Collectivist Banking

Now he Keynesian banker sings a different tune.

What Yellen Says Should ‘Keep People Awake at Night’

Outgoing Federal Reserve Chair Janet Yellen said Wednesday in testimony before Congress that the United States’ soaring debt “should be a very significant concern.”

“I would simply say that I am very worried about the sustainability of the U.S. debt trajectory,” Yellen said. “Our current debt-to-GDP ratio of about 75 percent is not frightening but it’s also not low.”

“It’s the type of thing that should keep people awake at night,” she added.

With the national debate having surpassed the $20 trillion mark, Yellen is certainly correct. National security experts have repeatedly warned the national debt is the single greatest national security threat to our country. [snip]

Yellen said the U.S economy was strong beyond the ballooning national debt, with the country near full employment and the financial system steadied by Dodd-Frank. She said that the Fed would likely raise interest rates soon to bring monetary policy back toward historic levels.

Some of the Fed’s liberal members have expressed concerns about raising rates with inflation still lagging below the Fed’s 2 percent target. Fed leaders, including Jerome Powell, Trump’s nominee for Fed chair, say they’re not sure why prices have increased a lower rate than ideal.

But Yellen, who’s favored a slow increase in rates, said rate hikes are essential to avoid creating a “boom-bust” economy. (The Hill)

Yellen has said she will retire when President Trump’s nominee, Jerome Powell, is confirmed.

Isn’t it strange she never said anything like this when Obama was in office. She screwed the interest rates into the ground, causing many seniors to suffer with no growth in their retirement plans, Social Security payments and bank savings. After which she turned around saying that inflation was low by changing the market basket items to keep the COLA raises nonexistent all the while food, clothing, gas and utilities shot up in cost.

Now she’s worried that the bubble will burst with the debt soaring and the rise in interest rates taking a huge bite out of government cash. The wonders of fiat money will never cease.


Collectivist Banking

Just when you think your money is safe…

Banking – This ain’t no foolin’ around…from Rico

Once upon a time, you took your money to a bank for safekeeping and the bank paid you interest on the deposit of your money in their bank.- The bank was accountable to you for your money.
Not any more.

We have gone from ZIRP (zero interest rate policy) where no interest was paid to depositors, to NIRP (negative interest rate policy) where depositors pay the bank for safekeeping their money.

But it has gotten even ‘better’ than that.

The laws have been changed once again, and when you deposit your money in a bank, it ceases to be your money and it belongs to the bank at the point of deposit.
– Depositors are now unsecured creditors to the bank that owns their depositor’s money at the point of deposit. Yes, you read that right…my regulatory sleight of hand. By depositing your money into a bank, your money becomes the bank’s money.

If the bank screws up, displays bad judgement, or conducts sloppy business and has a problem and/or fails, guess what? Aaaand it’s gone. [think: Cyprus].
– Unsecured creditors get paid back last for pennies on the pound…if they get paid back at all.

Banking today.
– You can go ‘broke’ by running out of money [read: Argentina], or you can have plenty of money that’s worthless [read: Venezuela, Zimbabwe] and be ‘broke.’ Pick one.

To badly paraphrase the lyrics of the Talking Heads:
“This ain’t no party, this ain’t no disco…this ain’t no foolin’ around.”

A follow up to Big Spenders

The Central Banks in the EU are working on a special way of dealing with their depositors if another “Grecian Formula” needs to be applied to cover a ‘Bail in’. Oh yes, a bail in is when the depositors get shafted instead of the bank stockholders when the financial markets and the bankers SCREW THE POOCH.

If the interest rates climb here the cost of the national debt will eat into every program this corrupt Congress is running to the point that they won’t be able to collect enough taxes to pay for all the promises. All that money will have to go toward paying the interest on outstanding bonds and T-Bills held by foreign Countries and Americans. Printing more money only worsens the situation, which is what we have been doing since LBJ raped Social Security to pay for the Vietnam War.

This is one reason for the drive toward a cashless society. When they control the money, they control you. It seems so nice to be able to wave your iPhone at the register to pay for that overpriced latte; what happens when the government decides no more lattes or gas, or movies, or steaks, or golf.

ECB – Not paying the piper when the ‘jig’ is up…from Rico

When the proverbial ‘jig’ is up, what does one do?
– Why, you simply change the rules of the game instead of paying the piper, at least that’s what the ECB (EUropean Central Bank) thinks.

With the “bail ins” of banks in Cyprus a now faded memory, and with the ECB essentially ‘broke’ [read: insolvent] it’s apparently time for the financial Ouroboros to consider devouring the little guy instead of itself.
The ECB proposes ending deposit protection [read: changing the rules].

An 08 Nov 2017 ECB document (an excerpt of the 58-pgs attached, it’s a mind-numbing read) considers that “deposits no longer need to be protected.”
– Instead of ‘fixing’ the banking system, the banking system is being ‘rigged’ by the bankers to remove ALL protection of deposits. Say ‘sayonara’ to the Euro 100,000 deposit level currently protected from bank bail-ins.

In MEGO (my eyes glaze over) legal lingo, the ECB is considering that in the event of a bank bail-in, it will (instead of protecting deposits) give depositor’s an “allowance” from their own savings. An allowance they will control.
– And only after a five-day wait period from time of a depositor’s request, they will determine what is an ‘appropriate’ amount of your own money you can access for food, rent, and other expenses.

If you have paid any attention to how the EU responded to BREXIT, or Catalonia, then you should clearly understand that these EU BureauRats could give a rat’s ass about the little people.
– Another time we will discuss the Central Banker’s push to implement a “cashless society” (gee, what could possibly ‘go wrong’ with that?*) while they buy physical Gold for themselves…..

*Think Puerto Rico when the power went out after their latest hurricane, for just one example. [No electricity=no digital money.]

It won’t be just the pooch that gets screwed!

Big Spenders

We have written to this before but another rehash can’t hurt-might help keep some from getting tipped over.

Rock, Paper, Scissors…from Rico

Gold, as an asset, does NOT change. It is everything else around it that changes.
At the end of 1970 one ounce of Gold cost just under $40; by 2001 Gold cost $200; by 2006 $600; and by 2017 just under $1300.

The purchasing power of the Dollar has depreciated substantially since 1970, while the purchasing power of Gold has appreciated (far more than the Dollar has declined).
What’s in your wallet?

Another time we’ll discuss holding stocks in a brokerage via “street registration” without certification.
[read: counter party risk aka ‘if you don’t hold it, you don’t own it.’]

Collectivist Banking

So many Americans believe that the Federal Reserve is a Governmental institution because it has the word Federal in the name. You couldn’t be more wrong. It is a private banking group formed by Woodrow Wilson a Progressive President and it just plays with your money. We have a Federal institution; it is called the U.S. Treasury.

Ron Paul: “The Fed’s Massive Bubble Is Creating A World Of Economic Pain”

There shouldn’t be a Federal Reserve, but it exists, and it’s constantly creating a world of economic pain.?

Each Federal Reserve bubble must turn into a bust. It’s unavoidable.

According to the central planners, the “solution” for the bust is more creation of new money and credit. That’s the only way they can keep their “system” alive.

When the Fed’s stock market bubble burst in 2000, it responded by creating new money and credit. Lo and behold, this led directly to the next bubble that was even bigger.

When the housing bubble burst in 2008, Wall Street was bailed out by taxpayers, and TRILLIONS of new dollars were created as the “solution.”

And now, almost 10 years later, we have an even bigger bubble than 2008.

The central planners at The Fed have done it again.

How much longer will we allow this “system” to last? How much economic pain will it take to return to sound money again?

To understand this one needs to look at currency against the price of a commodity benchmark, usually gold at a given point in time. The best point is when Nixon took the Country off the Gold Standard. Gold was priced around $300USD so we can start there.
Then it took $300 dollars to buy one ounce of gold. (12 troy ounces in a pound) Now gold is selling for close to $1300USD an ounce. Did gold rise up that much or is the dollar worth less (worthless). Loking at this another way, if you have $10 bill and the government prints another $10 bill, is your money worth $20 or worth $10, each bill now worth only $5 each. One way to find out is to try to exchange the dollars for another currency. Then you will find out what they believe the value of the dollar is. We are a debtor nation, like others with a fiat currency. We have nothing to back up the dollar except the “Full Faith and Credit” for what that is worth.
An example of where this financial idiocy terminates, observe Venezuela.

Maduro faces financial nightmare in Venezuela — just in time for Halloween

With its coffers empty and its financial moves restricted by U.S. sanctions, Venezuelan President Nicolás Maduro’s government is facing a nightmarish scenario with the approach of Halloween, when a series of debt payments totaling more than $3.5 billion are due.

Analysts said the government will do everything possible to make the payments, even if it means further cuts in already reduced food imports, which would deepen shortages in a country where a majority of people cannot get three meals a day.

But a default cannot be ruled out because of the precarious state of the country’s finances, the low level of reserves and the reluctance of strategic allies like Russia and China to continue lending money to Venezuela. [snip]

But the government could also decide to suspend all imports of food and medicine, De La Cruz added.

“They have demonstrated that they do not care about the well being of the people if it risks their hold on power,” he said.

The government has averted default in recent months because of timely loans from the Russian government, which so far has always seemed ready to provide the millions of dollars needed by its foundering Latin American ally. [snip]

“The Russians are not very happy,” Dallen said, noting a report in June that Venezuela had failed to make a $1 billion payment due to Moscow.

One billion dollars may not look like much in the United States, but it’s a lot for Russia, said Dallen, who often consults with Washington officials on Venezuelan affairs.

The Russians may well be approaching the point of concluding that continuing to invest in Venezuela is too risky, he added.

These ending ain’t pretty, usually finishing off with lots of gunfire and blood.

Cognitive dissonance

Tax cuts only


benefit big earners

If you aren’t making any money, you aren’t paying any income taxes. Now how in hell can a tax cut affect you? All the clangor and hollering about taxes is nothing but political BS to distract you from the real issue: Those clowns in DC aren’t doing anything to solve the deficit.

If they really want to help the lower and middle classes, they would get rid of the excessive fees and taxes on the phones, Internet, tires, textiles, Federal excise taxes on coffee liquor and tobacco. Get rid of the inheritance (death) tax.

As for the Income Tax, make it a flat 15% on all income including interest and dividends; no deductions for anything. Everybody pays the 15% big earners will pay more. Progressives don’t like it because it is FAIR.

No corporate tax; they don’t pay that anyway, you do. That is passed through to you as a cost of doing business. You pay that tax when you buy the product or service. You get their tax on income from money paid out as wages and not put into the business for expansion. The rest is paid out to stockholders as dividends; that is collected in their taxes.

Can you tell me why this cannot be accomplished? There isn’t any reason except recalcitrance on the part of the likes of Sens. McCain, Corker, Murkowski, Collins and Paul. Why are these individuals reelected again and again?

We know why the Democrats won’t vote to change the system. They don’t believe it is your money.

What’s in your wallet?

Not as much as you think. If you want to know what the value of the dollar is, look at the interest rate you get for it.

Dollar Deepens Dive as Caution on Currency Grows

The dollar was hit by fresh selling in Asian trading Friday, a day after notching a 2½-year low, as reasons for caution on the currency continued to mount.

The Wall Street Journal Dollar Index was off 0.4% in Asia to 84.38, putting it down 9.2% for the year.

Thursday’s 0.7% drop was part of a broader move by investors into haven assets such as gold and government debt—a dollar “capitulation trade,” said Rob Rennie, currency-strategy chief at Australian bank Westpac . It was fueled in part by the European Central Bank, which raised growth forecasts and thus spurred the euro. [snip]

Haven moves are also at play, with rallies in gold and government debt. Gold is at its highest level in a year, topping $1,350 a troy ounce, while there has been broad buying of global sovereign debt in recent days. Yields on 10-year U.K. bond fell back under 1% during Asian trading Friday while yields on 10-year Japanese debt dropped below zero. The market is concerned that North Korea will launch another missile Saturday, when the country celebrates its founding—the occasion for a nuclear-bomb test last year.

“The dollar can’t find any loving at the moment,” said Rodrigo Catril, a foreign-exchange strategist at National Australia Bank in Sydney. Given the unresolved fiscal issues in the U.S.—debt-ceiling measures “kicked down the road again”—and political wrangling between President Trump and his own party, he adds, it isn’t hard to understand why.