System will be dominoed
Prices can be rigged to create an illusion of price stability. The US Fed increased its buying of inflation-linked Treasury bonds (TIPS) since March 2020 at a faster pace than they were issued by the US Treasury, artificially pushing TIPS prices up and creating an illusion that the market is unconcerned about price inflation.But that is not all. Government statisticians are not above fiddling the figures or presenting figures out of context. We believe the CPI inflation figures are a true reflection of the cost of living, despite the changes over time in the way prices are input. We believe that GDP is economic growth — a questionable concept — and not growth in the quantity of money. We even believe that monetary inflation has nothing to do with prices. Statistics are designed to deceive.
This all coming from a state that forces everyone to submit to its monetary frauds by law. And since as law-abiding citizens we respect the law, but in the process, we hand enormous power to the monetary authorities, so we should not be surprised when that power is abused, as is the case with interest rates and the dilution of the state’s currency. And it follows that the deeper the currency fraud, when something gives, the greater is the ensuing crisis.
Europe is worse off. An examination of the numbers strongly suggests that even Eurozone banks, insurance companies and pension funds are no longer net buyers of Eurozone government debt. The situation has deteriorated so that Eurozone commercial banks appear to have credit restricted in New York. Without any savings offsets, the ECB has gone full Rudolf Havenstein, and is following similar inflationary policies to those that impoverished Germany’s middle classes and starved its labourers and the elderly in 1920-1923. The crisis in New York is an important advance warning of the fragility of the Eurozone’s monetary and banking system.
And the persistence of price inflation today is a subsequent development, likely to expose these banks as being riskier still because of higher interest rates on their exposure to Eurozone government and commercial bonds, and defaulting borrowers.
In March 2020 the US Fed reduced its funds rate to 0% and announced QE of $120bn monthly, the ECB did what it had learned to do when in a monetary hole: continue digging even faster. March 2020 saw the ECB increase purchases under the asset purchase programme (APP) and adopt a new programme, the pandemic emergency purchase programme (PEPP). These measures are the reason why the volumes of the Eurosystem’s monthly monetary policy net purchases are higher than ever before, driving its balance sheet total to over €8.5 trillion today.
Rising interest rates globally will affect all major currencies, and for some of them expose systemic risks. An examination of the existing situation and how higher interest rates will affect it points to the Eurozone as being the most likely global weak spot.The Eurozone’s debt position pitches the entire global financial and economic system further towards a debt crisis than generally realised. Particularly for Greece, Italy, France, Belgium, Portugal, and Spain in that order of indebtedness, the problem is most acute. They only survive because the ECB ensures they can pay their bills by funding them totally through inflation of the quantity of euros in circulation. The ECB’s entire purpose has become to transfer wealth from the more fiscally prudent member states to the spendthrifts by debasing the currency.
This means that savings are not offsetting the inflationary effects of government bond issues.
It must come to an end some time, and by destabilising a highly leveraged banking system the end will be a crisis. With its GDP being similar in size to China’s (which is seeing a more traditional property crisis unfolding at the same time) a banking crisis in the Eurozone could be the trigger for dominoes falling everywhere.
This all coming from a state that forces everyone to submit to its monetary frauds by law. And since as law-abiding citizens we respect the law, but in the process, we hand enormous power to the monetary authorities, so we should not be surprised when that power is abused, as is the case with interest rates and the dilution of the state’s currency. And it follows that the deeper the currency fraud, when something gives, the greater is the ensuing crisis.
Europe is worse off. An examination of the numbers strongly suggests that even Eurozone banks, insurance companies and pension funds are no longer net buyers of Eurozone government debt. The situation has deteriorated so that Eurozone commercial banks appear to have credit restricted in New York. Without any savings offsets, the ECB has gone full Rudolf Havenstein, and is following similar inflationary policies to those that impoverished Germany’s middle classes and starved its labourers and the elderly in 1920-1923. The crisis in New York is an important advance warning of the fragility of the Eurozone’s monetary and banking system.
And the persistence of price inflation today is a subsequent development, likely to expose these banks as being riskier still because of higher interest rates on their exposure to Eurozone government and commercial bonds, and defaulting borrowers.
In March 2020 the US Fed reduced its funds rate to 0% and announced QE of $120bn monthly, the ECB did what it had learned to do when in a monetary hole: continue digging even faster. March 2020 saw the ECB increase purchases under the asset purchase programme (APP) and adopt a new programme, the pandemic emergency purchase programme (PEPP). These measures are the reason why the volumes of the Eurosystem’s monthly monetary policy net purchases are higher than ever before, driving its balance sheet total to over €8.5 trillion today.
Rising interest rates globally will affect all major currencies, and for some of them expose systemic risks. An examination of the existing situation and how higher interest rates will affect it points to the Eurozone as being the most likely global weak spot.The Eurozone’s debt position pitches the entire global financial and economic system further towards a debt crisis than generally realised. Particularly for Greece, Italy, France, Belgium, Portugal, and Spain in that order of indebtedness, the problem is most acute. They only survive because the ECB ensures they can pay their bills by funding them totally through inflation of the quantity of euros in circulation. The ECB’s entire purpose has become to transfer wealth from the more fiscally prudent member states to the spendthrifts by debasing the currency.
This means that savings are not offsetting the inflationary effects of government bond issues.
It must come to an end some time, and by destabilising a highly leveraged banking system the end will be a crisis. With its GDP being similar in size to China’s (which is seeing a more traditional property crisis unfolding at the same time) a banking crisis in the Eurozone could be the trigger for dominoes falling everywhere.
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iamiam : the "peasants" in England saw this crisis coming and tried to save themselves. Thats why the "world" was so upset at Brexit, how dare peasants try to control the nation state... The EU fiscal policies will destroy europe and the benefactor will be what the EU was created to prevent, Russia.