And in typical, demonic fashion, “God’s representative on Earth”, who is every bit in line w/ the rest of his WEF & Davos pals, scurries to not have HIS Catholic institution & its enormous wealth suffer the consequences of the very socialist & worse policies & actions to which he is a party, true believer & practitioner.
UK Chaos Economics: Fretting over “Financial Stability” & “Contagion” after Gilts Plunged, Bank of England Buys Bonds
It wasn’t big hedge funds that blew up, but £1.5 trillion in leveraged pension funds. BoE stepped in to bail them out and prevent further contagion.
Over the past few days, the pound plunged, including with a flash-crash on Monday that briefly took it to record lows against the US dollar. Prices of long-dated bonds went into a death spiral, with the 10-year yield spiking by 130 basis points in four trading days to 4.63% early today, and by 275 basis points in seven weeks ago (up from 1.88% in early August).
The bond market reaction represents a colossal and sudden degree of “tightening” of the financial conditions, before the Bank of England’s QT had even started. QT is designed to bring up long-term yields, but they already exploded due to chaos.
It was the market’s backlash against the new government’s reckless plan to cut taxes for the rich and for corporations, funded by new debt, while piling on spending to subsidize energy costs, also funded by new debt, thereby requiring the issuance of large amounts of new debt, even as inflation has already reached to 10%.
The Bank of England, which is in charge of maintaining financial stability, now has a slew of problems to deal with: inflation spiraling out of control, currency plunging, bond market in chaos, financial stability at risk, and spreading contagion. And some of them require the response that the others require. So this is a mess, and there are no good solutions.
The BoE chose to maintain financial stability first because the bond market chaos was starting to blow up the financial system, as leveraged pension funds were getting collateral calls triggered by the spike in yields, and as UK lenders had suspended making mortgage offers because no one knew how to price them amid this chaotic volatility in bond yields.
Worried about “contagion” and “financial stability”
So the BoE came out today and said that it would purchase long-dated gilts with remaining maturities of over 20 years. The purchases would go through October 14.
“The purchases will be unwound in a smooth and orderly fashion once risks to market functioning are judged to have subsided,” it said.
And the 10-year yield plunged by around 60 basis points, to 4.01% at the moment, undoing the spike early today and yesterday:
Specifically, the BoE said it’s “monitoring developments in financial markets very closely in light of the significant repricing of UK and global financial assets.”
“This repricing has become more significant in the past day – and it is particularly affecting long-dated UK government debt,” it said.
“Were dysfunction in this market to continue or worsen, there would be a material risk to UK financial stability,” it said.
“This would lead to an unwarranted tightening of financing conditions and a reduction of the flow of credit to the real economy,” it said.
“In line with its financial stability objective, the Bank of England stands ready to restore market functioning and reduce any risks from contagion to credit conditions for UK households and businesses,” it said.
“To achieve this, the Bank will carry out temporary purchases of long-dated UK government bonds from 28 September,” it said.
“The purpose of these purchases will be to restore orderly market conditions. The purchases will be carried out on whatever scale is necessary to effect this outcome,” it said.
“These purchases will be strictly time limited. They are intended to tackle a specific problem in the long-dated government bond market,” it said.
“Auctions will take place from today until 14 October. The purchases will be unwound in a smooth and orderly fashion once risks to market functioning are judged to have subsided,” it said.
Bailing out leveraged pension funds.
Defined-benefit pension plans in the UK that were using an investment strategy, called liability-driven investment (LDI), got hit by collateral calls as long-dated gilts went into the death spiral.
“The amount of liabilities held by UK pension funds that have been hedged with LDI strategies has tripled in size to £1.5 trillion in the 10 years through 2020,” according to Bloomberg.
BlackRock, Legal & General Group Plc, and Schroders Plc manage LDI funds on behalf of pension clients. “The pension firms use them to match their liabilities with their assets, often using derivatives,” according to Bloomberg.
“LDI collateral buffers are partly set using historical data to build models based on the likely probability of gilt price movements,” Shalin Bhagwan, head of pension advisory at DWS Group, told Bloomberg.
I mean, surely this strategy is very conservative and is not risky at all and is very suitable for £1.5 trillion in pension funds. Until it suddenly blows up.
The massive spike in yields of long-dated gilts “blew through the models and the collateral buffers,” Bhagwan told Bloomberg. LDI funds got margin calls from their investment banks and had to post more collateral.
To meet the collateral calls and maintain their LDI positions, pension systems asked their managers to sell holdings in equities, bonds, and UK open-ended real estate funds, Bhagwan told Bloomberg.
And that’s precisely how contagions spreads: by having to sell unrelated assets in order to meet margin calls.
“The BOE had been warned by investment banks and fund managers in recent days that the collateral requirements could trigger a gilt crash, according to a person familiar with the BOE’s deliberations before they stepped in,” according to Bloomberg.
“The BOE intervention was required to prevent a vicious cycle becoming even more dangerous for pension funds forced to sell their gilt exposures,” Calum Mackenzie, an investment partner at Aon, told Bloomberg.
“The market’s swift and significant reaction underlined the big risk faced by pension funds who have had or who could have had their liability hedges reduced,” Mackenzie said.
“Any pension funds which has used even moderate levels of leverage are struggling to keep pace with the moves,” Mackenzie told Bloomberg before the BoE stepped in. “You have a bit of a death spiral potentially where pension funds in particular are being forced to sell because they’re breaching their leverage agreements with their LDI counterparties.”
The Pensions Regulator told Bloomberg today:
“We are monitoring the situation in the financial markets closely to assess the impact on defined benefit pension scheme funding.”
“We again call on trustees of DB schemes and their advisers to continue to review the resilience and liquidity of their investments, risk management and funding arrangements, and plan accordingly to protect the interest of scheme members.”
So there you have it --- continue raising interest rates and the financial system implodes.
Drop interest rates and already dangerous inflation ... will result in hyper inflation.
Just prior to Covid -- the financial system was about to collapse:
“The global economy was facing the worst collapse since the second world war as coronavirus began to strike in March, well before the height of the crisis, according to the latest Brookings-FT tracking index. “The index comes as the IMF prepares to hold virtual spring meetings this week, when it will release forecasts showing the deepest contraction for the global economy since the 1930s great depression. https://www.ft.com/content/9ac5eb8e-4167-4a54-9b39-dab48c29ac6c
The fundamental cause was related to the depletion of AFFORDABLE energy -- lots of oil and gas remains - but it's not economically viable to produce (unless people think the $5 a litre is viable).
So they launched Covid and began to poison as many people as possible - that of course bought some time -- lockdowns and work from home reduced our energy burn...
This was never a sure thing - obviously it has never been attempted.
They continue to pursue this goal and have upped the amount of MRNA in the new Booster shots... a Hail Mary pass? They threw Paxlovid into the mix trying to bring forth the demon mutation.
However so far all we get are contagious mutations... not the deadly 'Bossche Variant' that they are hoping for.
In the meantime, the energy depletion has gone critical. I believe the Ukraine war was initiated to provide cover for raging energy inflation -- I would note that this inflation was in play quite some time BEFORE that war got underway
The war is useful in that it provides and excuse for spiralling inflation - they tell us 'it's temporary - it's Putin's fault - sacrifice and take cold showers and turn the heat down - once we mop up Putin we'll return to normal'
That is pure bullshit - Russia could wipe up Ukraine in a week - IF they wanted to. But they don't. They want that to keep simmering because it provides cover for high energy costs and resulting inflation.
The men who run the world will NEVER admit that energy is a problem -- and forget about the MSM - they never tell the truth --- and they shouldn't -- if the masses were to realize this is the beginning of the end... their would be mass panic.
So that leaves with imminent global financial collapse (lights go out permanently - 8 billion angry hungry predators on the streets looking for those who caused this - and ripping each others faces off) in a race with their desperate attempt to elicit the Bossche Variant.
Time is very short now -- continue with these relatively high interest rates and something is gonna break... push interest rates down and without a doubt hyperinflation will rage across the world - and everything will break.
There is no way out of this.
Do they have a Plan B? Who knows - one thing is for certain - it is in the interest of nobody to sit back and let things collapse igniting mass murder, rape and cannibalism...
Keep in mind there are 4000 spent fuel ponds ready to spew toxic stuff for centuries... ultimately nobody gets out of this alive. The question is - do you mitigate the suffering by means other than the Bossche Variant.
What other means?
If everyone dies... then why not mitigate with a massive launch of nuclear weapons? Not a pleasant thought -- but those killed by the blasts would be the lucky ones. They do not have to suffer through the holocaust of violence and starvation.
There are also stories of coloured Fentanyl circulating -- it looks like candy... now why might this be happening? Will we see mass distribution of this deadly drug giving those that want it and opt out of the end game?
We are witnessing sheer madness --- something very big is imminent -- the northern kingdoms will buckle under energy inflation as winter bites... something has to happen otherwise we get total collapse.
Ideally UEP completes --- because if it does not --- heaven help us. The horror the world will experience is without parallel.
If you don’t cool the spent fuel, the temperature will rise and there may be a swift chain reaction that leads to spontaneous combustion–an explosion and fire of the spent fuel assemblies. Such a scenario would emit radioactive particles into the atmosphere. Pick your poison. Fresh fuel is hotter and more radioactive, but is only one fuel assembly. A pool of spent fuel will have dozens of assemblies.
One report from Sankei News said that there are over 700 fuel assemblies stored in one pool at Fukushima. If they all caught fire, radioactive particles—including those lasting for as long as a decade—would be released into the air and eventually contaminate the land or, worse, be inhaled by people. “To me, the spent fuel is scarier. All those spent fuel assemblies are still extremely radioactive,” Dalnoki-Veress says.
It has been known for more than two decades that, in case of a loss of water in the pool, convective air cooling would be relatively ineffective in such a “dense-packed” pool. Spent fuel recently discharged from a reactor could heat up relatively rapidly to temperatures at which the zircaloy fuel cladding could catch fire and the fuel’s volatile fission product, including 30-year half-life Cs, would be released. The fire could well spread to older spent fuel. The long-term land-contamination consequences of such an event could be significantly worse than those from Chernobyl.
Japan’s chief cabinet secretary called it “the devil’s scenario.” Two weeks after the 11 March 2011 earthquake and tsunami devastated the Fukushima Daiichi Nuclear Power Plant, causing three nuclear reactors to melt down and release radioactive plumes, officials were bracing for even worse. They feared that spent fuel stored in pools in the reactor halls would catch fire and send radioactive smoke across a much wider swath of eastern Japan, including Tokyo.
The Chernobyl accident was relatively minor, involved no spent fuel ponds, and was controlled by pouring cement onto the reactor. This was breaking down so a few years back they re-entombed.
Estimates of the cancer burden in Europe from radioactive fallout from the Chernobyl accident
Oct 2, 2022·edited Oct 2, 2022Liked by NE - Naked Emperor Newsletter
It only took 109 years for the forces of greed and evil to crush the fiat system they created. When the Federal Reserve was approved by the ignorant US legislators, they had no idea they were allowing Rockefeller’s, Rothschilds, Carnegie, Morgan, the tiny class of billionaires at the time, the one tool they needed to legally steal the financial wealth of the people who’s toil and struggle they could now profit from. It seems understandable that at the very same time Edward Bernays was drawing up the blueprints of propaganda to sway the once angry untrusting public into actually believing these criminals living in mansions wearing fancy suits care a hoot about them. The results are appearing in plain site everywhere you look.
They created the federal income tax around the same time. The original republic had no mechanism for direct federal taxation. Funny that a war came along shortly to scoop up all that lovely new income.
Have you ever watched Rich Man’s Trick? Really opened my eyes to a lot. https://youtu.be/9Wf3O93I4lI I’ve become friends with Richard Connelly the filmmaker.
Good post, thanks. This entire situation - financial, cultural, socio-economic, government, international relations - is inter-related. The insanity we find puzzling in our communities is substantially related to all this. In a sane world insanity is not selected for - financial or otherwise. It will be interesting to see if sanity or insanity wins out - very uncomfortable but interesting.
Yes, a complete collapse of the international Ponzi scheme. Interesting how utterly uninformed the average middle manager types are. The big boys, the international pirates, will be OK - for awhile.
Fed’s Favored Inflation Index Says: Underlying Inflation Just Isn’t Slowing Down at All
Just briefly here: The Fed uses the “core PCE” inflation index, released by the Bureau of Economic Analysis, as yardstick for its inflation target. This “core PCE” index – the overall PCE inflation index minus the volatile food and energy components – is therefore crucial in the current rate-hike scenario, amid red-hot inflation, when everyone wants to know when inflation is finally going to cry uncle.
Some folks thought that happened in July, when the month-to-month “core PCE” inflation slowed to “0%” (rounded down).
Turns out this much-ballyhooed month-to-month “core PCE” reading in July of “0%” was just a one-off event. In August, according to the BEA today, the core-PCE inflation index jumped by 0.6%, same as the multi-decade records in June 2022 and in April 2021 (all rounded to 0.6%). As Powell had said during the FOMC press conference: Underlying inflation is just not slowing down.
This “core PCE” is the lowest lowball inflation index the US government provides. But it is crucial in figuring out where the Fed’s monetary policy might go, and how far the Fed might go with its rate hikes, and when it might pause.
Compared to a year ago, the “core PCE” price index rose 4.9% in August, up from 4.7% in July.
This year-over-year measure is what the Fed uses for its 2% inflation target. But given the huge volatility in inflation last year, Powell said that they would be looking at month-to-month developments to get a feel of where inflation might be headed. They’re looking for “compelling” evidence that inflation is headed back to the 2% target.
Since about April 2021, I said that the Fed would need to bring its short-term policy rates to 4%, combined with sufficient QT, to bring inflation under control, and then pause to watch it take effect. I said that this would be enough to tamp down on what was then already soaring but still much less inflation. That was my story, and I stuck to it until a few months ago. Now it looks like the Fed will take those rates above 4% by yearend, and higher still next year.
In terms of overall inflation, “core PCE” doesn’t mean much because it is geared toward measuring some underlying inflation beyond the most volatile items that end up dogging consumers the most. But it is very important in terms of understanding what the Fed is looking at when it decides where to go with its rate hikes.
And what has caused this situation? When you run out of cheap to produce energy ... that is gonna lead to uncontrollable inflation. And we are running very low on affordable energy (notice I said affordable energy - lots of oil etc left... it just ain't affordable)..
Shale binge has spoiled US reserves, top investor warns Financial Times.
Preface. Conventional crude oil production may have already peaked in 2008 at 69.5 million barrels per day (mb/d) according to Europe’s International Energy Agency (IEA 2018 p45). The U.S. Energy Information Agency shows global peak crude oil production at a later date in 2018 at 82.9 mb/d (EIA 2020) because they included tight oil, oil sands, and deep-sea oil. Though it will take several years of lower oil production to be sure the peak occurred. Regardless, world production has been on a plateau since 2005.
What’s saved the world from oil decline was unconventional tight “fracked” oil, which accounted for 63% of total U.S. crude oil production in 2019 and 83% of global oil growth from 2009 to 2019. So it’s a big deal if we’ve reached the peak of fracked oil, because that is also the peak of both conventional and unconventional oil and the decline of all oil in the future.
SEE PAGE 59 - THE PERFECT STORM : The economy is a surplus energy equation, not a monetary one, and growth in output (and in the global population) since the Industrial Revolution has resulted from the harnessing of ever-greater quantities of energy. But the critical relationship between energy production and the energy cost of extraction is now deteriorating so rapidly that the economy as we have known it for more than two centuries is beginning to unravel https://ftalphaville-cdn.ft.com/wp-content/uploads/2013/01/Perfect-Storm-LR.pdf
The people who run the world are aware of the situation (obviously) and they've been trying for many decades to mitigate ... but they have failed.
They tried nuclear - there are limits to this (uranium is not infinite...)
A huge % of oil and gas are used for creating products such as fertilizers, pesticides plastics etc. There are not replacements.
Nuclear is only useful as a source of electricity.
And it is not possible to transition to EVs... far too expensive -- not enough raw materials available. So oil is needed to create petrol and diesel. There is no viable alternative.
We need affordable fossil fuels - or we are dead.
We are fast running out of affordable fossil fuels.
Keep in mind they are injecting babies... they are maiming babies... killing them. Leaders of the world didn't all suddenly join Team Devil... there is something else going on here... something so totally beyond most people's comprehension ... that they are willing to do that...
They are willing to do that because they know we are already dead. And they are trying to pre-empt insane levels of suffering.
Oct 2, 2022·edited Oct 2, 2022Liked by NE - Naked Emperor Newsletter
Yes, but despite the commom understanding, Central Banks can't "print money", all they can do is create Bank Reserves as an accounting consequence of QE. Bank Reserves do NOT represent liquidity in the system. Only Commercial banks can "print money" which they do every time they initiate a loan - which at present they aren't!
In terms of Bail-ins, people should also understand that if they have deposits in a Bank, the funds are no longer theirs but the Bank's and become an UNSECURED creditor.. Since Bond Holders and holders of other financial instruments ARE secured, depositors are basically at the back of the line. Of course, very few understand this and it wasn't widely advertised - can't think why!
Yes, that's a different issue. What happens with Government stimulus is that Treasury issues Bonds which the Fed "buys" but credits the proceeds to a Treasury General Account. not Bank Reserves. Treasury then draws down on this account to spend. That IS money injected directly into the system and amounts to a direct monetization of debt by the Fed.
In the most recent example during Covid, it was this stimulus which resulted in the squeeze on the supply chain and a supply side price spike (Not actually "inflation" by the real definition thereof).
What? I'm holding a $5 bill right now that says FEDERAL RESERVE NOTE. A lot of those recent stimulus checks (helicopter money) also came from balance sheet expansion at the Fed. Involving banks and the US Treasury as cut-outs does not change the basic facts.
You're missing the point. Yes, Fed QE is included in the "M's" (Like M2) but it is a fact that Bank Reserves are NOT liquid cash in circulation, they simply sit on the Fed's Balance Sheet as "Reserves" for Banks in the Federal Reserve system (The TBTFs). What does this achieve? Arguably nothing!
Are trying to snow me? Where did the US Treasury get the money for the stimulus checks from? They issued paper that banks bought. Where did banks get the money? They use Treasury paper as collateral to get money from the Fed. Hence my term cut-out.
The Fed has also been piling up sketchier collateral like mortgage backed securities and emitting US Dollars in return. That is printing.
You might also acknowledge the fact that all money in circulation is printed by the Fed and they can print more at will.
No, I'm trying to make the important distinction between the normal creation of the Money Supply and QE. QE is NOT money printing as everyone believes because the "money" just sits on its Balance Sheet as an accounting consequence.
Yes the Fed issues Federal Reserve Notes BUT it has no control over the money supply. In fact, it doesn't know how much money is in circulation because the Banks create Eurodollars as a ledger exercise without any knowledge of the Fed. That's why the Fed pays little attention to "the Ms". And right now there is a SCARCITY of Eurodollars (because the Banks are not initiating loans) which explains the rise in DXY NOT interest rates. It also explains why the critical curves : Eurodollar Futures, UST curve and Interest Rate Swaps - are all heavily inverted as they predict recession and disinflation. The Fed only has ANY influence at the short end.
So, truth be known, there isn't really a lot that the Fed can do except talk! Which explains why they talk a LOT.
Hope you’ve stockpiled some silver and gold coins. Going to be epic if CS fails. Silver will increase by $100s per day until there is no silver for sale because the item to trade for it ($) is worthless.
it might be a mistake to assume that gold or silver will be useful.
1/ You will likely be murdered by the dishonest for it - see Argentina.
2/ Other assets may be more attractive to the honest, and your gold or silver of no interest at all.
Here's a story from the Peninsular War in Spain, early 1800's.
The comparatively rich English officers were tired of the monotonous and limited rations, and decided to make an offer for all the tasty food being carried to town by a solitary peasant on his mule. They offered a gold English sovereign for everything he had.
One gold coin was way over the odds, by a huge margin, but what did he say?
'Sorry, senores, but your gold will not feed my family'.
And he walked his mule on to town. Being English gentlemen they didn't stop him, but one of them later put the story in his memoirs, which I found in a 2nd hand bookshop 200 years later.
When the global financial system collapses --- supply chains will collapse.
There will be no food.
There are some doomie preppers with stockpiles and gardens -- they'll be overrun within days as people head to where they believe the food is - rural areas. And then there are the neighbours of the doomies who did not prep - guess where they'll go...
And gold - well gold will be of zero value. You won't be able to trade an entire gold bar for a can of tuna.
This is collapse on an unprecedented scale. In the past collapse was brutal - but people could still feed themselves.
We have kicked the rungs of the ladder out as we turned to 'innovation' to grow the food to feed 8B. And the 'innovation' has ruined the soil. Nothing grows without the industrial inputs including the petro chems.
Nope. That's why I semi-retired in 2009 in my early 40's delegating my responsibilities and set out on the mother of all bucket lists along with my wife.
It's also one of the reasons why we decided not to have children (she's younger than me and we got together in 2007)... no reason to bring children into a shit show (we did sponsor two kids from the Philippines who lived with us and attending international schools along the way)
It was clear that we were on borrowed time so we decided to make the best of it. I am very surprised that they were able to kick the can for 14 more years... the men who run the world have done a stellar job of keeping the train on the tracks for this long.
So, who's to say they don't manage to do it for another 14 more? or even longer? or that any children brought into this shit show don't come up with the solutions?
There is no way out of this - it's not 2008... throwing more $$$ at the problem and driving interest rates down will only result in hyper inflation -- or collapse as discretionary spending crashes as everything costs so much.
But as has been pointed out - if they didn't pull back on the tightening -- we'd be Mad Maxxing about now - when financial contagion strikes -- the traders hit Sell - and in seconds it's chaos.
They've bought as a brief respite by loosening again ... but it wont last.
The fundamental problem is that the global economy needs cheap energy - otherwise it seizes up ... we burned most of the cheap stuff.
Of course they fed us a heap of shit about transitioning to renewables... that's obviously a bad joke... but most people know that energy is not infinite -- so it made them feel good about the future.
Shale binge has spoiled US reserves, top investor warns Financial Times.
Preface. Conventional crude oil production may have already peaked in 2008 at 69.5 million barrels per day (mb/d) according to Europe’s International Energy Agency (IEA 2018 p45). The U.S. Energy Information Agency shows global peak crude oil production at a later date in 2018 at 82.9 mb/d (EIA 2020) because they included tight oil, oil sands, and deep-sea oil. Though it will take several years of lower oil production to be sure the peak occurred. Regardless, world production has been on a plateau since 2005.
What’s saved the world from oil decline was unconventional tight “fracked” oil, which accounted for 63% of total U.S. crude oil production in 2019 and 83% of global oil growth from 2009 to 2019. So it’s a big deal if we’ve reached the peak of fracked oil, because that is also the peak of both conventional and unconventional oil and the decline of all oil in the future.
If they can keep it going for another 14 years then fantastic.
However I don't see that happening. Collapse was starting in 2019 - and they dropped Covid and the death injections... and now we are seeing the energy issue go critical - it's driving out of control inflation.
“The global economy was facing the worst collapse since the second world war as coronavirus began to strike in March, well before the height of the crisis, according to the latest Brookings-FT tracking index. “The index comes as the IMF prepares to hold virtual spring meetings this week, when it will release forecasts showing the deepest contraction for the global economy since the 1930s great depression. FT.comhttps://archive.ph/UUfl2
Clearly, private citizens must pay more tqaxes so the banks can be biled out. Otherwise the banks would collapse and that would mean private citizens lost the money they loaned to the bank in the first place (what, you thought the money in your account was yours?).
Clearly, this is an unforseen one-time occurrence glitch which has never ever happened before and can only be blamed on politicians and not on the bakers and the clans owning the banks.
Oct 2, 2022·edited Oct 2, 2022Liked by NE - Naked Emperor Newsletter
There is an alternative to the options they’re presenting however. And it’s been done before. There needs to be a Glass-Steagall style bankruptcy re-organization where commercial banking is split off from investment banking. Only commercial banking activities are insured, while the quadrillion dollar derivatives banking casino and the many merchant banking casino gambling debts are written off because it simply can’t be paid and it’s not legitimate. It has no entitlement to being bailed out.
It was done in 1932, but we can even go back to the time of Solon. At the end of the day, these kinds of problems can be solved with the stroke of a pen. Legitimate debts are written off, honest debts are honoured. The nations commit to new forward-looking projects that are needed not only for today, but for the next generations.
And in typical, demonic fashion, “God’s representative on Earth”, who is every bit in line w/ the rest of his WEF & Davos pals, scurries to not have HIS Catholic institution & its enormous wealth suffer the consequences of the very socialist & worse policies & actions to which he is a party, true believer & practitioner.
UK Chaos Economics: Fretting over “Financial Stability” & “Contagion” after Gilts Plunged, Bank of England Buys Bonds
It wasn’t big hedge funds that blew up, but £1.5 trillion in leveraged pension funds. BoE stepped in to bail them out and prevent further contagion.
Over the past few days, the pound plunged, including with a flash-crash on Monday that briefly took it to record lows against the US dollar. Prices of long-dated bonds went into a death spiral, with the 10-year yield spiking by 130 basis points in four trading days to 4.63% early today, and by 275 basis points in seven weeks ago (up from 1.88% in early August).
The bond market reaction represents a colossal and sudden degree of “tightening” of the financial conditions, before the Bank of England’s QT had even started. QT is designed to bring up long-term yields, but they already exploded due to chaos.
It was the market’s backlash against the new government’s reckless plan to cut taxes for the rich and for corporations, funded by new debt, while piling on spending to subsidize energy costs, also funded by new debt, thereby requiring the issuance of large amounts of new debt, even as inflation has already reached to 10%.
The Bank of England, which is in charge of maintaining financial stability, now has a slew of problems to deal with: inflation spiraling out of control, currency plunging, bond market in chaos, financial stability at risk, and spreading contagion. And some of them require the response that the others require. So this is a mess, and there are no good solutions.
The BoE chose to maintain financial stability first because the bond market chaos was starting to blow up the financial system, as leveraged pension funds were getting collateral calls triggered by the spike in yields, and as UK lenders had suspended making mortgage offers because no one knew how to price them amid this chaotic volatility in bond yields.
Worried about “contagion” and “financial stability”
So the BoE came out today and said that it would purchase long-dated gilts with remaining maturities of over 20 years. The purchases would go through October 14.
“The purchases will be unwound in a smooth and orderly fashion once risks to market functioning are judged to have subsided,” it said.
And the 10-year yield plunged by around 60 basis points, to 4.01% at the moment, undoing the spike early today and yesterday:
Specifically, the BoE said it’s “monitoring developments in financial markets very closely in light of the significant repricing of UK and global financial assets.”
“This repricing has become more significant in the past day – and it is particularly affecting long-dated UK government debt,” it said.
“Were dysfunction in this market to continue or worsen, there would be a material risk to UK financial stability,” it said.
“This would lead to an unwarranted tightening of financing conditions and a reduction of the flow of credit to the real economy,” it said.
“In line with its financial stability objective, the Bank of England stands ready to restore market functioning and reduce any risks from contagion to credit conditions for UK households and businesses,” it said.
“To achieve this, the Bank will carry out temporary purchases of long-dated UK government bonds from 28 September,” it said.
“The purpose of these purchases will be to restore orderly market conditions. The purchases will be carried out on whatever scale is necessary to effect this outcome,” it said.
“These purchases will be strictly time limited. They are intended to tackle a specific problem in the long-dated government bond market,” it said.
“Auctions will take place from today until 14 October. The purchases will be unwound in a smooth and orderly fashion once risks to market functioning are judged to have subsided,” it said.
Bailing out leveraged pension funds.
Defined-benefit pension plans in the UK that were using an investment strategy, called liability-driven investment (LDI), got hit by collateral calls as long-dated gilts went into the death spiral.
“The amount of liabilities held by UK pension funds that have been hedged with LDI strategies has tripled in size to £1.5 trillion in the 10 years through 2020,” according to Bloomberg.
BlackRock, Legal & General Group Plc, and Schroders Plc manage LDI funds on behalf of pension clients. “The pension firms use them to match their liabilities with their assets, often using derivatives,” according to Bloomberg.
“LDI collateral buffers are partly set using historical data to build models based on the likely probability of gilt price movements,” Shalin Bhagwan, head of pension advisory at DWS Group, told Bloomberg.
I mean, surely this strategy is very conservative and is not risky at all and is very suitable for £1.5 trillion in pension funds. Until it suddenly blows up.
The massive spike in yields of long-dated gilts “blew through the models and the collateral buffers,” Bhagwan told Bloomberg. LDI funds got margin calls from their investment banks and had to post more collateral.
To meet the collateral calls and maintain their LDI positions, pension systems asked their managers to sell holdings in equities, bonds, and UK open-ended real estate funds, Bhagwan told Bloomberg.
And that’s precisely how contagions spreads: by having to sell unrelated assets in order to meet margin calls.
“The BOE had been warned by investment banks and fund managers in recent days that the collateral requirements could trigger a gilt crash, according to a person familiar with the BOE’s deliberations before they stepped in,” according to Bloomberg.
“The BOE intervention was required to prevent a vicious cycle becoming even more dangerous for pension funds forced to sell their gilt exposures,” Calum Mackenzie, an investment partner at Aon, told Bloomberg.
“The market’s swift and significant reaction underlined the big risk faced by pension funds who have had or who could have had their liability hedges reduced,” Mackenzie said.
“Any pension funds which has used even moderate levels of leverage are struggling to keep pace with the moves,” Mackenzie told Bloomberg before the BoE stepped in. “You have a bit of a death spiral potentially where pension funds in particular are being forced to sell because they’re breaching their leverage agreements with their LDI counterparties.”
The Pensions Regulator told Bloomberg today:
“We are monitoring the situation in the financial markets closely to assess the impact on defined benefit pension scheme funding.”
“We again call on trustees of DB schemes and their advisers to continue to review the resilience and liquidity of their investments, risk management and funding arrangements, and plan accordingly to protect the interest of scheme members.”
So there you have it --- continue raising interest rates and the financial system implodes.
Drop interest rates and already dangerous inflation ... will result in hyper inflation.
3 words to summarize this: We are F789ed.
You had me at "leveraged pension funds". That's not going to end well.
Great info and analysis on the financial scene. Let's have more of this.
Just prior to Covid -- the financial system was about to collapse:
“The global economy was facing the worst collapse since the second world war as coronavirus began to strike in March, well before the height of the crisis, according to the latest Brookings-FT tracking index. “The index comes as the IMF prepares to hold virtual spring meetings this week, when it will release forecasts showing the deepest contraction for the global economy since the 1930s great depression. https://www.ft.com/content/9ac5eb8e-4167-4a54-9b39-dab48c29ac6c
Collapse Imminent: https://thephilosophicalsalon.com/a-self-fulfilling-prophecy-systemic-collapse-and-pandemic-simulation/
The Illusion of Stability, the Inevitability of Collapse http://charleshughsmith.blogspot.com/2021/09/the-illusion-of-stability-inevitability.html
Fed is sharply increasing the amount of help it is providing to the financial system https://www.cnbc.com/2019/10/23/fed-repo-overnight-operations-level-to-increase-to-120-billion.html Banks did not trust each other - similar situation when Lehman collapsed
The fundamental cause was related to the depletion of AFFORDABLE energy -- lots of oil and gas remains - but it's not economically viable to produce (unless people think the $5 a litre is viable).
So they launched Covid and began to poison as many people as possible - that of course bought some time -- lockdowns and work from home reduced our energy burn...
I believe this was the intention https://www.headsupster.com/forumthread?shortId=220 -- that they are trying to create some sort of Demon Covid (Marek's level deadly and high contagious mutation...).
This was never a sure thing - obviously it has never been attempted.
They continue to pursue this goal and have upped the amount of MRNA in the new Booster shots... a Hail Mary pass? They threw Paxlovid into the mix trying to bring forth the demon mutation.
However so far all we get are contagious mutations... not the deadly 'Bossche Variant' that they are hoping for.
In the meantime, the energy depletion has gone critical. I believe the Ukraine war was initiated to provide cover for raging energy inflation -- I would note that this inflation was in play quite some time BEFORE that war got underway
https://www.cnbc.com/2021/10/08/natural-gas-prices-are-skyrocketing-globally-what-it-means-for-the-us.html
The war is useful in that it provides and excuse for spiralling inflation - they tell us 'it's temporary - it's Putin's fault - sacrifice and take cold showers and turn the heat down - once we mop up Putin we'll return to normal'
That is pure bullshit - Russia could wipe up Ukraine in a week - IF they wanted to. But they don't. They want that to keep simmering because it provides cover for high energy costs and resulting inflation.
The men who run the world will NEVER admit that energy is a problem -- and forget about the MSM - they never tell the truth --- and they shouldn't -- if the masses were to realize this is the beginning of the end... their would be mass panic.
So that leaves with imminent global financial collapse (lights go out permanently - 8 billion angry hungry predators on the streets looking for those who caused this - and ripping each others faces off) in a race with their desperate attempt to elicit the Bossche Variant.
Time is very short now -- continue with these relatively high interest rates and something is gonna break... push interest rates down and without a doubt hyperinflation will rage across the world - and everything will break.
There is no way out of this.
Do they have a Plan B? Who knows - one thing is for certain - it is in the interest of nobody to sit back and let things collapse igniting mass murder, rape and cannibalism...
Keep in mind there are 4000 spent fuel ponds ready to spew toxic stuff for centuries... ultimately nobody gets out of this alive. The question is - do you mitigate the suffering by means other than the Bossche Variant.
What other means?
If everyone dies... then why not mitigate with a massive launch of nuclear weapons? Not a pleasant thought -- but those killed by the blasts would be the lucky ones. They do not have to suffer through the holocaust of violence and starvation.
There are also stories of coloured Fentanyl circulating -- it looks like candy... now why might this be happening? Will we see mass distribution of this deadly drug giving those that want it and opt out of the end game?
We are witnessing sheer madness --- something very big is imminent -- the northern kingdoms will buckle under energy inflation as winter bites... something has to happen otherwise we get total collapse.
Ideally UEP completes --- because if it does not --- heaven help us. The horror the world will experience is without parallel.
There are 4000 Spent Fuel Ponds Around the Globe…
If you don’t cool the spent fuel, the temperature will rise and there may be a swift chain reaction that leads to spontaneous combustion–an explosion and fire of the spent fuel assemblies. Such a scenario would emit radioactive particles into the atmosphere. Pick your poison. Fresh fuel is hotter and more radioactive, but is only one fuel assembly. A pool of spent fuel will have dozens of assemblies.
One report from Sankei News said that there are over 700 fuel assemblies stored in one pool at Fukushima. If they all caught fire, radioactive particles—including those lasting for as long as a decade—would be released into the air and eventually contaminate the land or, worse, be inhaled by people. “To me, the spent fuel is scarier. All those spent fuel assemblies are still extremely radioactive,” Dalnoki-Veress says.
It has been known for more than two decades that, in case of a loss of water in the pool, convective air cooling would be relatively ineffective in such a “dense-packed” pool. Spent fuel recently discharged from a reactor could heat up relatively rapidly to temperatures at which the zircaloy fuel cladding could catch fire and the fuel’s volatile fission product, including 30-year half-life Cs, would be released. The fire could well spread to older spent fuel. The long-term land-contamination consequences of such an event could be significantly worse than those from Chernobyl.
http://science.time.com/2011/03/15/a-new-threat-in-japan-radioactive-spent-fuel/
Japan’s chief cabinet secretary called it “the devil’s scenario.” Two weeks after the 11 March 2011 earthquake and tsunami devastated the Fukushima Daiichi Nuclear Power Plant, causing three nuclear reactors to melt down and release radioactive plumes, officials were bracing for even worse. They feared that spent fuel stored in pools in the reactor halls would catch fire and send radioactive smoke across a much wider swath of eastern Japan, including Tokyo.
https://energyskeptic.com/2017/the-devils-scenario-near-miss-at-fukushima-is-a-warning-for-u-s/
The Chernobyl accident was relatively minor, involved no spent fuel ponds, and was controlled by pouring cement onto the reactor. This was breaking down so a few years back they re-entombed.
Estimates of the cancer burden in Europe from radioactive fallout from the Chernobyl accident
https://pubmed.ncbi.nlm.nih.gov/16628547/
It only took 109 years for the forces of greed and evil to crush the fiat system they created. When the Federal Reserve was approved by the ignorant US legislators, they had no idea they were allowing Rockefeller’s, Rothschilds, Carnegie, Morgan, the tiny class of billionaires at the time, the one tool they needed to legally steal the financial wealth of the people who’s toil and struggle they could now profit from. It seems understandable that at the very same time Edward Bernays was drawing up the blueprints of propaganda to sway the once angry untrusting public into actually believing these criminals living in mansions wearing fancy suits care a hoot about them. The results are appearing in plain site everywhere you look.
They created the federal income tax around the same time. The original republic had no mechanism for direct federal taxation. Funny that a war came along shortly to scoop up all that lovely new income.
Have you ever watched Rich Man’s Trick? Really opened my eyes to a lot. https://youtu.be/9Wf3O93I4lI I’ve become friends with Richard Connelly the filmmaker.
Good post, thanks. This entire situation - financial, cultural, socio-economic, government, international relations - is inter-related. The insanity we find puzzling in our communities is substantially related to all this. In a sane world insanity is not selected for - financial or otherwise. It will be interesting to see if sanity or insanity wins out - very uncomfortable but interesting.
I agree about the inter-relatedness. We can make sanity win!
We are holding out for that! The only thing that stand against insanity is sanity, lol.
Covid and the injections are their direct response to the financial collapse that got under way in 2007... and has been brewing ever since.
That was just papered over with more of the same -- but in 2019 the gimmicks were no longer working ... so they acted https://www.headsupster.com/forumthread?shortId=220
UEP is failing.. and they are truly desperate now
Yes, a complete collapse of the international Ponzi scheme. Interesting how utterly uninformed the average middle manager types are. The big boys, the international pirates, will be OK - for awhile.
Fed’s Favored Inflation Index Says: Underlying Inflation Just Isn’t Slowing Down at All
Just briefly here: The Fed uses the “core PCE” inflation index, released by the Bureau of Economic Analysis, as yardstick for its inflation target. This “core PCE” index – the overall PCE inflation index minus the volatile food and energy components – is therefore crucial in the current rate-hike scenario, amid red-hot inflation, when everyone wants to know when inflation is finally going to cry uncle.
Some folks thought that happened in July, when the month-to-month “core PCE” inflation slowed to “0%” (rounded down).
Turns out this much-ballyhooed month-to-month “core PCE” reading in July of “0%” was just a one-off event. In August, according to the BEA today, the core-PCE inflation index jumped by 0.6%, same as the multi-decade records in June 2022 and in April 2021 (all rounded to 0.6%). As Powell had said during the FOMC press conference: Underlying inflation is just not slowing down.
This “core PCE” is the lowest lowball inflation index the US government provides. But it is crucial in figuring out where the Fed’s monetary policy might go, and how far the Fed might go with its rate hikes, and when it might pause.
Compared to a year ago, the “core PCE” price index rose 4.9% in August, up from 4.7% in July.
This year-over-year measure is what the Fed uses for its 2% inflation target. But given the huge volatility in inflation last year, Powell said that they would be looking at month-to-month developments to get a feel of where inflation might be headed. They’re looking for “compelling” evidence that inflation is headed back to the 2% target.
Since about April 2021, I said that the Fed would need to bring its short-term policy rates to 4%, combined with sufficient QT, to bring inflation under control, and then pause to watch it take effect. I said that this would be enough to tamp down on what was then already soaring but still much less inflation. That was my story, and I stuck to it until a few months ago. Now it looks like the Fed will take those rates above 4% by yearend, and higher still next year.
In terms of overall inflation, “core PCE” doesn’t mean much because it is geared toward measuring some underlying inflation beyond the most volatile items that end up dogging consumers the most. But it is very important in terms of understanding what the Fed is looking at when it decides where to go with its rate hikes.
And what has caused this situation? When you run out of cheap to produce energy ... that is gonna lead to uncontrollable inflation. And we are running very low on affordable energy (notice I said affordable energy - lots of oil etc left... it just ain't affordable)..
Shale binge has spoiled US reserves, top investor warns Financial Times.
Preface. Conventional crude oil production may have already peaked in 2008 at 69.5 million barrels per day (mb/d) according to Europe’s International Energy Agency (IEA 2018 p45). The U.S. Energy Information Agency shows global peak crude oil production at a later date in 2018 at 82.9 mb/d (EIA 2020) because they included tight oil, oil sands, and deep-sea oil. Though it will take several years of lower oil production to be sure the peak occurred. Regardless, world production has been on a plateau since 2005.
What’s saved the world from oil decline was unconventional tight “fracked” oil, which accounted for 63% of total U.S. crude oil production in 2019 and 83% of global oil growth from 2009 to 2019. So it’s a big deal if we’ve reached the peak of fracked oil, because that is also the peak of both conventional and unconventional oil and the decline of all oil in the future.
Some key points from this Financial Times article: https://energyskeptic.com/2021/the-end-of-fracked-shale-oil/
Our energy predicament, including why the correct story is rarely told https://ourfiniteworld.com/2022/07/28/the-worlds-self-organizing-economy-can-be-expected-to-act-strangely-as-energy-supplies-deplete/
SEE PAGE 59 - THE PERFECT STORM : The economy is a surplus energy equation, not a monetary one, and growth in output (and in the global population) since the Industrial Revolution has resulted from the harnessing of ever-greater quantities of energy. But the critical relationship between energy production and the energy cost of extraction is now deteriorating so rapidly that the economy as we have known it for more than two centuries is beginning to unravel https://ftalphaville-cdn.ft.com/wp-content/uploads/2013/01/Perfect-Storm-LR.pdf
Two words: nuke power
The people who run the world are aware of the situation (obviously) and they've been trying for many decades to mitigate ... but they have failed.
They tried nuclear - there are limits to this (uranium is not infinite...)
A huge % of oil and gas are used for creating products such as fertilizers, pesticides plastics etc. There are not replacements.
Nuclear is only useful as a source of electricity.
And it is not possible to transition to EVs... far too expensive -- not enough raw materials available. So oil is needed to create petrol and diesel. There is no viable alternative.
We need affordable fossil fuels - or we are dead.
We are fast running out of affordable fossil fuels.
Keep in mind they are injecting babies... they are maiming babies... killing them. Leaders of the world didn't all suddenly join Team Devil... there is something else going on here... something so totally beyond most people's comprehension ... that they are willing to do that...
They are willing to do that because they know we are already dead. And they are trying to pre-empt insane levels of suffering.
There will be no Great Reset. I guarantee that
Yes, but despite the commom understanding, Central Banks can't "print money", all they can do is create Bank Reserves as an accounting consequence of QE. Bank Reserves do NOT represent liquidity in the system. Only Commercial banks can "print money" which they do every time they initiate a loan - which at present they aren't!
In terms of Bail-ins, people should also understand that if they have deposits in a Bank, the funds are no longer theirs but the Bank's and become an UNSECURED creditor.. Since Bond Holders and holders of other financial instruments ARE secured, depositors are basically at the back of the line. Of course, very few understand this and it wasn't widely advertised - can't think why!
Maybe I'm wrong but stimulus check is a kind of direct FED money printing. (and also other covid supports were central bank money printings)
Yes, that's a different issue. What happens with Government stimulus is that Treasury issues Bonds which the Fed "buys" but credits the proceeds to a Treasury General Account. not Bank Reserves. Treasury then draws down on this account to spend. That IS money injected directly into the system and amounts to a direct monetization of debt by the Fed.
In the most recent example during Covid, it was this stimulus which resulted in the squeeze on the supply chain and a supply side price spike (Not actually "inflation" by the real definition thereof).
What? I'm holding a $5 bill right now that says FEDERAL RESERVE NOTE. A lot of those recent stimulus checks (helicopter money) also came from balance sheet expansion at the Fed. Involving banks and the US Treasury as cut-outs does not change the basic facts.
You're missing the point. Yes, Fed QE is included in the "M's" (Like M2) but it is a fact that Bank Reserves are NOT liquid cash in circulation, they simply sit on the Fed's Balance Sheet as "Reserves" for Banks in the Federal Reserve system (The TBTFs). What does this achieve? Arguably nothing!
Are trying to snow me? Where did the US Treasury get the money for the stimulus checks from? They issued paper that banks bought. Where did banks get the money? They use Treasury paper as collateral to get money from the Fed. Hence my term cut-out.
The Fed has also been piling up sketchier collateral like mortgage backed securities and emitting US Dollars in return. That is printing.
You might also acknowledge the fact that all money in circulation is printed by the Fed and they can print more at will.
No, I'm trying to make the important distinction between the normal creation of the Money Supply and QE. QE is NOT money printing as everyone believes because the "money" just sits on its Balance Sheet as an accounting consequence.
Yes the Fed issues Federal Reserve Notes BUT it has no control over the money supply. In fact, it doesn't know how much money is in circulation because the Banks create Eurodollars as a ledger exercise without any knowledge of the Fed. That's why the Fed pays little attention to "the Ms". And right now there is a SCARCITY of Eurodollars (because the Banks are not initiating loans) which explains the rise in DXY NOT interest rates. It also explains why the critical curves : Eurodollar Futures, UST curve and Interest Rate Swaps - are all heavily inverted as they predict recession and disinflation. The Fed only has ANY influence at the short end.
So, truth be known, there isn't really a lot that the Fed can do except talk! Which explains why they talk a LOT.
Hope you’ve stockpiled some silver and gold coins. Going to be epic if CS fails. Silver will increase by $100s per day until there is no silver for sale because the item to trade for it ($) is worthless.
it might be a mistake to assume that gold or silver will be useful.
1/ You will likely be murdered by the dishonest for it - see Argentina.
2/ Other assets may be more attractive to the honest, and your gold or silver of no interest at all.
Here's a story from the Peninsular War in Spain, early 1800's.
The comparatively rich English officers were tired of the monotonous and limited rations, and decided to make an offer for all the tasty food being carried to town by a solitary peasant on his mule. They offered a gold English sovereign for everything he had.
One gold coin was way over the odds, by a huge margin, but what did he say?
'Sorry, senores, but your gold will not feed my family'.
And he walked his mule on to town. Being English gentlemen they didn't stop him, but one of them later put the story in his memoirs, which I found in a 2nd hand bookshop 200 years later.
I guess we’ll see.
When the global financial system collapses --- supply chains will collapse.
There will be no food.
There are some doomie preppers with stockpiles and gardens -- they'll be overrun within days as people head to where they believe the food is - rural areas. And then there are the neighbours of the doomies who did not prep - guess where they'll go...
And gold - well gold will be of zero value. You won't be able to trade an entire gold bar for a can of tuna.
This is collapse on an unprecedented scale. In the past collapse was brutal - but people could still feed themselves.
We have kicked the rungs of the ladder out as we turned to 'innovation' to grow the food to feed 8B. And the 'innovation' has ruined the soil. Nothing grows without the industrial inputs including the petro chems.
So in your opinion is there anything that can be done to "right" the ship?
Nope. That's why I semi-retired in 2009 in my early 40's delegating my responsibilities and set out on the mother of all bucket lists along with my wife.
It's also one of the reasons why we decided not to have children (she's younger than me and we got together in 2007)... no reason to bring children into a shit show (we did sponsor two kids from the Philippines who lived with us and attending international schools along the way)
It was clear that we were on borrowed time so we decided to make the best of it. I am very surprised that they were able to kick the can for 14 more years... the men who run the world have done a stellar job of keeping the train on the tracks for this long.
So, who's to say they don't manage to do it for another 14 more? or even longer? or that any children brought into this shit show don't come up with the solutions?
https://wolfstreet.com/2022/09/28/uk-chaos-economics-fretting-over-financial-stability-contagion-after-gilt-plunge-bank-of-england-buys-long-dated-bonds/
There is no way out of this - it's not 2008... throwing more $$$ at the problem and driving interest rates down will only result in hyper inflation -- or collapse as discretionary spending crashes as everything costs so much.
But as has been pointed out - if they didn't pull back on the tightening -- we'd be Mad Maxxing about now - when financial contagion strikes -- the traders hit Sell - and in seconds it's chaos.
They've bought as a brief respite by loosening again ... but it wont last.
The fundamental problem is that the global economy needs cheap energy - otherwise it seizes up ... we burned most of the cheap stuff.
Of course they fed us a heap of shit about transitioning to renewables... that's obviously a bad joke... but most people know that energy is not infinite -- so it made them feel good about the future.
I am unaware of any solutions to this problem:
Shale binge has spoiled US reserves, top investor warns Financial Times.
Preface. Conventional crude oil production may have already peaked in 2008 at 69.5 million barrels per day (mb/d) according to Europe’s International Energy Agency (IEA 2018 p45). The U.S. Energy Information Agency shows global peak crude oil production at a later date in 2018 at 82.9 mb/d (EIA 2020) because they included tight oil, oil sands, and deep-sea oil. Though it will take several years of lower oil production to be sure the peak occurred. Regardless, world production has been on a plateau since 2005.
What’s saved the world from oil decline was unconventional tight “fracked” oil, which accounted for 63% of total U.S. crude oil production in 2019 and 83% of global oil growth from 2009 to 2019. So it’s a big deal if we’ve reached the peak of fracked oil, because that is also the peak of both conventional and unconventional oil and the decline of all oil in the future.
Some key points from this Financial Times article: https://energyskeptic.com/2021/the-end-of-fracked-shale-oil/
Our energy predicament, including why the correct story is rarely told https://ourfiniteworld.com/2022/07/28/the-worlds-self-organizing-economy-can-be-expected-to-act-strangely-as-energy-supplies-deplete/
If they can keep it going for another 14 years then fantastic.
However I don't see that happening. Collapse was starting in 2019 - and they dropped Covid and the death injections... and now we are seeing the energy issue go critical - it's driving out of control inflation.
“The global economy was facing the worst collapse since the second world war as coronavirus began to strike in March, well before the height of the crisis, according to the latest Brookings-FT tracking index. “The index comes as the IMF prepares to hold virtual spring meetings this week, when it will release forecasts showing the deepest contraction for the global economy since the 1930s great depression. FT.com https://archive.ph/UUfl2
Collapse Imminent: https://thephilosophicalsalon.com/a-self-fulfilling-prophecy-systemic-collapse-and-pandemic-simulation/
The Illusion of Stability, the Inevitability of Collapse http://charleshughsmith.blogspot.com/2021/09/the-illusion-of-stability-inevitability.html
Fed is sharply increasing the amount of help it is providing to the financial system https://www.cnbc.com/2019/10/23/fed-repo-overnight-operations-level-to-increase-to-120-billion.html Banks did not trust each other - similar situation when Lehman collapsed
A SELF-FULFILLING PROPHECY: SYSTEMIC COLLAPSE AND PANDEMIC SIMULATION https://thephilosophicalsalon.com/a-self-fulfilling-prophecy-systemic-collapse-and-pandemic-simulation/
Yes I'm amazed the ship hasn't sunk yet. Thank you for the response.
Clearly, private citizens must pay more tqaxes so the banks can be biled out. Otherwise the banks would collapse and that would mean private citizens lost the money they loaned to the bank in the first place (what, you thought the money in your account was yours?).
Clearly, this is an unforseen one-time occurrence glitch which has never ever happened before and can only be blamed on politicians and not on the bakers and the clans owning the banks.
Clearly.
If they start taxing sarcasm I'm bankrupt.
There is an alternative to the options they’re presenting however. And it’s been done before. There needs to be a Glass-Steagall style bankruptcy re-organization where commercial banking is split off from investment banking. Only commercial banking activities are insured, while the quadrillion dollar derivatives banking casino and the many merchant banking casino gambling debts are written off because it simply can’t be paid and it’s not legitimate. It has no entitlement to being bailed out.
It was done in 1932, but we can even go back to the time of Solon. At the end of the day, these kinds of problems can be solved with the stroke of a pen. Legitimate debts are written off, honest debts are honoured. The nations commit to new forward-looking projects that are needed not only for today, but for the next generations.
I’m in the US. If most of my money is tied up in one of those banks, is it best to have it dispersed between several institutions instead of just one?
Stay within the FDIC limit per bank. (((This assumes the FDIC insurance fund is solvent.)))
If you have millions, stay with US Treasuries. They pay higher yields than banks today.
It, too, is insolvent.
I know. Even if I have below the limit, I do worry.
I think we need to face the reality the people who pretend to centrally control economies have gotten addicted to debt and money printing.
That can they keep kicking down the road is getting bigger and heavier and they can only keep kicking it for so long.
Are they trying to tell us something (and taking the piss)
Credit Suisse Group appoints Axel P. Lehmann as new Chairman; António Horta-Osório has resigned
https://www.credit-suisse.com/about-us-news/en/articles/media-releases/csg-bod-changes-202201.html