Global Currency Reset (SDR's and the New Bretton Woods; by JC Collins)

[TargeT]

Ugly monday.... liquidity issues already.....

Dow closes down triple digits, posts worst opening day in 8 years
U.S. stocks closed lower Monday, the first day of trade of the year, weighed by renewed concerns of global economic slowdown and increased tensions in the Middle East. An overnight drop in Chinese stocks that triggered a circuit breaker under a new rule also pressured sentiment.

"Anytime a big market stops trading and it spills over to Europe, investors are nervous," said Marc Chaikin, CEO of Chaikin Analytics.

"Ex-China we were expecting a positive (market). At the end of the day, except for a few companies like Caterpillar, this really shouldn't have an impact on our markets," he said.

http://www.cnbc.com/2016/01/04/us-markets.html

China Halts Stock Trading After 7% Rout Triggers Circuit Breaker
he worst-ever start to a year for Chinese shares triggered a trading halt in more than $7 trillion of equities, futures and options, putting the nation’s new market circuit breakers to the test on their first day.
Trading was halted at about 1:34 p.m. local time on Monday after the CSI 300 Index dropped 7 percent. An earlier 15-minute suspension at the 5 percent level failed to stop the retreat, with shares extending losses as soon as the market re-opened. Traders said the halts took effect as anticipated without any major technical problems.

The world’s second-largest stock market began the year on a down note after data showed manufacturing contracted for a fifth straight month and investors speculated that the end of a ban on share sales by major stakeholders may come as soon as this week. Chinese policy makers, who went to unprecedented lengths to prop up stock prices during a summer rout, are trying to prevent financial-market volatility from weighing on economy set to grow at its weakest annual pace since 1990.
"This is a pretty dramatic start of trading for the year,” said Khiem Do, the Hong Kong-based head of multi-asset strategy at Baring Asset Management, which manages about $45 billion. “Some investors may have been unwinding their positions when trading volumes were light. That could have exaggerated the moves. The market has been very difficult to predict.”
Monday’s selloff rippled through regional equity markets, with Asian shares and U.S. equity-index futures extending losses. Chinese stocks’ influence on global markets has increased after the nation’s $5 trillion equity market rout, when the Shanghai gauge tumbled more than 40 percent from mid-June through its August low, rattled investor confidence in the world’s second-largest economy.

http://www.bloomberg.com/news/articl...-yuan-declines

[TargeT]

Somewhere along the way the U.S. became a nation of truck drivers

http://www.marketwatch.com/story/kee...job-2015-02-09

+

What you need to know about autonomous trucking

http://enoble.com/index.php/2016/01/...omous-trucking

will turn this crash from a minor discomfort to a disaster in a matter of months....... I'm guessing way sooner than predicted.

Don't forget:

Most Americans are one paycheck away from the street

http://www.marketwatch.com/story/mos...eet-2016-01-06

[TargeT]

China has been boosting it's GDP via corrupt government actions (over building) & now has upwards of 40+ ghost cities with an estimated 40million empty housing units.

So what ever economic numbers we've been seeing out of them are skewed & have been for years.

Source: https://youtube.com/watch?v=vZdBeczDLpA

but of course, that's not all china has going for it:

Source: https://youtube.com/watch?v=GrpAZ5qHSlU

[TargeT]

I filled my 26 gallon tank today for a fraction of what I used to pay... this is great, right?

Source: https://youtube.com/watch?v=tRCfHn4keH0

[TargeT]

The constriction just went one notch tighter...

$765,645,000,000: FY2016 Taxes Set Record Through December; $5,107 Per Worker; Feds Still Run $215.5B Deficit
CNSNews.com) - The federal government took in a record of approximately $765,645,000,000 in tax revenues in the first three months of fiscal 2016 (Oct. 1, 2015 through Dec. 31, 2015), according to the Monthly Treasury Statement released today.

That equaled approximately $5,107 for every person in the country who had either a full or a part-time job in December.

It is also an increase of about $24,288,810,000 in constant 2015 dollars from the $741,356,190,000 in revenue (in constant 2015 dollars) that the Treasury took in during the first three months of fiscal 2015.

As it was hauling in these record revenues, the Treasury spent approximately $981,190,000,000, and ended up the first three months of the fiscal year with a deficit of approximately $215,546,000,000, according to the monthly statement.

According to the Bureau of Labor Statistics, total seasonally adjusted employment in the United States in December (including both full and part-time workers) was 149,929,000. That means that the record federal tax revenue of 765,645,000,000 that the Treasury has pulled in so far this fiscal year already equals approximately $5,107 per worker.

In December 2014, there were 147,439,000 people employed in the United States. So, the then-record of $741,356,190,000 in revenues the Treasury pulled in during the first three months of fiscal 2015 (Oct.-Dec. 2014) equaled approximately $5,028 per worker.

http://cnsnews.com/news/article/tere...er-5107-worker


When you see a cliff, FLOOR IT!

At least you'll go out in a ball of glorious fire....

[TargeT]

the "wealth effect" haha.. they are creating terms now.... but at least they are seeing that the rate hike was terrible for the economy.

Dow falls 400, S&P at lowest level since late 2014 as oil slides
U.S. stocks traded sharply lower Wednesday as further decline in oil prices pressured global equities.

The Dow Jones industrial average held about 400 points lower in late-morning trade with IBM contributing the most to declines. The Nasdaq composite underperformed, briefly trading more than 3 percent lower.

The S&P 500 fell more than 2.5 percent to trade around 1,825, near its lowest since October 2014. ( Tweet This )

WTI briefly fell below $27 a barrel to hit its lowest level since September 2003. Traders said contract expiration around the 2:30 p.m. ET settle would likely contribute to volatility in oil markets.

http://www.cnbc.com/2016/01/20/us-markets.html

World faces wave of epic debt defaults, fears central bank veteran
Exclusive: Situation worse than it was in 2007, says chairman of the OECD's review committee

he global financial system has become dangerously unstable and faces an avalanche of bankruptcies that will test social and political stability, a leading monetary theorist has warned.

"The situation is worse than it was in 2007. Our macroeconomic ammunition to fight downturns is essentially all used up," said William White, the Swiss-based chairman of the OECD's review committee and former chief economist of the Bank for International Settlements (BIS). "Debts have continued to build up over the last eight years and they have reached such levels in every part of the world that they have become a potent cause for mischief," he said.

"It will become obvious in the next recession that many of these debts will never be serviced or repaid, and this will be uncomfortable for a lot of people who think they own assets that are worth something," he told The Telegraph on the eve of the World Economic Forum in Davos.

"The only question is whether we are able to look reality in the eye and face what is coming in an orderly fashion, or whether it will be disorderly. Debt jubilees have been going on for 5,000 years, as far back as the Sumerians."

http://www.telegraph.co.uk/finance/f...k-veteran.html

[ThePythonicCow]

James Corbett, of The Corbett Report has an important update and overview of what he sees happening with the global currency reset, available at SDR World Order.

His analysis is fairly well aligned with JC Collins, the analyst named in this thread's title, and whose latest update on what's going on can be found at The New SDR is here!.

Both Corbett and Collins see the major move being toward SDR denominated debt being the senior debt paper in the new monetary system, not Chinese Yuan denominated debt and not gold (though gold may become another "currency" in the SDR basket.)

The "exhorbitant privilege" of having one's national currency also serve as the world's senior debt currency is ultimately a burden to the bankers, to that nation, and to the world. The United States assumed that privilege after World War II, when all other major European and Asian nations were devastated by the war, leaving the US as the dominant world power and the necessary lender to others to fund their rebuilding. The US deserves no moral credit for its generous lending to various European and Asian countries after World War II ... this was another step in the Elite Bastards drive to get the entire world in debt ... to banks they control.


By Corbett's, Collins' and my view, human civilization will continue to use a debt-money system, in which money is lent into existence. This provides immense control over human civilization to the wealthiest and most powerful, who control the banks, the central banks, and the central bank of all central banks (the Bank of International Settlements, BIS, in Basel Switzerland).

Banks, central banks, and the BIS control what gets done by who receives loans, under what terms. They extract their "rent" so long as the lending continues, in the form of interest and sordid other fees and penalties. Then they extract the revenue streams (such as tax revenues and utility fees), the resources (such as the minerals, oil, timber and farm produce), the indebted labor of bankrupt borrowers, the ownership of corporations, and the political control of nations) on the way down, when, at a time of their choosing, they cut off the supply of "easy money", by calling in existing loans and tightening the criteria for new loans.

The boom-bust cycle of debt-money has become the dominant cycle affecting human activity, not the weather.

This role, as the creator of the world's money, by lending it into existence, controlling who will be lent how much, setting the terms of repayment, and controlling the terms of default, foreclosure or repossession of that debt or whatever was offered as security for that debt, is truly the real "exhorbitant privilege".

===

A key parameter in any such debt money system is what are they denominated in ... what do you (an individual, corporation or nation) need to make payments on the loan.

For my entire lifetime (I was born shortly after the end of World War II) this has been, predominantly, US Dollars (Federal Reserve Notes.) Many a nation or large corporation, in the last half century, has failed when they could not acquire sufficient US Dollars to meet their debt payments.

===

There is another key parameter, which has a history even longer than our current debt-money system. How is trade settled?

Our debt-money system came to be in its current form with the founding of the Bank of England in July 1694. But trade over large distances has occurred for thousands of years prior to that, and with such trade, as soon as it exceeds what can be settled with common barter (my furs for your spices, or whatever), the question comes into being: how will a trader be paid for the goods they deliver to a remote port or city? There must be a generally acceptable medium of exchange, something of value, that traders, suppliers, and buyers will all agree to use, to value their various goods and to provide or accept in exchange, at the agreed value. Prior to the Bank of England and the world-wide British Empire in the following centuries, this medium of exchange was gold and silver. The Uniform Commercial Code represents the current codification of the rules of such commecial activity. Over time, through the evolution of the British, then the American, empires, this has changed, to debt-money, which for my lifetime has meant the King (US) Dollar.

===

Three (at least) major issues need to be resolved in order to make this transition to a new world monetary system, based on some other debt denomination, in place of US Dollar denominated debt:

In what will new major debt be denominated?

By both Corbett's and Collins' analysis, it will be in SDR units. In the view of Jim Willie, of the Hat Trick Letter, another analyst I follow, we are returning to a gold (and silver and other such resource) backed monetary system. If I had to bet between these two alternatives, I'd bet on the SDR units ... but I 'd also hedge my bet.

How will existing debt be settled?

There is much US Dollar denominated debt. This includes "paper assets" such as promised social services, pension plans, and stock and real estate equity. I do not recall Corbett or Collins covering this difficult question in much detail. Given the truly stupendous amount of such outstanding "promises to pay" something to someone in US Dollars, this is a monumentally difficult question. In my view, many of those promises will default entirely, or to pennies on the dollar. That which cannot be paid ... won't. Debt or promises owed to the world's most powerful, or to their primary fronts (as China is becoming for the world's banksters and merchants, in my estimation) will be repriced from US Dollars into gold (at the ratio of about $US 5000 to one ounce of gold, in Jim Willie's view) or perhaps to some SDR basis (an alternative that also seems plausible to me.)

How will trade be settled?

What will a container ship or oil tanker's captain accept in payment, when they dock with cargo to unload? If suitable payment is not provided, the captain will not order the ship to be unloaded. We live in a connected world that depends on world trade. Already I am reading scattered reports of ships not unloading, or of (US Navy) ships being unable to purchase fuel at foreign ports of call, due to payment in US Dollars not being accepted. As with the reconstitution of US Dollar denominated debt, Jim Willie expects "gold trade notes" (gold backed paper) will be the new standard for payment in trade, and I an open to the possibility of something denominated in SDR's that can be exchanged for any of the (now five) major national currencies in the SDR basket at predictable rates will become the standard for payment in trade.

[ThePythonicCow]

Posted by Paul (here)
By Corbett's, Collins' and my view, human civilization will continue to use a debt-money system, in which money is lent into existence.

That is, in the longer term (3 to 20 years,say), a key question.

Will the central bank controlled debt-money system continue, just with (yet another) change in the unit of indebtedness, from the US Dollar, to various SDR based units, and with a change in the fundamental asset, from US Treasury debt to SDR denominated debt?

... or will the central bank controlled debt-money system collapse.

David Stockman, starting at 36:11 in the following video, anticipates that the central banking model (and implicitly, though he doesn't call that out), the debt-money model, will fail, and we will return to gold:

Source: https://youtube.com/watch?v=6kzYTNktHSs

Jim Willie, one of my favorite analysts (he's a hoot to listen to, and he is quite honest, competent and properly cynical in his work) also expects a return to gold based money. Many gold-bugs, who are more interested in selling gold or gold mining shares or such, have similar views, though less well motivated or thought out.

I suspect that Stockman, Willie, and the gold-bug hucksters are wrong, in part.

We all agree that the US Dollar will fall from its King Dollar Global Reserve status to just another national currency of a nation that is economically troubled and that suffers from a woeful imbalance of trade and continued weakening of their currency, until such time as America can rebuild its manufacturing and production base, and/or downsize their standard of living to that which their current third-world industrial capacity can support.

But I don't agree with Dave Stockman or Jim WIllie that the next world monetary system, once the dust settles, will be a real gold based money. There may well be some gold added to the SDR basket, joining the major currencies, the Dollar, Pound, Euro (or its successor), Yen and Yuan. But that will be a token presence for gold, of significant interest only to perhaps a few elite. The ordinary person, corporation or nation will get their money by borrowing it into existence, or by taxing someone else who borrowed it, or by selling some good or service to someone who borrowed it (or by stealing it <grin>), just as happens now.

I suspect that the primary "generic asset" that animates trade, contracts (which includes derivatives), savings, and "capital" investment will continue to be debt-paper -- someone's promise to pay something, someday, somehow.

A century or more ago, people would hoard gold if they had extra income that they wanted to save up for a rainy day or for a golden opportunity. Nations would maintain gold reserves, so that they could fund trade imbalances, monetary expansion, armies, and whatever else might be needed or sought.

Nowadays, people and nations hoard bonds, with US Treasury debt being the "gold standard" of bonds, when they have the opportunity, or need, to put something aside for the future.

===

I put capital in quotes above because there are two different meanings for "capital":

The more classical meaning of "capital" is the tools, reputations, expertise, infrastructure, live stock, land, seeds, buildings, roads, ports, ships, ... that can be developed over time to increase the productive capacity and the ability to survive disasters and difficulties.

The more recent meaning of "capital" is a stash of whatever is the "generic" form of wealth, be that gold, British gilts, US Treasury bills, notes and bonds, or SDR denominated debt, or of items that can be converted easily into such generic wealth, such as stocks and other bonds or debt paper.

The first form of capital actually does something for you. My computers and my computer education are some of my personal capital, as are the bags of rice and beans in my pantry.

The second form of capital is facing a major reset, as the basis for denominating the world's debt-money is converted from the US Dollar to SDR derivatives.

===

I expect that the result of this major reset will not be the demise of debt-money, but a change in the basis of our debt-money, from US Dollar denominated debt, to SDR denominated debt.

... unfortunately.

[TargeT]

awee man, I was hoping for a few years of hyper inflation to help pay down my loans... maybe next time

[PathWalker]

Posted by Paul (here)

Posted by Paul (here)
By Corbett's, Collins' and my view, human civilization will continue to use a debt-money system, in which money is lent into existence.

That is, in the longer term (3 to 20 years,say), a key question.

Will the central bank controlled debt-money system continue, just with (yet another) change in the unit of indebtedness, from the US Dollar, to various SDR based units, and with a change in the fundamental asset, from US Treasury debt to SDR denominated debt?

... or will the central bank controlled debt-money system collapse.
... unfortunately.

Thanks for the information and analysis.
I wish to assist with more optimistic forecast, that is as viable. With the better potential to manifest with your intent/imagination.

Looking back at empires collapse, there are always those secret agents and scientists looking for new patron or way of living (watch some Joseph Farell interviews), we can learn this from the collapse of Soviet empire and Nazi Germany.

Following this thread of thought with the economic collapse of the power structure, there is the potential for game changing technology disclosure.
Imagine free-energy, teleportation, matter replication, light healing.

Disclosing just one of the existing technologies mentioned, will fundamentally refute the current economic fundamentals:
1. Scarcity
2. Competition
3. Exploitation
And we hope to transform the economic fundamentals to:
1. Abundance
2. Collaboration
3. Service

I hope/believe/imagine/manifest that the coming economic collapse will usher the disclosure of game changing technology. That will change our social concepts as well...

Let the games begin...

[ThePythonicCow]

In the following video, Martin Armstrong has an excellent counter-point to the views of myself and others, that I've presented above.

Source: https://youtube.com/watch?v=sQwwgxnmcc8

Bonds are where the money is. Every debt has two parts: Party A has gotta pay, and Party B expects to get paid. The resulting debt paper, such as in bills, notes, bonds, mortgages, etc, is the primary store of "generic" wealth in our civilization. US Treasury debt is the King of the hill, the "gold" of our monetary system.

Some of us in the "alternative" media have pointed out that China is issuing the first SDR denominated debt, as described in this article at Epoch Times: What China’s SDR Bond Issue Really Means -- This is the first step toward one world currency, or in this article at ZeroHedge: In Historic Event, China Sells First World Bank SDR-Denominated Bonds In Decades.

Notice the amounts of this new Chinese debt issue - about $3 Billion worth.

The US Treasury issues about that much new debt paper every single day. There is some 5000 or 10000 times that much US Treasury debt paper in circulation, on the books of nations, central banks, major banks and corporations and others. Perhaps a quadrillion dollars worth of contracts, derivatives, and such are based on such debt paper.

When Jim Willie addresses this short fall, he expects that perhaps all the existing contracts, reserve assets, and other such, now written in US Dollar terms, will be converted to gold terms, over a couple of years, at perhaps a $5000 / ounce of gold conversion rate.

It would be far easier to convert the US from its arcane Imperial system for measuring distance (feet and miles), and weight (ounces and pounds), to the more rational metric system. Far easier ... and we tried doing that a few decades ago, and failed.

Let's face it ... Martin Armstrong may well have a good point here ... we first face a global depression and deflation, as our current capital (the monetary form of capital) system collapses. This is the nature of debt-money systems. They are the ultimate Ponzi scheme. This is how the great empires of the world come to their demise.

And, unlike after World War II, this time there will be no Yankees from America to save the world's arse. No one is left who is suffiicently stronger and untethered to this sinking monetary ship to ride to the rescue.

[take]

Thanks Paul, I hadn't listened to Jim Willie before, here's an eccellent (in my view) interview with him about a lot of things, but especially the chinese yuan/SDR/gold/bonds/markets etc issues.
Very interesting stuff. Just putting this out here:

Source: https://youtube.com/watch?v=TCIZKsp5Mxw

EDIT: added youtube info:
IN THIS INTERVIEW:
Jim Willie's forecasts currently playing out:
- NATO is fracturing ►1:34
- Russia and China are totally capturing Greece and Turkey ►6:07
- EU commission becomes ignored and are becoming irrelevant ►8:51
- RMB short term note will be launched with a gold backing that kills the US treasury bill ►13:17
- IMF to back the SDR with gold ►21:54
- Saudi oil sales and the death of the petrodollar ►30:03
Past forcastes that played out or are becoming true:
- Saudis to accept RMB currency from China (not quite yet, but OPEC nations in Nigeria & Algeria already) ►40:53
- The US goverment confiscation of pension funds (in steps) (seen with US goverment worker pensions, lately with money market funds)
►40:53
- USTreasury Bond 10-yr yield decline to 1.5%, and later to 1.0% (first part done, second part in progress) ►53:38

[ThePythonicCow]

Posted by Paul (here)
In the following video, Martin Armstrong has an excellent counter-point to the views of myself and others, that I've presented above.

Usually, from what I can see, Martin Armstrong avoids tying specific events to specific time frames. He will be vague about either one (such as what will happen) or the other (such as when it will happen).

But in this article today Gold – Dollar – Bonds, Martin comes right out and says:

==========

QUESTION:

Do you believe US dollar has been kept artificially lower than it should be (or at least in long range trading range) by at least two central banks lately? if so how long you think it would last, years?

ANSWER:

Yes. The central banks have been trying to keep the dollar down because a rising dollar will undermine Europe exposing the ECB total failure, and then there is the risk of major sovereign defaults among emerging markets who issued their debt in dollars. The IMF has lobbied hard with the Fed pleading not to raise rates for this fear of capital pouring into the dollar. They do not appear to be able to sustain this policy beyond January.

Gold is not something to avoid. True, institutions cannot buy gold for they earn no income. Gold is really for the individual and it will eventually be the hedge against government and the change in the monetary system which could come as early as 2018 but by 2020 if on schedule.

==========

(I added the bold highlighting.)

[TargeT]

Some interesting games going on here...

British stocks fell agonizingly short of an all-time high on Tuesday as optimism grew that the country's exporters and multinationals will benefit from the pound's slide to another 31-year low against the dollar.

http://www.apnewsarchive.com/2016/Th...aaac7467e66e99

[ThePythonicCow]

In reading an important article from F. William Engdahl just now, I realized something basic.

The most common "alternative" view of the US Dollar monetary system is that the US government (and/or its central bank, the Federal Reserve) is "just printing" money, like Monopoly money.

I've made some effort to disagree with this view ... fiat money, such as the US Dollar is not "printed" into existence. It is lent into existence. US Dollars are one half of a pair of "double entry accounting" ledger entries.

A banker coming to work with nothing but the rumpled suit he wears can create two corresponding and off setting items:

1. a credit to some borrower (perhaps as cash, a check, or a deposit in a bank account), and
2. a promise from the borrower to repay (perhaps as a loan document, mortgage, or bond), with fees and interest, that amount in the future, often with "real" property put up as security, in case the borrower defaults on the repayment terms.

This is how money is created, by lending it into existence, to individuals, corporations and governments, large and small.

Following from the (false, I claim) view that our current monetary system is "just printing money", the next meme in the common alternative view is that we need to get back to actually backing our money, once again, with something "real", such as gold.

No. I disagree.

I expect that the "next" world money will be another variant of a debt-money system, not a fundamentally gold backed system, and in perhaps another 80 years, this "next" system will be having its own existential crisis, as debt-money systems are wont to do.

Rather, the fundamental value backing our money is future productivity.

So long as there actually is future productivity sufficient to pay off debts in "real" items (labor, resources, food, water, energy, transportation, manufacturing, services, ...) of promised value, then that debt is potentially healthy. Once more is promised to be paid, than exists to pay, in any "real" and useful form to the holder of the debt paper, then that debt loses value. We are seeing this with pension, retirement and social security plans in the U.S.: more is promised in such retirement benefits to the Baby Boomers of my era than is available for them. What cannot be repaid ... won't.

One of the two keys to a healthy monetary system is the presence, with healthy maintenance, of a sound production base, sufficient to fund repayment of the debt that is used to fund the system.

This is not gold backing. This is future productivity backing.

This is where F. William Engdahl's article comes in. In his article The Eurasian Century is Now Unstoppable, he lays out his observations of what China and other Asian countries are doing to build the foundation for an expansion of healthy economic activity, over the next century or so, across the Europe-Asian land mass. He opens his article stating that he has just "returned from a fascinating two week speaking tour in China. The occasion was the international premier of [his] newest book, One Belt, One Road–China and the New Eurasian Century."

This documents, briefly and in readable style, the true basis of the "next" world monetary system. The next world monetary system will not be based on gold, nor on the British Navy, nor on the US Military-Industrial-Intelligence complex and its ability to corner, at various times, critical arms, world agriculture, manufacturing, war, oil and drug markets. Nor will it matter much whether the "most liquid" debt-paper at the base of this "next" monetary system is denominated in SDR's or Yuan. What will matter, in coming decades, is that the outstanding debt is less than the productive capacity of those repaying the debt (which includes funding promised retirement programs and social services.)

Must of the existing debt, including real estate bubbles in the US, China and elsewhere, and including promises of retirement and social service funding, and including car, stock market, health service and education loans, will fail, across most of the world's economically active regions. The old debt will die, some by default and some by inflating the "real" value of the currency of repayment to near zero. The Banksters and their overlords and their minions will once again use this occasion to extort more control over "real" wealth, resources, capital, and revenue streams.

New debt will be issued, relying on a rebirth of productivity, centered in Eurasia, founded on the build out being led by China that F. William Engdahl documents for us.

So long as productivity exceeds debt, the debt-money of the "next" world monetary system will remain fundamentally sound.

(The other key to a healthy monetary system is stopping the Elite Bastards of the world, via the International Banksters, from continuing to leverage the "exhorbitant privilege" of their critical role as "Money Masters" in human activity, controlling the expansion, terms, and contraction of money and debt, for their own benefit and continued increase of control of humanity. Whether the dominant money in the world was gold, pounds, dollars or SDR's and yuan, Banksters have been engineering Boom and Bust cycles now for centuries at least, to their own benefit. I don't expect this to change in my lifetime, nor my son's lifetime. May yet one more of my forecasts be proven woefully misguided <grin>.)

In short - F. William Engdahl documents for us what will be the basis for a new era of economic productivity. That will be the basis for the new world monetary system, not gold.

As with the Pound and then with the Dollar,, and so with the "new" world monetary system, debt-money systems are fundamentally based on economic productivity remaining in excess of promised debt repayments.

We have had, and we will have again, a debt-money system, not a precious metal monetary system.

We have had, and we will have again a debt-money system that is, at its heart, controlled by the Banksters and their Overlords.

The old debt and promises are collapsing, so far in a "slow burn" (as Catherine Austin Fitts calls it) punctuated by increasingly wild oscillations of instability, but perhaps soon enough in a more dramatic controlled demolition, or even catastrophic collapse.

(Unless Gail the Actuary is right, and energy becomes more expensive once again, as a ratio of useful energy extracted over energy spent to extract it, throttling future productivity. )

[ThePythonicCow]

Posted by Paul (here)
Once more is promised to be paid, than exists to pay, in any "real" and useful form to the holder of the debt paper, then that debt loses value. We are seeing this with pension, retirement and social security plans in the U.S.: more is promised in such retirement benefits to the Baby Boomers of my era than is available for them. What cannot be repaid ... won't.

These examples of social welfare programs and pension plans are not really the lending into existence of money, but rather other means by which excessive promises are made against future productivity.

There are a variety of ways in which this is done.

Medical and insurance plans promise future benefits, if certain events happen.

Taxes are collected for social programs and retirement plans that promise future benefits.

Stock market futures and options, interest rate swaps and foreign exchange swaps (derivatives) also promise future returns if certain events occur.

As with the loans (bonds, mortages, and other loan papers) generated when new money is lent into existence, these other promises also entangle the future, and depend on future productivity continuing to be sufficient to both meet existing needs and to payout on these promises.

Once productivity falls too low, these promises can no longer be fully honored.

The fraud runs deep, and is deeply entangled, world-wide. That loan which cannot be repaid, won't. The promise that cannot be kept, won't.

As Brandon Smith wrote today: The Noose Is Tightening Quickly On The Global Economy.

[Flash]

Thanks Paul for this thread. Although I do not comment on it, I always read it.

Your last post seems interesting to me. It makes sense that a debt/credit economy should be entirely based on promises of future productivity. Hence the listing of every social/birth number on the stock market upon birth. Countries like Canada relying on their natural resources are now litterally bought out by the Chinese. So Asia will have the natural resources (as they actually do in rare metals) and the workforce, therefore mastering the economy. Hard and soft means related to future productivity. Either Chinese are very bright and us quite stupid (comes in mind the relinquishing of the control of the internet to be taken up by the Chinese), which is not the case, we are not that stupid, or the transfer of apparent control has been planned a while ago.

It reminds me of hearing that the Chinese were dominated by another reptilian of the reptilians than the western world and that if control had to be relinquished, Chinese domination would be attempted, hence remaining under reptilians. While Russia was under control of another race altogether.

In any case, a debt based economy linked to future productivity promises that are never entirely met IS a slave based economy, not natural resources based (gold). And, an economy based on slavery will not allow for free energy or anything freeing the slaves. Rome never freed its slaves.

We are heading for another thousand years of slavery for the 99%, under Apparent Chinese control. In this case, we are stupid to let the Russians align with the Chinese instead of making them our friends.

I personally prefer slavery under the US based control because although it is still slavery, it is much softer and believe it or not, less corrupted than anything Chinese will ever be.

The question however is how do we become free?

Note to myself: i have to reread this text of mine, I am not sure I make sense although I know what I am seeing.

[ThePythonicCow]

Posted by Flash (here)
The question however is how do we become free?

Note to myself: i have to reread this text of mine, I am not sure I make sense although I know what I am seeing.

Your words make sense to me.

The struggle for human freedom continues.

[Cara]

Analysis of Deutsche Bank within global financial system and some speculation towards the end about possible motivations of different players.

(Bold blue text is my emphasis)


From the Corbett Report (https://www.corbettreport.com/deutsc...ing-time-bomb/

***********************************

Deutsche Bank: Europe’s Ticking Time Bomb
Corbett • 10/05/2016 • 6 Comments



You have no doubt heard by now about the precarious situation that Deutsche Bank finds itself in, including the impending US government fine for selling faulty mortgage-backed securities in the run up to the financial crisis. The lamestream media is busy running stories about German bailout rumors, and bank’s uncanny ability to not quite die…yet. But in case anyone is tempted to draw comparisons with the 2008 financial crisis, rest assured that the failure of Deutsche Bank would be no “Lehman Bros. moment.” It would be incomparably worse.

Deutsche Bank is not just one of the largest banking and financial services companies in the world (although it is that). It is also one of the most inter-connected banks in the world. As the IMF helpfully pointed out earlier this year:

“Deutsche Bank is also a major source of systemic risk in the global financial system. The net contribution to global systemic risk is captured by the difference between the outward spillover to the system from the bank and the inward spillover to the bank from the system based on forecast error variance decomposition. Deutsche Bank appears to the most important net contributor to systemic risks in the global banking system, followed by HSBC and Credit Suisse. Moreover, Deutsche Bank appears to be a key source of outward spillovers to all other G-SIBs as measured by bilateral linkages.”

And here is the handy dandy diagram they provided to demonstrate those “bilateral linkages” that could contribute to “outward spillovers” to the other “G-SIBs” (that’s “globally systemically important banks” to all of you not versed in Bankster-speak):



But more to the point, this doesn’t just mean that their CEOs play golf together every year or two. These linkages include derivatives counterparties. What this diagram is really showing us is that when/if Deutsche Bank goes under it will create a derivatives black hole that threatens to draw in most of the largest financial institutions in the world…each one of which would then create its own black hole of derivatives debt.

Now you’ll remember that derivatives are bets on the performance of some other thing, like an asset, index, interest rate, etc. Like any bet, it can happen between two or more people and things can get very messy when one of the people involved doesn’t have the money to pay up in the end. But derivatives can get even more wild, since the amounts in question can add up to trillions of notional dollars, i.e. money that does not actually change hands…unless everything falls apart and someone is left holding the bag.


This is why Warren Buffett famously referred to derivatives as “weapons of mass destruction.” This is also why the 2008 crisis was so severe. If AIG had not been bailed out then its $527 billion in credit default swaps with Goldman Sachs, Morgan Stanley, Bank of America and Merrill Lynch (as well as DB and dozens of other European banks) would have unwound and potentially brought down the global financial system. And so the banksters held the proverbial (or not-so-proverbial) gun to Congress’ head and achieved the largest bailout in corporate history.

So if all of that was done on the basis of AIG’s half-a-trillion or so in counterparty risk, what are we looking at with Deutsche Bank?

Well, in 2013 its notional derivative exposure was 55.6 trillion euros. Let’s put that in perspective with a graphic from ZeroHedge comparing DB’s derivative exposure to the Gross Domestic Product of Germany.



Does that look frightening? Well, don’t worry. Deutsche’s derivative black hole has been pared back to a much more modest 46 trillion or so euros, a mere 15 times German GDP.

Does that make you feel any better? I didn’t think so.

Well, maybe this will make you feel better: In the wake of the 2008 meltdown, the banksters put their heads together to come up with some new regulatory guidelines for containing the derivatives exposure mess. These changes were articulated by the G20 at the 2009 Pittsburgh conference. While the protesters outside were being abducted in broad daylight and being introduced to the LRAD, the banksters’ political puppets were busy hammering out the following:

“All standardized OTC derivative contracts should be traded on exchanges or electronic trading platforms, where appropriate, and cleared through central counterparties by end-2012 at the latest. OTC derivative contracts should be reported to trade repositories. Non-centrally cleared contracts should be subject to higher capital requirements.”

(Interestingly, this idea was first proposed in a white paper published by the Bank for International Settlements (yes, that Bank for International Settlements), then announced at the G20, then handed off to the Financial Stability Board (which I’ve discussed before) to insure compliance, and then adopted by the individual central banks that make up the BIS membership. And that in a nutshell is how global marching orders are given without the need for an explicit “global central bank” with authority over everyone.)

So theoretically this new regulatory regime, combined with the fact that many of Deutsche Bank’s derivatives will be hedged by other trades, will mean that we won’t be looking at a 46 trillion euro black hole if Deutsche goes under…

…Unless.


Unless the regulations that the banksters enacted to “control” the derivatives problem were mere window dressing to distract the public while the banksters carry on with their world-threatening casino games.

Unless the IMF, which went to great pains to single Deutsche Bank out as the most precarious bank in Europe, might have ulterior motives for destabilizing the existing financial order and bringing in one governed by their own soon-to-be global reserve instrument.

Unless the US government has its own reasons for pulling the rug out from under the ECB by imposing a fine that they know would cause Deutsche to go under.

Unless the ECB actually welcomes such an event (and the recalcitrance of Germany to bail the bank out) as an excuse to flex its muscle and intervene directly with a miracle bailout that “saves the world” in the nick of time.

But we all know such august institutions as these would never cause a crisis in order to benefit from it, would they?

And on a completely unrelated note, Deutsche Chief Executive John Cryan is in Washington this week to meet with US officials on the sidelines of the IMF’s annual meeting. Sleep tight, everyone!

[Flash]

Has anybody seen this about China and its currency and what it means for the world financial health?

I am not that litterate in finance, so some help in genuine laymen terms would be welcome

Source: https://youtube.com/watch?v=JtOmnZdVFQM