Posts Tagged ‘IMF’

ALL TRICK, NO TREAT: Happy Halloween From Your Ruling Elite…

October 31, 2012

This bunch see themselves as the rightful rulers of the planet, and your masters of reality.

Now that’s scary.

Bush pumpkin line discontinued this year – for not being scary enough.

But now the masks are off it seems, and criminal behaviour has become an open sport – where the perpetrators are not even concealing their acts and selfish motives. This is the golden age of state-sanctioned crime. All trick, no treat.

Don’t be shy, tell us which is face is most frightening, in the comment section below…

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Blowing the Lid on Child Abuse in Entertainment – The Ben Fellows Radio Show with guest Patrick Henningsen

October 11, 2012

On the show today Ben talks with Patrick Henningsen of 21st Century Wire, about Jimmy Saville and the BBC pedophile scandal, the dirty side of show business, IMF and foreign aid fraud, MSM manipulation, the Middle East, the upcoming American elections and the 21st Century Wire TV show.

….

Russia signs deal with North Korea to write off 90% of North Korea’s $11 billion debt to Moscow

September 19, 2012

REFRESHING NEWS

 

North Korea said Tuesday that it had signed an agreement with Russia settling an estimated $11 billion debt owed by Pongyang that dates back to the Soviet era.

The North’s state news agency KCNA said the agreement was signed Monday in Moscow, but gave no details of the terms involved.

“The North-Russian debt adjustment pact will pave the way for the two countries to further expand economic cooperation between them,” the KCNA report said.

Russian Deputy Finance Minister Sergei Storchak had made a rare visit by a top Russian official to Pyongyang in May to discuss settling the outstanding debt.

The Izvestia newspaper reported last year that Russia would write off 90 percent of the total sum — estimated at $11 billion — and that the other 10 percent would be spent on joint development projects in North Korea.

Following his visit, Storchak confirmed that part of the settlement would involve investment in energy, health and education projects in the isolated Stalinist state.

The debt had been discussed in August last year at a rare summit in the Siberian city of Ulan-Ude between North Korea’s late leader Kim Jong-Il and Russia’s former president Dmitry Medvedev.

Kim Jong-Il died in December and was succeeded by his son Kim Jong-Un.

Until recently, talks on the issue had seemed deadlocked with Moscow insisting Pyongyang needed to acknowledge that it owed the money to Russia as the successor of the Soviet Union

But Moscow is keen to pursue several projects with its neighbour, including a trans-Korean railroad, the construction of an electricity line and a pipeline carrying Russian gas to South Korea via the North.

ELITES HAVE ORDERED A MEDIA BLACKOUT ON SUCCESSFUL RON PAUL 2012 CAMPAIGN – VOTERS MUST CARRY HIM TO VICTORY

August 22, 2011

By SARTRE
21st Century Wire
August 22, 2011

The stark reality about the Ron Paul revolution is that the power elites could not survive in a society based upon individual liberty. Nevertheless, this statement does not imply that a Paul presidency would guarantee the elimination of the oligarchy.

The faint memory of what a free nation could be or even what our country once was, could be revived under certain circumstances. Imagine the abolishment of the Federal Reserve and the fractional debt created money system. Consider a non-interventionist foreign policy that allows for actual national defense and secures the borders. Or, best of all, a limited government culture that is based upon the principle that government exists to serve citizens in their pursuit of freedom. Thomas Jefferson’s soul lives within the Ron Paul generation. 

Ron Paul 2012

THE LAST HONEST PLAYER: The establishment fear Ron Paul because he is not on the take and cannot be bought.

The barons of media exclusion, that spread a confederacy of silence around Ron Paul, are descendants of the same cabal that sent Jefferson to France during the drafting and debating at the Constitutional Convention. These latest cohorts want to continue the same dominance over the spirit of the revolution. This eternal battle is presently waged under an invigorant new awakening. The old game no longer works.  Swept away are their lies, because their pseudo propaganda all point to the oz cult behind the curtain, and the destructive reality of their plots are visible for all to see.

No wonder, since he does not play their game, Ron Paul is such a threat to their control. Consider the insight of our long time friend and courageous advocate of an American First foreign policy, Mark Dankof. He gets to the core reason why the (FCM) Fawning Corporate Media wants to prevent Ron Paul from winning the GOP nomination.

“Israel, the Jewish Lobby worldwide, the Central Bankers, and the energy/gas consortiums, are the driving force behind making this war happen.  Jay Solomon’s story (WSJ – Senators Press Obama On Iran’s Central Bank) indeed notes that Senator Mark Kirk (R., Illinois) and Senator Charles Schumer (D., New York), are the co-sponsors of the letter, in a “sign of bipartisan support for tougher financial measures against Iran.  . . .“  What the Wall Street Journal omits, of course, is that Kirk received more Israeli/Jewish PAC money for his initial election to the Senate, than any other candidate in the last election cycle, and that Schumer’s pockets have been lined historically with reams of the same levels of financial largesse for doing the bidding of the Zionist State.  We might also draw the legitimate and documentable conclusion that Kirk, Schumer, and their colleagues in both houses of Congress, demonstrate the stranglehold that Israel has on both major political parties, as demonstrated each year by Hugh Galford and Janet McMahon of the Washington Report on Middle East Affairs in Washington.  The numbers provided annually by Galford and McMahon provide the quantitative proof of what President Obama told Ha’aretz in his last trip to Israel:  that Obama himself could not possibly have been elected to the U. S. Senate in Illinois (the seat now held by Kirk, by the way), or the American Presidency, without the amount of Jewish money and political support that came his way.  Presumably, the President is saying something about the larger political system and the way it works systemically.  Follow the money trail.  And the Bankers.  And the number of Israeli assets in the GOP Presidential sweepstakes (the exception is Ron Paul) who have never met a surrogate war they didn’t like, including the one on the drawing board now they will assiduously promote if The Masters should decide that Mr. Obama needs replacing in 2012 for insufficient sycophancy.”

Sadly, many Tea Party conservatives still accept the Neocon foreign policy deception. Ron Paul is a non-interventionist, not an isolationist. Watch the thinking man’s version of a strong leader in the video, Ron Paul Speaks Out: Media Blackout, Economic Freedom, Intellectual Revolution. Go beyond the sound bites and ads, then ask the hard questions.

Once the presidential campaign heats up after Labor Day, the cast of characters will keep shucking out the phony common man populism, while cavorting with the same money interests, corporatists and banksters that select every other nominee. Have you forgotten the Skull and Bones ticket of 2004? Surely, the progressive McCain was no choice over the “bomber” Obama general.

Now the Ron Paul generation understands that liberty and genuine national security is never advanced under the military-industrial-homeland war party. Yet, usually the only candidates you get to vote for out of the duel party wag the dog parade is a kosher toady. The unremitting plans to eradicate Iran, drives the banking internationalists for the same reason that Libya became a bombing range target. No nation is allowed to challenge the money monopoly. Gaddafi’s gold and Ahmadinejad’s economic independence as cited in an IMF report, cannot stand the risk of any unorthodox ruler. How dare the Zionist controlled press make a rare slip up and reveal, “The IMF said it has revised its previous figures on Iran’s economy after a brief visit to the country, expressing admiration for some of the controversial plans introduced by the hardline president.”

The entrenched GOP party facilitators want to marginalize Ron Paul as dangerous because he resists tribe orders and refuses to waste another generation of youth in the service of zealots. Liberty demands that our sons and daughters no longer be consumed as cannon fodder. Translate the “ON BEHALF OF A GRATEFUL NATION” sympathy statement to read – The defense department regrets to inform you that your sons are dead because they were stupid.

Now even the disappointed left have figured out that warmonger Barry Soetoro AKA Barack Obama, is no different from George W. Bush. So when will the Republican faithful come to grips, that Bachmann and Cain are IRS and Federal Reserve cronies, respectively?

Obama is Bush, warmonger and puppet of the elite

SHOWING HIS BUSH CREDENTIALS: In the end, Obama merely expanded and finished the Bush Jr agenda.

As for Romney, anyone who is willing to champion person status for corporations deserves to file chapter 7 on his own campaign aspirations. New World Order Perry is the puppet of choice. His rhetoric will ring home to many, because he lifts it directly from the Ron Paul journal. However, Rick Perry is the next incarnate plastic doll, which will read the script from the banksters’ ledger sheet, once elected.   

When was the last time you heard another Republican presidential candidate utter the words civil liberties? Or name another public figure that actually made his life’s work synonymous with LIBERTY? Only Ron Paul stands the test of performance.

So how can Paul win in the GOP primaries? The New York Times offers a salient chart and states, “On the Republican side, partisan self-identification peaked in the early 1990s – as did the percent of the electorate voting in Republican primaries – before declining.” Decrying the GOP hacks, every liberty Republican patriot needs to organize their universe of friends and acquaintances to get the vote out at the ballot box on primary day. Just a minimum increase and return to the 33% 1990 levels with Ron Paul voters will result is his victory for the nomination. The caveat does require a verifiable monitoring of any enhanced electronic voting count against liberty-minded voters or the sabotage by the party of the delegate certification process.

Presidents are selected well before the general election. Ron Paul will generate significant support and votes from independents. Even disgruntled Democrats will rally in a general election; however, the Republican registered primary voter must resist the perennial Neocon treachery.

The frustration of discussing politics in an era of denial needs to be overcome. Enrolling a Republican voter into the cause of Liberty can be a daunting task. Those who believe that the party of Lincoln champions a proper conservative defense of liberty are wholly confused. Tea Party proponents must reject the GOP establishment and their – hijack express. Do not believe the hype.  Accurate public Tea Party approval sentiment is not in decline. Simply, the only drink that Rick Perry partakes is an imported Camellia sinensis brew, while he worships another lord in the Bilderberg temple.

Lastly, those critics of Ron Paul’s Austrian economics usually oppose a return to a resurrection of a modified gold standard. Yet if you dig deeper, those same detractors maintain an apologist attitude for keeping a central banking system. Few disparagers view the preservation of liberty on the same scale as their return from compound interest.

The money elite may soon conduct another false flag to scare the uninformed and redirect one more staged diversion. The rush of enthusiasm for retaking our liberty is the essence of the Ron Paul message. The generation that tasted the joy in the establishment’s fear during the 1960’s appreciates just how a government can be broken, from conducting an exhausted and immoral war.  

Today everyone needs to learn this lesson, apply traditional conservative populist principles, and eliminate the central banking tyranny that is the prime destroyer of our economy. The fascist state that follows orders and reports to this private bank-ruling cartel is the foremost enemy. Is Liberty more important to you or do you think a looser fit of your governance chains is achievable with your continued apathy?      

This oldie but goodie YouTube tune is still relevant today. Break out the band and get your neighbor to join in and sing the lyrics. Most important – get out the Republican Ron Paul primary vote.

This article first appeared at the BATR FORUM.  

Soros calls on Portugal and Greece to pull out of euro and quit the EU ahead of Merkel-Sarkozy debt summit

August 16, 2011

By Alan Hall
Daily Mail
August 16, 2011

Speculator George Soros says both Greece and Portugal should dump the euro and quit the EU because of their massive debts.

MASTER OF DISASTER: Soros is likely to have hedged his bets to profit from the collapse of the Euro.

Soros told Germany’s Der Spiegel magazine that leaving would not kill off the euro – or the EU.

Debt-stricken Greece and Portugal are struggling to implement eurozone and International Monetary Fund-mandated reforms by slashing spending and raising taxes in exchange for financial aid.

Chancellor Angela Merkel and President Nicholas Sarkozy (pictured here in December last year) have taken leading roles in the debt crisis and will hold talks and a press conference in Paris.

European shares experienced slight gains as investors focused on tomorrow’s meeting between France and Germany to deal with the current financial crisis in the region.

President Nicholas Sarkozy and Chancellor Angela Merkel have taken leading roles in the debt crisis and will hold talks and a press conference in Paris.

Soros also suggested the time had come for eurozone members to accept the introduction of eurobonds.

‘Whether you like it or not, the euro exists. And for it to function properly, countries sharing the currency must be able to refinance a large part of their debt under the same conditions,’ he said.

More…

Berlin is opposed to the introduction of such bonds, but Soros suggested Germany, as Europe’s strongest financial partner, should be responsible for defining the rules for its introduction.

Soros, who made over $1billion by betting against the British pound in 1992, also said he had no intention of playing the market against the common european currency.

‘I am certainly not betting against the euro, because the Chinese have a huge interest in an alternative to the dollar and will do everything possible to help Europeans save it,’ he said.

Both Greece and Portugal, along with Ireland, have been granted multi-billion EU-IMF rescue loans to prevent them from defaulting on their huge debts.

Despite Berlin’s resistance to the idea of eurobonds, today one of Germany’s leading economic associations came out in favour of the move, claiming all other avenues had been exhausted.

BGA export association president Anton Boerner said: ‘What is the alternative?

‘The alternative is the markets attack Italy, then France, we lose our AAA rating and then it’s our turn. This is a downward spiral that would lead to a worldwide depression.              

‘What have we achieved then? We’ll end up paying [for the crisis] three times over. This way we pay just once.’        

The head of the centre-left Social Democrats, Sigmar Gabriel, has also backed the idea, telling German public television station ARD late on Sunday that eurozone countries should be able to raise 50-60 per cent of their funding through such joint issues if they agreed to certain conditions. .. 

Read more: http://www.dailymail.co.uk/news/article-2026281/Soros-calls-Portugal-Greece-pull-euro-quit-EU-ahead-Merkel-Sarkozy-debt-summit.html#ixzz1VCbr4IDT

FIAT vs METAL: DREAMTIME GOLD, THE EURO AND OTHER NEW MONEYS

July 16, 2011

The ECB is technically insolvent, but we won’t hear that on primetime

By Andrew McKillop
21st Century Wire
July 16, 2011

Once upon a time there was the Eurozone and its all-new hard money, the EURO…

It got off to a good start with a monstrously high forced surrender cash-in rate for the national moneys it replaced: depending on country, around 15 to 25 percent above the euro’s real worth. This yielded several years in the early 2000’s when it wasn’t even necessary to doctor the official inflation numbers, but through a penchant for old ways and traditions, national economic agencies, the European Commission, the ECB and other rightly named players kept on doing it. This made sure that all of its fundamental economic data was absolutely fake, an important aid to launching a now-floundering ‘cuckoo’ fiat money.

KEEPING THE MONEY STRONG

The 1956 Treaty of Rome and subsequent treaties like Maastricht and Nice lectured that governments must leave their central banks alone and not force them to liquidate gold assets. They could play around with SDRs and paper gold behind closed doors at the IMF, but in their home patch the central bank’s role is currency and money supply management, not government financing woes. Making this a lot less than sure by creative interpretation of the founding texts, the creation of the ECB and operation of the Eurozone, recently expanded to 17 countries, included the Protocol of the European System of Central Banks and European Bank, with “ESCB” being the correct name for the Euro zone. 

THE "EURO-FED" : The ECB will not be told what to do by the European Union.

This protocol says in one of its Articles that neither the ECB, nor any national central bank, nor any member of their decision-making bodies will be told what to do by any European Union institution, body or national government. 

Another article prohibits community institutions or governments having what the article calls ‘overdrafts’, or any other type of easy loan facility with the ECB, or with any national central bank. This rather ferocious, seeming limit on selling gold, of course in secret, was easily got around by interpreting it to mean that gold cannot be put up as collateral for loans received by a central bank and passed on to private banks or to its national government- but it can be swapped.

While the IMF’s recent director Strauss-Kahn was surely interested in wife-swapping, his gold-swapping appetite was even stronger, with the IMF’s action in this domain on an extreme high since Strauss-Kahn moved in, during late 2007. Since then, the swapping bug has new and powerful adepts, or competitors, in Europe as the IMF, ECB, the US Federal Reserve and European central banks scramble to invent, shuffle, swap and sell paper gold, buy government debt, and bail out any private banks who belong to the club.

SELLING GOLD

The ECB under another French political nominee, J-C Trichet, lost no time with its Eurozone central banking partners in ignoring these strictures and ran official gold sales rising from around 35 tons a year, to their first high point in 2009 at 142 tons. In 2010 the brakes were slammed, and sales crashed to 6.2 tons. Official reasons given for this nicely underline the schizophrenic balancing act played out by all central banks and the governments they are officially independent from and unrelated to.

On the one hand central banks seek a low and preferably declining gold price, because a low gold price (by money magic) means that fiat paper moneys they also print and circulate will seem relatively stronger in comparison. To help that process, claimed to generate and maintain confidence and trust in their paper moneys, they have to sell gold.

On the other hand if the gold price is rising, they have to buy gold, and by 2010 (in fact long before), gold was showing ugly signs of going only one way: up. Central bankers mulled the dire fact that gold, by 2010, had its best 10-year streak for price growth – since the 1920s – a fateful decade for central bankers, and everybody else after 1929.

The Central Bank Gold Agreement (CBGA) set at the dawn of the 2000’s, sought limited and controlled European central bank gold sales because of concern that uncoordinated selling was destabilizing the gold market and driving down gold prices too far – despite this being what one side of the Jekyll-and-Hyde central banker psyche wants.  In February 2001 gold prices had fallen from their previous record high (in nominal dollars) of $850 an ounce, reached in 1980, to $253. By September 2010 the price had grown to $ 1300, and today is menacing to break out from current levels around $1550 to unknown and exotic new extremes – for central bankers.

By pure schizophrenia therefore, gold selling suddenly became dangerous and unacceptable in late 2010 but well before then, from 2008, national governments were in panic mode on sovereign debt, budget deficits and collapsing private banks across Europe, in the USA, and Japan. They needed huge new amounts of financing, and central banks had no choice but to pony-up liquid cash using the only real hard asset they have: their gold reserves. They were therefore thrust into the purest of all two-way splits: they had to buy (or in fact invent) gold, while they also had to sell both real and invented gold: needing a frenzy of gold swaps.

THE FRAGILE ECB

The ECB could be called the worst possible mix-and-mingle of classic central bank and semi-federal bureaucratic institution. Both secretive and incompetent, it has intensified Europe’s sovereign debt crises by waiting too long to act, then panicking in an unproductive way. The Bank’s hard asset gold and gold related financial resources (called gold-related receivables), are based on its declared gold reserves of 522 tons at end 2010, with a value of less than €20 bn at today’s gold price ($1550 per ounce). With other resources, whose value or present worth is market price-related, its total reserves are in nominal terms about €82bn but its current operations and exposure, notably the buying of Greek debt and loans to Greece, and loans to other PIIGS countries, stood at around 444 billion euro as of June 2011.

The Bank is therefore now leveraged around 23 to 24 times relative to its real capital base, meaning that should the ECB see the value of its assets fall by less than 5 percent, from booking losses on its loans, from purchases of bad government debt in the PIIGS, or from selling gold at one price but then having to buy it back again at a higher price, its entire capital base would be wiped out. To be sure, that is ‘unthinkable’ because the ECB, even more so than most other central banks is ultimately underwritten by taxpayers. In turn this means there is a hidden – and potentially huge – cost of the Eurozone crisis to taxpayers buried in the ECB’s books.

Hefty losses for the ECB are no longer a remote risk. Greece is effectively already in ‘rolling default’  because it does not have the capacity to pay double-digit interest rates on its ballooning debt, as shown by the supposedly disappointing results from each new bail-out package from the EU, ECB and IMF. To date. the ECB has probably taken on around €200bn in Greek assets, in other words well over twice the ECB’s capital base, and as much as 8 times the value of its 500-odd tons of gold at current gold prices. Since value compression from the penny-on-the-dollar forced sale of Greek national assets is predictably ferocious, and investor-speculators operate a classic raid on its assets, encouraged by all the institutional players including the European Commission and European governments, this will cause large losses to the ECB.

Some forecasts put the probable loss for the ECB, only on its Greek operations at around €45 to €65 billion, depending on how deep the write-downs and losses are and how long the crisis drags on.. 

A loss of this magnitude would make the ECB insolvent – meaning taxpayers in the Eurozone 17 countries will have to finance its recapitalisation. Alternatives exist: the Bank could ask Eurozone governments to send it more cash through a capital call on their national central banks, which could sell some of their gold to raise the cash. In theory and almost always in practice when a central bank is recapitalised it will print and issue more money. The ECB would therefore almost certainly print more euro notes and organize more euro coin minting, making it certain the results are inflationary, which is  specially unacceptable for Germany, the strongest economy in Europe, with the second-largest central bank stock of gold in the world. The risk of Germany quitting the euro, or in fact, keeping it for a selected and restricted club of ‘hard money capable’ countries would radically increase. 

THE NUMBERS DON’T ADD UP

Looking at the debt-and-deficit crises of the Europe-USA-Japan threesome it is hard to say which one might be less out of control than the others. Each has its special edge of unreality and uncontrollability, with the USA oppressed by the single biggest debt load, the Europeans having the fastest spreading and most dangerous loss of control, and the Japanese having the oldest and most untreatable hyper-debt.

If we took the total official gold stocks of the world’s 180-plus central banks, or the 15 – 19 European parties to different versions of the CBGA since 1999, and the current gold price which central bankers tell us is extreme high and dangerous, the present total net worth of these two official gold piles is not just tiny, but minuscule in relation to present-day sovereign debt and deficit crises.

If by magical means it was possible to sell the biggest of these two piles, world total central bank gold reserves as reported to the World Gold Council, around one-third of it held by CBGA parties, this would produce about $1500 billion. This is far short of the Obama administration’s annual deficit for 2011. Even the recent and current ECB and IMF bailout of Greece, costing above $250 billion, is one-sixth of that amount – to unsuccessfully bail out the sinking finances of one small country with 11 million inhabitants. Japanese sovereign debt is over $12 300 billion, and growing, most recently by a probable $150 billion hit from the Fukushima disaster, with the same again for tsunami damage.

Question: What can central bank gold stocks do against that ?

Possibly this is known, but also possibly it is too extreme to be understandable – by central bankers and their ilk. Heavy attention in government-friendly and politically correct media has gone to the horse-trading process for shoehorning France’s own Christine Lagarde, a near world class swimming champion in her youth – into the IMF. Europe wants and needs the directing role, because Europeans must invent and swap an awful lot of gold, fast.

Under Strauss-Kahn the “loan portfolio” of the IMF was multiplied from $1 billion in 2006 to around $100 billion today, and the amount of paper  SDRs the IMF could print, allocate and shuffle between member countries were drastically raised, but the numbers remain derisively small compared with the size of the problem.

The next quantum leap in IMF financial resource creation, all of which have a ‘gold handle’ somewhere in their design, might only need to be 10-fold, or 20-fold, we are told by believers to expect ‘good luck’ and to muddle through, but how the IMF could do this trick is still relatively unknown. In the event of failure, we are forced back to the rather gob-smacking scenario of an ‘entirely new money’ being created.

Financial markets, as expected are doing their predictable best to drive the crisis. The US debt ceiling of $14 300 billion sets a nice playing field for political horsetrading and name-calling;  after Greece, market operators in Europe are quaking with music hall fear from their surprise discovery that Italy is a super Greece;  and Japan’s latest weak government is on its way out as national debt racks on and up by as much as $400 billion only since March. Ingredients have fallen into place for a Summer Panic on world stock markets – which is unusual in modern times, but no problem at all if we go back to classic Victorian-era panics.

NEW MONEY

To be sure, both political elites and their well-disciplined media and press supporters will hunker down and try to ignore the crisis, driving financial market operators to new extremes of saying out loud what they want: easy cash and low interest rates. They have the whip hand for exactly that reason. Easy cash and low interest rates has been the only tune in town since 2008 – but the results are unreal. Saying there is no cause for concern is nice or traditional, but the vastest amounts of extra money ever printed in human history has failed to do anything to, or with the real economy: this is more than just alarming.

Today’s crisis is totally unlike the 1979-1980 panic era. This is despite the “Crash of 79” being cited more and more as the likely model for what happens now, featuring the solid-looking precedents of high gold and oil prices, high unemployment, banking sector stress, rising government deficits and falling regimes in the Arab and Muslim world. Today’s crisis has major missing ingredients: high inflation and high interest rates. It also includes ingredients that weren’t present in 1979: the BRICS are big creditor nations today, both China and India are massively industrialising. They have both, like Russia and Brazil, on many times warned they are not happy with the dollar’s constant loss of value. In 1979, sovereign national debt in the OECD countries was often tiny and sometimes nonexistent – Japan for example was a huge net creditor country with the rest of the world.

One new money could in theory therefore come from over the horizon, BRICS Money, but even a moment’s look at the idea shows this neat fantasy is as unreal as the debt-and-deficit crisis of the OECD group. Gold-backed money, an idea that was tried in the 1920s, but resulted in gold prices only rising and the gold-backed moneys of the day folding one by one, is another popular quick solution, among many observers, but would have direct consequences. To work, it would need a cut in world liquidity by let us say 90 percent, to allow each new bill or note to command, equate to and freely exchange with a measurable speck of metallic gold.

Bancor-type money of the Keynesian genre, in fact never really detailed in the ramblings of Keynes but featuring a basket of real resources able to range across the commodities space, could or might be a candidate new single world reserve currency. Massive intervention across global commodity markets would be needed, with a huge risk of price spirals, and crashes in the value of the ‘fiduciary resources’, that is commodity values. Setting up this nice idea would take a lot more than a single day’s work for ex-swimming champ Lagarde at the IMF. 

Other genial-seeming solutions have already come and gone. In particular the Carbon Money trial balloon of 2009, heavily promoted by Strauss-Kahn at the IMF, which folded as fast as it had appeared.

We can unfortunately be sure that financial market operators have their own solution: another 1929. Lemming-like and driven by herd instinct, they are drawn to these kind of events because. In certain market contexts like the present there is one Total Solution: sell everything, except of course gold.

Leads and ideas from the finance sector can be counted on for their apocalyptic-type absence, forcing the question back into the public arena. This unfortunately is not prepared to deal with such a fundamental question. We could or might suggest that No Alternative economics, as some early neoliberals in their heyday right after the crash of 1979 called their first solution of the day – high street bank interest rates gouged to 20% or more in OECD countries – has generated a No Solution crisis in 2011.

The problem may be so special, and so big we can only anticipate and hope for unprecedented solutions. These would likely be forced to include debt moratoriums on some of the biggest economies of the world, starting with the USA, existing moneys would have to be protected from implosion, world prices of key basic commodities would have to controlled – but whatever the solutions, they will have to come fast.

Gold and Silver Likely to Go Parabolic Due to ‘Global Shockwaves’ if U.S. Defaults

July 16, 2011

Before it’s News
July 16, 2011

Gold is some 0.5% lower against the U.S. dollar and most currencies today but higher in Australian dollars as the Aussie fell on Australian and global economic growth concerns. Asian equity indices were mixed as are European indices.

Bond markets have seen subdued trading but Greek bonds are again under pressure and the Greek 10-year yield has risen to 17.37% in increasingly illiquid trade.

The dawning reality that the U.S. will be downgraded due to its appalling fiscal position led to new record nominal gold and silver prices yesterday.

Denial regarding the possibility of a U.S. default continues with some analysts denying that such an event is “possible”. Such an event is possible and it grows more likely by the day. US Federal Reserve Chairman Ben Bernanke warned overnight that a default on America’s debt will spark a major crisis and send shockwaves through the global economy.

“The Treasury security is viewed as the safest and most liquid security in the world, and the notion it would become suddenly unreliable and illiquid would throw shockwaves through the entire global financial system,” he told a congressional committee.

US CDS has broken out to the upside and there is the potential for sharp moves up here as was seen in the aftermath of the Lehman and global financial crisis.

The fundamentals for gold and silver could not be better as the outlook for most paper currencies and government paper (sovereign debt) is not good. The precious metals are again being seen as safe haven assets to protect from government profligacy and currency debasement. The risks of a “depression” and currency crises in Europe and the U.S. are rising and this is contributing to significant safe haven demand.

The fact that gold and silver have no counter party risk and cannot default and cannot be debased or printed into oblivion makes them crucial diversifications. Gold, global equities and AAA rated, short dated bonds remain the best way for investors to protect themselves from today’s growing sovereign debt and monetary risk.

Gold, silver, good equities and good bonds will be better than depreciating cash or currencies in the coming years. Real diversification will help protect preserve and grow wealth…

FLASHBACK: 21st Century Wire Reports on Summer Gold Parabolic on May 24, 2011

MARKET FLASH: GOLD PARABOLIC COMING THIS SUMMER

By Andrew McKillop
21st Century Wire
Originally published May 24, 2011

Question: Why could gold go parabolic?

Prices for the Yellow Metal have recently suffered, along with silver, from sudden investor retreat using rationales like ‘inflation is beaten’, the global economy is recovering and the US dollar is getting stronger. Against the overvalued euro, maybe, but against gold the US dollar, euro, yen and almost all other paper moneys only have one way to go:  down.

Gold is a very special market and gold plays a key arbiter role in the unending attempt by the IMF and central banks to bolster and defend the value of “fiat moneys”. Their strategy is simple: push down the price of gold, anyway they can.

With the sudden and spectacular fall of the IMF’s Strauss-Kahn, 18 May, a large number of gold shuffling and swap operations between the IMF, central banks, the ultra-secret BIS and the world’s highly restricted number of authorized bullion banks could have been frozen in mid-air. When the balls hit the ground the collateral monetary damage could be a lot more interesting and much more powerful than what Strauss-Kahn did with his personal playthings in a Manhattan hotel room.

Strauss-Kahn’s sudden ouster comes at a key moment for its biggest debt bailout operations in favour of governments like that of Greece or Portugal, Ireland or Spain, the Baltic states, Iceland and others – who have to run a constant financing operation to save their national private banks, insurance companies and mortgage lenders. IMF austerity cures and forced firesale of government assets, under Strauss-Kahn or any body else, only makes the debt-load financing problem worse. To be sure, the IMF line is things have to get worse before they get better

Other so-called rich countries with similar crisis-level debt loads start with the USA, but at such fantastic rates of new financing need that, since late 2008, the USA is in permanent crisis territory…

SEE FULL MAY 24th REPORT HERE

SEE ALSO:

The Strauss-Kahn Affair: It’s Now Make or Break Time for the IMF

A NEW DAWN FOR THE IMF: SWITCHING DEBTS TO ASSETS

June 30, 2011

By Andrew McKillop
21st Century Wire
June 30, 2011

In the gallic joy and media hoopla of yet another French elite politician with almost no knowledge of economics getting the IMF top job, confirming the real role and mission of this fragile institution, its bizarre mutation to financial and economic charlatanism- goes almost unnoticed. The Greek debt crisis however shows this stark and clear.

The IMF and the European Central Bank, with an outgoing French director and an incoming Italian chief, are basically struggling for survival – due to the debt crisis of a country with 11 million inhabitants whose GDP comes in at about 5 percent of EU-27 GDP.

Whoever says IMF and ECB also says ‘US Federal Reserve’, although Ben Bernanke would likely nuance that and distance himself from failed “quantitative tightening” in south-east Europe, to concentrate on failed QE at home.

What the IMF and ECB have cooked up in Europe’s PIIGS, with the second I-for-Italy moving upstage in a dangerous way as the Berlusconi empire and media circus crumbles, is nothing short of ultra Keynesian deficit medicine mixed with ultra Neoliberal austerity cures of the IMF 1980s Third World type. The net result is simple: debt has to become assets. Never mind the ideology because if this gambit fails, the euro will fall and a string of European, US, Japanese and other banking houses will shudder and tremble, 2008-style.

OLD AND NEW

The doctrinal mix-and-mingle running through the veins of global central bankers and their bridges to the political deciding elite – the IMF playing master of ceremonies – has become so confused, so bizarre we could call it an ice cream cocktail with chopped gherkins put through a mixmaster. It was not even born to fail – it was simply not biologically possible, but like dinosaurs… it happened. Using Greece as an online, real time exhibit of leading edge financial engineering, the IMF and ECB, along with the European Union and a few Greek politicians, watched by the US Fed and some very engaged private bankers and finance sector players, are creating one of the most massive debt explosions the world has ever seen. All this with the small assets, and big debts of a small country edging along the Balkans.

But the Greek Ponzi-style debt pyramid grows every day; most media reporting gives rather fakely, exact numbers of the type: “As of 9am Wednesday morning, Greek sovereign debt is 365.2 billion euros”, and a slightly less fantasist number for how much Greece has to receive to cover the 31 days of July: 12 billion euro, roughly $ 1500 for every man, woman and child in the country. With borrowing like that, why work ? The second income has arrived, but of course with strings attached.

All eyes are turning towards French Finance Minister Christine Lagarde, the first woman to run the IMF or any large financial institution.

The latest 12-billion dollop is the last part of the first debt package masterminded by the IMF and the Europeans, with the ECB in the lead but also including the European Commission and major government players, led by Germany’s Angela Merkel who has publicly said she got on fine with Dominique Strauss-Kahn, and will get on fine with Christine Lagarde: it is official.

GREEK FINANCE: WITH STRINGS ATTACHED

The strings attached include the Dr Jekyll part of the two-headed IMF monster: Greece has to perform. It has to achieve 50 billion euro of asset sales, not so easy in a country of 11 million inhabitants operating in the oversupplied Mediterranean package tour business against bankrupt Tunisia and bankrupt Egypt, now selling 8-day holidays at modern hotels, with food and air flights, at around $ 400 per person. With the July monthly instalment from the IMF and the Europeans, the entire Greek nation could ship itself out to Egypt for the month and find something creative to do with the unused assets, back home.

Greece of course also has other assets, like lignite fuelled power plants, toll highways, ports, tanker shipping lines and even a few semi-bankrupt airlines.

The real potential of achieving 50-billion-euro of asset sales in Greece, anytime at all, let alone soon is however rather low – but that doesn’t matter. What is needed is a public attempt at doing it, and here the IMF and its European friends, with their uncertain and perhaps wavering US allies, have stepped back in time to the 1980s Third World debt pantomine, complete with funny noses: all that is needed is a remake of the Club of Paris, bringing worried banks and reassuring IMF officials together, for a debt and asset slaughter, where assets were turned into debts rather fast.

OLD ASSETS, NEW DEBTS

A country like Greece today, or 1980s-style debt strangled Third World countries, or Russia, Argentina and others in the 1990s has so much short-term debt and ever rising interest rates on that growing part of its debt balloon – a lead balloon – that any asset it puts on the block will be depreciated, quick time. The depreciation is rigorously ferocious, something like an aside in a Thorsten Veblen book on cigar puffing, cognac swilling Victorian capitalists. What you thought might bring in 5 billion euros will in fact return 50 million, penny-on-the-dollar style. Under that type of New Reality, austerity has to be Victorian-style, witness a hike in value added tax on Greek restaurant meals from 10 percent to 23 percent: if you have enough cash to eat out, you have enough to pay the IMF and ECB.

Asset sales and state revenue hikes in Greece will therefore, and can only disappoint.

Meanwhile, the debt clock ticks on and up, another bailout will be needed, so more assets have to be sold (even if they dont exist) and the austerity program has to be tightened, again. In the Russian case in the 1990s, national pride took a strange New Capitalist turn: roughly 40 percent of the entire population were de-monetized or moved out of the cash economy for several years. To be sure, this had a rather draconian impact on imports, let alone mortality rates, but even if oil was worth nothing in the 1990s, Russia kept on exporting it along with other Sunset Commodity resources – exactly like Argentina. So Russia pulled through, to a certain extent, leaving Putin with a permanent chip on his shoulder regarding Western capitalist partners and iron will to stay a creditor nation.

Greece isn’t likely to have a resource-led export revenue boom, like Russia, Argentina and almost all the Jekyll-finance 1980s victims of the IMF in low income Africa and other Third World countries. This is Europe, meaning new-style rigour in a new-style post-liberal economy – which as we already said is the most bizarre cocktail crock of loony economic tunes a Martian could imagine. Failure is certain.

Courage has no place at all in that me-too circus, but it could work in the Greek case:  a sudden and dramatic abandonment of the euro with no prior warning would almost certainly succeed, aided by its shock and horror. The reintroduced drachma would spiral to nothing – but then banks, including the global central bank-surrogate, the IMF, and the would-be federal European ECB would understand they had gone too far with their Veblen medicine and themselves were set to lose everything, too. This brings us straight to a fundamental notion embodied in Keynesianism: if you have a big debt and can’t pay, bankers will stay interested in you. If you have a small debt and can’t pay – go away and die or take a stay in prison.

Greece could shift to a street-friendly military regime of the type which (legend says) saved vodka swilling Boris Yeltsin, install a land army agriculture corps and national sea fisheries corps, develop close and friendly relations with other ruined new democracies of the Mediterranean region, and basically refuse to pay its debt.

Playing for time, the new popular regime of Greece would by necessity be populist, and start by ousting all foreign migrant workers from the country, stemming remittance outflows from the country. This again would signal the new popular regime means business. An aggressive financial strategy with all other EU27 nations would also be necessary, carefully using the twin arms of debt default menace, and joint venture asset development promise.

THE POST LIBERAL RECOVERY

The IMF’s present role models and dominant ideology cocktails range from the laughable to the absurd and back again. Even as a gold hoarder and semi-legal trader, operating with the Basle-based BIS, the IMF is a failure and like other new style central banks probably has a lot less physical gold than it claims. All it can offer debt-strapped countries is SDRs and new debt, drawing down and destroying, or depreciating to almost nothing any real assets that happen to fall into its hands.

Recovery is almost officially defined by the IMF as an Act of God, or Inch’allah for the Gulf state petro-monarchies brought onside by the IMF whenever possible.

We can be sure that previous feats of the IMF, especially its decades-long debt financing saga with low income resource exporter Third World countries, would have dragged on even longer – if there had not been a sudden, strong and sustained upsurge in commodity prices. This upsurge was totally expected by almost any analyst able to use a two-dollar calculator, and totally unexpected by the IMF and its ruling elite politician friends. The IMF therefore has a proven track record of being surprised, and will be surprised by what we can call post-liberal recovery.

In Greece, Portugal, Ireland, Spain and across the Med in Tunisia and Egypt this post-liberal recovery is emerging, sometimes quite fast. The restored state, the government, national institutions and national identity all have a post-global economy importance which of course is played down by average government friendly media in presently unaffected countries. This is a dangerous trend for fuddle-along debt financing and austerity miracles, which only fatten the regular gang of charlatans, who in any case will quickly lose their ill-gotten gains on the gaming tables of the global financial casino.

The process is also post-ideology in a major way. Carefully unexplained by dominant media and their business editors, the failed dictators of the Arab world, currently including ben Ali of Tunisia, Mubarak of Egypt, Gaddafi of Libya and al Assad of Syria all played squeaky clean copybook export platform economics, yipped on by IMF-friendly economists and commentators. Inside their countries the story was a lot different. Street resistance was not driven by ideology or by demonstrators waving pictures of Che Guevara – but by citizens sick of not being able to afford to eat and the victims of permanent mass unemployment, casually described by well paid IMF experts as “an adjustment phenomenon”.

Forcing the economy to ground zero, which again is official IMF medicine, drives society to a rapid search-and-select of what counts and what does not. The flimsy global economy and its tinsel promises weigh little, and outright resistance to austerity measures and cures will rise.

The fear of anarchy and revolution in the post-liberal world – and a total loss for global finance players – is now moving up the teleprompter, prompting European, US, Japanese and other remaining defenders of Orthodox ‘no alternative’ economics to throw money at emerging national governments in a string of countries. Played right, Greece might also benefit from this.