, and now both Brazil and India are getting press about domestic economic troubles.

When the mainstream media is recruited to this sort of reporting, you can bet the elites WANT it publicized.

The narrative seems to us neatly laid out. The initial bubble-and-bust in 2008 provoked a good deal of controversy. But it is likely that the crumbling of the BRICs, coming some four years later, will not look to most like a connivance.

Of course, it must be. The degradation of the world’s economy should be laid at the feet of the system that is currently empowered: Monopoly/mercantilist fiat-paper central banking.

We’re not supposed to notice, of course. But we DO notice. It’s not OUR world. It’s not OUR economy. It’s theirs.

But so long as we borrow this world, we’ll do our best. We’ll downsize, try not to borrow. Maybe buy more gold and silver. Try to drop out of the consumerist society as much as possible. Buy some farmland.

Store some food.

All prudent moves. We can’t control the larger confluence of forces that are driving the world’s economy down. We can’t work on that scale, of course. Only a handful can and apparently do.

But we can arm ourselves with knowledge. We can appreciate this weary world’s directed history.

We can educate others. Above all, we can control our own psychology and desires. We can refuse to give in to pessimism.

Conclusion: We can take what Ludwig von Mises famously called human action to better our own lifestyles and those of our loved ones. We can protect ourselves. And we should.

Source

Related articles

• BRICs Slowdown Casts Pall On Global Economy (freeinternetpress.com)
• Pepe Escobar looks at the future, as we build a full spectrum confrontation world (fabiusmaximus.wordpress.com)

Your Quick Guide To The IMF-World Bank Meetings Today

by Simone Foxman

World leaders are meeting in Washington, D.C., to attend a joint IMF-World Bank meeting.

Their focus? The funding available to the IMF, specifically to support the ongoing debt and bank crises in Europe.

Countries in Europe and Asia have expressed interest and even firm commitments in contributing more money to the fund. The U.S. and Canada, however, have said they won’t contribute any more cash to an effort EU leaders should be able to resolve themselves.

While we could hear more pledges over the course of the day, so far Japan, Switzerland, Poland, Sweden, Denmark, Norway, and the euro area have all made dollar commitments totaling $320 billion, according to Bloomberg:

Read more: BI

Related articles

• Selected Headlines from Business Insider, April 19, 2012 (jhaines6.wordpress.com)
• IMF Director LaGarde responds to move to rescind U.S. tax dollars (humanevents.com)
• IMF Exploits Euro-Crisis to Create Global Money Power (mb50.wordpress.com)

Euro currency could collapse and trigger another Great Depression, IMF warns for the first time

End of the Euro?: The IMF warns that one country leaving the single currency could force its entire collapse

By Hugo Duncan

PUBLISHED: 12:45 EST, 17 April 2012

UPDATED: 04:28 EST, 18 April 2012

The eurozone could break up and trigger a global economic slump to rival the Great Depression, the IMF warned last night.

In its World Economic Outlook report, the International Monetary Fund said the collapse of the crisis-torn single currency could not be ruled out.

It was the first time the Washington-based institution has accepted the prospect of the eurozone splitting up and follows fears over the health of the Spanish economy.

The IMF predicted a return to recession in the eurozone this year but upgraded its growth forecasts for Britain.

However, it warned that the world remains at risk of collapsing into a slump that would rival the Great Depression – with ‘acute risks in Europe’ the major threat.

‘Things have quietened down but there is a very uneasy calm,’ said IMF chief economist Olivier Blanchard. ‘I have a feeling that at any moment things could get very bad again.’

Speaking at the launch of the half-yearly report in Washington, Mr Blanchard said there was ‘no plan’ in place to deal with a country leaving the euro.

However Greece is widely expected to default on its crippling debts and quit the doomed single currency.

‘If such an event occurs, it is possible that other euro area economies would come under severe pressure as well, with a full-blown panic in financial markets,’ the IMF report said.

‘Under these circumstances, a break-up of the euro area could not be ruled out. This could cause major political shocks that could aggravate economic stress to levels well above those after the Lehman collapse.’

U.S. investment bank Lehman Brothers imploded in September 2008 – plunging the world economy into the worst recession since the 1930s. The IMF said that although ‘the outlook for the global economy is slowly improving again’ it is ‘still very fragile’.

It warned of the ‘possibility that several adverse shocks could interact to produce a major slump reminiscent of the 1930s’.

The IMF forecast growth of 0.8 per cent in Britain this year – more than the 0.6 per cent it predicted in January, but less than last September’s target of 1.6 per cent. Its 2013 forecast was unchanged at  2 per cent.

Asked about the IMF’s comments on the eurozone, a Downing Street spokesman said: ‘The eurozone still needs to get its house in order. Those issues still exist and no doubt will be a focus of discussions at the coming meeting of the IMF towards the end of the week, which the Chancellor will be attending.’

The IMF said Britain will outperform Germany and France this year – their economies are expected to grow by just 0.6 per cent and 0.5 per cent respectively.

The Italian and Spanish economies are forecast to decline by 1.9 per cent and 1.8 per cent, while a slump of 4.7 per cent is expected in Greece following a 6.9 per cent drop in 2011.

But the report warned that output in the eurozone could fall by 3.5 per cent over the next two years if the debt crisis escalates.

This would knock 2 per cent off the world economy, said the IMF, while a 50 per cent rise in the oil price would lower output by a further 1.25 per cent.

In the absence of such ‘shocks’ the global economy is expected to grow by 3.5 per cent this year, down from 3.9 per cent in 2011, with the U.S., Canada and Japan leading the way in the developed world.

‘Because of the problems in Europe, activity will continue to disappoint in the advanced economies as a group, expanding by only about 1.5 per cent in 2012 and by 2 per cent in 2013,’ said the report.

Source

Related articles

• ‘Euro meltdown will be a bigger disaster than the credit crunch’ (express.co.uk)
• IMF: Euro Break-up Cannot Be Ruled Out (news.sky.com)
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IMF Exploits Euro-Crisis to Create Global Money Power

Monday, April 16, 201

by Staff Report

Euro Area Seeks Bigger IMF War Chest on Spanish Concerns … European officials travel to Washington this week seeking a bigger global war chest to combat the debt crisis as Spain’s government battles to quell renewed market turmoil over its finances. Three weeks after European leaders unveiled emergency euro- area funding exceeding the symbolic $1 trillion mark, concerns about Spain’s position have ratcheted the nation’s borrowing costs to the highest levels this year. Crisis-fighting resources will dominate talks at the International Monetary Fund’s spring meeting in Washington from April 20-22. – Bloomberg

Dominant Social Theme: Austerity would work if Europe would just cooperate.

Free-Market Analysis: Almost unnoticed, the world’s leaders now speak in terms of trillions rather than billions (or millions) as they used to, and the IMF and central banks are leaders in this trend (see above excerpt).

The goal of the elites running these facilities is world government and the European Union is a stepping-stone to this consolidation. Austerity, the program that is supposedly stabilizing European finances, is actually an elite dominant theme that does the opposite of its stated intent.

As part of this globalist thrust, the power elite seeks to empower certain international facilities with additional funding and authority. Out of chaos … order, as the article excerpted above once again illustrates:

Bowing to international pressure to do more while stopping short of a bolder proposal, European governments agreed last month that 500 billion euros ($654 billion) in fresh money would be placed aside 300 billion euros already committed to create an 800 billion-euro defense against contagion.

By also offering to give the IMF 150 billion euros, “European governments have done their part,” ECB Executive Board Member Joerg Asmussen said April 13. “I would now expect our non-European friends and partners to contribute their part to IMF resources.”

This kind of problem/solution formula is easy to understand for anyone who wants to look. The elites pursue their goals via dominant social themes, fear-based promotions that frighten people into giving up power and wealth to globalist facilities. In this case the mechanism is the “sovereign debt crisis” and the solution is to puff up the IMF with more resources.

The longer the so-called sovereign debt crisis goes on, the more the globalists utilize it to expand the power of their chosen institutions. We wrote about this phenomenon just the other day in an article entitled, “Debt Crisis Plotted to Deliver the Euro to the IMF?” Here’s how we explained the genesis:

One has to keep in mind the artificiality of the current economic construct. The economy of the world is run via monopoly fiat/paper money printed by central banks. It is this system that has seemingly crashed half of the world’s economy and is well on the way to delivering China into the same situation …

The EU crisis itself, as we have often pointed out, started when certain poorer countries were given large amounts of money by Brussels to “equalize” the economy. These funds were supposed to allow the bureaucracies to address native imbalances and create fiscal health.

Of course, this money was nothing but a kind of bribe. The elites of the given nation pocketed the funds and then made sure their countries entered the EU. After this occurred, further lending took place via the elite’s top, European commercial banks.

After the 2008 crash, it became clear that the EU’s PIGS couldn’t repay the loans. This was likely the plan all along. After this realization set in, the power elite that orchestrates this sort of thing ensured that the solution to this manipulated dilemma was “austerity.”

The idea is evidently and obviously to make people so miserable that they will eventually welcome world government and world money. The power elite orchestrating this has been using what we call directed history for at least a century and probably closer to three – within the context of the modern globalist conspiracy.

The article we are analyzing today from Bloomberg suggests an expanded IMF based on the Euro crisis. But the IMF is also promoting a US$500 billion expansion via developing countries.

The justification is that the European crisis might spill over into other continents and nations. The IMF has to be prepared for via a half billion-dollar transfer from the very countries it claims to be protecting. Reuters reports the following:

Euro Area Seeks Bigger IMF War Chest on Spanish Concerns … International Monetary Fund (IMF) Managing Director Christine Lagarde said that she is hoping to make “real progress” at this week’s meetings …

In January, the IMF said it would need $600 billion in new resources to help “innocent bystanders” who might be affected by economic and financial spillovers from Europe … On Friday, officials from the Group of 20 nations told Reuters the world’s major economies were likely to agree to provide the IMF with somewhere between $400 billion and $500 billion.

A G20 official said the fundraising effort would likely raise about $50 billion from Japan and a similar amount from China and Saudi Arabia, in addition to the $250-300 billion already committed by EU countries. Smaller amounts will likely come from countries such as Russia, Mexico and Brazil.

Thus it is that the IMF expands. It is receiving at least US$150 billion from Europe and hundreds of billions from mostly “developing” countries. It is interesting that the Reuters article and the Bloomberg article don’t quite match up on the European contributions. What’s a few hundred billion among friends?

In fact, nobody REALLY knows how much money is flowing at the top, or where it is headed. The point of the reports is promotional and has little to do with accuracy. The idea is to throw vast sums around as to imbue government officials with godlike powers.

Often, we discover the announcements made about funds prove not to be true. The European sovereign debt crisis was supposed to have been solved years ago, when the first announcements were made that funds had been delegated to “fix” the problem by leading European sponsors.

In fact, we have come to realize this crisis – like other crises around the world – are often manufactured ones. This is no doubt why they often last so long. The longer the crisis lasts, the more possibilities for a transformative effect.

In this case it seems obvious to us that the intent is to make citizens of the West so miserable (via “austerity”) that they will welcome virtually any change, even globalism, that promises to make their lives better.

Seen through this admittedly cynical lens, the 20th century with all its “isms” and arguments for expanding government via socialism, etc., was the first part of a promotion that is now nearing its latter stages. Having successfully made people dependent on government, the powers-that-be are now removing those props in order to further their internationalist aims.

No doubt global governance will be sold the same way as were the initial governmental solutions of the 20th century – as a panacea that will somehow reduce the world’s afflictions and rectify the wrongs of the “market.”

Conclusion: We are not yet sure the IMF is destined to become the world’s central bank – complete with an SDR global currency – but the IMF is continually showing up at the center of things as world economic chaos blossoms. More that the Bank for International Settlements or even the World Bank, it appears to be the Chosen One.

Source

Related articles

• IMF funds drive caught in global power shift (jhaines6.wordpress.com)
• Spain again to test investors’ nerves (donny-wise.com)
• Japan mulls $60 bil. contribution to IMF resource boost (english.kyodonews.jp)
• Daily US Opening News And Market Re-Cap: April 16 (zerohedge.com)
• S. Africa pushing for more World Bank, IMF reform (seattlepi.com)

Debt Crisis Plotted to Deliver the Euro to the IMF?

Spanish bailout ‘impossible’ for eurozone, says prime minister Mariano Rajoy … The eurozone is not equipped to bail out Spain, the country’s prime minister Mariano Rajoy has admitted, as global traders continued to punish the nation’s stocks and bonds. Mr Rajoy said it was “not possible to rescue Spain” but insisted his country did not need a Greek-style international bail-out anyway …Christine Lagarde, the boss of the International Monetary Fund (IMF), also warned that Europe’s rescue mechanisms were not enough to restore confidence to global markets but said the IMF could provide a “global firewall”. Speaking in Washington on Thursday, Ms Lagarde, who is seeking to raise $500bn (£313.4bn) in extra funds for the IMF from the G20, warned risks to the global economy “remain high; the situation fragile”. “We need a broader approach – and a stronger global firewall – if we are to push back this crisis. The IMF can help. But to be as effective as possible, we need to increase our resources.” – UK Telegraph

Dominant Social Theme: What is needed is a global currency.

Free-Market Analysis: We’ve long since come to the conclusion that the EU‘s sovereign crisis is a manufactured one. This article supports such a conclusion, in our view.

One has to keep in mind the artificiality of the current economic construct. The economy of the world is run via monopoly fiat/paper money printed by central banks. It is this system that has seemingly crashed half of the world’s economy and is well on the way to delivering China into the same situation.

If China’s economy folds – and it seems well on the way – there will likely be a global depression. The elites, in our view, are preparing to offer up the International Monetary Funds’ SDRs as an alternate currency. The IMF is increasingly active as the “lender of last resort” throughout the world (see article excerpt above).

The EU crisis itself, as we have often pointed out, started when certain poorer countries were given large amounts of money by Brussels to “equalize” the economy. These funds were supposed to allow the bureaucracies to address native imbalances and create fiscal health.

Of course, this money was nothing but a kind of bribe. The elites of the given nation pocketed the funds and then made sure their countries entered the EU. After this occurred, further lending took place via the elite’s top, European commercial banks.

After the 2008 crash, it became clear that the EU’s PIGS couldn’t repay the loans. This was likely the plan all along. After this realization set in, the power elite that orchestrates this sort of thing ensured that the solution to this manipulated dilemma was “austerity.”

The idea is evidently and obviously to make people so miserable that they will eventually welcome world government and world money. The power elite orchestrating this has been using what we call directed history for at least a century and probably closer to three – within the context of the modern globalist conspiracy.

These elites, based out of the City of London it seems, with arms in Washington DC, Rome, Tel Aviv and elsewhere, have been working steadily toward world government and used fear-based promotions to achieve it.

These dominant social themes are generated to frighten people into seeking or at least accepting globalist solutions. These themes are usually accompanied by artificial crises – in this case, economic crises created by the boom/bust monopoly central banking system.

There is no doubt that “austerity” is not helping solve the apparently ginned-up economic crisis in Spain, Greece or Italy. Here’s more from the article excerpted above:

“To talk about a bail-out for Spain at the moment makes no sense,” he told reporters. “Spain is not going to be rescued; it’s not possible to rescue Spain, there’s no intention to, it’s not necessary and therefore it’s not going to be rescued.” Despite his comments, the Madrid bourse fell and the yields on the country’s benchmark bonds remained stubbornly high. While other European markets soared on Thursday following strong gains in America, Spain’s Ibex index lost 0.5pc.

Politicians in Rome tried to counter the markets’ view that Italy was in the same predicament as Spain.Vittorio Grilli, Italy’s deputy finance minister, said “markets are very nervous” but added: “We cannot talk about a derby between Italy and Spain.” Analysts at Bank of America Merrill Lynch said: “Although Spain and Italy face very different economic and fiscal issues, their yields are largely moving in tandem.”

Meanwhile, the Greek unemployment rate rose to 21.8pc, according to fresh figures from the national statistics office. During 2011, the average annual jobless rate soared to 17.7pc from 12.5pc the year before, revealing the toll of the crisis and resulting austerity measures that have seen one-in-10 jobs destroyed. One-in-five Greeks is now jobless, including 50.8pc of those aged under 25. The rate is twice as high as the eurozone average.

Various EU countries were manipulated into joining the EU, after which time a central-banking led economic crisis created a global meltdown. Then austerity was initiated to counter the “sovereign debt” crisis in Europe. The PIGS are now suffering from this faux-solution.

Even the name PIGS (PIIGS) is suspect. Developed years ago by a Goldman Sachs banker, the name denotes greed and has been applied to nation-states characterized in this way. It seems to us that this is all part of a larger manipulation. Directed history – from the nomenclature on down.

Meanwhile, the IMF continues to receive high-profile coverage in the elite controlled mainstream media. This high profile is being constructed within the context ongoing efforts to build up SDRs as a mainstream currency.

A good article on the moves being made to build this currency is entitled “The Triffin Dilemma Will Create a 3-G World” and was posted at Goldseek. In it, author Richard Mills points out the following:

In the wake of the financial crisis of 2007–2008, Zhou Xiaochuan the governor of the People’s Bank of China, said that a national currency is unsuitable as a global reserve currency … In a speech titled “Reform the International Monetary System” Zhou argued that part of the reason for the original Bretton Woods system breaking down was the refusal to adopt Keynes‘ bancor.

Calling Keynes’s bancor approach “farsighted” Xiaochuan proposed strengthening existing global currency controls through the IMF by the adoption of International Monetary Fund (IMF) special drawing rights (SDRs) as a global reserve currency. When Special Drawing Rights were originally created in 1969 one SDR was defined as having a value of 0.888671 grams of gold, equal to the value of one US dollar at that time. After the breakdown of the Bretton Woods system the SDR was redefined in terms of a basket of four currencies.

From January 1 2011, the IMF has determined that the four currencies will be assigned revised weights based on their roles in international trade and reserves. Due to varying exchange rates, the relative value of each currency varies continuously and thus the value of the SDR fluctuates. The IMF fixes daily the value of one SDR in terms of US dollars based on the exchange rates of the constituent currencies.

We’ve speculated that the elites want to create some sort of formalized gold standard in the past. But more and more the logic is inescapable: The elites are opposed to gold at every level (except for themselves). They hate the idea in fact that the common man owns either gold or silver. Monopoly fiat/paper offers much more control.

Having spent a century building up monopoly central banking, all the way to 150 central banks, the power elite seems in no mood to back-peddle. The IMF is apparently their chosen vehicle to create an international monopoly fiat currency, and it continues to have a high profile.

Conclusion: The IMF is presented as the “firewall” that can contain the European conflagration. Eventually the IMF’s SDR “currency” shall be elaborated on, perhaps sooner rather than later. The European crisis is a kind of shadow play and the IMF and its money are likely being positioned as a solution … if not THE solution.

Source

Related articles

• Spain Tries to Save Itself as Prospects Slip Away (247wallst.com)
• ECB Asmussen: To Use Monpol, Nonstandard Tools If Needed: WSJ (forexlive.com)
• IMF funds drive caught in global power shift (firstpost.com)
• Global growth forecasts to be revised down (independent.co.uk)

EL-ERIAN: Europe Threatens To Cripple The IMF

G20 finance ministers need to stand in the way of European manipulation of the International Monetary Fund when they meet in Mexico City this weekend, PIMCO chief executive Mohamed El-Erian writes in a column published today in the Financial Times.

A staunch critic of Europe‘s attempts to get around its internal problems by relying on IMF funding, he argues that non-European economies need to stand up for the IMF’s professed “uniformity of treatment,” particularly given the harsh rules the organizations have imposed on emerging market countries in Asia and Latin America in the past.

A few choice snippets:

It should come as no surprise that over the last couple of years Europe has pressed the IMF very hard to make exception after exception – and it has succeeded. This has resulted in a number of firsts by an organisation that prided itself on the “uniformity of treatment” for member countries.

And later…

This is an internal issue that the IMF cannot, and should not be expected to, solve. It is up to the eurozone to decide whether to go forward in its current configuration towards a fiscal union or whether to first slim down to a more coherent and stable configuration. This would provide a better basis for a larger European-financed firewall.

As tempting as it is, Europe should not seek to obfuscate this critical decision by using IMF financing to give the appearance of sustaining the unsustainable. It must start making the necessary, albeit very difficult, decisions. Until this happens, the G20 has a global responsibility to protect the IMF from further damage to its credibility and legitimacy.

Read El-Erian’s full editorial in the Financial Times >

Source

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• EL-ERIAN: The REAL Reason Europe Is Begging For Help From The IMF (businessinsider.com)
• EL-ERIAN: Even EU Leaders Know This Greek Deal ‘Will Only Last A Few Months At Best’ (businessinsider.com)
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