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“Sell In May And Go Away” Might Be A Good Idea For Conventional Assets

May 24, 2015 by · Leave a Comment 

Volatility in the currency markets, bond markets, and stock markets likely has a lot of people on Wall Street feeling a bit worn out. Taking a summer vacation in the Hamptons might just be their best idea.

The coming months promise to be anything but quiet and predictable. Here are a couple of items that may yield profound implications for stock, bond and currency investors before summer ends…

The Threat of an Official Recession Is Looming

Threat of Recession

The next few months are critical for the U.S. economy. The official definition of recession calls for two successive quarters of negative GDP. First quarter GDP came in barely positive, initially estimated at 0.2%, but it will be revised twice before July. Some experts expect it will wind up in negative territory.

The U.S. trade deficit recently came in much larger than expected. The higher deficit will, setting other factors aside, translate to lower GDP. Investors will get a look at 2nd quarter GDP in late July and pessimism among forecasters is growing.

So far U.S. equity investors are hoping for the best, or at least hoping the Fed will reverse course on tightening. Stocks are shrugging off bad news and powering higher with price-to-earnings valuations climbing into the nosebleed section.

It is hard to imagine valuations at these levels holding if investors and high frequency trading algorithms must grapple with an official recession. Of course, should the Fed announce some new form of stimulus in response to bad news then all bets are off.

The End Is Nigh for Greece

The Greek government is running out of tricks to avoid a default. Last week, officials there paid €750 million Greece owed to the IMF by borrowing €650 from the IMF; a last resort gimmick they won’t be able to repeat.

Absent finding an agreement with lenders to modify loans and dramatically reduce what is owed, the Greeks will be in outright default as early as next month. This summer should tell the tale on Greece’s future within the European Union.

Greek Government Default

Should Greece default and exit the EU, it will be the first event of its kind, and it has the potential to open a Pandora’s Box. There will be bank failures within Greece and pain for anyone holding Greek debt. It could pave the way for bankruptcy and an exit in a number of other nations where finances are also in shambles. And no one can confidently predict the outcome in derivatives markets where banks and hedge funds have been making highly leveraged bets.

Should the Greeks manage to reach an accord with lenders, markets will have to contend with a different set of challenges. You can bet other overly indebted nations including Ireland, Spain, Portugal, and Italy will aggressively pursue similar deals. The pain for bond holders isn’t likely to end with Greece.

The EU has a flood of bad debt swirling around its knees, but officials there continue to pretend they stand on solid ground. Regardless of whether Greece defaults outright or manages to cut a deal, it looks like the pretending will have to stop – and soon.

Clint Siegner is a guest columnist for Veracity Voice

Clint Siegner is a Director at Money Metals Exchange, the national precious metals company named 2015 “Dealer of the Year” in the United States by an independent global ratings group. A graduate of Linfield College in Oregon, Siegner puts his experience in business management along with his passion for personal liberty, limited government, and honest money into the development of Money Metals’ brand and reach. This includes writing extensively on the bullion markets and their intersection with policy and world affairs.

Beyond Baltimore: Political Looting of Nation’s Wealth

May 12, 2015 by · Leave a Comment 

The CVS Pharmacy at the corner of North and Pennsylvania Avenue in Baltimore is a burnt-out shell. You probably saw the video last week. An angry mob carried the store’s inventory out by the armload, then set fire to whatever was left. Company officials are still deciding whether or not to rebuild.

Looting is not good for business in Baltimore. But it is absolutely fantastic for business in Washington DC.

Legions of political fundraisers are busily drafting letters to the faithful. Politicians are weaving the riots into their rhetoric. There is nothing like this kind of red meat to get people voting and writing checks.

The Republicans seemingly have the upper-hand in the political debate. The Democrat Party has had an iron grip on the City of Baltimore, running things from top to bottom for nearly 50 years. It’ll be harder for political leftists to assign the blame elsewhere, but that won’t stop them from trying.

Every politician will tell you what the problems are and propose a solution. There will be buckets of diagnoses and prescriptions from all over the spectrum. Devotees will shout about welfare, schools, unemployment, poverty, police militarization, and more. There is one issue, however, that isn’t going to get so much as a whisper in either Democratic or Republican fundraising letters.

Corrupt Money System Causes America to Rot from Within

We’re referring to the subject of honest money. Neither party wants to bring it up.

Democrats may have spent the past 5 decades building the dystopia that is Baltimore today. But they couldn’t have done it without the bipartisan effort in Washington DC to build our modern welfare/warfare state using oceans of freshly printed dollars and mountains of debt.

Politicians of every stripe love dishonest money. It’s the ultimate accountability dodge. It’s how you make promises to voters without even asking them to pay.

One side will moan about American jobs being sent overseas, disproportionately impacting minorities and the lower class. They’ll blame it on greedy corporations. They won’t mention their party’s undying support of Fed money creation and limitless borrowing – the very foundation of massive and perpetual trade deficits. Don’t expect them to admit that a whole lot of the unbacked dollars they adore effectively filled the cargo holds of ships instead of U.S. manufactured goods. And then sailed abroad to be swapped for goods made elsewhere.

Danger: Fraud, Scam, Theft

The other side will screech about welfare. But they aren’t going to screech about Richard Nixon (R) – who slammed the gold window and made the dollar completely irredeemable. No way. Their party happily puts those fiat dollars to work funding wars and defense contractors. And they used them to outfit police departments across America with armored vehicles, military grade weapons, and training on how to use them against the disaffected masses marching in our streets.

The Republican Establishment, too, likes the option to bail out banks and the well connected without having to raise taxes or send real money for the purpose. And, despite the rhetoric, they have yet to defeat a single bill hiking the debt ceiling. In fact, they are almost certain to quietly hike it again later this year when Obama and his Treasury Secretary come calling.

GOP fundraising letters won’t discuss the direct relationship between the dishonest money the party loves – the printing and borrowing – and the wasteful spending it purports to hate. The government’s myriad of free money programs will be blamed on those darned “Socialists” across the aisle instead. In reality, both parties are responsible.

The events in Baltimore make great fodder. Rest assured, DC fundraisers have gone into overdrive. They say that your contribution is urgently needed. We suggest you support sound money instead.

Clint Siegner is a guest columnist for Veracity Voice

Clint Siegner is a Director at Money Metals Exchange, the national precious metals company named 2015 “Dealer of the Year” in the United States by an independent global ratings group. A graduate of Linfield College in Oregon, Siegner puts his experience in business management along with his passion for personal liberty, limited government, and honest money into the development of Money Metals’ brand and reach. This includes writing extensively on the bullion markets and their intersection with policy and world affairs.

The Secretive Bank of England

May 12, 2015 by · Leave a Comment 

With the enactment of the privately owned central bank, the Bank of England provided the model for the financial enslavement of governments, and their citizens. Well before the conflict for establishing a National Bank in America or the eventual surrender to the money changers with the betrayal in instituting the Federal Reserve, the history of the Bank of England needs to be studied. Relying on British historians may seem to invoke a cultural bias; however, the range and wealth of information on this topic comes from an earlier age. Further research will expand this understanding and many of the sources cited can fulfill this objective.

For purposes of a mainstream account, the official site of the Bank of England provides a flowery version about the background and purported success of the scheme proposed by   “William Paterson, envisaged a loan of £1,200,000 to the Government, in return for which the subscribers would be incorporated as the “Governor and Company of the Bank of England”. Although the new bank would have risked its entire capital by lending it to the Government, the subscription proved popular and the money was raised in a few weeks. The Royal Charter was sealed on 27 July 1694, and the Bank started its role as the Government’s banker and debt-manager, which it continues today.”

“The bank hath benefit of interest on all moneys which it creates out of nothing.”

– William Paterson

THE FORMATION OF THE BANK OF ENGLAND by Halley Goodman provides a detailed and well sourced chronicle and background.

“The goldsmiths evolved to become the original private bankers of the time. Since  goldsmiths already had as part of their trade private stores of gold and stout vaults to store them in, entrepreneurs could entrust their own gold to them for safe keeping, for a fee, and receive a paper receipt for the deposit. The goldsmiths could then lend monies against these deposits for an additional fee. Mr. Hartley Winters declares that “some ingenious goldsmith conceived the epock-making notion of giving notes…and so founded modern banking.” Merchants would deposit “their money with the goldsmiths and received from them receipts” that “…were payable on demand, and were transferred from one holder to another in payment of debts.” These receipts or notes from the goldsmith bankers, often in the form of a letter, are some of the earliest surviving cheques in England. Given the economic realities of the time, although deposits provided the funds for their business, most of the clients of these goldsmith bankers were usually borrowers rather than depositors.”

From such humble origins, the foundation was laid to invent a central bank that would create money out of thin air and loan it at interest to the government, who lost it sovereignty for making this Faustian bargain.

Secrets of the Bank of England Revealed at Last!!

The Charter of the Bank of England (1694) with the Great Seal of William and Mary. The first usury central bank to be incorporated in England.

The Bank of England account, published by Cassell, Petter & Galpin cites a rocky start and opposition from the goldsmiths.

“In 1696 (very soon after its birth) the Bank experienced a crisis. There was a want of money in England. The clipped silver had been called in, and the new money was not ready. Even rich people were living on credit, and issued promissory notes. The stock of the Bank of England had gone rapidly down from 110 to 83. The goldsmiths, who detested the corporation that had broken in on their system of private banking, now tried to destroy the new company. They plotted, and on the same day they crowded to Grocers’ Hall, where the Bank was located from 1694 to 1734, and insisted on immediate payment—one goldsmith alone demanding £30,000. The directors paid all their honest creditors, but refused to cash the goldsmiths’ notes, and left them their remedy in Westminster Hall. The goldsmiths triumphed in scurrilous pasquinades entitled, “The Last Will and Testament,” “The Epitaph,” “The Inquest on the Bank of England.”

It did not take long for the Jewish bankers to set their sights on Paterson’s bank and financers for the English regime. Brother Nathanael Kapner adds his audacious viewpoints.

“The new King William III soon got England involved in costly wars against Catholic France which put England deep into debt. Here was the Jewish bankers’ chance to collect. So King William, under orders from the Elders of Zion in Amsterdam, persuaded the British Treasury to borrow 1.25 million pounds sterling from the Jewish bankers who had helped him to the throne.

Since the state’s debts had risen dramatically, the government had no choice but to accept. But there were conditions attached: The names of the lenders were to be kept secret and that they be granted a Charter to establish a Central Bank of England. Parliament accepted and the Jewish bankers sunk their tentacles into Great Britain.”

Actual control of the fiat central bank is discussed in Who owns the Bank of England?

“A very famous story relates to the Bank of England and the infamous Rothschilds, that all powerful banking family. This story was re-told recently in a BBC documentary about the creation of money and the Bank of England.

It revolves around the Battle of Waterloo in which Nathan Rothschild used his inside knowledge of the outcome and his faster horses and couriers to play the market by getting the result of the battle before anyone else knew the outcome.

He quickly sold his English bonds and gave all the traders who looked to him for guidance the impression that the French had won at Waterloo.

The other traders all rushed to sell their bonds before the market crashed thinking that they were now worthless and a massive fire-sale occurred as brokers clamered to get rid of their stock. This massive sell off quickly drove the price of the bonds down to 5% of their original worth.

Once the bottom had dropped out the market Nathan Rothschild then re-bought as many bonds back as he could at hugely discounted prices and in doing so he multiplied his wealth twenty times in 3 days of trading.

At the same time as becoming immensely wealthy he also became the single largest debtor to the English government which ultimately gave him control over the bank of England.”

If you are so inclined to do your own research, two sources, HISTORY OF THE BANK OF ENGLAND written by Dr. A. Andreades and Complete Histories: Bank of England to 1694, are worthy of review.

“As you can see by the 250-year chart of Bank of England stock, the shares showed no real trend during the 1700s, rose in price during the Napoleonic Wars as England left the gold standard and suffered inflation, declined in price from around 1818 to 1845 during the deflation that followed, rose in price for the rest of the 1800s as the Bank gradually increased its dividend, plunged until 1920 as inflation occurred without any compensating rise in the dividend, then gradually rose in price until the Bank was nationalized in 1945. The behavior of the Bank of England’s stock encapsulates the general behavior of the British stock market over that 250-year period.”

Now for most of its history the privately held, Bank of England was extremely profitable to its owners. The method for charging interest on the creation of money has been the prime vehicle for driving both public and private debt throughout modern times.

The Guardian reports in the article, The truth is out: money is just an IOU, and the banks are rolling in it.

“The Bank of England let the cat out of the bag. In a paper called “Money Creation in the Modern Economy“, co-authored by three economists from the Bank’s Monetary Analysis Directorate, they stated outright that most common assumptions of how banking works are simply wrong, and that the kind of populist, heterodox positions more ordinarily associated with groups such as Occupy Wall Street are correct. In doing so, they have effectively thrown the entire theoretical basis for austerity out of the window.”

The entire monitory financial system is based upon charging usury on the creation of national currencies. No larger debtor exists then governments. The perfection of the Rothschild fraud is founded upon charging compound interest on the very medium of exchange that serves as legal tender.

The Bank of England set the stage for the centralization of all banking under the umbrella of banksters control. In order to discover all the secrets of manipulating the financial system, one must comprehend, the first and primary lesson; that central banks do not function as beneficiaries to their host nation, much less the ordinary “little people”.

Keeping this deplorable rip-off system extorting their pound of flesh is the principal objective of the financial elites. Interest on government bonds must be paid. More debt needs to be incurred. And the framework for human impoverishment lies at the feet of central banking.


Sartre is the publisher, editor, and writer for Breaking All The Rules. He can be reached at: BATR

Sartre is a regular columnist for Veracity Voice

The Rich Get Richer

May 9, 2015 by · Leave a Comment 

Why are stocks still flying-high when the smart money has fled overseas and the US economy has ground to a halt?

According to Marketwatch:

“For the eighth week in a row, long-term mutual funds saw more money flowing out of U.S. stocks and into international stocks, according to the Investment Company Institute……For the week ended April 22, U.S. stocks saw $3.4 billion in net outflows from long-term mutual funds…For the year to date, net outflows for U.S. stocks are $13.79 billion, while inflows for international stocks are $41.12 billion.

Those figures, however, don’t count exchange-traded funds. In April alone, mutual funds and ETFs that focus on international stocks saw $31.8 billion in net inflows, while U.S.-focused funds and ETFs shed $15.4 billion, according to TrimTabs Investment Research.” (“Why U.S. stocks are near highs even as fund investors flee“, Marketwatch)

So if retail investors are moving their cash to Europe and Japan (to take advantage of QE), and the US economy is dead-in-the-water, (First Quarter GDP checked in at an abysmal 0.1 percent) then why are stocks still just two percent off their peak?

Answer: Stock buybacks.

The Fed’s uber-accommodative monetary policy has created an environment in which corporate bosses can borrow boatloads of money at historic low rates in the bond market which they then use to purchase their own company’s shares.  When a company reduces the number of outstanding shares on the market, stock prices move higher which provides lavish rewards for both management and shareholders.  Of course, goosing prices adds nothing to the company’s overall productivity or growth prospects, in fact, it undermines future earnings by adding more red ink to the balance sheet. But these “negatives” are never factored into the decision-making which focuses exclusively on short-term profits. Now get a load of this from Morgan Stanley via Zero Hedge:

 “In 2014, the constituents of the S&P 500 on a net basis bought back ~$430Bn worth of common stock and spent a further ~$375Bn on dividend payouts. The total capital returned to shareholders was only slightly less than the annual earnings reported. On the fixed income front, the investment grade corporate bond market saw a record $577Bn of net issuance in 2014. While the equity and bond universes don’t overlap 100%, we think these numbers convey a simple yet important story. US corporations have essentially been issuing record levels of debt and using a significant chunk of their earnings and cash reserves to buy back record levels of common stock.”  (“Buyback Bonanza, Margin Madness Behind US Equity Rally”, Zero Hedge)

So corporations are borrowing hundreds of billions of dollars from investors through the bond market. They’re using this cheap capital to repurchase shares in order to boost skyrocketing executive compensation and to line the pockets of their shareholders. At the same time, they are weakening the capital structure of the company by loading on more debt.  (It’s worth noting that “highly rated U.S. nonfinancial companies” are now more leveraged than they were in 2007 just before the crash.)

This madcap buyback binge has gotten so crazy, that buybacks actually exceeded profits in two quarters in 2014. Here’s the story from Bloomberg:

“Companies in the Standard & Poor’s 500 Index really love their shareholders….Money returned to stock owners exceeded profits in the first quarter and may again in the third. The proportion of cash flow used for repurchases has almost doubled over the last decade while it’s slipped for capital investments, according to Jonathan Glionna, head of U.S. equity strategy research at Barclays Plc.

Buybacks have helped fuel one of the strongest rallies of the past 50 years as stocks with the most repurchases gained more than 300 percent since March 2009.” (Bloomberg)

But maybe we’re being too pessimistic here. Maybe stocks would have risen anyway due to record high earnings and improvements in the economy. That’s possible, isn’t it?

Nope. Not according to Morgan Stanley at least. Check it out:

“Since 2012, more than 50% of EPS growth in the S&P 500 has been driven by buybacks and growth ex-buybacks has been a mere 3.3% annualized. (EPS: Earnings Per Share)

“More than 50% “!  There’s your market summary in one damning sentence. No buybacks means no 5-year stock market rally. Period.  If it wasn’t for financial engineering and the Fed’s easy money, stocks would be in the same general location as the real economy, circling the plughole, that is.

What’s so frustrating about the present phenom is that the Fed knows exactly what’s going on, but just looks the other way.  So while the stock bubble gets bigger and bigger,  CAPEX –which is investment in future productivity and growth– continues to deteriorate, GDP drops to zero, and demand gets progressively weaker. Shouldn’t that warrant a rethinking of the policy?

Heck, no. The Fed is determined to stick with the same lame policy until hell freezes over. Whether it works or not is entirely irrelevant.

Now take a look at this eye-popper from Wolf Street:  “GE, in order to paper over a net loss of $13.6 billion and declining revenues in the first quarter, said on April 10 that it would buy back $50 billion of its own shares.” (Wolf Street)

I can’t tell you how many times I’ve read similar stories in the last couple years.  The company’s revenues are shrinking, they’re losing money hand over fist, and what do they do?

They announce they’re going to buy back $50 billion of their own shares.

What a joke. And it doesn’t stop there. The Fed’s policies have also ignited a flurry of activity in margin borrowing. This is from CNBC:

“NYSE margin debt rose to an all-time high in March, according to recently released data from the stock exchange….NYSE margin debt sat at $476.4 billion, up from $464.9 billion at the end of February..(Note: That’s $95 billion more than 2007 at the peak of the bubble.)

Margin debt is created when investors borrow money in order to buy stocks. If an investor buys $100 worth of stocks with $50 in capital, that individual has $50 of margin debt outstanding. Since margin debt provides leverage, it amplifies gains, but also increases the risk to an investor.” (“What record-high margin debt means for stocks”, CNBC)

whitgraf1

More borrowing, more risk taking, more financial instability. And it’s all the Fed’s doing. If rates were neutral, then prices would normalize and CEOs would not be engaged in this reckless game of Russian roulette. Instead, it’s caution to the wind; just keep piling on the debt until the whole market comes crashing down in a heap like it did six years ago. And that’s the trajectory we’re on today, in fact,  according to TrimTabs Investment Research, February saw buybacks in the amount of $104 billion, ” the largest monthly figure since these flows were first tracked 20 years ago. ”

So things are getting worse not better. Bottom line: The Fed has led the country to the cliff-edge once again where the slightest uptick in interest rates is going to send the economy into freefall.

But why? Why does the Fed keep steering the country from one financial catastrophe to the next?

That’s a question that economists Atif Mian and Amir Sufi answer persuasively with one small chart. Check it out:

“Here is the distribution of financial asset holdings across the wealth distribution. This is from the 2010 Survey of Consumer Finances:

whitgraf2

The top 20% of the wealth distribution holds over 85% of the financial assets in the economy. So it is clear that the direct income from capital goes to the wealthiest American households.” (Capital Ownership and Inequality, House of Debt)

Why does the Fed create one bubble after the other?

Now you know.


Mike Whitney is a regular columnist for Veracity Voice

Mike Whitney lives in Washington state. He can be reached at: fergiewhitney@msn.com

Rethinking The Saudi Connection

May 3, 2015 by · Leave a Comment 

Part I

Saudi Arabia has been dominating the Middle Eastern news recently. Its bombing of the Shia Houthis in Yemen, supported by Washington, and its ambivalent stand on ISIS, concealed in Washington, should raise questions about the nature and long-term ambitions of the desert kingdom. On those key issues there is an apparent conspiracy of silence in the American mainstream media and the policy-making community.

Saudi Arabia, the most authentically Muslim country in the world, is a polity based on a set of religious, legal, and political assumptions rooted in mainstream Sunni Islam. To understand its pernicious role in the ongoing Middle Eastern crisis, and to grasp the magnitude of its ongoing threat to America’s long-term strategic interests and security, we should start with the early history of that strange and unpleasant place.

MUHAMMAD IBN ABD AL-WAHHAB was born in central Arabia over three centuries ago, but his legacy is alive and well. Wahhab was a zealous Muslim revivalist who lived in the period of the Ottoman Empire’s early decline. He felt that Islam in general, and Arabia in particular, needed to be spiritually and literally re-purified and returned to the true tenets of the faith. Like Islam’s prophet he married a wealthy woman much older than himself, whose inheritance enabled him to engage in theological and political pursuits. His Sharia training, combined with a brief encounter with suffism – which he rejected – produced a powerful mix. From the suffis he took the concept of a fraternal religious order, but rejected initiation rituals and music in any form. He also condemned the decorations of mosques, however non-representational, and sinful frivolities such as smoking tobacco. This Muslim anabaptist rejected veneration of saints and sites and objects connected with them, and gave rise to a movement that sees itself as the guardian of true Islamic values. His ideas were espoused in the Book of Unity which gave rise to the name of the movement, al-Muwahhidun, or Unitarians.

By the middle of the 18th century Wahhab, like Muhammad eleven centuries earlier, found a politically powerful backer for his cause. In 1744 he struck a partnership with Muhammad ibn-Saud, leader of a powerful clan in central Arabia, and moved to his “capital,” the semi-nomadic settlement of ad-Dir’yah (Riyadh). Since that time the fortunes of the Wahhabis and the Ibn Said family have been intertwined. Under ibn-Saud’s successor Abdul-Aziz, the Wahhabis struck out of their desert base at Najd with the fury unseen in a millennium. In what looked for a while like the repetition of Muhammad’s and the Four Caliphs’ phenomenal early success a millennium earlier, they temporarily captured Mecca and Medina, marched into Mesopotamia – forcing the Ottoman governor to negotiate humiliating terms – and invaded Syria.

This was an unacceptable challenge to the Sultan, the heir to the caliphate and “protector of the holy places.” In 1811 he obtained the agreement of Ali Pasha, Egypt’s de facto autonomous ruler following Napoleon’s withdrawal, to launch a campaign against the Wahhabis. After seven years they were routed. Later in the century, however, the sect revived under Faysal to provide the focus of Arab resistance to the Ottoman Empire, which they considered degenerate and corrupt.

In 1902 a daring and bellicose prince of the ibn-Saud family, named after Abdul-Aziz “the warrior,” returned from exile with 40 horsemen and took control of Riyadh. He exploited the terminal weakness of the Ottoman Empire, soon to be embroiled in revolution and beset by external threats to its crumbling empire in the Balkans and Libya. Fired by the spirit of Wahhabism, Abdul Aziz embarked on a campaign to recover control over the whole of Arabia. In 1912 the Wahhabi revival prompted the founding of a religious settlement at Artawiyah, 300 miles north of Riyadh, under the auspices of theIkhwan, the Brotherhood. This was a stern Arabian variety of Plymouth, a Muslim New Jerusalem in which people were dragged from their homes and whipped for failing to attend Friday prayers.

IN THE CHAOTIC YEARS after the demise of the Ottoman Empire the Ikhwan proved to be an able and fanatical fighting force, securing victory for Ibn Saud, their leader and the founder of the present royal dynasty. In 1925 they carried out Ibn Saud’s order that all revered burial sites in Mecca and Medina be destroyed, including the “heavenly orchard” in Medina, where relatives and many early companions of Muhammad were buried. In 1926 they proclaimed Abdul-Aziz the King of Hejaz. Within a decade he had united the rest of Arabia and imposed the Wahhabist view of the world, man, law, and Allah, on most of the peninsula.

It is incorrect to say that the Wahhabi movement is to Islam what Puritanism is to Christianity, however. While Puritans could be regarded as Christianity’s Islamicists sui generis with their desire to turn Christianity into a druly scriptural, literalist theocracy, Wahhabism is unmistakably “mainstream” in its demand for the return to the original glory of the early Islamic Ummah. Their iconoclastic zeal notwithstanding, the Wahhabis were no more extreme or violent than the models for Islam – the “prophet” and his companions – have been in all ages and to this day.

THE HEIRS OF ABDUL WAHHAB are still heading the Saudi religious establishment. They resisted the introduction of “heathen” contraptions such as radio, cars, and television, and relented only when the King promised to use those suspect mediums to promote the faith. They stopped the importation of all alcohol, previously sold to foreigners (1952), and banned women driving motor vehicles (1957). The Kuran and Sunna are formally the country’s constitution and the source of its legal code. The original sources of Islamic orthodoxy – the Kuran and Hadith – provide ample and detailed evidence that Saudi Arabia is as close as we can get to an Islamic state and society. The State Department report on human rights in the Kingdom of Saudi Arabia published 15 years ago offers an accurate glimpse of that vision in action:

Freedom of religion does not exist. Islam is the official religion and all citizens must be Muslims. Neither the Government nor society in general accepts the concepts of separation of religion and state, and such separation does not exist. Under Shari’a conversion by a Muslim to another religion is considered apostasy. Public apostasy is a crime punishable by death -if the accused does not recant. Islamic religious education is mandatory in public schools at all levels. All children receive religious instruction… Citizens do not have the right to change their government. The Council of Senior Islamic Scholars… reviews the Government’s public policies for compliance with Shari’a. The Government [views] Islamic law as the only necessary guide to protect human rights. There is legal and systemic discrimination based on sex and religion.

Nothing has changed since: the Kingdom of Saudi Arabia is the most intolerant Islamic regime in the world. While the Saudis continue to build mosques all over the world, tens of thousands of Christians among the millions of foreign workers from Asia, Europe and America must worship in secret, if at all. They are arrested, lashed or deported for public display of their beliefs. The Saudi religious police, known as the Committee to Promote Virtue and Prevent Vice, continues to routinely intimidate, abuse, and detain citizens and foreigners. In 2002 they pushed girls escaping from burning school buildings back into the inferno and certain death because they did not have their heads properly covered. Its detainees are routinely subjected to beatings, sleep deprivation and torture. Punishments include flogging, amputation, and public execution by beheading, stoning, or firing squad – over 50 were performed so far this year.

Women are second class citizens: according to the CIA world factbook, 82.2% of females are literate, in comparison to 90.8% literacy rates in males. The testimony of one man equals that of two women, and female parties to court proceedings must deputize male relatives to speak on their behalf. Women are not admitted to a hospital for medical treatment (often for wounds resulting from domestic violence) without the consent of a male relative. In public a woman is expected to wear an abaya (a black garment that covers the entire body) and to cover her head and face. Daughters receive half the inheritance awarded to their brothers. Women must demonstrate Sharia-specified grounds for divorce, but men may divorce them without giving any cause. In addition women must not drive cars, must not be driven except by an employee, or husband, or a close relative, and even then must not occupy the front seat. Women may study abroad if accompanied by a spouse or an immediate male relative. Women may own a businesses, but they must deputize a male relative to represent it.

Political detainees commonly are held incommunicado in special prisons during the initial phase of an investigation, which may last weeks or months, without access to lawyers. Defendants usually appear without an attorney before a judge, who determines guilt or innocence in accordance with Shari’a standards. Most trials are closed, and crimes against Muslims receive harsher penalties than those against non-Muslims. A sentence may be changed at any stage of review, except for punishments stipulated by the Koran.

The only expanding industry in Saudi Arabia is that of Islamic obscurantism. Some examples are grotesque: in 1966 the Vice-President of the Islamic University of Medina complained that Copernican theory was being taught at Riyadh University; it has been banned ever since. Three hundred years after the Christian theologians had to concede that the Earth went around the Sun, the geocentric theory was reaffirmed in the centers of Saudi learning. Segregation of the sexes at schools is set at age nine, which is the age for girls to start to wear the veil.

The opinions of the ullema are the only internal check and balance on the ruling family. Five Saudi Islamic universities produce thousands of clerics, many more than will ever be hired to work in the country’s mosques. Thousands end up spreading and promoting Wahhabism abroad. The King of the Saudis remains their Imam. He and the Wahhabi religious establishment see it as their sacred duty and purpose to evangelize the world. The petro-dollar windfall has paid for the construction of some ten thousand mosques and “Islamic centers” in the United States and other parts of the world. All along, needless to say, no churches (let alone synagogues) can be built in Saudi Arabia, and all non-Muslim religious practice is strictly forbidden.
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The Banksters War On Cash

May 2, 2015 by · Leave a Comment 

Once upon a time, the famous criminal Willie Sutton was asked why he robbed banks, and his response was simple, eloquent, and humorous: “Because that’s where the money is.” Well, soon that adage may be proven untrue. What exactly is the meaning of legal tender? In order to place money in its proper perspective, examine what the U.S. Treasury says.

“The pertinent portion of law that applies to your question is the Coinage Act of 1965, specifically Section 31 U.S.C. 5103, entitled “Legal tender,” which states: “United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues.”

Now one might reasonably expect that conducting cash transactions would be guaranteed by the full weight and protection of the Federal Government. Such an assumption would be false, since the Banksters operate as a power beyond the law. The Zero Hedge report in Largest Bank In America Joins War On Cash, reveals a frightening trend.

“The war on cash is escalating. Just a week ago, the infamous Willem Buiter, along with Ken Rogoff, voiced their support for a restriction (or ban altogether) on the use of cash (something that was already been implemented in Louisiana in 2011 for used goods). Today, as Mises’ Jo Salerno reports, the war has acquired a powerful new ally in Chase, the largest bank in the U.S., which has enacted a policy restricting the use of cash in selected markets; bans cash payments for credit cards, mortgages, and auto loans; and disallows the storage of “any cash or coins” in safe deposit boxes.”

There is only one conclusion that can be drawn from such an anti-cash sentiment. Your property is no longer your own. This fundamental attack on the value of money should erupt in national outrage. However, a key reason why people continue in their daze is provided in the following stats. 75 Percent Of Americans Don’t Have Enough Savings To Cover Their Bills For Six Months: Survey. If folks don’t have any significant savings, accepting further restrictions on cash just does not seem that important to them.

Such a response guarantees even further risks that the public cannot avoid. And this condition is not confined just to the United States.

The Mises Institute European cites examples of The International War on Cash, in their extensive archives. Accompanying these cases is a report that The ‘War On Cash’ Migrates To Switzerland. In addition, review The War on Cash Special Report, which provides several references on the assault to ban and eliminate cash. Lastly, The “War on Cash” in 10 Spine-Chilling Quotes provides an inclusive overview of the anti cash sentiment that is building among establishment authoritarians.

All these illustrations forecast a coming disaster. Calling in the Federal Reserve notes and replacing the last vestige of a U.S. Dollar with some new accounting medium of exchange would surely incur a diminished purchasing value, when a swap takes place.

Consumers are so conditioned to the rapid change in color and design of the “Green Back” that substituting a new currency will hardly turn into a national scandal. A run at banks to withdraw the merger sums in personal accounts will be met with the preverbal distain that money center banks are so good at dispensing.

This is the ultimate dilemma, between a rock and a hard place. One can already imagine the public comments from Treasury. Maybe bring back Hank Paulson for his public relation skills might just be the last straw for savers, but for the dependency class, few will even change the channel from their favorite “Reality TV” episode.

“Going to the Mattresses” when your lock box is sealed by your banker is a very poor option for the average consumer. Security in a paper currency that can be recalled and pegged lower by government policy is dangerous.

As for precious metals, who among us would not reasonably conclude that hoarders will risk the criminalization of their preparedness. Electronic money such as Bitcoins could and probably will be shut down as a method to establish a counterfeit money scheme.

Remember that the legal tender laws can and will define what medium of exchange will constitute money under a fiat paper meltdown.

There is no pure play of secure means to provide peace of mind. Those who propose putting all your chickens in one basket have not taken measures to protect against a “bird flu money” pandemic.

Now is the time to place pressure on the entire banking system to demonstrate a modicum of social and economic responsibility to the customers and communities they are suppose to serve.

Defending the too big to fail money center institutions with a zero interest rate flow of credit inevitably results in a climate of eliminating cash as an alternative to earning a negative rate deposit policy.

Banksters continue to operate their debt credit scam with virtual immunity. A historic financial storm is building. It will soon surpass the 2008 meltdown by an unimaginable degree.

Those who believe personal debt will be ignored or forgiven, do not understand the nature of the financial plutocrats. Their control of political power is intact. Little suggests that this will change unless the nation revolts.

The shortcomings of the Tea Party and the Occupy Wall Street movements, while valuable in raising public awareness, never solidified into a national crusade against the international banksters.

In order to grasp the opportunity, when a system wide collapse occurs, people need to get their own house in order. Do not be part of the cashless society, because that course directly enables the monitoring, intimidation and control of your ability to survive.

Boycott the mega banks and seek local and community friendly financial franchises. The war on cash must be fought before the only money available will only buy approved items at the government company store. Act now with urgency.


Sartre is the publisher, editor, and writer for Breaking All The Rules. He can be reached at: BATR

Sartre is a regular columnist for Veracity Voice

Wealth Destruction For The 99.9 Percent

May 2, 2015 by · Leave a Comment 

Blaming the 1% for diminished prosperity avoids the real reasons for designed poverty. In round terms, the seven billion souls that populate this planet translate into seventy million to be part of the 1%. Well, that amount is still a very large number to blame for the systemic transfer of riches into the hands of the few. A far more relevant approach is to examine the .001% or around seven million that fall into the mover or shakers of asset and possessions. Before targeting this group of mega wealth, that figure includes a very significant number, who are non players when it comes to global politics or transnational finance.

Recent record art sales illustrate the insulated existence that wraps the super rich in a different world from ordinary people. The Washington Post writes, What it looks like when the .001 percent fights over art.

“Welcome to Christie’s,” Pylkkanen said, without missing a beat.

It was that kind of night, with Christie’s selling a record $852.9 million worth of contemporary and post-war art. There were new records for 11 artists, including Twombly, Ed Ruscha, Peter Doig, Martin Kippenberger and Seth Price, according to figures released by Christie’s.”

Not exactly familiar household art celebrities, this version of trickledown economics is only for the in crowd. A Reuter report, Life continues sweetly for the .001 percent, continues.

“Art envy isn’t the only sign that the Occupy Wall Street din isn’t being heard on penthouse terraces. Sanford Weill, the former chief executive of Citigroup (C.N), put his 6,700-square-foot, top-floor residence on Central Park West on the market for $88 million. That’s twice what he paid for it four years ago and would be a Manhattan record. Weill said he plans to donate proceeds from the sale to charity, but for the time being would still have it as a deduction to apply against his taxable income.

The point is, the besieged banker class is still going about its business — and wielding considerable clout. That’s a lesson celebrity chef Mario Batali learned after likening bankers to Adolf Hitler and Josef Stalin at a media event. After news of the comments swept across Wall Street and sparked talk of boycotts among Batali’s well-heeled clientele, he apologized. With the 99 percent rallying against them, the rich clearly can’t afford to turn on themselves.”

While the uber rich are not exactly a monolith, there are certain factors that go unchallenged. List of 80 People With as Much Money as 1/2 of Humanityprovides a starting point. Then examine the growth in their wealth. In 2015, there was a record of 1,826 people on the list with a total net worth of $7.05 trillion, up from $6.4 trillion in 2014. The bible of financial registry is the Forbes billionaire list which is wholly inadequate as a comprehensive tally.  Notwithstanding, the seven trillion figure is but a fraction of the estimated $241 trillion which represents total global combined wealth of all the people in the world.

This disparity just does not compute when compared to the commonly held dogma of the holdings of the 1%. Even the rarified air of the .001% will not account for the difference. The missing link is that people, as individuals, do not control the vast majority of resources, assets, money and wealth.

Governments, financial institutions, corporations, transnational conglomerates, NGO’s, trusts, estates and hidden hybrid ownership truly controls the global economy that dictates, who benefits from the consolidation of capital and oversight of natural resources.

The mandates that pass as national laws and international treaty relations share a common composition. Protecting the superstructure that facilitates elite domination over the masses of world population is the object of the game. The rest of us are left with distractions, illusions and misdirect narratives of a false reality that embodies the popular culture.

The mass media message is consistent. It paints the ruling class as benevolent and caring. The collectivist administrations of different regimes are planned as a huge dependence machine. Some countries are more dominant than others, by all practice institutional autocracy as a condition of allowing their citizens the privilege of conditional government sustenance.

Individual liberty is besieged as a frightening threat to the system. Actual free economic markets are destroyed as a matter of course. Cartels, cabals and monopolies rule as cronyism with the decision makers dictate the direction of the technocratic socialism that has engulfed world society.

The reason why human circumstances continue to deteriorate is clear to anyone who has the honesty to admit that the dire consequences are not accidental or unintentional. However, coming to grips with the architectures of international finance is just too painful to endure. A comment from a leaving subscriber of the BATR RealPolitik Newsletter, sums up perfectly a core reason why the world totalitarian system continues with such little opposition. “Your site does an excellent job of exposing the truth but this imposes too high a price on my daily mental attitude and overall health”.

Life is seldom fair, and more often painful, but a cop out of unpleasant reality guarantees that the Rothschild manipulated model of world slavery will achieve their ultimate goal of massive population extinction for the dependency populace.

A primary failure of the “Looney Left” is placing their faith into the role of government to correct the punitive excesses of global internationalism. The nature of the contrived interdependency is based upon the power of fiat finance to own and dictated policy to their state sponsored lackeys.

Those brave hearted dissenters to the “international community” are driven from office, discredited by a media assault or killed if they become too much of a threat.

Jack Lessenberry offers this assessment in, Politics and Prejudices: What’s really ruining America.

“Income inequality in this nation is not only bad and getting worse, but most of us are either brainwashed, in total denial, or too gutless to even talk about it. Why don’t you hear Hillary Clinton or Elizabeth Warren screaming about this, as they should be?

For two simple reasons: First, they’re afraid they’ll instantly be accused of wanting to start “class warfare,” a term that, like socialism, evokes bad nightmares of — shudder — Communist dictatorships.

But more sadly, they probably don’t think there’s anything they can do about it, other than maybe slow the trend a little bit.”

This critique of the “so called” daring progressives actually reveals that both play up to the establishment. Bucking the true world power brokers is very dangerous. Ask JFK, RFK, George Wallace and Ronald Reagan. Satanic megalomaniacs are committed to the impoverishment of the masses and their eventual total demise.

When was the last time that a real populist grassroots movement was able to overthrow the ruling elites? The deplorable answer is never in our lifetime.

The systemic wealth destruction that has rendered former Middle America to borderline poverty came as no accident. Don’t blame all those new faces in the billionaire crowd; they only have large bank accounts. Focus on the dynasty families that share the same bloodline and pull the strings on government puppets that administer the all-inclusive enslavement of humanity as their primary goal.

Collectivism is a deadened scheme, originated by the globalists to deceive the struggling “unwashed” to look toward government for a better future. Wow, what a miserable fiasco.

Having money is better than being poor, all other factors relative. However, earning wealth the old fashion way, by working hard is virtually a non starter today. The casino economy is a stacked deck against the industrious.

Only a total reputation of the Free Trade corporatist plantation that has de-industrialized America could remotely turn the tide. But before any boom could begin and restore national hope, the political organized crime syndicates must be recognized as the enemy of the people and driven from their power centers and debt created money schemes.

Just like the burnt out aforementioned BATR reader, the remaining moral participants that do battle with a corrupt system must risk having their head cut off, for any chance of returning to prosperity.

The task is great and little time is left. The NYT reports that a Deal Reached on Fast-Track Authority for Obama on Trade Accord, will expand the globalist fiefdom even more.

“To further sweeten the deal for Democrats, the package includes expanding trade adjustment assistance — aid to workers whose jobs are displaced by global trade — to service workers, not just manufacturing workers. Mr. Wyden also insisted on a four-year extension of a tax credit to help displaced workers purchase health insurance.”

This is a clear example of collectivism at play. Government subsidies that replace real employment, does not create wealth for our own people or for the country as a whole. It is high time to admit that the 99.9% is screwed as long as this same old globalist trade fraud continues to impoverish our domestic economy.

Rally against the globalists and refuse any legitimacy to a system that is designed to distract with class warfare, while the central banksters own the vast total wealth and control the power structure.


Sartre is the publisher, editor, and writer for Breaking All The Rules. He can be reached at: BATR

Sartre is a regular columnist for Veracity Voice

FDIC Plots A Bank Heist Involving YOUR Accounts

April 25, 2015 by · Leave a Comment 

There’s a new front opening up in the war on your wealth. If you haven’t heard yet of the “bail-in,” you will. Even if you have, you need to know the latest…

The bail-in is another weapon in the government’s arsenal of capital controls meant to reward Wall Street cronies and separate you from your money.

We’ve long been familiar with capital controls, such as daily limits on bank withdrawals. Add that to seven years of microscopic interest rates cannibalizing savers’ nest eggs combined with planned inflation stealing your money while you sleep. But unlike the drip-drip we’re used to, the bail-in will come upon you quickly, harshly, and with finality.

As the world faced a complete financial meltdown in 2008, Congress ponied up fresh taxpayer money – $800 billion for openers and trillions since – to bail-out favored banks and industries. Out-of-favor institutions were allowed to fail. Jobs, fortunes, and futures disappeared while unborn generations were saddled overnight with unpayable debt.

Congress and bankers noted the sharply disagreeable taxpayer reaction. So they recycled an old idea from the Great Depression’s playbook – next time, just steal bank depositors’ life savings.

That tried and true tactic took a new name: the bail-in. The easy part – the laws they needed had been in place for decades. But for added cover, they passed the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, a 1930’s-styled, bank heist blueprint with a feel-good name.

Those laws altogether say your money in your bank account in your name is not your money. Those laws say the bank owns your deposited money, not you.

Wait…what?

Court cases have upheld for decades that putting your money in savings, a CD, or other banking products means you’ve become an “unsecured creditor.”

Your deposit is actually an unsecured loan to the bank with all the problems of counterparty risk! Instead of being presented with collateral, you get an IOU that pays a pittance in interest, or in many cases nothing.

A busted bank doesn’t have to return your principal deposits. Unlike when YOU are the borrower and THE BANK is the lender, the bank didn’t tender you a lawyered up promissory note or offer you a lien on its assets. Legally speaking, you may as well have handed your money to a stranger in the alley.

“Unsecured creditor” means just what it says: “no security.”

As banks went belly up during the Great Depression, slaughtering depositors’ life savings, Congress offered reassurance that banks could be safe by creating the Federal Deposit Insurance Corporation, or FDIC. For decades thereafter, careful depositors walked the tightrope of spreading their deposits among various banks to qualify for insurance protection.

Every depositor should now be aware of the FDIC’s congressional mandate to handle the next global economic meltdown. Readers can read that entire scheme here.

It’s not an easy read because it was never meant to be. Here are some notes that might help…

The Scheme’s Fine Print Reads: Bank Depositors Are Screwed

It’s a joint plan with the Bank of England. Bankers see the next meltdown again going global. The title accurately names the sole intended survivors – “Globally Active, Systemically Important Financial Institutions.” The document reveals a future meltdown was anticipated, discussed, and coordinated years before the publication date of December 10, 2012.

The language “top of the group” refers to creditors, stock holders, and bond holders. They are first in line for slaughter (p. ii, p. iii).

“Resolution tools” and “resolution powers” are used throughout the document. “…applying resolution tools to different parts of the group” means FDIC has authority to make it up as they go (p.1, para 3). “…resolution authorities must not be constrained in exercising discretion” means FDIC decisions carry absolute legal authority (p.1, para.4).

FDIC Bank Heist

FDIC doesn’t like the word “save,” as in “save bad banks.” FDIC substitutes the word “resolve” 18 times.

And then there’s you, the “unsecured creditor.”

As it happens, “unsecured creditors” are quite important with the FDIC, appearing 11 times in the 18 page document. “…unsecured creditors should thus expect that their claims would be written down to reflect any losses that shareholders did not cover” means we’ll tell you how much you lost after we divvy up the take (p.6, para 12). That could also point to lowered insurance limits without notice, if any insurance is left at all.

“…it will take time for losses to be assessed for purposes of recapitalization” strongly hints at freezing any loot in accounts left behind (p.8, para 35).

Your consolation prize, if there’s one at all, might be some government-issued bank stock you can’t sell.

FDIC congratulates itself 9 times for not “exposing taxpayers,” never mentioning FDIC itself would be bankrupt after the first $50 billion in claims, leaving taxpayers to bail-out the very FDIC created in 1933 to shield their savings deposits. One single zombie bank could easily swallow $50 billion. Estimates of currently insured FDIC deposits exceed $6 trillion.

Bail-in Scheme Has Been Tested and Is Ready for Use

The bail-in ripoff scheme has been successfully tested. Depositors in Cyprus found their savings largely wiped out early in 2013. That infamous bail-in was a test run, leaving the U.S. government’s fingerprints all over Cyprus. It is significant to note Cypriot authorities claimed, on their website, the legal authority to change rules mid-stream at any time, just as the FDIC claims.

Low withdrawal limits stopped panicked depositors’ last minute bank runs. As banks stole their deposits, no citizens stormed banks with pitchforks, no guillotines were hauled into the village square. Bankers from Cyprus to New York congratulated themselves all around.

Poland quickly followed, stealing not bank accounts but private pension funds. Authorities took 50% of Polish retirement funds overnight with the click of a mouse.

FDIC Bail-In Plan

Bail-in plans have been adopted by Canada, Australia, and throughout Europe for future use. The G-20, representing the twenty largest national economies, rubber stamped approval for global bail-ins late last year, as has the International Monetary Fund. Just last week, Austria suddenly dumped its version of FDIC insurance altogether.

Governments facing economic annihilation across the globe are now legally authorized to seize banking depositors’ savings, either all or in part, overnight, and without notice. The bail-in is a treasure map for bankers and governments at the next hint of worldwide economic calamity.

They know the next meltdown will be your grandfather’s Great Depression.

Unlike the 1930’s, there will be no point standing in long lines with hat in hand to ask for your money. By the time you hear the news, your money in the bank will already be gone.

Guy Christopher is a guest columnist for Veracity Voice

MoneyMetals.com columnist Guy Christopher is a seasoned writer living on the Gulf Coast. A retired investigative journalist, published author, and former stockbroker, Christopher has taught college as an adjunct professor and is a veteran of the 101st Airborne in Vietnam.

Cost of Negative Bank Rates

April 11, 2015 by · Leave a Comment 

So you thought that the unimaginable could not happen. The signal is heard loud and clear. Keeping your money in a fiduciary account will not only earn no interest; there will be an actual cost of parking your funds in a bank relationship. The madness that has engulfed the financial sector is preparing to escalate the systematic looting of saved capital. Ponder the consequences of negative bank rates and ask, what exactly can anyone do or where can they place their money for safekeeping. The first objective of entrusting your funds to a financial institution is to have the ability to obtain access to the return of your capital.

The Less Than Zero article analysis explains accordingly.

“Since central banks rates provide a benchmark for all borrowing costs across a country’s economy, yields on a range of fixed-income securities – including government bonds of countries like France and Germany – also slipped below zero. Banks are reluctant to pass on negative rates to retail depositors for fear of losing customers, even though that hurts their profit.

In theory, interest rates below zero should reduce borrowing costs for companies and households, driving demand for loans. In practice, there’s a risk that the policy might do more harm than good.”

Only a dullard would believe that banking institutions will not eventually drop their interest rate pay outs to depositors, as their own costs are taxed or central banking policy demands that the value of the currency must be diminished.

The example that Australia Wants To Tax Bank Deposits: Will The US Follow? This report poses an obvious question for anyone keeping money in the depository system.

“Several months ago, the government of Australia proposed to tax bank deposits up to $250,000 at a rate of 0.05% (5 basis points). To be clear, the proposal seems to plan on taxing the banks based on the amount of deposits they’re holding—but it’s pretty obvious this will be passed on to consumers in the form of lower interest rates.”

  1. Taxes on bank deposits are generally the same as negative interest rates.
  2. Taxes always start small… then increase over time.
  3. Taxes are rarely used for their stated purpose.
  4. If this can happen in Australia, is anyone foolish enough to think it can’t happen in the US or Europe?

Reuven Brenner, in The Potentially Devastating Consequences of Negative Rates, published in Real Clear Markets, the admittedly benedictory of this planned policy.

“The fact that the U.S. stock market has been – at least nominally – at an all-time high is not particularly surprising in such an environment. The problem is that stock-market signals no longer convey the information they did during normal times of positive interest rates. According to Bloomberg, companies have been buying back their shares at $5 billion per day, or roughly 2 percent of the value of shares traded on U.S. exchanges. Since 2009, they have bought back more than $2 trillion of their shares, spending about 95% of their earnings on buybacks and dividends, while issuing bonds at the low interest rates. Central banks’ zero interest rate experiment brought about the profitable financial engineering and increased nominal stock prices. The latter do not signal improved real prospects, but only that the buying of one’s own shares is a good investment with zero or negative interest rates.”

Individual net wealth has declined and real income has been in the tank since the 2008 meltdown is indisputable for the average family. Retirees have been hurt the most. The Negotium essay, Low Interest Rates Impoverish Savers makes the case that minuscule interest rates harm savers and concludes: “The submissive banking customer needs to take a hard look on continuing their depositing relationship with the commercial saving establishment.”

This determination is based upon pure common sense. The tangible purchasing power of the U.S. Dollar in this deflationary income scenario is buffeted by higher prices for staple and necessary costs. The end result is a loss of wealth and dim prospects of recouping the decrease in value of their cash.

What actions can be taken while your paper money can still be used to buy assets?

Even if a dramatic implosion of the international financial system can be forestalled or in a perfect world, avoided; the slow drop by drop decline in the marginal liquidity of the personal resources will accelerate even faster. All fantasyland prospects of prosperity returning as indebtedness continues are pure poppycock.

Going to cash presents another risk as author, Pater Tenebrarum’s assessment in The Consequences of Imposing Negative Interest Rates, indicates. “In the US, private persons who are found in possession of large amounts of cash must fully expect that it will be confiscated without trial or any evidence of a crime by means of the “civil forfeiture” procedure.”

Even if ready Federal Reserve notes are not stolen, the other danger is a currency recall. The “crayola currency” substitution, which has already taken place with hardly a whimper from the public, trained the population for a very real possibility that the U.S. Dollar may go extinct and a new fiat medium with a substantially lower purchasing power would be introduced.

Protecting capital in equities or bonds keeps your money at the mercy of the Corporatocracy. Stashing your notes in a saving account where a charge for keeping a deposit is certainly painful. None of these options are safe much less foolproof.

Buying physical metals has a strong historic record of preserving your remaining wealth. However, how long do you think it will take to criminalize holders of gold when the financial dam busts?

The only certainty known is that only the NWO elites have prepared their vision for global enslavement through the credit and debit paper transactions that they control. Populism demands a new era of monitory accountability and honest money.

Only from the ashes of central banking pillage through a political realignment of decentralized power can the world crawl back to solvency.


Sartre is the publisher, editor, and writer for Breaking All The Rules. He can be reached at: BATR

Sartre is a regular columnist for Veracity Voice

Destructive Centralization and the GE Corporatist Culture

March 29, 2015 by · Leave a Comment 

Entrepreneurs’ versus the corporatists’ mode of business culture are separated by a vastly different view of enterprise. The former deems his work as innovative, creative and beneficial to customers. The later see the corporate organization as an institution end of itself. Competition makes the business pioneer sharp and driven, while any competitor is targeted for demise within the corporative culture. Buyouts of ventures that show promise may be a payoff reward for the struggling enterpriser, but the corporatist CEO sees the absorption of new technology as a twofold gain. Acquiring the means to create or advance market share and stamping out any future competitive threats.

This corporatist culture actually has merged with the definitive enforcement partner; namely, the state. The morphing of anti-trust safeguards into a system of crony alliance protection is the current standard for the globalist economy. The implication is that a company needs to pay to play and become “Free Trade” proponents to even remain in business.

Thomas E. Woods Jr. cites a prime example of the contemporary corporate-government fascism that controls the global economy, with the example of Government Electric. In The Cultural Costs of Corporatism: How Government-Business Collusion Denigrates the Entrepreneur and Rewards the Sycophant, the formula is set.

The best case study in political entrepreneurship may be General Electric. CEO Jeffrey Immelt pretty clearly laid out his approach in a letter to stockholders in the depths of the 2008–9 recession, and just days after the inauguration of Barack Obama, who promised to “remake America.”

Immelt wrote:

“The global economy, and capitalism, will be “reset” in several ways. The interaction between government and business will change forever. In a reset economy, the government will be a regulator; and also an industry policy champion, a financier, and a key partner. . . . Successful companies won’t just “hunker down”; they will seek out the new opportunities in a reset world.”

Later in the letter, Immelt stated more directly that GE saw the government as its best potential customer:

“GE’s broad technical portfolio positions us as a natural partner as the role of government increases in the current crisis. Over the past decade, we have positioned GE to lead in the “big themes.” These include emerging market growth, clean energy, and sustainable healthcare. . . .

Governments will invest to stimulate their economies, solve societal problems, and create jobs. GE’s broad portfolio and expertise position us as a natural partner. Tackling important problems together will require teamwork and respect between business, government, and society. We know how to do this and intend to play an important part in solving these essential challenges.”

If success is measured by the amount of retained money or return on assets and especially how little taxes are paid, the GE mold is frightening. Corporatism: The Real World of Corporate Favoritism reports.

“General Electric’s annual SEC 10-K filing for 2011 (filed February 24, 2012) reveals that the company paid at most 2.3% of its $81.2 billion in U.S. pretax profits in federal income taxes over the last 10 years.

Indeed, General Electric, the nation’s largest corporation, paid no federal corporate taxes in the United States in 2010, according to a report in The New York Times.”

The book, Rescuing Capitalism from Corporatism by John David Rose documents the long record of GE’s criminal price fixing going back to 1911 anti-trust violations. By any reasonable criteria, over a century of predatory pricing and monopolist market domination is a definite cultural deficiency.

Corp Watch contributor Charlie Cray lists a series of General Electric transgression topics and examples. Some of the more relevant items are:

Enronomics

Defense Contracting Fraud

Violations of Securities Laws

Tax issues

History of GE Labor Relations

Environment and product safety

Anti-competitive and consumer protection

Unlawful Debt Collection Practices

It would be difficult to explain away such a pattern of conduct as merely the side effects of becoming a prevailing behemoth. More to the point, the mentality that allows and encourages such behavior is a fundamental component that invigorates transgressions against ethical business practices. The net effects upon society, encourages the corporatist mindset to consolidate their state sponsor cronyism.

It seems unnecessary to dispute the negative consequences of “too big to fail” after the 2008 collapse. However, the concept of The Economic System of Corporatism offers this assessment.

“Coupled with the anti-market sentiments of the medieval culture there was the notion that the rulers of the state had a vital role in promoting social justice. Thus corporatism was formulated as a system that emphasized the positive role of the state in guaranteeing social justice and suppressing the moral and social chaos of the population pursuing their own individual self-interests. And above all else, as a political economic philosophy corporatism was flexible. It could tolerate private enterprise within limits and justify major projects of the state. Corporatism has sometimes been labeled as a Third Way or a mixed economy, a synthesis of capitalism and socialism, but it is in fact a separate, distinctive political economic system.”

Yes, once again, let’s called this synthesis by its true name; fascism. Just how well has the government achieved this utopian and fantasy notion that government is in the business of dispensing social justice?

At the heart of the corporatist mindset is control of markets and elimination of competitors. Government survives on deceiving the public and transnational corporations thrive on working their partnership relations with official authorities.

GE may be one of the most obvious offenders; nonetheless, the formulation of politics picking winners and losers based upon bribes and favoritism is a dreadful system. Preference for an actual free market based upon a decentralized merchant economy is the only alternative to globalism, which is enslaving the world.

The corporatist culture fuels the despotism, which society is so willing to accept. Voting how to spend your money is one of the few options a consumer has. Business collaborators with government crooks feed the abuses that GE perfects so well. This confederation in crime naturally harms ordinary citizens.


Sartre is the publisher, editor, and writer for Breaking All The Rules. He can be reached at: BATR

Sartre is a regular columnist for Veracity Voice

City of London’s Ownership of American Colonies

March 28, 2015 by · Leave a Comment 

The misplaced reverence to the ill formulated U.S Constitution and hidden subjugation back to the City of London is one aspect of history that is not taught in government schools or discussed in institutes of higher education. This subject is probably new to most observers of the legacy from the Founding Father’s biggest mistake. Regular readers of BREAKING ALL THE RULES are familiar with the arguments made in the essays, In the beginning: Let there be the Articles of Confederation and Articles of Confederation was Preferable. Now the case for the betrayal of the purpose of the American Revolution needs to be explored.

Cited on the US Constitution Gave Legal Ownership and Control of the United States to London site is an assessment by Michael Edward.

“Neither the American people nor the Queen of Britain own America. The Crown Temple owns America through the deception of those who have worn their allegiance by oath to the Middle Templar Bar. The Crown Bankers and their Middle Templar Attorneys rule America through unlawful contracts, unlawful taxes, and, contract documents of false equity through debt deceit, all strictly enforced by their completely unlawful, but ‘legal,’ Orders, Rules and Codes of the Crown Temple Courts Our so-called ‘judiciary’ in America. This is because the Crown Temple holds the land titles and estate deeds to all of North America.”

An examination of The Templars of the Crown provides elaboration on this appraisal. For an even more in-depth analysis, review the material that probes AMERICAN LAND OWNERSHIP, A TRUE OXYMORON, which deals with the work of James Montgomery.

“Many of you are aware that the laws of this nation and it’s states, were made to be in compliance and submission to the laws of England, only modified by state and federal law. You will see in this last Chapter state statutes from just a few of the original colonies, that this is the case. Are these what are called ancient statutes? Yes. However, since the king’s Corporation is alive and well as are his heirs, so is his Trust and the law used to create and govern it. The law that governs his Trust can only be amended, no law could be enacted contrary to the king’s will and cestui que trust, the main corporate sole where office is always found, the Crown. The king’s practice of granting lands in this country to those loyal to him continues, along with their land grants being protected by state ancient statutes which are still on the books. We are governed by the king’s nobles just as in times of old England, self proclaimed nobles, and corporate trusts. They rule this country and the world. The huge corporations have been granted power and liberty not known by the common man. The nobles, real and the created, occupy their possessions as fiduciaries and trustees of the king’s grants; only if they remain loyal to the system, their privilege and life style are their reward.”

Invest the time in discovering all the historic accounts, legal rulings and linkages that go back to the Crown, AKA, the City of London.

If you are unfamiliar with The (British) Crown Empire and the City of London Corporation take a quick refresher course on the actual nature of the financial foundation and codified sanction that purports to be lawful. Jurisprudence may be legal by the definition and formulations of the judicious barrister class, but it certainly is not founded on the basic principles of natural law.

Julian Websdale concludes: “The whole Earth is governed by The Crown, through Crown Colonies which belong to The City – The Crown Empire. It governs Africa and still governs China and India. The colonies of the Earth are really just Crown Colonies – The United States of America are states of The Crown.”

Now this interpretation may seem bizarre to most and the plot thickens in the The construe Powers – Behind the Global Empire piecing together a long account of legalized equity mandates.

“The signed treaties and charters between Britain and the United States reveals that King James the 1st was not only famous for translating the Bible, but for signing the first charter of Virginia in 1606. That charter granted America’s British forefathers a license to settle and colonize America and guaranteed future kings and queens of England to have sovereign authority over citizens and colonized land in America. The treaty of 1783 identifies the king of England as the prince of the United States. King George the 3rd gave up most of his claims over American colonies, but he kept his right to continue receiving payment for his business venture of colonizing America.”

The next element to consider has The Top of the Pyramid: The Rothschilds, the British Crown and the Vatican Rule the World. Read this account and trace back the historic lineage of  some of the Englishmen who founded America.

“To have the Declaration of Independence recognized internationally, Middle Templar King George III agreed in the Treaty of Paris of 1783 to establish the legal Crown entity of the incorporated United States, referred to internally as the Crown Temple States (Colonies). States spelled with a capital letter ‘S,’ denotes a legal entity of the Crown.

At least five Templar Bar Attorneys under solemn oath to the Crown, signed the American Declaration of Independence. This means that both parties were agents of the Crown.”

As time proceeds, the sell out of the “shot heard around the world” revolution deepens.Two Constitutions in the United States. 1st was illegally suspended in favor of a Vatican “Crown” corporation in 1871. This approving assessment of the Federal Constitution views a Shadow Government in place since 1871.

“Since 1871 the United States president and the United States Congress has been playing politics under a different set of rules and policies.  The American people do not know that there are two Constitutions in the United States.  The first penned by the leaders of the newly independent states of the United States in 1776.  On July 4, 1776, the people claimed their independence from the Crown (temporal authority of the Roman Catholic Pope) and Democracy was born.  And for 95 years the United States people were free and independent.  That freedom ended in 1871 when the original “Constitution for the United States for America” was changed to the “THE CONSTITUTION OF THE UNITED STATES OF AMERICA”.

The Congress realized that the country was in dire financial straits, so they made  a financial deal with the devil –  the Crown (a.k.a. City of London Corporation – est. by the Catholic Church on Jan 1, 1855 ) thereby incurring a DEBT to the Pope.  The conniving Pope and his bankers were not about to lend the floundering nation any money without some serious stipulations. So, they devised a way of taking back control of the United States and thus, the Act of 1871 was passed.  With no constitutional authority to do so, Congress created a separate form of government for the District of Columbia.

With the passage of  “the Act of 1871” a city state (a state within a state) called the District of Columbia located on 10 sq miles of land in the heart of Washington was formed with its own flag and its own independent constitution – the United States’ secret second constitution.”

Lastly, Three Corporations run the world: City of London, Washington DC and Vatican City list the City of London houses as including:

Rothschild controlled ‘Bank of England’

Lloyds of London

The London Stock Exchange

All British Banks

The Branch offices of 384 Foreign Banks

70 USA Banks

Fleet Streets Newspaper and Publishing Monopolies

Headquarters for Worldwide Freemasonry

Headquarters for the worldwide money cartel known as ’THE CROWN’

Conclusion: “City of London directly and indirectly controls all mayors, councils, regional councils, multi-national and trans-national banks, corporations, judicial systems (through Old Bailey, Temple Bar and the Royal Courts of Justice in London), the IMF, World Bank, Vatican Bank (through N. M. Rothschild & Sons London Italian subsidiary Torlonia), European Central Bank, United States Federal Reserve (which is privately owned and secretly controlled by eight British-controlled shareholding banks), the Bank for International Settlements in Switzerland (which is also British-controlled and oversees all of the Reserve Banks around the world including our own) and the European Union and the United Nations Organization.”

This introduction to the actual influence and pompous legal authority that underpins the financial hierarchy is based upon a historic explanation that is foreign to most Americans. The implications are staggering and for this reason alone, most are not willing to do their own research. Do not get caught up in the uncanny departure from the usual rendering of reality. Remember that the City of London’s coat-of-arms reads in Latin – Domine Dirige Nos – which translates, Lord, direct us. The true question, asks just which deity do the soldiers of the Crown adore?


Sartre is the publisher, editor, and writer for Breaking All The Rules. He can be reached at: BATR

Sartre is a regular columnist for Veracity Voice

Washington’s War On Russia

March 21, 2015 by · Leave a Comment 

“In order to survive and preserve its leading role on the international stage, the US desperately needs to plunge Eurasia into chaos, (and) to cut economic ties between Europe and Asia-Pacific Region … Russia is the only (country) within this potential zone of instability that is capable of resistance. It is the only state that is ready to confront the Americans. Undermining Russia’s political will for resistance… is a vitally important task for America.”

-Nikolai Starikov, Western Financial System Is Driving It to War, Russia Insider

“Our first objective is to prevent the re-emergence of a new rival, either on the territory of the former Soviet Union or elsewhere, that poses a threat on the order of that posed formerly by the Soviet Union. This is a dominant consideration underlying the new regional defense strategy and requires that we endeavor to prevent any hostile power from dominating a region whose resources would, under consolidated control, be sufficient to generate global power.”

-The Wolfowitz Doctrine, the original version of the Defense Planning Guidance, authored by Under Secretary of Defense Paul Wolfowitz, leaked to the New York Times on March 7, 1992

The United States does not want a war with Russia, it simply feels that it has no choice. If the State Department hadn’t initiated a coup in Ukraine to topple the elected president, Viktor Yanukovych, then the US could not have inserted itself between Russia and the EU, thus, disrupting vital trade routes which were strengthening nations on both continents. The economic integration of Asia and Europe–including plans for high-speed rail from China (“The New Silk Road”) to the EU–poses a clear and present danger for the US whose share of global GDP continues to shrink and whose significance in the world economy continues to decline. For the United States to ignore this new rival (EU-Russia) would be the equivalent of throwing in the towel and accepting a future in which the US would face a gradual but persistent erosion of its power and influence in world affairs. No one in Washington is prepared to let that happen, which is why the US launched its proxy-war in Ukraine.

The US wants to separate the continents, “prevent the emergence of a new rival”, install a tollbooth between Europe and Asia, and establish itself as the guarantor of regional security. To that end, the US is rebuilding the Iron Curtain along a thousand mile stretch from the Baltic Sea to the Black Sea. Tanks, armored vehicles and artillery are being sent to the region to reinforce a buffer zone around Europe in order to isolate Russia and to create a staging ground for future US aggression. Reports of heavy equipment and weapons deployment appear in the media on nearly a daily basis although the news is typically omitted in the US press. A quick review of some of the recent headlines will help readers to grasp the scale of the conflict that is cropping up below the radar:

“US, Bulgaria to hold Balkans military drills”, “NATO Begins Exercises In Black Sea”, “Army to send even more troops, tanks to Europe”, “Poland requests greater US military presence”, “U.S. Army sending armored convoy 1,100 miles through Europe”, “Over 120 US tanks, armored vehicles arrive in Latvia”, “US, Poland to Conduct Missile Exercise in March – Pentagon”

Get the picture? There’s a war going on, a war between the United States and Russia.

Notice how most of the headlines emphasize US involvement, not NATO. In other words, the provocations against Russia originate from Washington not Europe. This is an important point. The EU has supported US-led economic sanctions, but it’s not nearly as supportive of the military build up along the perimeter. That’s Washington’s idea and the cost is borne by the US alone. Naturally, moving tanks, armored vehicles and artillery around the world is an expensive project, but the US is more than willing to make the sacrifice if it helps to achieve its objectives.

And what are Washington’s objectives?

Interestingly, even political analysts on the far right seem to agree about that point. For example, check out this quote from STRATFOR CEO George Friedman who summed it up in a recent presentation he delivered at The Chicago Council on Foreign Affairs. He said:

“The primordial interest of the United States, over which for centuries we have fought wars–the First, the Second and Cold Wars–has been the relationship between Germany and Russia, because united there, they’re the only force that could threaten us. And to make sure that that doesn’t happen.” … George Friedman at The Chicago Council on Foreign Affairs, Time 1:40 to 1:57)

Bingo. Ukraine has nothing to do with sovereignty, democracy or (alleged) Russian aggression. That’s all propaganda. It’s about power. It’s about imperial expansion. It’s about spheres of influence. It’s about staving off irreversible economic decline. It’s all part of the smash-mouth, scorched earth, take-no-prisoners geopolitical world in which we live, not the fake Disneyworld created by the western media. The US State Department and CIA toppled the elected-government in Ukraine and ordered the new junta regime to launch a desperate war of annihilation against its own people in the East, because, well, because they felt they had no other option. Had Putin’s ambitious plan to create a free trade zone between Lisbon to Vladivostok gone forward, then where would that leave the United States? Out in the cold, that’s where. The US would become an isolated island of dwindling significance whose massive account deficits and ballooning national debt would pave the way for years of brutal restructuring, declining standards of living, runaway inflation and burgeoning social unrest. Does anyone really believe that Washington would let that to happen when it has a “brand-spanking” trillion dollar war machine at its disposal?

Heck, no. Besides, Washington believes it has a historic right to rule the world, which is what one would expect when the sense of entitlement and hubris reach their terminal phase. Now check out this clip from an article by economist Jack Rasmus at CounterPunch:

“Behind the sanctions is the USA objective of driving Russia out of the European economy. Europe was becoming too integrated and dependent on Russia. Not only its gas and raw materials, but trade relations and money capital flows were deepening on many fronts between Russia and Europe in general prior to the Ukraine crisis that has provided the cover for the introduction of the sanctions. Russia’s growing economic integration with Europe threatened the long term economic interests of US capitalists. Strategically, the US precipitated coup in the Ukraine can be viewed, therefore as a means by which to provoke Russian military intervention, i.e. a necessary event in order to deepen and expand economic sanctions that would ultimately sever the growing economic ties between Europe and Russia long term. That severance in turn would not only ensure US economic interests remain dominant in Europe, but would also open up new opportunities for profit making for US interests in Europe and Ukraine as well…

When the rules of the competition game between capitalists break down altogether, the result is war—i.e. the ultimate form of inter-capitalist competition.” (The Global Currency Wars, Jack Rasmus, CounterPunch)

See? Analysts on the right and left agree. Ukraine has nothing to do with sovereignty, democracy or Russian aggression. It’s plain-old cutthroat geopolitics, where the last man left standing, wins.

The United States cannot allow Russia reap the benefits of its own vast resources. Oh, no. It has to be chastised, it has to be bullied, it has to be sanctioned, isolated, threatened and intimidated. That’s how the system really works. The free market stuff is just horsecrap for the sheeple.

Russia is going to have to deal with chaotic, fratricidal wars on its borders and color-coded regime change turbulence in its capital. It will have to withstand reprisals from its trading partners, attacks on its currency and plots to eviscerate its (oil) revenues. The US will do everything in its power to poison the well, to demonize Putin, to turn Brussels against Moscow, and to sabotage the Russian economy.

Divide and conquer, that’s the ticket. Keep them at each others throats at all times. Sunni vs Shia, one ethnic Ukrainian vs the other, Russians vs Europeans. That’s Washington’s plan, and it’s a plan that never fails.

US powerbrokers are convinced that America’s economic slide can only be arrested by staking a claim in Central Asia, dismembering Russia, encircling China, and quashing all plans for an economically-integrated EU-Asia. Washington is determined to prevail in this existential conflict, to assert its hegemonic control over the two continents, and to preserve its position as the world’s only superpower.

Only Russia can stop the United States and we believe it will.


Mike Whitney is a regular columnist for Veracity Voice

Mike Whitney lives in Washington state. He can be reached at: fergiewhitney@msn.com

China Wants To Have A Reserve Currency

March 14, 2015 by · Leave a Comment 

Common wisdom has China as the future model for the Globalist economy. Also, conventional thinking has the Western financial debt created money system as the backbone of the New World Order. The big question is, are both components of the same intentional plan? When China Has Announced Plans For A ‘World Currency’, the world is put on notice that a fundamental shift is about to take place.

“What you are about to see is rather startling, but it shouldn’t be a surprise.  When it comes to economics and finance, the Chinese have always been playing chess while the western world has been playing checkers.  Sadly, we have gotten to the point where checkmate is on the horizon.

The following comes from CNBC

The tightly controlled Chinese yuan will eventually supersede the dollar as the top international reserve currency, according to a new poll of institutional investors.

The survey of 200 institutional investors – 100 headquartered in mainland China and 100 outside of it – published by State Street and the Economist Intelligence Unit on Thursday found 53 percent of investors think the renminbi will surpass the U.S. dollar as the world’s major reserve currency.

Optimism was higher within China, where 62 percent said they saw a redback world on the horizon, compared with 43 percent outside China.”

Before the celebration begins that the game is up for the Federal Reserve mastery from the days of the Bretton Woods Conference, look a little closer. While gold and its fixed price were instrumental to that monitory standard, the freeing from fixed rates has generated the madness of floating currency speculation that now dominates the financial markets.

The cunning and patient Chinese built their export economy on cheap priced goods into their importing customer economies. Saving is a noble objective in the East, while going into debt is the hallmark of Western practices. The Chinese have applied their huge balance of trade surpluses to buying up commodities. Most notable is gold.

The article, Could China actually have 30,000 tonnes of gold in reserves? Makes the strongest argument that China is poised to become the new superior currency is based upon the potential of establishing a convertible relationship between the renminbi and bullion.

“China has much more gold than it is allowing the world to see. As Alasdair Macleod, probably the world’s number one analyst of the gold market, wrote that between 1983 and 2002 China probably accumulated 25,000 tons of gold. Thus, its current gold holdings are probably north of 30,000 tons in contrast to the USA which has either sold or leased most of its gold.”  Now this statement coming from one of the usual gold megabulls might be ignorable, but Hunt does not fall into this category and has a good track record of insights into China’s strategic initiatives as far as metals and minerals are concerned.”

Before the rush to the door to dump your U.S. Dollars for whatever store of wealth one believes will maintain its purchasing value, consider what the voice of the global financial establishment, the IMF says. Stating the outlook from the central Bankster’s perspective in, Will the Renminbi Rule?, the message is that paper money, burdened by debt, is still firmly in place.

“Given China’s size and growth prospects, it is widely seen as inevitable that the renminbi will eventually become a reserve currency. To gauge the likelihood and timing, it is necessary to consider the typical attributes of a reserve currency and evaluate China’s progress in each of these dimensions. The factors that generally affect a currency’s reserve status includes:

  • Economic size
  • Macroeconomic policies
  • Flexible exchange rate
  • Open capital account
  • Financial market development

The IMF concludes:

“The renminbi is unlikely to become a prominent reserve currency—let alone challenge the dollar’s dominance—unless it can be freely converted and China adopts an open capital account.”

Now for anyone even remotely schooled in the manners and maturations of the financial elites, turning the other cheek to a pretender, is not in the lesson book.

Investment manager, Richard Harris offers in a report, Time to create new Chinese-Hong Kong dollar, an interesting possibility.

“The HK dollar itself is a dead unit having been pegged first to the pound and later to the US dollar, with the current rate fixed in 1983. The prevailing view about depegging is that it would be too dangerous. The unit only floated for a relatively short period from 1974-1983 and, I recall, without much confidence in its success.

The obvious answer is to combine the dead HK dollar with the embryonic CNH. This would be a completely independent, floating currency. The CNY would be used for current account transactions such as exports and imports, whilst the new “Chinese Dollar” (HKD/CNH combined) would cater for capital account financial transactions.”

Keeping paper money in place as the international medium of exchange is fundamental to the New World Order. While China may never implement an actual redemption of gold for their renminbi, there is a real possibility that some gold weighted backing for Chinese paper instruments could be introduced.

The U.S. Dollar maintains illusionary worth, only because the central bankers are all in with their dollar dominated derivatives. Moreover, the Chinese are very much dependent upon their exports to keep their economy going. Settlement in Federal Reserve notes is crucial for the American system to keep buying from overseas.

Just the mere threat of payment in the renminbi for all the Chinese goods that Walmart imports     could be devastating. Allowing for a gradual transition into a semi-reserve renminbi status keeps the Bankster’s game going.

The prudent analysis suggests that the NWO created China’s emergence into an economic power through off-shoring domestic industries in their subject countries. Nonetheless, the international cabal is not about to starve their interest paying indebted nations by letting the Chinese accumulate even greater cash reserves.

Expect a downturn in China’s prospects, as soon as any ascendency for their currency begins gaining a reserve acceptance.


Sartre is the publisher, editor, and writer for Breaking All The Rules. He can be reached at: BATR

Sartre is a regular columnist for Veracity Voice

Currency Turmoil Making Metals Ownership More Attractive

March 14, 2015 by · Leave a Comment 

The first two months of 2015 have seen turmoil in the currency markets extend from Russia and Ukraine to the heart of Europe.

“Central Banks Now Open 24/7 Fighting Currency Wars and Deflation,” blared a February 12th Bloomberg headline. Against this backdrop, precious metals have been on the rise in terms of all currencies except the Swiss franc and the U.S dollar.

In January, the Swiss National Bank shocked markets by announcing that it would de-link its currency from the euro. The move came one week ahead of the European Central Bank’s $1.1 trillion Quantitative Easing announcement. Swiss officials decided it would be too costly to keep accumulating depreciating euros in order to maintain the currency peg. The Swiss franc surged by the most ever in a single day.

With the exception of Switzerland, all other countries in Europe (and many others around the world) are trying to depreciate their currencies.

Since January 1, the following central banks have announced interest rate cuts or other monetary easing measures: European Central Bank, Reserve Bank of Australia, Reserve Bank of New Zealand, Monetary Authority of Singapore, and the central banks of India, Canada, Denmark, and Sweden.

On February 12th, the Swedish Riksbank announced a surprise rate cut from 0% to below 0%. “To ensure that inflation rises towards the target, the Riksbank is prepared to quickly make monetary policy more expansionary, even between the ordinary monetary policy meetings,” the world’s oldest central bank said in a statement.

Sweden joins the European Central Bank and the central banks of a handful of other countries in pushing benchmark interest rates into negative territory. These central bankers are all aiming to revive inflation. “Investors” who are buying bonds yielding less than nothing (a negative rate) are apparently convinced that central bankers won’t succeed in depreciating their currencies.

Insanity! Investors Now Paying for the “Privilege” of Lending to Broke Governments

Precious Metals Currency Wars

This could go down as one of the oddest, most irrational asset bubbles in history. Trillions of dollars are now tied up in debt instruments that promise to return less than the invested principal. According to a report issued by J.P. Morgan, $3.6 trillion in government bonds around the world now carry negative yields.

It raises the obvious question; why would so many people be willing to accept a negative rate of return?

You’d think that institutional investors would start getting wise to holding gold as a hard-currency alternative to cash instruments that yield less than zero. The fact that gold has no interest rate is actually an advantage in an environment where competing rates are negative! Plus, unlike most of the bonds issued in this upside-down interest rate market, gold has significant appreciation potential.

If inflation rises even modestly to the 2% target of European and U.S. central bankers, then bonds issued at rates of below 2% will all be losers. The two-year Treasury note yields only 0.63%. Even the recent 10-year yield of 1.98% fails to match the Federal Reserve’s inflation ambitions.

The fact that gold has no interest rate is actually an advantage in an environment where competing rates are negative!

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In this environment of ultra-low nominal yields or even negative real yields, precious metals as a reserve asset look very attractive. Many central bankers around the world agree and are busily accumulating gold. According to a report issued by the World Gold Council in February, governments around the world added 477.2 metric tons of gold to their reserves in 2014. That haul was the second biggest in 50 years.

When inflation fears return to the market, as they eventually will, precious metals will become one of the premier asset classes to hold. Even now, they are performing better than virtually all other world currencies.

The end game of these ongoing currency wars is that all fiat currencies will be debased. And a true flight to quality will accelerate – with assets fleeing depreciating currencies (and debt instruments denominated in them) and piling into gold and silver.

Will the Fed Chicken Out on Rate Hikes?

Of course, right now it’s deflation fears that are dominating headlines. But the inflationary policy responses from the European Central Bank and others that have followed the ECB’s lead have lifted gold and silver prices markedly in terms of euros and other currencies.

As confidence in European currencies plunges, there’s only so much corresponding dollar strength the Federal Reserve is willing to tolerate. There’s been much talk of rate hikes coming later this year, and that widespread expectation has been priced into the market. Any rhetorical or policy disappointments from the Fed in the months ahead could cause traders to sell the dollar.

Whether later this year or further down the road, it’s only a matter of time before currency turmoil spreads to the United States.

The U.S. has a higher debt-to-GDP ratio than some troubled European countries. It has higher levels of unfunded liabilities (estimated to be in excess of $100 trillion) than any other country. The dollar’s status as world reserve currency has allowed the U.S. to become financially overextended. But that vaunted status is slowly deteriorating as Russia, China, and other countries form economic alliances that bypass the dollar.

When these chickens come home to roost, you don’t want to be wholly dependent on the U.S. government’s promises or its currency. Sizeable holdings in physical precious metals will help make you financially resilient in the face of the spreading global currency crisis.

Stefan Gleason is President of Money Metals Exchange, the national precious metals company named 2015 “Dealer of the Year” in the United States by an independent global ratings group. A graduate of the University of Florida, Gleason is a seasoned business leader, investor, political strategist, and grassroots activist. Gleason has frequently appeared on national television networks such as CNN, FoxNews, and CNBC, and his writings have appeared in hundreds of publications such as the Wall Street Journal, Detroit News, Washington Times, and National Review.

Splitting The Atlantic Alliance

March 14, 2015 by · Leave a Comment 

NATO Lies and Provocations…

“The war has been provoked to destroy the Russian World, to draw Europe into it, and to surround Russia with hostile countries. Unleashing this world war, America is trying to deal with its own internal problems.”

Sergei Glazyev, Advisor to Russian President Vladimir Putin

The fabrications of NATO’s top commander in Europe, General Philip Breedlove, have driven a wedge between Germany and the United States that could lead to a collapse of the Atlantic Alliance. According to the German news magazine, Der Spiegel, Breedlove has repeatedly sabotaged Chancellor Angela Merkel’s attempts to find a diplomatic solution to the war in Ukraine by spreading “dangerous propaganda” that is misleading the public about Russian “troop advances on the border, (and) the amassing of munitions and alleged columns of Russian tanks.” But while the unusually critical article singles out Breedlove for his hyperbolic exaggerations of so-called Russian aggression, the real purpose of the Spiegel piece is to warn Washington that EU leaders will not support a policy of military confrontation with Moscow.

Before we explain what’s going on, we need to look at an excerpt from the article. According to Spiegel:

“…for months now, many in the Chancellery simply shake their heads each time NATO, under Breedlove’s leadership, goes public with striking announcements about Russian troop or tank movements … it is the tone of Breedlove’s announcements that makes Berlin uneasy. False claims and exaggerated accounts, warned a top German official during a recent meeting on Ukraine, have put NATO — and by extension, the entire West — in danger of losing its credibility.

There are plenty of examples….At the beginning of the crisis, General Breedlove announced that the Russians had assembled 40,000 troops on the Ukrainian border and warned that an invasion could take place at any moment. The situation, he said, was “incredibly concerning.” But intelligence officials from NATO member states had already excluded the possibility of a Russian invasion. They believed that neither the composition nor the equipment of the troops was consistent with an imminent invasion.

The experts contradicted Breedlove’s view in almost every respect. There weren’t 40,000 soldiers on the border, they believed, rather there were much less than 30,000 and perhaps even fewer than 20,000. Furthermore, most of the military equipment had not been brought to the border for a possible invasion, but had already been there prior to the beginning of the conflict. Furthermore, there was no evidence of logistical preparation for an invasion, such as a field headquarters.
Breedlove, though, repeatedly made inexact, contradictory or even flat-out inaccurate statements.”…

On Nov. 12, during a visit to Sofia, Bulgaria, Breedlove reported that “we have seen columns of Russian equipment — primarily Russian tanks, Russian artillery, Russian air defense systems and Russian combat troops — entering into Ukraine.” It was, he noted, “the same thing that OSCE is reporting.” But the OSCE had only observed military convoys within eastern Ukraine. OSCE observers had said nothing about troops marching in from Russia.

Breedlove sees no reason to revise his approach. “I stand by all the public statements I have made during the Ukraine crisis,” he wrote to SPIEGEL in response to a request for a statement accompanied by a list of his controversial claims.”
(Breedlove’s Bellicosity: Berlin Alarmed by Aggressive NATO Stance on Ukraine, Der Spiegel)

While it’s easy to get swept up in the Spiegel’s narrative of a rabid militarist dragging Europe closer to World War 3, the storyline is intentionally misleading. As anyone who’s been following the Ukraine fiasco for the last year knows, there’s nothing particularly unusual about Breedlove’s distortions. Secretary of State John Kerry has made similar claims numerous times as have many others in the major media. The lies about “Russian aggression” are the rule, not the exception. So why has the Spiegel decided to selectively target Breedlove who is no more deceitful than anyone else? What’s really going on here?

Clearly, the Spiegel is doing Merkel’s work, that is, undermining the credibility of Washington’s chief commander in Europe in order to discourage further escalation of the conflict in Ukraine. But while Merkel wants to humiliate Breedlove to show that Germany will not sit on its hands while Washington plunges the region into the abyss; she has also shown considerable restraint in limiting her attack to the General while sparing Kerry and Obama any embarrassment. This is quite an accomplishment given that –as we said earlier–virtually everyone in the political establishment and the media have been lying nonstop about every aspect of the conflict. Merkel doesn’t want to discredit these others just yet, although the Spiegel piece infers that she has the power to do so if the “bad behavior” persists.

The Spiegel article is part of a one-two punch designed to force Washington to change its confrontational approach. The second jab appeared late Sunday afternoon when EU Commission President Jean-Claude Juncker announced that Europe needed to field its own army. Here’s the story from Reuters:

“The European Union needs its own army to face up to Russia and other threats as well as restore the bloc’s foreign policy standing around the world, EU Commission President Jean-Claude Juncker told a German newspaper on Sunday…

“With its own army, Europe could react more credibly to the threat to peace in a member state or in a neighboring state.

“One wouldn’t have a European army to deploy it immediately. But a common European army would convey a clear message to Russia that we are serious about defending our European values.” (Juncker calls for EU army, says would deter Russia, Reuters)

Can you see what’s going on? On the one hand, the Spiegel delivers a hammer-blow to the credibility of NATO’s top officer and on the other, the President of the EU Commission blindsides US powerbrokers by announcing a plan to create an independent EU fighting force that will render NATO redundant. These are big developments that have undoubtedly left the Obama troupe reeling. This is a full-blown assault on NATO’s role as the primary guarantor of EU regional security. Maybe the European people are gullible enough to accept Junker’s absurd claim that an EU army will “send an important message to the world”, but you can be damn sure that no one at 1600 Pennsylvania Avenue believes that nonsense. The move is clearly designed to send a message to Washington that Europe is fed up with NATO and wants a change. That means it’s “shape up or ship out time” for Breedlove and his ilk.

Ironically, these developments align Merkel with Putin’s view of things as stated in his famous Munich speech in 2007 when he said:

“I am convinced that we have reached that decisive moment when we must seriously think about the architecture of global security. And we must proceed by searching for a reasonable balance between the interests of all participants in the international dialogue … The United States, has overstepped its national borders in every way … And of course this is extremely dangerous. It results in the fact that no one feels safe. I want to emphasize this — no one feels safe.” (Russian President Vladimir Putin, 43rd Munich Security Conference, 2007)

How can the US possibly cast itself as “steward of the global security system”, when its interventions have left a trail of decimated failed states from the southernmost border of Somalia to the northern tip of Ukraine, a chaotic swathe of smoldering ruin and agonizing human suffering that rivals the depredations of the Third Reich.

Europe’s security requirements cannot be met by a belligerent, warmongering US-controlled entity that acts solely in Washington’s interests. At present, NATO gets 75% of its funding from the US, which is why the alliance is less interested in peacemaking and security than it is in internationalizing its imperial war of aggression across the planet. Prior to the crisis in Ukraine, European leaders didn’t see the danger of this idiotic arrangement (even though interventions in Serbia, Libya and Afghanistan should have brought them to their senses) But now that NATO’s recklessness could vaporize Europe in a nuclear firestorm, leaders like Merkel and Hollande are starting to change their tune. Keep in mind, the ideal scenario for the US would be a limited war that levels large parts of the European and Asian continents, thus restoring the US to its post WW2 heyday when the “rubblized” world was Washington’s oyster. That would be just fine for genocidal maniacs and armchair warriors who rule the globe from the safety of their well-stocked DC bunkers. But for Europe, this is definitely not a winning strategy. Europe doesn’t want a war, and it certainly doesn’t want to be used as cannon fodder for the greater glory of the dystopian NWO.

Putin advisor, Sergei Glazyev, figured out what Washington was up to long before Kiev launched its wretched “anti terrorism” campaign against federalist rebels in the East. Here’s how he summed it up:

“The main task the American puppet masters have set for the (Kiev) junta is to draw Russia into a full-scale war with Ukraine. It is for this purpose that all of these heinous crimes are committed – to force Russia to send troops to Ukraine to protect the civilian population…

The bankruptcy of the US financial system, which is unable to service its foreign debt, the lack of investments to finance a breakthrough to a new technological order and to maintain America’s competitiveness, and the potential defeat in the geopolitical competition with China. To resolve these problems, Americans need a new world war.” (Sergei Glazyev)

Bingo. The steadily-declining empire, whose share of global GDP continues to shrivel with every passing year, has wanted a war from the get go. That’s the only way that the US can reverse its precipitous economic slide and preserve its lofty spot as the world’s only superpower. Fortunately, EU leaders are beginning to pull their heads out of the sand long enough to grasp what’s going on and change their behavior accordingly.

It’s worth noting, that no one in the Merkel administration or anyone else for that matter, has publicly challenged the allegations in the Spiegel article. Why is that, do you think?

Doesn’t their silence suggest that they knew all along that all the anti-Putin propaganda hullabaloo was pure bunkum; that “evil” Putin didn’t send tanks and soldiers across the border into Ukraine, that Putin didn’t shoot down Malaysian Airline 17, that Putin didn’t have a political opponent gunned down gangland style just a few hundred yards from the Kremlin? Isn’t that what their silence really says?

Of course, it does. The reason no one in power has spoken out is because –as the Spiegel cynically admits–“A mixture of political argumentation and military propaganda is necessary.”

“Propaganda is necessary”?

Whoa. Now there’s an admission you’re not going to see in the media too often. But it’s the truth, isn’t it? The Euro-leaders have been going along with the lies to keep the public in line. In other words, it’s a healthy dose of perception management for the sheeple, but the unvarnished truth for our revered overlords. Sounds about right. Only now these ame elites have decided to share the facts with the lumpen masses. But, why? Why this sudden willingness to share the truth?

It’s because they no longer support Washington’s policy, that’s why. No one in Europe wants the US to arm and train the Ukrainian army. No one wants them to deploy 600 paratroopers to Kiev and increase US logistical support. No one wants further escalation, because no one wants a war with Russia. It’s that simple.

For the first time, EU leaders, particularly Merkel, understand that the United States’ strategic objectives (the pivot to Asia) do not align with those of the EU, in fact, Washington’s geopolitical ambitions pose a serious threat to Europe’s security. Regrettably, it’s not enough for Merkel to simply understand what is going on. She needs to huddle with her EU colleagues and take positive steps to derail Washington’s plan now, otherwise the US will continue its incitements and false flags until Putin is forced to respond. Once that happens, a broader and, perhaps, catastrophic conflagration will be unavoidable.


Mike Whitney is a regular columnist for Veracity Voice

Mike Whitney lives in Washington state. He can be reached at: fergiewhitney@msn.com

Showdown In Athens

March 1, 2015 by · Leave a Comment 

Varoufakis vs. The Troika…

“Will the United States, Germany, the rest of the European Union, the European Central Bank, and the International Monetary Fund – collectively constituting the International Mafia – allow the new Greek leaders of the Syriza party to dictate the conditions of Greece’s rescue and salvation? The answer at the moment is a decided “No”.

— William Blum, The Greek Tragedy, Veracity Voice

“The Greek economy is finished…. There is no power, no force within the Greek economy, within Greek society that can avert – it’s like – imagine if we were in Ohio in 1931 and we were to ask: What can Ohio politicians do to get Ohio out of the Great Depression? The answer is nothing.”

— Yanis Varoufakis, Greek Finance Minister

A disagreement over the terms of a deal to provide a bailout extension for Greece, has set the stage for a final clash between the Eurogroup and members of the Greek ruling party, Syriza.  Although the agreement was approved on Tuesday when a list of reforms were submitted by Greek finance minister Yanis Varoufakis to the Eurogroup, Varoufakis believes that changes to the original program give him greater flexibility to implement policies that will end austerity, reduce the ailing country’s primary budget surplus, and ease the humanitarian crisis that has persisted for 6 years.  Regrettably,  no one at the ECB, the European Commission or the IMF shares Varoufakis’s views on the subject. The so called “troika” thinks that Greece has signed on to essentially the same program that was in place before the negotiations, give or take a few cosmetic changes in the language. And because the program is the same, they think Varoufakis should stick with the same policies as his predecessor and ignore mounting public opposition to austerity. Given the irreconcilable differences between the two parties, there’s bound to be a violent confrontation in the near future that will lead to heated recriminations and, eventually, a Grexit.

To illustrate the widening chasm between Varoufakis and the members of the Eurogroup, consider the fact that, going into the negotiations, Varoufakis was determined to end the bailouts and secure a “bridge” loan that would shield Greece from default for a six month period of adjustment after which basic changes to the current austerity regime would be re-negotiated. While the Eurogroup agreed to change the term “program” to “agreement” and “troika” to “institutions”, in the minds of the EU finance minsters, the substance of the original deal, which was laid out in the hated Memorandum of Understanding, remained the same. Take a look at this excerpt from a letter from ECB president Mario Draghi and Eurogroup president Jeroen Dijsselbloem and you’ll see how this is playing out:

“I assume that it is clear, that the basis of concluding the current review, and also any future arrangements, will be the existing commitments in the current Memorandum of Understanding and The Memorandum of Economic and Financial Policies  (MEFP). In this context we note that the commitments outlined by the authorities differ from existing programme commitments in a number of areas. In such cases, we will have to assess during the review whether measures which are not accepted by the authorities are replaced with measures of equal or better quality in terms of achieving the objectives of the programme.” (Naked Capitalism)

What Draghi is saying is that Varoufakis’s changes will be put under a microscope to see if they conform with the memorandum which Varoufakis believes no longer applies. The way this will work on a practical basis, is that additional money will only be meted out incrementally depending on compliance with, you guessed it, the old agreement. In other words, Varoufakis will not have a 4 month grace period to experiment with his pro-growth, anti-austerity economic policies. He’ll be expected to toe the line from Day 1.

Varoufakis either doesn’t understand what he signed or thinks he can implement his own plan without too much interference from the Eurogroup. Either way, there’s probably going to be a confrontation given the vast disparity in the way the agreement is being interpreted. In a Tuesday interview with CNBC, Varoufakis said that the new deal is fundamentally different than the previous agreement. He said:

“Some people have been insisting that the program that we’ve been under must surely be the program that we shall remain under simply refuse to understand that this has changed. So they keep insisting that that program is still on-going. Let me give you a very simple number. The program that we challenged compelled to the Greek government to extract 4.5% of the primary surplus every year in a depressed economy. We’ve changed that. Now surely that is not dismissed as simply a non-event and it’s business as usual, so it’s not business as usual we have a fresh start and now what matters is to use the opportunity of that fresh start in order to build something good on top of it. And we will endeavor to do this.” (“CNBC Exclusive Interview: Greek Finance Minister, Yanis Varoufakis“, CNBC)

See? He sincerely believes that the old deal is history. But the troika, the Eurogroup, and the majority of people who have analyzed the new arrangement, disagree. They think everything is the same (which explains why critics on the right and left have repudiated the deal as a “climb-down, a capitulation and a sellout.)

In an interview with Nikos Hatzinikolaou on REAL FM, Greece, Varoufakis rejected the Memorandum while claiming that the new agreement represents “a huge success’ in ending the “recessionary measures” that are needlessly prolonging Greece’s Great Depression. Here’s what he said:

Varoufakis: “The current  government (Syriza) wants to say things with their name. I will explain it to you in very simple terms, Mr. Hatzinikolaou. As long as our debt is what it is, as long as Greece was bounded within this iron cage of primary surpluses that were impossible to achieve without killing whatever is left in the private sector, and as long we have a negative sign in investments (essentially, real investments), it was impossible to achieve this exit.

What we are trying to do – and have succeeded in doing so; it was a huge success, I’d say – is to create a four-month bridge during which we achieve the following:

First, the cancelation of the recessionary measures and the implementation of a transitional program we ourselves have made, one the Greek society will be able to withstand. This will help us negotiate during this four-month period a new contract between us and our partners with the goal of solving this system of three equations with three unknowns.

Hatzinikolaou: Thus, we are talking about a new Memorandum? ….

Varoufakis: OK. Let us be careful with the words. What does the Memorandum mean? … Let me remind you of what it comprises. It comprises the logic of continuous domestic [or internal] devaluation, of  huge primary surpluses in an economy that does not have a real credit system, where investments are negative, and at the same time where we have a series of measures that empower this recession.  This is the MoU. It is the automation, the a-politicization, and the subjection to the crisis.” (“The juicy interview of Greek Finance Minister, Yanis Varoufakis“, Greek Analyst)

Varoufakis  appears to be saying that, in his view, the new agreement constitutes a rejection of the memorandum and, thus, is a de facto repudiation of austerity.  The question is whether Varoufakis is stretching the facts to give himself greater latitude to relieve Greece’s humanitarian crisis and to put Greece back on a sound path to growth.  While those are worthy goals, they are not likely to win the Eurogroup’s support. Check out this excerpt from a letter from the IMF to Dijsselbloem concerning the vagueness of Varoufakis’s reform package:

“In quite a few areas, however, including perhaps the most important ones, the letter is not conveying clear assurances that the Government intends to undertake the reforms envisaged in the Memorandum on Economic and Financial Policies. We note in particular that there are neither clear commitments to design the envisaged comprehensive pension and VAT policy reforms, nor unequivocal undertakings to continue already-agreed policies for opening up closed sectors, for administrative reforms, for privatization, and for labor market reforms. As you know, we consider such commitments and undertakings to be critical for Greece’s ability to meet the basic objectives of its Fund-supported program, which is why these are the areas subject to most of the structural benchmarks agreed with the Fund.” (Excerpt IMF letter posted at Naked capitalism)

Repeat: “We consider such commitments and undertakings to be critical for Greece’s ability to meet the basic objectives of its Fund-supported program.”  In other words, Greece should not expect to get its loan extension unless it follows the troika’s explicit orders on pensions, VAT (sales taxes), government cutbacks, privatization and labor market reforms.

So, what is Varoufakis’s approach to these benchmarks?

Let’s take a look at pension reform. In an interview with CNBC’s Julia Chatterley on Tuesday, Chatterley asked Varoufakis point blank, “So you’re ruling out pension cuts?”

Varoufakis: “Of course over the next four months there will be no such thing.” (CNBC)

How about raising the VAT tax?

Same thing. And in the interview on REAL FM Varoufakis covered the other policies that the troika sees as “critical”. Listen to this exchange:

Hatzinikolaou: My fundamental question about the e-mail is whether or not it entails layoffs in the public sector …, if it entails pension reductions … if it entails wage reductions?

Varoufakis: I will answer to all these questions, since these are very specific questions, and it is best that we speak forthrightly. My answer to all of these questions is NO, in NO WAY.”

Let’s summarize: No pension cuts, no higher VAT taxes, no lower wages for public workers, and no layoffs. While I admire what Varoufakis is suggesting, I can’t figure out how he’s going to convince the troika to give him more money.  Apparently, he thinks that streamlining the government and aggressively pursuing tax cheats will do the trick. Or maybe he has something else up his sleeve, like ignoring the terms of the agreement long enough to generate growth in the economy, lower unemployment, and create an improved environment for foreign investment. He might think that that will force the troika to acknowledge that austerity has failed and that pro-growth Keynesian strategies actually produce positive results. Of course, that’s just a guess on my part. It’s impossible to know for sure.

Here’s more of the interview with CNBC:

Varoufakis:   “The reason why we have this 4 month period is to re-establish bonds of trust between us and our European partners as well as the IMF in order to build a new, we call it, contract between us and our partners so as to put an end to this spiral, the debt inflationary spiral; reform Greece; and make sure that CNBC doesn’t care about Greece anymore, because we don’t want to be in the headlines for all the wrong reasons.” (“CNBC Exclusive Interview: Greek Finance Minister, Yanis Varoufakis“, CNBC)

The “bonds of trust” are going to  put to the test if Varoufakis doesn’t comply with the troika’s diktats, that’s for sure.

Varoufakis assumes that the troika doesn’t understand the impact of its belt-tightening policies. He seems to think that the punishment that’s being inflicted on Greece is just the unfortunate byproduct of debt reduction policy and not a deliberate attempt to crush the unions, roll back progressive reforms, decimate the welfare state, and reduce the country to a condition of “permanent colonial dependency.”    But that viewpoint is shockingly naïve, after all, the IMF has been in the looting biz for a long time and has a pretty good grasp of the effects its toxic policies.  They know what they’re doing, just like know that austerity is just a refinement of the “shock doctrine” which is the traditional way the elites exploit crises by imposing harsh, economy-demolishing reforms that only benefit themselves and their class. The men who conjure up these thieving schemes aren’t likely to be hoodwinked by Varoufakis’s vague reforms. They’re going to force Varoufakis to jump through all their respective hoops before he gets one dime of their precious money. Here’s Varoufakis again:

“There is going to be a great deal of toing and froing between us and the institutions and our partners but what we have established through stubborn refusal to succumb to the notion that elections change nothing over the past couple of months or weeks I should say is the notion that this government deserves to have a degree of room for policy-making that allows us to reform Greece and to carry the great multitude out there with us. This is the government for the first time in Greece that has the people behind it and it would be a terrible waste not just for us but for our partners to allow this wave of support to dissipate through non-action.” (CNBC)

Does Varoufakis really think he can pull this off?  Does he really think he can out-fox the slimy, authoritarian brigands and leg-breakers who run these extortionist institutions and who will use every means possible to extract the last drop of blood from their victim be he an aspiring, but penniless student at the university or a destitute pensioner huddling homeless and frozen in an abandoned doorway in downtown Athens?

This isn’t going to end well. Varoufakis had one card to play–the threat of leaving the Euro–and he failed to play it. Now his leverage is gone and the roof is about to cave in. Just wait and see.

The troika isn’t going to convene another dreary round of negotiations to rehash the same old nonsense. Those days are over.  They’re simply going to withhold the money, curtail liquidity assistance, and torpedo the Greek banking system. Kaboom! That’s the way this thing is going to go down. The mood among the EZ finance ministers has soured considerably since the last meeting. They want to put this whole thing behind them. They’re sick of it.  They want closure. They’re not going to quibble over issues they’ve already gone over and clarified a million times.  Varoufakis will either have to get with the program or face the consequences. That’s the way it works in Mafia-land; you either pay the piper or you find yourself in the East River in cement booties.

Who knows: maybe this is what Varoufakis wanted from the beginning, a ferocious clash ending in banishment, a Grexit.  Well, he won’t have to wait long now.


Mike Whitney is a regular columnist for Veracity Voice

Mike Whitney lives in Washington state. He can be reached at: fergiewhitney@msn.com

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