Apr 022014
 
 April 2, 2014  Posted by at 7:13 pm Finance


Esther Bubley Greaseball, mascot at Stevens Airport, Frederick, MD October 1943

Since we can all attest to the fact that our financial banking economic system is bust and busted, we should probably look at ways to repair and cure it. And we don’t want to wait for the system to repair itself from the inside with the aid and abetment of its political stooges, revolving door and otherwise, because that will only lead to everyone else paying through the nose for a system they didn’t break to begin with. If we don’t seize control over this ourselves, it will never be cured, and the guys that went for broke and succeeded will make out like bandits and disappear like thieves into the night, leaving us with enough damage to last for multiple and miserable generations.

That last bit may not be evident to you, because the spin cycle runs at full force and speed, but what you think is the financial system is more volatile and vulnerable than probably ever before, based as it is on central bank handouts exclusively, and can’t take much if any sudden swings. I got three first points together that I think we need to execute, and one is still kind of optional, but there are many more, so let’s have suggestions. Abandoning the use of money altogether is not one I consider to be serious, or one world governments or currencies or debt jubilees.


1) All money must be banned from politics

This is so obvious that maybe that’s precisely the reason it’s ignored. As I said before, if you allow money to enter your political system, money will end up buying the system. That’s where one man one vote becomes one dollar one vote, and that isn’t the spirit of anyone’s constitution. It IS the reality of politics all throughout the western world though. In theory every American has the same weight as Jamie Dimon or the Koch brothers, but in practice that’s just an absurd notion.

Incidentally, just today the US Supreme Court struck down more limits on money that can be handed to politicians, claiming that the limits deny potential donors freedom of speech. And of course that’s just a next step, and of course the Cargenies of the planet have had a much bigger say than your (great-) grandparents for a long time, but how can you call that democratic, and how does it boost free speech that some people can buy a candidate’s time and others cannot? At least have the decency to tell the great unwashed that you changed over into an aristocracy or meritocracy or whatever fancy name you can come up with. Just not democracy.

It may seem like a dead and moot point, but banning money from politics is essential. There are plenty of possible systems under which a state can make a fixed amount of campaign money available for candidates, so there are no practical constraints. More than enough ideological ones, however, judging from Roberts and Scalia cum suis. Total campaign donations in the 2012 elections surpassed $6 billion, and one of Hillary’s 2016 superpacs recently estimated her campaign would cost over $1.7 billion alone. And there’s still people who go vote. Go figure.


2) One country must restructure its entire financial system

Since the global banking system is so interconnected, all it would take to cleanse the system from all the festering debt that still resides within it is for one country to shut all banks on its territory one day and go through their books until there’s not a single stone unturned. People can be allowed – perhaps limited – access to their money while the investigations take place, and foreign banks will have the choice of either participating, with their books opened, or close their branches. Hidden losses will be written down, and banks with too much unpaid debt will be made to default. Bondholders will be the first to absorb losses, and an order created in which other creditors either get paid or not.

It may well be more complicated than I put it now, but just think of the advantages: at the end of the process, the first country to do this will be the only “rich” country to come out with a truly clean bill of financial health. That will attract a lot of investment. It will also attract a lot of anger, but the dirty secrets hiding in the ledgers should shut up a lot of that anger.


3) One country must leave the EU.

This one is optional, but it would help the process along in a big way. I can think of no other reason some countries are still in the EU, other than they have handpicked leaders who happen to have a past in banking. It may be a tough task to go from euro’s to lira or drachmas or escudos, but it will be worth it because the flaws in both the common currency and the bureaucracy that pushes it will be exposed.

I saw Barroso talk the other day about ” … in my ten years as chairman of the European Commission … “, and I was thinking: that unelected beanbag has been in office for ten years, while the leaders and parliaments of European nations’ governments must be (re-)elected every 4 years (or so). To gauge if the people (still) have faith in them, to gauge if broken promises are not held too much against them. The very least Brussels should do is put a maximum term on everybody’s stay, but it’s been a Barroso and Van Rompuy and Rehn and Juncker game of revolving door musical chairs for a very long time now and they’re not going to leave on their own.

It’s like a private enterprise runs the world’s second most populous democracy after India. How is that even possible? And there are European parliamentary elections in May, but they’re not going to leave after that either. At least US senators and congressmen, rich and corrupted as they may be, need to get re-elected.

Once one country leaves the EU and eurozone, more will follow soon after. And that will be the end of a once well-intentioned experiment gone horribly awry. But at least the Greeks and Italians will no longer be held prisoners by the global troika money cabal. They’ll have the freedom to rebuild and go deal with their own domestic corruption issues instead of international ones.

And make no mistake: such upheaval in Europe will have a huge impact in the US. Volatile and vulnerable are the key words.

‘Epic’ Debate On High-Frequency Trading (MarketWatch)

Michael Lewis came face-to-face with one of the antagonists of his book on high-frequency debate on Tuesday. The author of the new book “Flash Boys” got into a heated debate on live TV with BATS Global Markets exchange president William O’Brien about the pros and cons of high-frequency trading and whether it ruins the markets for the retail investor. On CNBC on Tuesday, Lewis accused HFTs of “rigging the market” and touted the new exchange IEX making a more even playing field. “I think he is outrageous and part of the problem,” said Lewis pointing to the BATS president. “This is the heart of capitalism right now, the unfairness of the exchanges.”

Founder of IEX exchange, Brad Katsuyama, also joined the cast to battle out whether the high-frequency traders beats out the regular investor. “I believe that the markets are rigged and I think you are part of the rigging,” said Katsuyama directly to O’Brien. Katsuyama went on to the explain why traders should price trades more fairly. The exchanges’ view of the market is slower than some of their fastest participants, he said. “Shame on both of you for falsely accusing thousands of people on wrongdoing…to try to build a business on fear, mistrust and accusations,” shot back O’Brien.

Read more …

High-Frequency Traders Chase Currencies as Stock Volume Recedes (Bloomberg)

Forget the equity market. For high-frequency traders, the place to be is foreign exchange. Firms using the ultra-fast strategies getting scrutiny thanks to Michael Lewis’s book “Flash Boys” account for more than 35% of spot currency volume in October 2013, up from 9% in October 2008, according to consultant Aite Group LLC. It’s the opposite of equities, where their proportion shrank to 50% in 2012 from 66% four years ago, according to Rosenblatt Securities Inc. As brokers get better at cloaking orders and volume shrinks in stocks, speed trading remains a growth business in the $5.3 trillion foreign-exchange market, where authorities on three continents are examining the manipulation of benchmarks.

While some see them as a sign of transparency, the tactics are catching on just as their role in equities is probed by the New York state attorney general and Federal Bureau of Investigation. “The use of HFT will make trading and regulation in the FX market more complex, and there would also be some questions over the fairness,” Anshuman Jaswal, senior analyst at research firm Celent in Boston, said by e-mail. “Use of HFT also increases liquidity and depth in markets. Both sides of the argument carry some weight, and there is no one right answer.”

The debate surrounding high-frequency trading, a term describing strategies that use lightning-fast computers to eke out profits in securities markets, blew up this week after Lewis published “Flash Boys” and said U.S. equities are rigged. The book makes few references to currency, saying instability HFT creates is bound to spread from equities sooner or later.

About 30% to 35% of transactions on EBS, an electronic trading platform owned by ICAP Plc that facilitates currency deals, are high-frequency driven, the Bank of International Settlements said in a December report. The rise in electronic and algorithmic trading is prompting firms to set up shop close to the servers of electronic platforms, a strategy to reduce transmission time that has long been popular in stocks. High-frequency strategies flourished in American equities as rising computer power and two decades of regulation broke the grip of the New York Stock Exchange and Nasdaq Stock Market and trading spread to more than 50 public and private venues. Now, speed traders are proliferating in foreign exchange.

Read more …

Fault Runs Deep in Ultrafast Trading (NYT)

“The United States stock market, the most iconic market in global capitalism, is rigged.” That’s what Michael Lewis told Steve Kroft on the CBS show “60 Minutes” on Sunday evening. It was a clever, if hyperbolic, way for Mr. Lewis to describe the topic of his important new book, “Flash Boys,” a make-your-blood-boil read about the abusive way that high-frequency trading works. Mr. Lewis’s well-crafted narrative highlights a perverse system on Wall Street that has allowed certain professional investors to pay hundreds of millions of dollars a year to locate their computer servers close to stock exchanges so they can make trades milliseconds ahead of everyone else.

In some cases, the superfast investors are able to glean crucial information from the stream of trading data flowing into their systems that allows them to see what stocks other investors are about to buy before they are able to complete their orders. There is only one problem with Mr. Lewis’s tale: He reserves blame for the wrong villains. He points mostly to the hedge funds and investment banks engaged in high-frequency trading. But Mr. Lewis seemingly glosses over the real black hats: the big stock exchanges, which are enabling — and profiting handsomely — from the extra-fast access they are providing to certain investors.

While the big Wall Street banks may have invented high-speed trading, it has gained widespread use because it has been encouraged by stock markets like the New York Stock Exchange, Nasdaq and Bats, an electronic exchange that was a pioneer in this area. These exchanges don’t just passively allow certain investors to connect to their systems. They have created systems and pricing tiers specifically for high-speed trading. They are charging higher rates for faster speeds and more data for select clients. The more you pay, the faster you trade. That is the real problem: The exchanges have a financial incentive to create an uneven playing field.

This is not to suggest that high-frequency hedge funds and banks aren’t complicit; they are. And some may be doing more than simply taking advantage of the rules. Eric T. Schneiderman, New York’s attorney general, recently began an investigation into high-frequency trading. “There are some things here that may be illegal,” he told Bloomberg News. “There are some things that may now be legal that should be illegal or that the markets have to be changed.”

Read more …

How Superman III Explains High-Frequency Trading (Bloomberg)

Michael Lewis’ latest book “Flash Boys” explores the world of High Frequency Trading. To understand this complex process, you don’t need to read a whole book, all you need is a copy of the notoriously bad movie Superman III.

Read more …

Speed Trading in a Rigged Market (Ritholtz)

On “60 Minutes” last night, author Michael Lewis made a bland assertion: High-frequency traders, he said, working with U.S. stock exchanges and big banks, have rigged the markets in their own favor. The only surprising thing about Lewis’s assertion was that anyone could be even remotely surprised by it. The math on trading is simple: It is a zero-sum game. One trader’s gain is another trader’s loss. Only in the case of HFT, the losers are the investors — by way of their pension funds, retirement accounts and institutional funds. The HFT’s take – the “skim” – comes out of these large institution’s trade executions.

The technology behind HFT may be complex, but the math is that simple. Once the Securities and Exchange Commission allowed stock exchanges to share with traders all of the unexecuted incoming orders, it was hard not to make money by skimming a few cents or fractions of a cent from each trade. Several years ago, the founder of Tradebot, one of the biggest high-frequency firms, had said that the firm had “not had a losing day of trading in four years.” The firm’s average holding period for stocks is 11 seconds.

Any professional trader can tell you that his job is to manage risks. It is a statistical certainty that a percentage of trades will be losers. You are establishing a position with an unknown outcome. Sometimes they go your way, other times they go against you. How is it possible that one of the largest high-frequency trading firms executes millions and millions of orders for four years without ever having a down day? The short answer is what they do is not trading — it is skimming. I call it legalized theft. High-frequency trading is a tax on investors, encouraged by the exchanges, allowed by the SEC. It is prima facie proof that something is amiss.

It is interesting to note that the rigging theme is consistent with everyone who looks closely at this subject. My colleague Josh Brown notes that markets haven’t become rigged, they have always been rigged. What is different is the ability of high-frequency traders to see other people’s orders, jump ahead of them, and then sell that exact same stock to them, at a higher price. It is the ultimate market-skimming operation.

The specialist system that pre-dated HFT had its flaws, as we saw in the 1987 stock-market crash. But it also had one crucial redeeming factor: A human being stood ready, willing and able to make a market in a stock when other buyers and sellers disappeared. HFTs, on the other hand, have no such obligation. When things get rough, they unplug their machines. This makes their claims of added liquidity laughable. They are the centerpiece of a flawed system without any socially redeeming qualities. I am looking forward to reading “Flash Boys.” I hope our members of Congress and the folks at the SEC do so too.

Read more …

China Burns Speculators as $5.5 Billion Lost on Yuan Bets (Bloomberg)

China is succeeding in making its currency less predictable. Investors are paying the price. Clients of U.S. commercial banks have lost about $2 billion this year on $332 billion of options betting the yuan would appreciate, while Chinese companies lost $3.5 billion on $150 billion wagered on a benchmark forwards contract, according to data compiled by Morgan Stanley and the Depository Trust & Clearing Corp. in Washington. These contracts, when including bearish bets, account for more than a third of global trading in the Chinese currency.

After almost a decade of gains, speculators had come to regard the yuan as a one-way trade, leading to a surge in capital inflows that stands to leave the country vulnerable to a sudden shift in investor sentiment. Policy makers responded by selling the yuan and widening its trading band, encouraging a record 2.4% quarterly decline that was the biggest among Asian currencies. “The depreciation was engineered to burn the fingers of speculators,” said David Loevinger, a former senior coordinator for China affairs at the U.S. Treasury and now a Los Angeles-based analyst at TCW Group Inc., which oversees $132 billion. “The People’s Bank of China wants two-way volatility embedded in the market.”

Read more …

You know, you got some steel and you use it as collateral for a loan to get more steel (or some other asset). Rinse, repeat and get rich.

Steel Defaults Seen by S&P as Yuan Ruins Ore Loans (Bloomberg)

The Chinese steel industry’s ability to survive 1 billion yuan ($161 million) of losses per month without more defaults is under threat as a slump in iron ore and the yuan undermines a key source of financing. The currency has weakened 2.5% this year and a measure of exchange-rate swings reached a record, prompting Goldman Sachs Group Inc. to predict funding that uses the steelmaking ingredient as collateral will drop over the next two years due to foreign-exchange hedging costs. Iron ore prices fell 11% in the past five months as cash shortages at closely held mills prompted what Morgan Stanley says is panic selling.

Chinese steelmakers, which account for almost half of the world’s production, can ill afford a funding squeeze as an industry association reported 43% of them made losses in January amid an 8.6% slump in demand from a year earlier. Nanjing Iron & Steel told investors on March 22 its bonds will be delisted, while Caixin magazine reported on March 25 that Shanxi-based Haixin Iron & Steel Group can’t repay loans.

“Private steelmakers will see very significant operational problems and funding issues this year, so we could see another default,” Sangyun Han, a Hong Kong-based credit analyst at Standard & Poor’s Ratings Services, said in a phone interview yesterday. “Higher volatility of the currency is another negative factor in their financing in addition to volatile iron ore prices and weak demand.”

About 40% of the iron ore at China’s ports are part of commodity finance deals, according to Mysteel Research, as cash-starved companies bring in cargo to secure lines of credit. Stockpiles have reached a record 108.45 million metric tons, up 41% in the past year, reflecting both increased use in funding and declining demand from mills. The ore is priced in dollars and usually bought using letters of credit, which means any decline in the yuan causes losses at the time of repayment.

Read more …

Ex-President Jiang Urges Beijing To Curb Anti-Corruption Drive (FT)

Jiang Zemin, the former Chinese president, has urged the current leadership to rein in the toughest anti-corruption campaign in decades, which is threatening the interests of some Communist party elders. Mr Jiang, who stepped down as president of China in 2003 but retained control of the military for a further two years, has sent a clear signal in the past month to Xi Jinping, the president, according to three people familiar with the matter. Mr Jiang sent a message saying “the footprint of this anti-corruption campaign cannot get too big” in a warning to Mr Xi not to take on too many of the powerful families or patronage networks at the top of the party hierarchy.

Former President Hu Jintao, who was replaced by Mr Xi a year ago, has also expressed reservations about the anti-corruption drive and warned his successor not to expand it too far, according to one person involved in executing the campaign. President Xi has made tackling corruption and official largesse the centrepiece of his presidency, vowing to tackle powerful “tigers” (high-ranking officials) as well as “flies” at lower levels in the bureaucracy. In the coming weeks, the authorities are expected to reveal public charges against one of the biggest tigers in the Chinese system: Zhou Yongkang, the former head of the domestic security apparatus.

Mr Zhou was detained by Communist party investigators late last year along with hundreds of family members and allies throughout the security services, energy industry and political bureaucracy. If he is put on public trial, he will be the most senior Chinese official to face such charges since the founding of the People’s Republic in 1949. Mr Hu and Mr Jiang have been broadly supportive of the anti-corruption drive until now and both accepted Mr Xi’s decision to purge Mr Zhou, even though Mr Zhou was a Jiang ally for many years, according to people familiar with top leadership discussions. But both leaders think the campaign has gone far enough and that further escalation could harm their own interests or those of their respective factions.

Read more …

Debt Troubles Within The Great Wall (FT)

Is China different? Or must its borrowing binge, like most others, end in tears? This is now a hotly debated topic. On one side are those who predict a Chinese “Minsky moment” – a point in the credit cycle at which, as Hyman Minsky foretold, panic grips the financial system. On the other side are those who insist that China’s debt mountain poses no threat to the planned growth of the economy: the authorities say it will be above 7% and above 7% it will be. [..]

First, if you take the official statistics at face value, China’s net exports shrank from 8.8% of gross domestic product in 2007 to 2.6% in 2011. This was offset by a jump in the share of investment over the same period, from 42% of GDP – already extremely high – to 48%. There are reasons to doubt reported levels of investment, but it is less reasonable to question its abrupt rise.

Second, linked with the rise in the share of investment was an explosion in credit and debt. According to the International Monetary Fund, by the final quarter of last year total “social financing”, as the Chinese authorities describe it, had reached 200% of GDP, up from only 125% before the crisis. Moreover, much of this increase had been outside traditional banking channels. Instead, there has been explosive growth of what one might call a “shadow banking system with Chinese characteristics”. This does not rely on the complex securitisations or wholesale markets now notorious in the west – but rather on new intermediaries, such as trusts, and innovative instruments such as “wealth-management products”. According to Fitch, the credit rating agency, credit outstanding to the private sector is now as big, relative to GDP, as it was in the US in 2007.

Third, China’s growth rate has slowed from 10% or more in the past decade to about 7% in 2012 and 2013. This is still high. But it is not quite as high. Imagine you were told of an unnamed economy that had soaring investment and credit, but falling growth. A rising proportion of investment activity was being funded by debt, while at the same time returns were falling. You would surely expect an unhappy ending.

Read more …

Hong Kong Wins From China Credit Woes as Loans Reach Record (Bloomberg)

Hong Kong’s syndicated loan market enjoyed a record first quarter as Chinese companies shunned local financing in favor of cheaper offshore funds. Lending in the city surged 41% to $20.8 billion in the first three months compared with a year earlier, the busiest start since Bloomberg starting tracking the data in 1999. Volumes in China shrank 45% to $5.8 billion, the worst first quarter in four years. Onshore borrowing costs for the nation’s top-rated companies jumped 30 basis points to 5.89% in March, the biggest monthly rise since November, ChinaBond data show.

Hong Kong is luring Chinese companies as interest rates surge in the world’s second-largest economy amid lending curbs and its first onshore bond default. In the three months through March, borrowers led by Cnooc Ltd. (883) and Dongfeng Motor Group Co. agreed offshore loan margins that averaged 227 basis points more than benchmark rates, down from 254 a year earlier. “The trend for offshore borrowing in Hong Kong is likely to continue this year,” said Pedro Cheung, the head of corporate finance at Bank of China Ltd. (Hong Kong). “China’s onshore borrowing costs have increased and liquidity is relatively tight.”

Read more …

Stiglitz: Inequality An Equal Concern for China, U.S. (Caixin)

Your latest book talks about the price of inequality, which is very pertinent to both the United States and China. The Gini coefficient of the two countries is almost the same, surprisingly. What observations would you make of that?

The Gini coefficient is almost the same. The situations are different, and the nature of inequality is different. So for instance, over the last 30 years, China has done a lot to reduce poverty at the bottom, and the people in the middle have done very well. Where the inequality has come is that people at the top have done even better. Also, in the early stages of development, it’s almost always the case that some parts grow faster than others. The coast grows faster than the west, urban areas always grow faster than the rural areas.

So in the early stages of development, it is quite often the case that inequality increases. It’s not an excuse, but it is a description of what often happens. It’s also a warning that one has to take strong policies to try to prevent this from getting worse, policies to try to keep the country together. The distinctive aspect of the U.S. is that it has become the country, among well-developed countries, with the highest level of inequality, whereas China, by any means, does not have the worst inequality amongst the emerging markets. Its increase is a worry, but it’s not the worst. In the U.S., it’s a real worry because it is clearly the worst.

The nature of inequality in the U.S. is that it has all three aspects. The top is getting a larger and larger share. Between 20% and 25% [of wealth] goes to the top 1%. The share of the top 10% has increased three- to fourfold in the last 30 years. The bottom is getting poorer. The fraction of the population in poverty has increased. One out of 40 American children live in poverty, and then the middle is stagnating. The median income in the U.S. today is roughly the same as it was a quarter century ago.

The wealthiest 50 delegates on China’s congress control $15.3 billion, while the 50 richest members of U.S. congress only controls $1.6 billion in total. So does that mean the U.S. Congress represents the people, whereas China’s represents rich capitalism?

I think both countries have to be sensitive to economic inequality getting translated into political inequality, and political inequality creating economic inequality. It’s a vicious circle that one has to worry about undermining our economy and our society. So I think that’s an ailment that is common in both. The title of my book “The Price of Inequality” reflects my judgment that we are paying a high price for this inequality, a high price in economic performance. We could have a faster growing economy, a more dynamic economy with more equality. But we’re also paying a political price. The sense of confidence in our institutions is being undermined. If citizens don’t believe that politicians are making decisions on their behalf, it corrodes trust.

Now, in the U.S., the people making the decisions may not be the wealthiest, but they may be making the decisions on behalf of the wealthiest because the wealthiest are paying them. That’s the wealth behind power. In fact, the problem is getting elected in the U.S. is extremely expensive. In the last election, both candidates spent $1billion. Now they didn’t have that billion dollars. They had to raise it, and when you raise it from people, most weren’t doing it as an act of charity but as an investment. And when they make an investment they expect a return.

Read more …

Canada’s Getting Richer. Most Canadians Aren’t. (Bloomberg)

Canada’s Conservative government has long made sound economic management the centerpiece of its claim to office. Now, with the country’s outlook showing mixed signals and a federal election coming next year, I’m looking at ways to measure the health of the economy, and what each says about Canada’s. The last installment looked at the state of the labor market, and explained how raw numbers are probably the least useful metric.

But in deciding whether a government has delivered good jobs, people’s ability to find work is only half the story. The other half is how much money they’re making. When the Conservatives took office in 2006, the median family income was $47,600. In 2011, the latest year for which Statistics Canada has released figures, it was $47,700. (Both figures are in 2011 dollars.) In other words, at the end of Stephen Harper’s first six years as prime minister, a household in the middle of the income distribution was pulling in $100 more than it did when he took office.

In fact, 2011 median income was $1,600 lower than at its pre-recession peak in 2008. Things have looked a little better for those at the top of the income distribution. In 2006, adjusted market income for the highest-earning 20% of Canadian families was $104,000; by 2011, that had increased 5%, to $109,200. The change was less sunny for the bottom quintile of families, who saw their adjusted market income fall 6% over the same period, to $8,300 from $8,800.

Another important indicator on income is the share of Canadians earning the minimum wage. In a healthy economy, that share would be steady, or even falling. Instead, the portion of workers getting the adult minimum wage last year was 6.7%, a 50% jump over the level when the Conservatives took office. One could argue that an increase in minimum-wage workers was to be expected during the recession. Indeed, the share started rising in 2009. But four years later, the portion of minimum-wage workers doesn’t seem to be falling back to pre-recession levels.

As incomes stagnated, the cost of living rose, pushing households deeper into debt. In 2006, Canadian households had debt equal to 135% of their nominal disposable income, a figure roughly equal to U.S. households and about one-fifth lower than in the U.K. By 2012, household debt had jumped to 165% of disposable income in Canada, while it fell to 111% in the U.S. and 152% in the U.K. In fact, of the countries for which the Organization for Economic Cooperation and Development reports these data for that year, Canada’s household debt levels were the highest for 2012, the latest for which figures are available.

Unsurprisingly, much of that increase came from larger mortgages, as housing costs have rocketed up and Canadians borrow more to pay those costs. Mortgage debt as a share of nominal disposable income rose from 82% in 2006 to 105% in 2012. In effect, Canada switched places with the U.S., where those figures moved in the opposite direction.

Read more …

The best proof that Europe will slide down into deflation is to be found in the incessant across the board denial by European ‘experts’ and politicians that it will.

The Eurozone: Sleepwalking Towards Japan (Guardian)

The timing could hardly have been more opportune: just days before its next policy meeting, the European Central Bank (ECB)has been provided with evidence that deflation edges ever closer. The annual inflation rate in March across the 18-nation eurozone dropped to 0.5%, its lowest level in over four years. Five countries are already seeing prices drop year on year. Faced with the same data, the response of the US Federal Reserve or the Bank of England would not be in doubt: policy would be eased. But this is the ECB we are talking about, so the financial markets are in two minds as to what will be decided on Thursday.

Initially, the euro fell on expectations that the ECB would be forced to act. But then the markets had second thoughts, noting that the president of the Bundesbank, Jens Weidmann, had commented at the weekend that the growth picture was improving and that inflation was being driven lower by temporary factors. The suspicion that the ECB will sit on its hands led to the euro rising against the dollar, the pound and the yen. The ECB needs to be extremely careful that it does not sleepwalk its way to disaster. The short-term threat of deflation may well be exaggerated by the timing of Easter in 2013 and 2014. It may also be the case that falling inflation is boosting real consumer incomes by making pay packets go further.

But growth is weak, banks are reducing their lending, credit is contracting, and the ECB is reducing the size of its balance sheet. To cap it all, the euro has been strengthening at a time when a key export market – China – has been slowing. Sure, in the best of all worlds, the eurozone recovery will continue to strengthen. But the risk of growth losing momentum – as it did in the UK in 2011 and 2012, before the announcement of the Funding for Lending scheme – is real. The eurozone is one mild recession away from being the new Japan. Hence the need for policy action. Starting this week.

Read more …

François Hollande’s Deficit Plea Sets Up Clash With Brussels (FT)

A demand by France for more leeway in imposing Berlin-backed austerity policies has reignited a fight at the core of the eurozone over how to promote growth in countries struggling to pull out of recession. Paris traded blows with Brussels on Tuesday over the issue after President François Hollande made clear after appointing a new prime minister that he wanted a delay in meeting targets for the budget deficit to allow room for his new growth plan. Arnaud Montebourg, the outspoken leftwing industry minister who is set to occupy a prominent role in the new government, condemned the European Commission for its “austerity and dogma” and for being “totally useless on the question of growth”.

Like Mr Hollande, Matteo Renzi, the new Italian prime minister, has repeatedly suggested he should be allowed to flout the budget deficit limit if it presents a credible reform effort. But the European Commission, charged with enforcing the eurozone’s tough new fiscal rules, signalled it would not look favourably on French requests not to be held to its already delayed target of reducing its budget deficit to 3% of national income by 2015. Berlin, backed by the Finnish government, in February issued a stinging rebuke of the Commission’s 2013 decision to give Paris and Madrid two additional years to get under the 3% deficit ceiling. It accused Brussels of using “a somewhat arbitrary approach” to granting leniency.

A confidential paper, distributed to all EU finance ministries and obtained by the Financial Times, made clear that Germany believed France and Spain had failed all criteria required to be granted budget flexibility. Olli Rehn, the EU economic commissioner in charge of evaluating eurozone budgets, has publicly warned Mr Renzi’s government that Brussels will have no choice but to cite Italy formally if it breaches the 3% limit. Reacting to Mr Hollande on Tuesday he noted that Paris’ deadline “has already been extended twice in recent years”. Speaking at a meeting of EU finance ministers in Athens, he added: “What is important now is France make the necessary structural effort. I believe it is essential France acts decisively.”

Read more …

Italy Turned Into A Launch Pad For The US Empire (RT)

Italy is in fact a limited sovereignty country. “Italy appears in many respects to be a colony,” says the Italian philosopher, Gianni Vattimo, former European MP. “On one hand it is a Vatican colony, on the other it is an American colony, an American State even, without the power to elect the president. We are a limited sovereignty country indeed. We are a kind of Batista’s Cuba with military bases instead of brothels.”

Well, the bases are obviously not simply an old gift from the Cold War, they are the claws and antennas of the Empire. Calling the US an empire is not some kind of hippie 1968 revolt jargon. If you have any doubts, read the US 2012 Defense Strategic Guidance. You will see that it speaks of US military power expanding globally exactly as empires have always done in history. This is said to be in the national interest (a word that only the US can use) and, more superficially, i.e. ideologically, in the “common interest.”

Obviously they never speak of aggression but always about facing global threats. To quote the DSG at its most ideological level ironically resounds as a modern global philosophy “à la Habermas”: “Across the globe we will seek to be the security partner of choice, pursuing new partnerships with a growing number of nations — including those in Africa and Latin America — whose interests and viewpoints are merging into a common vision of freedom, stability, and prosperity.”

To achieve this, the US has more than 1,000 bases around the world, plus 4,000 at home. Pressed by Congress, the Pentagon said that this network in 2012 had a cost of $22 billion, but in reality no one is really capable of fathoming the depths of the US military annual balance sheet. A recent calculation by David Vine, assistant professor of anthropology at American University, in Washington, DC, guess that the real cost is around $170 billion. In Vine’s definition, US bases are the “Launch Pad” for the Pentagon’s unending war program.

Read more …

Cyprus Wants to Seize Assets to Tame Bad Debt (Bloomberg)

Cypriot lawmakers must make it easier for banks to seize property when borrowers default to tackle the issue of bad loans, the country’s most pressing issue, central bank governor Panicos Demetriades said. Borrowers who intentionally fail to repay loans need to be reined in, Demetriades said in an interview yesterday in Athens. A possible political fight may delay planned legislation to tackle the Mediterranean nation’s stock of bad debt, he said. The law is required under the country’s 10 billion-euro ($13.8 billion) international rescue put together a year ago.

“There’s a lot of strategic default happening,” Demetriades said. “Borrowers need to know that there’s a consequence when you don’t pay. It’s still the case that the banks are not able to basically carry out any repossessions in any meaningful timeframe. That’s the top priority now, to address NPLs,” or non-performing loans.

A holdup in addressing bad debt could, as happened in Greece, hamper Cyprus’s plan to recover from a financial crisis that came close to forcing the country out of the euro. Demetriades, who also sits on the European Central Bank’s Governing Council, steps down on April 10 after resigning in the wake of a long-running feud with Cypriot President Nicos Anastasiades. Demetriades declined to comment on the circumstances of his resignation. Demetriades will be succeeded by Chrystalla Georghadji, the country’s auditor general.

Read more …

The discussion about whether or not the UK has a real estate bubble won’t be resolved until it blows up in Britain’s faces. Fear of a bubble? Hey, if 18% per year is not a bubble, what is?

Fears Of Bubble As London House Prices Rise 18% (Guardian)

House prices in London have increased by almost a fifth over the past 12 months, and are now 20% above their pre-crisis peak, according to the latest data from the country’s biggest building society. In news that will fuel concerns of a price bubble in the capital, Nationwide building society said the average price of a London home had increased by 18% over the year and by 5.3% in the past three months alone, and at £362,699 was now more than twice the figure for the rest of the UK.

“The gap between house prices in London and the rest of the UK is the widest it’s ever been, both in cash and percentage terms,” said Nationwide’s chief economist, Robert Gardner. “Overall, the southern regions have been outperforming for some time, with the result that house prices in London, the outer metropolitan and outer south-east have now surpassed their pre-crisis peaks,” he said.

Read more …

Russia To Construct Gas Pipeline To Crimea (RT)

Russian gas exporter Gazprom will build a pipeline to supply gas to energy-strapped Crimea, according to the Russian Ministry of Energy. “Without gas in Crimea there is no possibility for new production, therefore the likelihood of the project is 90%,” a senior official at the Ministry of Energy told Vedomosti on Tuesday. Since the project is in its early stages, the cost is highly speculative, and ranges from $200 million to $1 billion, depending on the route of the pipeline. The more expensive option is a 10 billion cubic meter capacity pipeline that would run between Russia’s southern Krasnodar region to Sevastopol.

The more economic option would start in Anapa, another city in the Krasnodar region on the northern coast of the Black Sea, adding an extra section to the existing South Stream project. However, the project would take at least two years, according to Michael Korchyomkin, director at European Gas Analysis. The most important thing that needs to be studied before construction kicks off is Crimea’s own resource potential, as Vedomosti cites its source in one of the project institutes. “First we are considering Crimea’s shelf,” Interfax quoted Sergey Donskoy, Crimea’s Natural Resources Minister, on Monday. Data is still being collected, Donskoy added.

In 2013, the Crimea peninsula consumed 650 million cubic meters of gas, according to Crimea’s Deputy Energy Minister Vadim Zhdanov. In the summer Crimea’s demand is about 2 million cubic meters per day and in the winter roughly 10 million cubic meters. On Tuesday, Gazprom announced new gas prices for Ukraine; $385.5 per 1,000 cubic meters, an increase from the discounted $268.50 per 1,000 cubic meters the country enjoyed in the first quarter of 2014. As part of the Russian Federation, Crimea will likely not have to pay this price, but a fraction, as Russia caps domestic natural gas prices, and they are usually a quarter of what is charged to European and CIS clients.

Read more …

In The US, Democracy Is Now A Sham (ClubOrlov)

The founding principle for this new form of government which emerged in the 18th century, was that the Common Man was the ultimate source of power. Citizen legislators would enact the laws and shape the nation’s destiny. But instead, our republic is now strong-armed by professional politicians. The two dominant concerns of these careerists are to STAY in power and to do the bidding of those who ENABLE them to stay in power. Anyone who doubts this statement might try explaining why campaign finance reform and term limits are perennially “off the table.” Actually, that is an understatement – they aren’t even in the building.

It is bad enough that the President, Congress and the Courts serve the interests of a minority that is so tiny that it is almost microscopic. What is even worse, is WHO that elite constituency is. It is exclusively THE BIGS: Big banks, Big corporations, Big agriculture, Big energy, Big pharmaceuticals, Big health care, Big high tech and the BIGGEST of them all – the military-industrial complex.

The “Vox Populi” – voice of the people is now as quaint and outmoded as telephone booths on street-corners. Even when there is a massive outpouring of disapproval for a policy – such as the enormous public outcry against Iraq Invasion 2 – the will of the people is disregarded. Instead, the “leaders” kiss the sterns of their financial backers. Ten million irate citizens cannot offset a single Halliburton.

But not only has genuine democracy vaporized, its putrid carcass is used against the ordinary person for whom it was initially conceived. Our demagogues give stirring speeches applauding our inalienable rights and the freedoms that our constitution protects. But at the same time, they barely whimper when a whistle blower reveals that the surveillance grid that is monitoring our behavior is beyond the wildest imaginings of Orwell or Huxley. And when the head of the Department of Omnipresent Surveillance admits that he lied to Congress, he is not prosecuted for perjury. Amazingly, he doesn’t even lose his job.

When the President signs the NDAA act which allows for “indefinite detention” of citizens without formal charges or without the right to a lawyer, it should be utterly clear that the boot of Soft-Core Tyranny is now on our neck. And that unchecked and almost unnoticed power continues to grow at an obscene pace.

Read more …

NSA Performed Warrantless Searches On Americans’ Calls And Emails (Guardian)

US intelligence chiefs have confirmed that the National Security Agency has used a “back door” in surveillance law to perform warrantless searches on Americans’ communications. The NSA’s collection programs are ostensibly targeted at foreigners, but in August the Guardian revealed a secret rule change allowing NSA analysts to search for Americans’ details within the databases. Now, in a letter to Senator Ron Wyden, an Oregon Democrat on the intelligence committee, the director of national intelligence, James Clapper, has confirmed for the first time the use of this legal authority to search for data related to “US persons”.

“There have been queries, using US person identifiers, of communications lawfully acquired to obtain foreign intelligence targeting non-US persons reasonably believed to be located outside the United States,” Clapper wrote in the letter, which has been obtained by the Guardian. “These queries were performed pursuant to minimization procedures approved by the Fisa court and consistent with the statute and the fourth amendment.”

The legal authority to perform the searches, revealed in top-secret NSA documents provided to the Guardian by Edward Snowden, was denounced by Wyden as a “backdoor search loophole.” Many of the NSA’s most controversial programs collect information under the law affected by the so-called loophole. These include Prism, which allows the agency to collect data from Google, Apple, Facebook, Yahoo and other tech companies, and the agency’s Upstream program – a huge network of internet cable taps.

Confirmation that the NSA has searched for Americans’ communications in its phone call and email databases complicates President Barack Obama’s initial defenses of the broad surveillance in June. “When it comes to telephone calls, nobody is listening to your telephone calls. That’s not what this program’s about,” Obama said. “As was indicated, what the intelligence community is doing is looking at phone numbers and durations of calls. They are not looking at people’s names, and they’re not looking at content.”

Read more …

Detroit is a textbook example of what happens when there are multiple claims to to the same shrinking slices underlying wealth. This is our future.

Detroit Pension Fight Heats Up After Deeper Cuts (DFP)

Retirees and pension board representatives fighting big benefits cuts in Detroit’s bankruptcy pushed back Tuesday after the city said it would pursue a comprehensive change in the management of the city’s two pension funds. Increasingly angry retirees launched counterefforts to fight cuts to the pension benefits of thousands of current and retired city workers, holding their largest protest yet outside federal court. Pension fund representatives, meanwhile, chastised emergency manager Kevyn Orr’s team for announcing a shake-up in the structure and management of the pension funds even as both sides are in confidential mediation talks.

The pension funds also released a joint statement, calling Orr’s proposal for replacement of the pension boards “tantamount to a takeover.” “This is when we are supposed to be in good-faith negotiations and court-ordered mediation,” the statement said. “The plan as proposed is best described as completely unrealistic for the operation of these important pension funds for first responders and city workers who dedicated their careers to the City of Detroit. Indeed, such radical and irresponsible concepts could very well derail mediation and ensure protracted litigation.”

Meanwhile, the official committee of Detroit retirees, representing pensioners in the city’s bankruptcy case, served subpoenas on the Detroit Institute of Arts, seeking extensive records and documentation about the museum, its artworks, financing and a broad array of tax returns and appraisals. The retiree committee also served a subpoena on New York-based auction house Christie’s for documents related to its city-commissioned appraisal of the DIA’s artworks last year.

The subpoenas by the retiree committee appeared aimed at pressuring the city for a fuller accounting of the museum’s overall worth in an attempt to potentially force the issue of selling DIA assets to satisfy the city’s liabilities — a gambit that one legal expert said could prove risky. The move mirrored a similar subpoena served on the DIA by bond insurer Syncora, one of Detroit’s largest creditors, which is fighting for a sale of the museum’s art because the insurer is on the hook for about $620 million in Detroit debt.

Read more …

Chicago Mayor Seeks to Repair Badly Underfunded Pension Plan (NYT)

Contending with one of the most poorly funded pension systems among the nation’s major cities, Mayor Rahm Emanuel’s administration has begun an urgent push to require some city workers to pay more for their retirement benefits and to raise property taxes for Chicagoans. The effort is meant as a crucial step toward repairing a pension system at risk of insolvency and so troubled that Moody’s Investors Service last month downgraded Chicago’s credit rating, saying pension liabilities “threaten the city’s fiscal solvency absent major revenue and other budgetary adjustments adopted in the near term and sustained for years to come.”

Laurence Msall, president of the Civic Federation, a nonpartisan research group that has regularly warned about the city’s fiscal problems, said, “We think this is a reasonable plan that balances shared sacrifices among employees, city government and Chicago taxpayers.” Mr. Msall said the changes would put two of the city’s pension funds — representing more than 56,000 city workers and retirees — on a course to be 90% funded in 40 years, although he said it would be preferable if they were completely funded sooner.

Yet the proposal by Mr. Emanuel, a Democrat who faces re-election next year, is complicated by a seeming split among union forces in this Democratically controlled state. The city said the proposal grew out of talks with labor unions, but at least one union has already publicly expressed vehement opposition, particularly given a state constitutional protection of pensions. The city now finds itself aligned with the state, which late last year passed a long-debated overhaul of pensions for state workers, as test cases for how Democrats, who have often steered clear of pensions because of their traditional ties to labor, will manage the politically and financially sensitive terrain.

The mayor’s proposals are subject to legislative approval, and as early as this week his aides are expected to press lawmakers to back them. But even if the legislature approves Mr. Emanuel’s idea, it will be only a partial solution. Remaining unanswered will be issues about retirement funding for teachers, police officers and firefighters, as well as a looming requirement that the city increase its contribution to some workers’ pension funds by almost $600 million next year.

Mr. Emanuel’s proposal would require more than half the city’s workers and retirees — those with ties to the municipal pension fund and the laborers’ pension fund — to contribute more toward their pensions over a period of years. By 2019, for instance, employees would contribute about 11% of their salaries to pensions, compared to about 8.5% now. In addition, cost-of-living increases would no longer rise at a 3% rate, compounded each year, but would typically rise more slowly, and such increases would be skipped in certain years. Some of the details are similar to changes lawmakers agreed to last year for state workers.

Read more …

Home Forums Debt Rattle Apr 2 2014: 3 First Steps To Cleanse The Economic System

This topic contains 14 replies, has 8 voices, and was last updated by  imaginer 5 years, 5 months ago.

Viewing 15 posts - 1 through 15 (of 15 total)
  • Author
    Posts
  • #12055

    Esther Bubley Greaseball, mascot at Stevens Airport, Frederick, MD October 1943 Since we can all attest to the fact that our financial banking economi
    [See the full post at: Debt Rattle Apr 2 2014: 3 First Steps To Cleanse The Economic System]

    #12056

    Raleigh
    Participant

    Great article! Getting money out of politics is THE first step that must occur. Everything else we can come up with follows from that.

    “Mr Jiang sent a message saying “the footprint of this anti-corruption campaign cannot get too big” in a warning to Mr Xi not to take on too many of the powerful families or patronage networks at the top of the party hierarchy.”

    And this is a former Chinese president!!! Did China provide the huge amount of stimulus after the financial crisis occurred because they were worried about peasant anger (from them losing their jobs), or was it done in order to bail the elite out, keep it all going until they could get their money out of the country?

    These guys are just as bad, if not worse, than the scumbag politicians here, and their and their family members’ money is safe in the British Virgin Islands and other tax havens.

    https://www.icij.org/offshore/leaked-records-reveal-offshore-holdings-chinas-elite#

    #12057

    rapier
    Participant

    Getting money out of politics is as unlikely as getting CO2 emissions down significantly. These two things are entwined and really inseperable. When they happen they will happen together and neither will happen by choice.

    #12060

    Raleigh
    Participant

    rapier – you are probably right. This is interesting: 2012 Follow the Money Chart for “Who owns the US government?”

    https://auntieimperial.tumblr.com/post/81304737110

    Yowza! That’s a lot of money, and they have guns too.

    Supreme Court ruled 5-4 today to “eliminate limits on how much money people can donate in total in one election season. […] In effect, it expands the loosening of campaign finance laws that occurred with the high court’s Citizens United decision in 2010 that eased campaign spending by outside groups.”

    https://www.cnn.com/2014/04/02/politics/scotus-political-donor-limits/

    Just great, more money. Is anyone starting to feel slightly strangled?

    Ilargi, I do think that change is possible, but it’s going to take a catastrophic event to wake people up, and it’s going to have to knock their socks off. And even then, I don’t think they could handle too much change in the status quo. What do you think of Karl Denninger’s “One Dollar of Capital”? He seems to think it would stop all inflation, which might curtail growth a fair bit.

    https://market-ticker.org/akcs-www?post=209282

    #12074

    polistra
    Participant

    Two of those suggestions are important. Cleaning out banks is what FDR did in 1933, and it worked. Breaking up EU is obviously needed.

    But getting money out of politics is neither possible nor important.

    The US national election system has been a bad idea from the start. Commentators in the 1850’s were describing the Presidential election as “imaginary”.

    Look at a controlled experiment: Canada and US started with the same people and same system. Canada kept Parliament, US chose a new system. Now Canada is better off, more adaptable, more able to roll with the punches. When problems come up, Canada can solve them.

    US is absolutely frozen in place, unable to do anything remotely sane. Vast amounts of money pour into the two political brands, which are identical.

    They’d still be identical without the money, and the system would still be completely broken without the money.

    #12081

    SteveB
    Participant

    “Abandoning the use of money altogether is not one I consider to be serious…”

    That didn’t surprise me, but after reading Nicole’s latest I find it baffling. Maybe you define “serious” differently than I do. Nicole says that we have no other choice but to decentralize. Excluding choices will lead to that. Fortunately, you and Nicole don’t get to decide the choices—serious or otherwise; they exist.

    #12083

    Diogenes Shrugged
    Participant

    Good article and good ideas, but until criminals are prosecuted, no solution will make any real difference.

    Zero Prosecutions of Elites for Most Destructive Frauds in World History-William Black

    A huge sorting out of winners and losers is coming. The message so far from the big winners of power and big winners of wealth is, “crime pays.”

    In addition to punishing crime, I’ll add one more recommendation, and that is to impose shorter and stricter term limits on all elective offices. Governments are really NEVER democratic except on the days ballots are cast.

    #12084

    GeoLib
    Participant

    Step 4

    #12087

    imaginer
    Participant

    I believe it will take true grassroots efforts, and the National Liberty Alliance fits the need.

    The mission of the National Liberty Alliance is to restore the people to sovereignty through knowledge, and only then will they be armed with the virtue to take political and judicial power. The people have it in their power to disarm and defeat the enemy of Liberty both foreign and domestic if they only understood the principles of freedom and to stand upon them.

    To take political power is to control our elected representatives, by bringing them into obedience through fear of the people. This is accomplished by understanding the office of & becoming an elected committeemen, and then execute the powers of the Common Law Grand Jury.

    To take judicial power is to control our courts by understanding jurisdiction and bringing into subjection all government officers and officials using common law courts by opening courts of record, and executing “people” authority, it is that simple!

    But, to successfully apply political and judicial power you must have a sense of justice and mercy which is synonymous with virtue. And to get virtue you need to have a relationship with your creator. If everyone exercised these principles America could shake off the chains of tyranny, reinstate our republic, and bring down the NWO “literally overnight”.

    This is the only way to save the nation, for without power you are powerless!

    NLA started at a kitchen table less than a year ago and have grown to 2470 people nationally. The goal is to constitute Common Law Grand Juries in every U.S. County.

    There are 3142 County’s in the Nation.

    To date, 314 Counties have been administratively constituted though not seated yet.

    8 States have constituted the Administration of the Common Law Jury in all counties.

    These videos will explain the rationale of invoking the Common Law Grand Jury.

    https://www.nationallibertyalliance.org/slavery-consent

    https://www.nationallibertyalliance.org/common-law

    Breaking News: Quo Warranto filing imminent in New York State

    https://www.nationallibertyalliance.org/sites/default/files/Quo%20Waranto%20filed%203-24-14.pdf

    ***** Please notice the parts on INJURIES and DUTY OF THE COURT *****

    Writ of Prohibition

    https://www.nationallibertyalliance.org/sites/default/files/WRIT%20OF%20PROHIBITION.pdf?onlineViewer=false

    No Legal Authority of the Admiralty (CORPORATE) Court

    https://docs.google.com/viewer?url=https://www.nationallibertyalliance.org/sites/default/files/No%20legal%20authority.pdf

    Prudinti tru counsel

    https://www.nationallibertyalliance.org/sites/default/files/Prudinti%20tru%20counsel%2010-10-13.pdf?onlineViewer=false

    Writ of Mandamus

    https://docs.google.com/viewer?url=https://www.nationallibertyalliance.org/sites/default/files/01_19_14%20St%20Johns%20Writ%20of%20Mandamus%20.pdf

    Keep up with the efforts in YOUR State here:

    https://www.nationallibertyalliance.org/state-pages-introduction

    Reestablishing True Justice is the best way to begin to solve our many problems.

    There are those who say succession is the answer.

    There are those who say a move to amend is what is needed.

    I say NO.

    Neither of these efforts will truly fulfill what’s still deep in our hearts somewhere.

    We must stand together as a people and restore what has been stolen from us.

    Our Communities, Our States, Our Constitution.

    Together we can do anything.

    Thank you for listening, we need all of you.

    In Faith,

    Stephen Nacci – Rhode Island Coordinator
    National Liberty Alliance
    * HONOR * JUSTICE * MERCY *
    https://www.nationallibertyalliance.org

    #12088

    Diogenes Shrugged
    Participant

    Imaginer, what does your National Liberty Alliance claim to provide that the freedom movement hasn’t already offered ad-nauseum for the last fifty-plus years? Milton Friedman’s “Free to Choose” series aired on PBS back in 1976, as I recall, which would have been five years after Libertarianism was invented in Lakewood, Colorado. So many facets of constitutionalism and libertarianism have come and gone since. Harry Browne and Ron Paul come to mind, but so many others have also tried mightily to make an impression politically. The Future of Freedom Foundation, Foundation for Economic Education, Lew Rockwell, Cato Institute and countless others have tried so hard to make a dent philosophically, and to educate Americans. None of it ever won even ten percent of the hearts and minds of Americans. We live in a country where, ironically, freedom isn’t actually all that popular. Everybody wants to chain down somebody else. We live in a world where myriad forms of theft and brutality share equal ground as business models with free markets and honest work. Despite all of man’s technological, scientific and moral achievements, we still operate under jungle law. For instance, what government doesn’t operate under the creed “might makes right?” Constitutional law? Don’t make the three branches laugh!

    I worked for nearly a decade with a woman who earned her PhD in China, and became a top scientist under Mao. She emigrated to the US, learned English, earned another PhD, and became a top research scientist for a big company here. One day she confided something to me that she said she’d never told anybody else. She said, “Do you know what the worst part of living in communist China under Mao was?”

    Go ahead: think about that for a moment and take a guess.

    “It was the fact that you couldn’t speak your mind to anybody, not even your family. You didn’t dare. Nobody could be trusted.”

    Well, that is increasingly how it is here in the United States. And as far as I know, and as far as you know, too, the National Liberty Alliance might just be “controlled opposition.” Welcome to American Intelligence, where deception is a much bigger (and better financed) weapon than subs, ships, fighter jets and nukes.

    You see, that’s why organized crime is so successful. Most of the people working for the mob don’t know they’re working for the mob. But this post is already too long, so maybe more on that another day. In the mean time, I don’t know if your outfit is legit or not, but I don’t trust anybody in this country any more.

    #12101

    imaginer
    Participant

    Good Morning Diogenes Shrugged,

    Thank you for your thoughtful post.

    Imaginer, what does your National Liberty Alliance claim to provide that the freedom movement hasn’t already offered ad-nauseum for the last fifty-plus years?

    As far as I know, there has never been an nationwide effort to to seat a Common Law Grand Jury in every county of the country to address so many issues as outlined in the Quo Warranto ever in our history.

    ….So many facets of constitutionalism and libertarianism have come and gone since….

    You assume I personally am a libertarian, or a Constitutionalist.

    You would be mistaken friend, as my philosophy differs from those in important ways.

    First of all, my beliefs include exercising the rights as outlined in the Magna Carta, and before that for me personally, Brehon Law, and before that Gods law, and the natural rights we have been bestowed from the beginning of human existence.

    Second of all, I am a Georgist, not a libertarian, though I do work with folks with those beliefs, I feel my role is to reach out and work with those who might have beliefs that I consider incomplete and perhaps compromised by groups like the Von Mises Institute funded by folks like the Rockefellers.

    Just as our justice system has been undermined, so has the economics field.

    https://www.amazon.com/The-Corruption-Economics-Georgist-Paradigm/dp/0856832448/ref=sr_1_2?ie=UTF8&qid=1396620420&sr=8-2&keywords=mason+gaffney

    Perhaps you are unfamiliar with the term, so check out the meager blog I just started.

    https://geoeconomics.wordpress.com/

    There are two types of Libertarians:

    According to classical liberals, land belonged to the user for as long as the land was being used, and no longer. But according to royal libertarians, land belongs to the first user, forever. So, do the oceans belong to the heirs of the first person to take a fish out or put a boat in? Does someone who plows the same field each year own only one field, while someone who plows a different field each year owns dozens of fields? Should the builder of the first transcontinental railroad own the continent? Shouldn’t we at least have to pay a toll to cross the tracks? Are there no common rights to the earth at all? To royal libertarians, there are not; but classical liberals recognized that unlimited ownership of land never flowed from use, but from the state:

    A right of property in movable things is admitted before the establishment of government. A separate property in lands not till after that establishment…. He who plants a field keeps possession of it till he has gathered the produce, after which one has as good a right as another to occupy it. Government must be established and laws provided, before lands can be separately appropriated and their owner protected in his possession. Till then the property is in the body of the nation. — Thomas Jefferson

    https://www.abeldanger.net/2012/04/henry-georges-land-value-tax-phony.html

    Another essay on the subject.

    https://geolib.com/essays/sullivan.dan/royallib.html

    You said – “For instance, what government doesn’t operate under the creed “might makes right?” Constitutional law? Don’t make the three branches laugh!”

    Please see this supreme court ruling as to the proper standing in Law of the CLGJ.

    https://docs.google.com/viewer?url=https://www.nationallibertyalliance.org/files/juristdocs/US%20v%20Williams.pdf

    The National Liberty Alliance is approaching this from the perspective of the inherent rights of the people themselves, not the three branches of government, the 4th branch.

    “The Common Law Grand Jury is an unalienable right, protected under the Law by the Fifth Amendment. Common Law is synonymous with Natural Law which can never be codified or supplanted, for Common Law is our American Heritage, born of the Declaration of Independence.”

    “I don’t know if your outfit is legit or not, but I don’t trust anybody in this country any more.”

    Believe me, I am of the same mind and what you wrote above that statement is unfortunately something we are forced to contend with, but is always been so, no?

    “There is nothing new under the sun.”

    All I can say, despite my own reservations, and acknowledging yours as truthful, I have decided to take “A Leap of Faith.”

    It is always worth a try as we stand on the shoulders of those who struggled before us.

    I will conclude this answer to you with a question.

    Are you lost at sea?

    https://docs.google.com/viewer?url=https://www.nationallibertyalliance.org/files/juristdocs/International-Law-Admiralty-Maritime-Are-You-Lost-at-Sea%20rev%202.pdf

    Thank you sir.

    Stephen Nacci – Rhode Island Coordinator
    National Liberty Alliance
    * HONOR * JUSTICE * MERCY *

    https://www.nationallibertyalliance.org/preface

    #12119

    Diogenes Shrugged
    Participant

    Imaginer, thank you for your exhaustive reply.

    Looking over your links, I should be frank in telling you that I’m not an attorney, so legal documents are above my head. I am an atheist, so all references to “higher law” and such are lost on me. Furthermore, I’m an anarchist in the sense that I view humans as sovereigns, so any ambition to collect taxes by force is anathema.

    There is also the matter that I view land as private property rather than as a commons. The American Indian viewed land as a commons, and it worked well for him. But we have to work with what we’re faced with now, and that’s land as private property. Of course, nobody really owns his land as long as governments collect property taxes, so perhaps Georgism is just a variant on the present system of *illusory* private property after all.

    No need to clarify anything for me. I will continue to look over your links as time permits. But I think your Liberty Alliance will have a steep uphill struggle as long as it lacks a pithy, short, and understandable mission statement (like a Twitter post) that anybody could understand immediately. Most people have neither the time nor the patience for a dozen links to legal documents and videos.

    Again, thanks.
    Diogenes Shrugged
    * HONESTY *

    #12120

    imaginer
    Participant
    #12121

    imaginer
    Participant

    Regarding geoeconomics, the land title would be Usufruct verses Allodial

    https://en.wikipedia.org/wiki/Usufruct

    https://en.wikipedia.org/wiki/Allodial_title

    Basically the Land Value Tax (LVT or Single Tax) espoused by Henry George means you pay for the “rent” of the land that you use, but not a dime on ANY improvements, such as buildings, etc. It is based on the concept that no human created the earth.

    Arden, Delaware, for instance, has been a Single-Tax, Arts and Crafts, Garden-City Utopia since 1900. https://www.arden.delaware.gov/

    They are also related to the original game of Monopoly, our big problem today.

    This article is from the TV Show, “History Detectives”

    https://docs.google.com/viewer?url=https://www-tc.pbs.org/opb/historydetectives/static/media/transcripts/2011-04-08/202_monopoly.pdf

    It was called the “landlords Game” and was stolen and then misrepresented, of course!

    I like this model as it is fairly simple to read.

    https://www.henrygeorge.org/isms.htm

    This combined with a new monetary system for the people could be a great help to us.

    I believe that the Georgist System is an “Automatic Earth” model in that because we are facing a huge lack of funds in the short term as this system dies, stewardship of the land and the environment would be mostly self regulated and this system meets that challenge. It also has natural incentives for people to improve the land and themselves.

    #12185

    imaginer
    Participant

    https://beforeitsnews.com/tea-party/2014/04/de-facto-coup-detat-over-the-united-states-2524182.html

    Franklin D. Roosevelt

    XXXIII President of the United States: 1933-1945

    2 – Proclamation 2038 – Calling Congress into Extraordinary Session
    March 5, 1933

    By the President of the United States of America
    A Proclamation

    Whereas public interests require that the Congress of the United States
    should be convened in extra session at twelve o’clock, noon, on the
    Ninth day of March, 1933, to receive such communication as may be made
    by the Executive;

    Now, Therefore, I, Franklin D. Roosevelt, President of the United States
    of America, do hereby proclaim and declare that an extraordinary
    occasion requires the Congress of the United States to convene in extra
    session at the Capitol in the City of Washington on the Ninth day of
    March, 1933, at twelve o’clock, noon, of which all persons who shall at
    that time be entitled to act as members thereof are hereby required to
    take notice.

    In Witness Whereof, I have hereunto set my hand and caused to be affixed
    the great seal of the United States.

    FRANKLIN D. ROOSEVELT

    Franklin D. Roosevelt

    XXXIII President of the United States: 1933-1945

    8 – Proclamation 2039 – Declaring Bank Holiday
    March 6, 1933

    By the President of the United States of America
    A Proclamation

    Whereas there have been heavy and unwarranted withdrawals of gold and
    currency from our banking institutions for the purpose of hoarding; and

    Whereas continuous and increasingly extensive speculative activity
    abroad in foreign exchange has resulted in severe drains on the Nation’s
    stocks of gold; and

    Whereas those conditions have created a national emergency; and

    Whereas it is in the best interests of all bank depositors that a period
    of respite be provided with a view to preventing further hoarding of
    coin, bullion or currency or speculation in foreign exchange and
    permitting the application of appropriate measures to protect the
    interests of our people; and

    Whereas it is provided in Section 5 (b) of the Act of October 6, 1917
    (40 Stat. L. 411), as amended, “That the President may investigate,
    regulate, or prohibit, under such rules and regulations as he may
    prescribe, by means of licenses or otherwise, any transactions in
    foreign exchange and the export, hoarding, melting, or earmarkings of
    gold or silver coin or bullion or currency . . .”; and

    Whereas it is provided in Section 16 of the said Act “That whoever shall
    willfully violate any of the provisions of this Act or of any license,
    rule, or regulation issued thereunder, and whoever shall willfully
    violate, neglect, or refuse to comply with any order of the President
    issued in compliance with the provisions of this Act, shall, upon
    conviction, be fined not more than $10,000, or, if a natural person,
    imprisoned for not more than ten years, or both . . .”;

    Now, Therefore I, Franklin D. Roosevelt, President of the United States
    of America, in view of such national emergency and by virtue of the
    authority vested in me by said Act and in order to prevent the export,
    hoarding, or earmarking of gold or silver coin or bullion or currency,
    do hereby proclaim, order, direct and declare that from Monday, the
    Sixth day of March, to Thursday, the Ninth day of March, Nineteen
    Hundred and Thirty-three, both dates inclusive, there shall be
    maintained and observed by all banking institutions and all branches
    thereof located in the United States of America, including the
    territories and insular possessions, a bank holiday, and that during
    said period all banking transactions shall be suspended. During such
    holiday, excepting as hereinafter provided, no such banking institution
    or branch shall pay out, export, earmark, or permit the withdrawal or
    transfer in any manner or by any device whatsoever, of any gold or
    silver coin or bullion or currency or take any other action which might
    facilitate the hoarding thereof; nor shall any such banking institution
    or branch pay out deposits, make loans or discounts, deal in foreign
    exchange, transfer credits from the United States to any place abroad,
    or transact any other banking business whatsoever.

    During such holiday, the Secretary of the Treasury, with the approval of
    the President and under such regulations as he may prescribe, is
    authorized and empowered (a) to permit any or all of such banking
    institutions to perform any or all of the usual banking functions, (b)
    to direct, require or permit the issuance of clearing house certificates
    or other evidences of claims against assets of banking institutions, and
    (c) to authorize and direct the creation in such banking institutions of
    special trust accounts for the receipt of new deposits which shall be
    subject to withdrawal on demand without any restriction or limitation
    and shall be kept separately in cash or on deposit in Federal Reserve
    Banks or invested in obligations of the United States.

    As used in this order the term “banking institutions” shall include all
    Federal Reserve Banks, national banking associations, banks, trust
    companies, savings banks, building and loan associations, credit unions,
    or other corporations, partnerships, associations or persons, engaged in
    the business of receiving deposits, making loans, discounting business
    paper, or transacting any other form of banking business.

    FRANKLIN D. ROOSEVELT

    My whole hearted apology to the web site these docs were copied from.
    Future posts will include the proper credit.

    Franklin D. Roosevelt

    XXXIII President of the United States: 1933-1945

    11 – Proclamation 2040 – Bank Holiday
    March 9, 1933

    By the President of the United States of America
    A Proclamation

    Whereas, on March 6, 1933, I, Franklin D. Roosevelt, President of the
    United States of America, by Proclamation declared the existence of a
    national emergency and proclaimed a bank holiday extending from Monday
    the 6th day of March to Thursday the 9th day of March, 1933, both dates
    inclusive, in order to prevent the export, hoarding or earmarking of
    gold or silver coin, or bullion or currency, or speculation in foreign
    exchange; and

    Whereas, under the Act of March 9, 1933, all Proclamations heretofore or
    hereafter issued by the President pursuant to the authority conferred by
    section 5 (b) of the Act of October 6, 1917, as amended, are approved
    and confirmed; and

    Whereas, said national emergency still continues, and it is necessary to
    take further measures extending beyond March 9, 1933, in order to
    accomplish such purposes:

    Now, Therefore, I, Franklin D. Roosevelt, President of the United States
    of America, in view of such continuing national emergency and by virtue
    of the authority vested in me by Section 5 (b) of the Act of October 6,
    1917 (40 Stat. L. 411), as amended by the Act of March 9, 1933, do
    hereby proclaim, order, direct and declare that all the terms and
    provisions of said Proclamation of March 6, 1933, and the regulations
    and orders issued thereunder are hereby continued in full force and
    effect until further proclamation by the President.

    In Witness Whereof, I have hereunto set my hand and have caused the seal
    of the United States to be affixed.

    Done in the District of Columbia, this 9th day of March, in the Year of
    our Lord One Thousand Nine Hundred and Thirty three, and of the
    Independence of the United States the One Hundredth and Fifty-seventh.

    FRANKLIN D. ROOSEVELT

    By the President:

    CORDELL HULL
    Secretary of State.

    Source:
    https://venturacountyteaparty.ning.com/xn/detail/5170468:BlogPost:105592

Viewing 15 posts - 1 through 15 (of 15 total)

You must be logged in to reply to this topic.