The political corruption in this country is no longer whispered about. It is out in the open and fairly well recognized. Productive society is getting plundered by the parasite class [...]
banks
Dec 162011
Charles Hugh Smith states:
… our financial system is fundamentally based on lies, fraud, embezzlement, misinformation, perverse filters and incentives, shadow systems that mock transparency and regulation, class privilege and the systemic flouting of the rule of law.
Mr. Smith’s article is damning. Many are unwilling to accept the statement above. For those who fall into this category, Mr. Smith offers a set of questions:
If you want evidence, then ask yourself:
How many people have been indicted, convicted and served time for financial crimes during the current era of financial fraud and malfeasance, the most pervasive in U.S. history?
Answer: essentially none; the number is signal noise.
Was the American public lied to about the need and true purpose of TARP and the other bank bailouts?
Answer: yes.
Did Congress meekly cave into the demands to “save the banks” and swallow whole the most absurd threats, i.e. save our cronies lest anarchy become the order of the day?
Answer: yes.
Did the Federal Reserve backstop the banks to the tune of $7.7 trillion in complete secrecy?
Answer: yes.
Are there two sets of laws and rules, one for the Financial and Political Elites, who are free from oversight and the rule of law, and another for the rest of us?
Answer: yes. Just look at the massive level of corruption and systemic fraud, and the near-zero number of investigations which result in indictments, convictions and prison time.
Has anything been done to change any of this systemically?
Answer: no. The Kleptocratic Power Elite likes the system as is.
Dec 122011
Rick Moran at American Thinker places the European condition in perspective:
Euro zone banks near collapse
Rick Moran
The recently completed summit of EU leaders came up with a solution of sorts to deal with the sovereign debt crisis.
But what it didn’t address was the growing crisis over credit access for european banks. The Telegraph:
The European Central Bank admitted Continue reading »
Dec 052011
In March of 2010, I discussed the possibility of another bank holiday. We had one during the Great Depression where banks were ordered to close:
One of the first New Deal legislative acts was the closing of the banks, known as a national banking holiday. Banks were closed for about a week. Neither deposits nor withdrawals were allowed.
The nature of our fractional-reserve banking and the current state of the financial markets make such an event more likely now than it was in early 2010 when I first warned about it. To understand banking mechanics and how they enhance the possibilities of such an event, I suggest you read the earlier article.
With the situation in Europe deteriorating and the increasing recognition that there is no solution, capital will leave these banking systems as well as flee the countries involved. If you fear bank failure, you take your cash out. If you fear currency failure, you put your money into safer currencies, preferably outside of the country.
Some European pundits have talked of a bank walk rather than a bank run. That is, there are signs that some people are beginning to remove funds from the banking system. Panic is the biggest fear of fractional reserve banking systems because they don’t have enough money to redeem but a small percentage of deposits (probably 5 – 10%). Thus, any fear renders banks illiquid and unable to honor withdrawal requests.
Will this happen in Europe? I suspect it will and much more. If this panic hits in Europe it is apt to start a bank walk or worse in the US. The Economist deals with these possibilities.
For those who are fortunate enough to have savings left, it might be prudent to keep a month or two of expenses in cash outside the banking system. The opportunity cost for doing so is virtually zero because you do not earn any return on cash in the banks. It might provide a reasonable resource, should our banking system be forced into another bank holiday.
Long-term, as most regular readers know, I am not a fan of cash because I think fiat currencies will be driven to what Voltaire described as their intrinsic value — zero.
Dec 042011
Tyler Durden discusses the video below:
In the following video Chris Martenson – economic analyst at chrismartenson.com and regular guest contributor to Zero Hedge, and James Turk, Director of the GoldMoney Foundation talk about the problems facing the eurozone as well as the global economy. Chris Martenson points out that the whole world simply has too much debt. This is why he believes that there won’t be a real solution to the euro crisis. The big question will rather be who will take losses on the debt, which can’t possibly be repaid. The lack of political leadership and unwillingness to accept reality is contributing to this crisis. Additionally, the monetary tools central banks have traditionally used to revive economies are starting to show less and less effect. In Martenson’s view, the financial sector has become way too large and interlinked across borders, so that a default by one country could bring down the whole financial systems, because credit default swaps would get triggered and could bring down the writers of those derivatives.
Durden’s full summary can be seen here. By all means, watch this video:
 A Scathing Indictment of Society, Our Financial Culture and Our GovernmentMy only comment is to read this piece and then re-read it. It conveys properly what much of our society has become. BCM HAS CEASED OPERATIONS POSTED BY ANN BARNHARDT [...] |
 A Timeline for EuropeNo one knows how this economic crisis will play out. For sure, it will have an ending that few can imagine. From Zerohedge comes this rehash of our crisis and [...] |
 The Hangover From Hell Lies AheadThe talking heads on CNBC this morning are excited about the ECB rate cut. I assume it is because they are paid to generate viewership, although ignorance and/or stupidity should [...] |
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 When Capital FleesWhat is spelled out below is not difficult imagining. However, once capital starts to run from somewhere to somewhere else, it is difficult to predict where it ends up. Mr. [...] |
There is No SolutionThe hole that the banking systems and governments have dug for themselves has no way out. Here are some Europeans talking with Robert Shapiro, former adviser to President Clinton and [...] |
 Politician UnBurdenedI have never been particularly admiring of Gordon K. Brown of the UK. After all, he is/was a politician. No longer in office, apparently he chooses his words less carefully [...] |
 Desperate Government Will Do Anything With Your Money!We are past the point of economic rationality. What drives everything from here forward is political desperation. Here are two examples. Has Fannie Mae bailed out Bank of America? The [...] |
A Timeline for Europe
Description of New America
Signs of a Recovery?
Cheap Money and Markets
The Oligarchy Running the Country
Worst Bill Ever. What About the Constitution?
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