World Press Network

Time to review ancient history. We see clearly that what happens today has happened in the past. People would love to imagine that modern industrial free trade floating fiat currency economic capitalism is brand new and operates differently from all previous systems. This is false.

As the European attempts to fool Mother Nature (i.e. unmanipulated markets that are free to discover price and price risk) disintegrate, does anyone seriously think the PPT can prop up the U.S. stock market with its usual pre-market manipulations?

When Mother Nature reasserts reality, the frauds, scams and facades will shred like tissue in a hurricane. Maybe that process of reverting to reality is finally about to begin.

Either the YesMen have infiltrated Italy's biggest, and most undercapitalied, bank, or the stress of constant, repeated lying and prevarication has finally gotten to the very people who know their livelihoods hang by a thread, and the second the great ponzi is unwound their jobs, careers, and entire way of life will be gone. Such as the head of UniCredit global securities Attila Szalay-Berzeviczy, and former Chairman of the Hungarian stock exchange, who has written an unbelievable oped in the Hungarian portal Index.hu which, frankly, make Alessio "BBC Trader" Rastani's provocative speech seem like a bedtime story.

So it’s back to the depressing topic of Atlantic Monthly blogger and paid PR flak for defense contractors, Joshua Foust–something I’d rather avoid, but the scumbags won’t let me.

The acceptance of failure is impossible for those in control in front of and behind the scenes, because banking is their key power over everything.

The irony is thick, the tragedy stirring.

End of manipulation of Precious Metals?

How debt creation has fueled asset-price inflation since the 1980s

Banking in recent decades has not followed the productive lines that early economic futurists expected. As noted above, instead of financing tangible investment to expand production and innovation, most loans are made against collateral, with interest to be paid out of what borrowers can make elsewhere. Despite being unproductive in the classical sense, it was remunerative for debtors from 1980 until 2008 – not by investing the loan proceeds to expand economic activity, but by riding the wave of asset-price inflation. Mortgage credit enabled borrowers to bid up property prices, drawing speculators and new customers into the market in the expectation that prices would continue to rise. But hothouse credit infusions meant additional debt service, which ended up shrinking the market for goods and services.

Under normal conditions the effect would have been for rents to decline, with property prices following suit, leading to mortgage defaults. But banks postponed the collapse into negative equity by lowering their lending standards, providing enough new credit to keep on inflating prices. This averted a collapse of their speculative mortgage and stock market lending. It was inflationary – but it was inflating asset prices, not commodity prices or wages. Two decades of asset price inflation enabled speculators, homeowners and commercial investors to borrow the interest falling due and still make a capital gain.

This hope for a price gain made winning bidders willing to pay lenders all the current income – making banks the ultimate and major rentier income recipients. The process of inflating asset prices by easing credit terms and lowering the interest rate was self-feeding. But it also was self-terminating, because raising the multiple by which a given real estate rent or business income can be “capitalized” into bank loans increased the economy’s debt overhead.

While many of us are working to ensure that the Occupy movement will have a lasting impact, it’s worthwhile to consider other countries where masses of people succeeded in nonviolently bringing about a high degree of democracy and economic justice. Sweden and Norway, for example, both experienced a major power shift in the 1930s after prolonged nonviolent struggle. They “fired” the top 1 percent of people who set the direction for society and created the basis for something different.

It is hard to describe fully the lost ways of the US Federal Reserve. The phrase New Normal is a transparent attempt by financial icons in the private sector to put a face of legitimacy on a system bound in the USDollar and its heavy handed management, reinforced by a daisy chain of $trillion frauds. Such cannot be done. The term was coined by Mohamed El-Erian, from the PIMCO helm. Bond fraud followed by TARP Fund fraud, followed by Financial Accounting fraud, followed by Mortgage Contract fraud, followed by unauthorized multi-$trillion fraudulent grants by the USFed, followed by the grand sequence Quantitative Easing to wash value out of the USDollar, followed by the unilateral undercut to USGovt creditors, followed by more unilateral decisions to sanction Iran for nuclear weapon development that even Defense Secretary Leon Panetta admits is not a reality, well, does not make for global leadership. It makes for a travesty. Yesterday the USFed released more directives. So the USEconomy is stuck in a weak reverse gear. The accommodation will extend until year 2014. These guys are basic liars. Even Bill Gross of PIMCO takes shots at the central bank policy or ruin. The United States will suffer financial repression (in Gross's words) if the Federal Reserve implements additional bond monetization as policy. The USFed will hold its benchmark interest rate at near 0% for at least the next three years, as a testament to central bank failure. No departure from the 0% rate can be done. The USGovt debt service requires it, demands it, and will default without it. The ZIRP and QE are worn as badges of failure and dishonor.

Here's another interview with Nicole, conducted by Nicholas Bawtree for Italian magazine Terra Nuova, October 2011 in Florence, Italy.

There is this ancient Chinese curse: may your wishes be granted.

According to the documents, the bank spent $4.13m from October 2008 to December 2011 on lobbyists as it tried to influence three different areas of legislation.

The bank sought influence over consumer protection, with proposed legislation such as the Consumer Overdraft Protection Fair Practices Act and the US Credit Card Act.

These proposed laws wanted to make it harder for young people to be given credit cards, have their credit limits extended and over the imposition of limits on interest rates. They also suggested a possible limit on hidden overdraft charges and penalty fees.

Listen carefully to the rationales provided for taking down Glass-Steagall, which helped to set up the current financial crisis and collapse. This interview with John Reed by Bill Moyers is one of the most powerful and yet simple summaries of the cause of the financial crisis that I have heard.

Mr Tchenguiz, along with his brother Robert, were arrested in March 2011 as part of an investigation by the Serious Fraud Office, into the collapse of Icelandic bank Kaupthing.

Robert Tchenguiz was the bank's biggest shareholder, and had been loaned £1.7 billion by the bank.

They were questioned for 13 hours, and hundreds of documents and computer files were seized. They were eventually released without charge.

Both brothers have brought judicial reviews against the search and arrests warrants granted to the SFO and City of London Police.

Warrants for the brothers were quashed in December following the SFO's admission that errors had been made in obtaining search warrants to raid Mr Tchenguiz's London offices.

The warrants were quashed and the seized material was returned.

Mr Tchenguiz is now seeking £100 million damages from the SFO for the damage he says has been caused to his reputation and business.

He has dismissed the investigation as a 'fishing expedition'.

Mr Tchenguiz is known for his love of parties which are adorned by good-looking young women. He was actually due to hold one such party on his 130ft yacht on the day he was arrested in December.

One one occasion Mr Tchenguiz sent all the girls at one party with £2,000 spending money each to go on a shopping trip in St Tropez.

The combination makes the UK the Private Debt Capital of the G20 world.

All this implies that when a debt slowdown hits the UK, it could do so with even more impact than it did in the USA. As I’ve argued extensively elsewhere, aggregate demand in a credit-based economy is income plus the change in debt. This perspective puts the UK’s staggering dependence upon private debt into sharp relief; explains why—as yet—it hasn’t suffered as sharp a downturn as has the USA; and also implies that that day of reckoning may be approaching.

Today, consumers are too indebted to borrow, and banks are too insolvent to lend. Therefore, there is no possibility of further debt expansion as a substitute for real income growth. An offshored economy is a dead and exhausted economy.

The consequences of a dead economy when the government is wasting trillions of dollars in wars of naked aggression and in bailouts of fraudulent financial institutions is a government budget that can only be financed by printing money.

The consequence of printing money when jobs have been moved offshore is an inflationary depression. This catastrophe could begin to unfold this year or in 2013. If Europe’s problems worsen, flight into dollars could delay sharp rises in US inflation until 2014.

The emperor has no clothes, and sooner or later this will be recognized.