In the end “Cash” becomes the bank$ter$ worst enemy


Cash will crash the bank$ter$ and they have their BIG central bank brother to thank for…


The Rakyat Post

Big problem for EU banks – they have just too much cash

FRANKFURT, 30 Aug 2016: 

In the strange days of negative interest rates, having €1 trillion more than you need can be a drag.

But that’s precisely how much eurozone banks will soon have parked at the European Central Bank (ECB), even though they must pay a punitive charge that is eating deep into their profits and forcing lenders to throw out old business models.

The charge on excess cash was introduced by the ECB in 2014 to force banks to stop hoarding cash and lend more, so boosting growth and inflation.

But most of that ever-growing cash pile comes from the ECB itself, which is printing €80 billion a month to lower borrowing costs.

The new cash ultimately ends up in somebody’s bank account – so it is effectively trapped in the banking system, contributing to excess liquidity.

The negative deposit rate already cost banks €2.6 billion since 2014, according to Reuters calculations using ECB data.

Lenders’ reluctance to pass on the charge to depositors means their margins are shrinking, raising concern about their ability to cope with future shocks.

“Banks cannot fully offset this by cutting remuneration for depositors so their margins have suffered,” Marco Troiano, a director at Scope Ratings, said. “They need to cut costs and impose fees – both of which may cost them customers.”

Some lenders have already started to charge for basic services in markets where such fees were once taboo. Germany’s Postbank, a unit of Deutsche Bank, recently scrapped free current accounts for millions of customers.

“I think it is right that banks are discussing current account fees,” Bundesbank director Andreas Dombret said in an interview. “Banking services cannot be free if banks earn no interest margin.”

Several European lenders already charge corporate clients a percentage for large deposits and a small cooperative bank in the Bavarian Alps has introduced fees for wealthy retail customers.

Yet even more drastic measures could lie ahead if deposit rates stay at current or even more negative levels.

Economists have started to wonder at what point banks would simply start to hoard physical cash to avoid the penalty rate. Some Bank of England studies put this pain threshold at minus 0.5%, just 10 basis points below the ECB’s deposit rate.

When the ECB unveiled plans earlier this year to retire the €500 note, there was a public outcry in Germany, where many people saw the move as an attack on their ability to keep their savings in cash.

German and French banks hold two-thirds of excess liquidity, according to a Deutsche Bank analysis, while Italian and Spanish banks hardly have any excess reserves.

Economists have formulated several hypotheses to explain this pattern. They cite Germany’s strong exports to other eurozone countries, the prominence of French and German banks as financial brokers and both countries’ status as relatively safe places to park one’s money within the bloc.

Ultimately, most explanations revolve around the two countries’ superior economic health compared with their eurozone peers.

This acts as a magnet for cash and, combined with negative returns on much bank-to-bank lending, contributes to keeping it locked in the coffers of those firms at painfully high costs.

Reuters


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A Letter To The Economist


FEE

Where Mainstream Economics Goes Wrong

fireworks_web

Here is a letter I’ve sent to The Economist:

Sir or Madam:

With “Two out of three ain’t bad” (August 27) you complete your series on six big ideas in economics – a series on, as you write in your July 21st introduction, “[w]hat economists can learn from the discipline’s seminal papers.”  The series is useful.  I fear, though, that your choice of ideas grievously if inadvertently diminishes the perceived importance of even bigger economics ideas – ideas that perhaps aren’t as clever as George Akerlof’s ‘lemons’ model or as politically convenient as the Keynesian multiplier, but that form the foundation of all sound economics.

These foundational ideas include F.A. Hayek’s explanation that market prices convey to each market participant the specific information she needs to coordinate her activities with the literally billions of other economic agents across the globe.  Without these prices there are no economies for which Hyman Minsky’s analysis or the Mundell-Fleming trilemma are even potentially relevant.

And the idea that is the bedrock of all economics is the understanding that complex economic order emerges spontaneously, without central design or guidance, when private property is secure and markets are at least reasonably free – when, in short, there reigns what Adam Smith called the “the obvious and simple system of natural liberty.”

Too many economists today, busy mastering mathematical technique or striving to make their work relevant for current holders of political power, lamentably never learn – much less master – these and other foundational ideas.  But no amount of mastery of the idea of the likes of Nash equilibrium or of the Stolper-Samuelson theorem is worth a damn without a mastery of these older, less sexy, yet foundational ideas.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

Donald Boudreaux is a senior fellow with the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at George Mason University, a Mercatus Center Board Member, a professor of economics and former economics-department chair at George Mason University, and a former FEE president.


Related

The Sad State of the Economics Profession

Most economists today, however, have sold themselves to the enemy. They work for government agencies such as the IMF, OECD, World Bank, central banks, or academic institutions where their research is heavily subsidized by government agencies. To succeed they have to “toe the line.” You don’t bite the hand that feeds you.

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Could The Internet Be Set To Be Shut Down On The Eve of Jubilee, October 1st?


TDV

Ever since we caught on to the Shemitah timetable that Jonathan Cahn had discovered, we’ve discovered clue after important clue about the potential timetable being followed by the globalists towards creating a New World Order.

Christine Lagarde, with her “magic number 7” numerology speech caught our interest.  Then, William White of the IMF talking about how a debt jubilee was coming which will wipe out most paper assets also got our attention.

And, we discovered that the Jubilee Year, also called the Super Shemitah, ends on October 2nd of this year.

Because of that we’ve been watching those dates carefully.  Probably the most significant event we’ve seen yet is that the Chinese Yuan will be put into the IMF’s SDR currency basket on October 1st.  This, alone, could set off shockwaves in the markets.

But, now, another major event has just been announced to occur on October 1st.

The United Nations could take over control of the Internet on October 1, when the Internet Corporation for Assigned Names and Numbers (ICANN) passes from US administration to the control of a multilateral body, most likely the United Nations International Telecommunications Union (ITU).

While the administration and its defenders have denied that the UN will have authority over ICANN, the Wall Street Journal‘s L. Gordon Crovitz points out that ICANN will need to be run by a state agency in order to retain its antitrust exemption, which makes it almost certainly that the UN will step in to take control.

Given that we consider the Jubilee Year to be the year when the final pieces are put into place for a global one-world government, having the US give up control of the internet to the UN on October 1st, the day before the end of the Jubilee Year and on the same day that a new global monetary order will be positioned is cause for serious scrutiny.

The globalists have hated the internet since they began to figure out it was causing them big problems in controlling the world and its people.  John Kerry in 2013, said, “this little thing called the Internet … makes it much harder to govern.”


He’s right, of course.  The internet has made it so billions of people can actually get access to real information… not the propaganda put out by governments and the mainstream media.

The word government means “govern”, or to control, and “ment” which means mind.  It is, in fact, a form of mind control.  And in order for it to succeed to the point that the entire Earth is governed by a tyrannical, one world government, people need to be kept from the truth.

For this reason, the term “internet kill switch” has been used regularly by the US government.  It’s often put into bills, including the Proposed Protecting Cyberspace as a National Asset Act of 2010 as a way to “protect” people from cybercrime.  Of course, like all things the government does, it is not to protect the people, it is to protect the government.

Even the two frontrunners for Commander in Crime of the US, Trump and Clinton, both want to shutdown parts of the internet, “Donald Trump, Hillary Clinton Plan to Close Parts of the Internet: Censorship in America?

And, since anarcho-capitalists created bitcoin to fight the central banks, the globalists have stepped up all their efforts to shut down the internet as much as possible.

The internet makes it hard to keep people controlled and confused… and bitcoin makes it hard to control the money system.  That 1-2 punch, alone, has them running very, very scared.

And so, when it was just recently announced that on October 1st, the day before the end of the Jubilee Year, that control of the internet will be turned over to the UN… one has to be very, very suspicious.

Would they declare a new monetary system based on the SDR and its inclusion of the Chinese Yuan on October 1st, which is a Saturday, leading to bank closures worldwide AND then turn off the internet to keep most from even knowing what is going on?

You have to consider it a possibility.  The globalists/banksters have no problem killing hundreds of millions of people as they did in the 20th century with all the bank manufactured wars, which included both World Wars.  They had no problem doing 9/11 to scare the world into accepting their War of Terror and a lockdown on any last remaining freedoms.

Will they do it?  Only time will tell.

But we’ve been suggesting to people all year to get prepared for something as big and catastrophic as the internet being shut down… so hopefully many have made plans to prepare for the worst already.

If you still haven’t, we’d suggest getting out of the financial system (especially the banks) as much as possible.  Even if they don’t pull the switch on October 1st, we are nearing the very end of this current financial system.

And, many of the things we’ve suggested people move into have done very well.  Gold and silver have already gone up dramatically this year, bitcoin is up 200% since last summer and many of our other recommendations, such as Ethereum (up more than 500% since we mentioned it in January) and Monero (which we just mentioned two weeks ago to subscribers has since risen over 400%… in just two weeks!).

Monero - The Dollar Vigilante 2

I expect September and October to include significant market volatility and  other kinds of potentially disastrous results. But the reverberations of Jubilee 2016 will continue well after its end date.

As we move into the last month of the Jubilee Year, we are bound to see catastrophic events occur – either ones that take place now or ones that promise a future, comprehensive disaster. We’ll be following these possibilities and predicting them as we have for the past two years.

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An American conspiracy to oust Malaysia’s Najib – or a propaganda war?


The Edge Markets

By South China Morning Post 

KUALA LUMPUR (Aug 29): As Malaysian Prime Minister Najib Razak becomes increasingly besieged by revelations in a US civil suit alleging fraud in his brainchild 1Malaysia Development Berhad (1MDB), his supporters are hitting back with a textbook tactic straight from classic psychological warfare manuals.

Over the past several days leading up to Malaysia’s 59th Independence Day on August 31, senior leaders and operatives of Najib’s party, United Malays National Organisation or Umno, are claiming that the suit by the Department of Justice is the start of a US plot to topple Najib.

Comparisons have been made between the DoJ suit and the 2003 invasion of Iraq when then-US President George W Bush used destroying weapons of mass destruction as a pretext for war.

By channelling nationalistic feelings that intensify at this time of year, they hope to nullify a key message in the DoJ suit which has grabbed the public’s attention – that Najib’s associates and his stepson defrauded 1MDB. And that Najib very possibly benefited from the graft.

The propaganda war around the DoJ suit also serves to neutralise the latest two threats to the political survival of Najib and Umno. The first is a series of massive rallies by electoral reform group Bersih 2.0 to pressure the government to reopen investigations into 1MDB.

The other, bigger, threat is Bersatu, a political party set up by the former premier Mahathir Mohamad, Najib’s highly regarded former deputy Muhyiddin Yassin and other former Umno rebels. Bersatu aims to replace Umno as the party of choice among Malaysia’s rural ethnic Malays, a key voting bloc, and to defeat Umno and its allies in the next general election.

By using the foreign conspiracy bogeyman, Umno hopes to discredit Mahathir, the political opposition and Bersih 2.0 in the eyes of rural Malays.

The DoJ suit claims that US$3.5 billion was stolen from 1MDB and funnelled into the accounts of controversial businessman Low Teck Jho, Najib’s stepson Riza Aziz and two others. About US$1 billion of those funds were used to buy luxury properties, paintings and pay for gambling debts in the United States, the suit claims, and US$731 million deposited into the personal account of an individual called “Malaysian official One” (MO1).

Although Najib is not specifically named, the suit states that MO1 is a relative of Riza and held high positions in the Malaysian government and 1MDB. (Najib had been a chairman of 1MDB’s advisory board).

Najib has denied any wrongdoing, while Malaysia’s attorney general has also cleared him of any crime related to 1MDB.

The term “MO1” has been a lightning rod for Najib’s critics and a viral meme much to the chagrin of his supporters. Numerous news reports claim it refers to Najib and a protest is being planned to “arrest MO1”.

According to Bersatu founding member Kamarul Azman Habibur Rahman, the DoJ suit was a turning point in the public’s perception of the 1MDB affair.

For the first time, the suit spelled out in clear terms how the scandal was a crime, unlike the probes by Malaysian authorities.

“When you talk to rural folk about 1MDB it’s hard for them to grasp concepts such as bad investments, shell companies and debt,” said Kamarul Azman, who was expelled from Umno for criticising Najib.

“But the suit makes it clear that 1MDB money was stolen and these individuals have to go to court to defend themselves. So now, rural folk can see that something seriously wrong happened. And that is what Umno is so scared of,” he said.

Umno, together with its partners in the Barisan Nasional coalition, was re-elected in the 2013 general election thanks largely to rural Malays.

“Because they cannot defend themselves against these allegations they claim it’s a foreign conspiracy,” said Kamarul Azman.

Over the past three weeks, two of the party’s senior leaders, Idris Haron and Ahmad Bashah Md Hanipah, have painted the DoJ suit as a foreign conspiracy to topple the democratically-elected Najib.

Similar claims were made by articles in Umno-owned daily Utusan Malaysia and its portal Umno Online. These reports also accused Bersatu’s leaders Mahathir and Muhyiddin of conspiring with foreign powers.

In the past Umno has also tarred political rivals the People’s Justice Party (PKR) and Democratic Action Party as foreign agents in order to discredit them among rural folk. Ironically Mahathir used this tactic repeatedly in 1998 against then estranged Deputy Prime Minister Anwar Ibrahim, the founder of PKR.

Umno declined to comment.

The problem with the smear campaign, said another Bersatu leader, Syed Saddiq Abdul Rahman, was that it did not gel with Najib’s own public persona of being a darling of the US. Najib has been fond of boasting of his cosy relationship with US President Barack Obama. “He’s played golf with Obama, he tells everyone his administration managed to bring Obama to Malaysia twice and how he’s even ridden in The Beast [the US president’s official limousine]. So there’s this cognitive dissonance there.”

Also, Mahathir’s notoriety for being a critic of Western superpowers was embedded in the Malay psyche, said Syed Saddiq.

Ibrahim Suffian, of the think tank Merdeka Centre, said the bogeyman tactic had been used too often in the past. Coupled with the inconsistencies of Najib’s own explanations of where the donation came, Ibrahim said such conspiracy theories were starting to look like a propaganda campaign to mask an inconvenient truth.

Kamarul Azman added: “Even rural folk understand that when you have to go to court to face charges, then something is seriously wrong.”

Sheridan Mahavera is a Kuala Lumpur-based journalist

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Invest 99L – The Storm of The Century


whatdoesitmean

Russia Orders Ships Away From American Waters, Warns “Storm Of Century” Likely To Strike

By: Sorcha Faal, and as reported to her Western Subscribers

An interesting “urgent bulletin” circulating in the Kremlin today issued by the Ministry of Transport (MoT) is “warning/strongly advising” that all Federation maritime concerns “remove/displace” their shipping vessels from the Atlantic Ocean region as sometime during the next fortnight (14-days) a catastrophic “storm of the century” event is likely to occur along the Eastern coastal regions of the United States. [Note: Some words and/or phrases appearing in quotes are English language approximations of Russian words/phrases having no exact counterpart.]

According to this bulletin, MoT experts have identified an Atlantic Ocean “disturbance”, known as Invest 99L, that is being “severely and abnormally” affected by what is called the South Atlantic Anomaly (SAA) that stretches across most of South America to the Southern part of Africa.

 

Invest 99L

South Atlantic Anomaly

 

The South Atlantic Anomaly, this bulletin explains, is an area where the Earth’s inner Van Allen radiation belt comes closest to the Earth’s surface dipping down to an altitude of 200 kilometers (120 mi), but over this past year has become “erratically intense”—which coincides with The European Space Agency (ESA) reporting in June (2016) that our Earth’s magnetic field is weakening at an alarming rate for reasons scientists have yet to explain.

The extreme and alarming danger posed to Invest 99L by the South Atlantic Anomaly, this bulletin notes, is that when these two “forces” meet/merge, for any amount of time, the growth of this storm will “become explosive” and reach into the ionosphere (the edge of space) due to the inability of the upper reaches of our atmosphere to freeze this storms water and inhibit its growth—and as detailed in Doctor-Scientist Blanca Mendoza’s, of the Instituto de Geofisica Universidad Nacional Autonoma de Mexico, groundbreaking research paper titled The Effects of Space Weather on Hurricane Activity.

 

 

Catastrophic “super-storms” like Invest 99L is feared to become with its merging with the South Atlantic Anomaly, this bulletin continues, begin their life cycle in the African Sahara Desert where rapidly changing temperatures cause powerful winds, and that then cross the Atlantic Ocean, sometimes gaining in strength and becoming what are called hurricanes.

Most strangely, at least to us, is that while the European Center for Medium-Range Weather Forecasts long range computer models are confirming the fears this MoT bulletin is expressing about this potential “storm of the century” ready to strike the US, we can find no evidence that the Obama regime is preparing, or even telling, the American about what may occur—with the only warning to these people we’ve able to find coming from an independent weather researcher who is, likewise, warning that only 10 days are left until impact.

 

August 23, 2016 © EU and US all rights reserved. Permission to use this report in its entirety is granted under the condition it is linked back to its original source at WhatDoesItMean.Com. Freebase content licensed under CC-BY and GFDL.

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Malaysia in dependent ?


Come August 31 2026, The Federation of Malaysia will be celebrating its 59th year of “independence” from the colonial masters of the once mighty British empire.

Merdeka-Malaya-1957

Tunku Abdul Rahman the first Prime Minister shouting “Merdeka” on August 31 1957 at the Merdeka Stadium in Kuala Lumpur

Yes the Mat Sallehs (the whites) have gone home and Malaysia is a “sovereign” nation and self-governed.

At what cost?

Who owns the central bank of Malaysia?

merdeka

Merdeka (independent)?

“Far back in ancient times we were the first to cry among the masses of the people the words “Liberty, Equality, Fraternity,” words many times repeated since those days by stupid poll parrots who from all sides round flew down upon these baits and with them carried away the wellbeing of the world, true freedom of the individual, formerly so well guarded against the pressure of the mob…

In all corners of the earth the words “Liberty, Equality, Fraternity” brought to our ranks, thanks to our blind agents, whole legions who bore our banners with enthusiasm. And all the time these words were canker-worms at work boring into the well-being of the goyim, putting an end everywhere to peace, quiet, solidarity and destroying all the foundations of the goy States.”

Protocol #1 [The Protocols of The Meetings of The Learned Elders of Zion]

The (ever rising) cost of “independence”:

nd

The Malaysian National Debt as at 14:43H August 28 2016

MERDEKA!

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NIRP: A Tax in Sheep’s Clothing


TheDailyBell

Negative Rates and Cash Bans: The Chaos Continues at Jackson Hole

Negative Interest Rates: A Tax in Sheep’s Clothing … A negative interest rate is just a tax on the banks’ reserves. The tax has to be borne by someone: The banks can choose not to pass it on and just have lower after-tax profits. This will depress the share price of banks and weaken their balance sheets by having lower equity values.

central-banking-dollars

Negative rates should be integral part of central bank policy options … Central banks should make negative interest rates a fully integrated part of monetary policy in order to respond effectively to future recessions, according to an academic paper presented on Friday to some of the world’s top central bankers.  “It is only a matter of time before another cyclical downturn calls for aggressive negative nominal interest rate policy actions,” concludes Marvin Goodfriend, a professor of economics at Carnegie Mellon University and a former policy adviser at the Richmond Federal Reserve bank.  – Reuters

The Federal Reserve meeting at Jackson Hole has been covered by the mainstream media in ways that gave the impression that policy discussions were a kind of theoretical exercise.

Papers were presented on such issues as negative interest rates (see excerpt above) that emphasized an academic context. The idea that comes across is that those involved were earnestly striving to combat US economic dysfunction and current unnaturally low interest rates.

The larger issue here is one that we didn’t find written about: the assumption of the inherent right of policymakers to do what is “necessary” to make the US economy “healthier.”

The debate is certainly cast in theoretical terms but the results will inevitably involve the use of force.

The assumption is that involved in the “monetary debate” will come to a reasoned conclusion that society as a whole will be impelled to adopt. Those who do not wish to adopt such a solution – and who actively resist – may be prosecuted or jailed.

A few days ago, in a lead-up to the conference, the Wall Street Journal published a longish editorial by Dr. Kenneth Rogoff, the Thomas D. Cabot Professor of Public Policy at Harvard University.

Rogoff was also the former chief economist of the International Monetary Fund and the article was taken from an upcoming book, “The Curse of Cash,” to be published in September by Princeton University Press.

Here’s an excerpt:

Money fuels corruption, terrorism, tax evasion and illegal immigration—so the U.S. should get rid of the $100 bill and other large notes … When I tell people that I have been doing research on why the government should drastically scale back the circulation of cash—paper currency—the most common initial reaction is bewilderment. Why should anyone care about such a mundane topic?

But paper currency lies at the heart of some of today’s most intractable public-finance and monetary problems. Getting rid of most of it—that is, moving to a society where cash is used less frequently and mainly for small transactions—could be a big help.

There is little debate among law-enforcement agencies that paper currency, especially large notes such as the U.S. $100 bill, facilitates crime: racketeering, extortion, money laundering, drug and human trafficking, the corruption of public officials, not to mention terrorism

The necessity for this sort argument has to do with the inevitable results of the imposition of negative interest rates. Cash will have to become more difficult to obtain and use because people won’t want to pay banks for placing cash in savings accounts. They might instead wish to hold cash at home so they don’t have to pay a fee.

As stated, the larger issue here is one of compulsion – and its presentation within an academic context. The Wall Street Journal editorial, for instance, is part of a book that will shortly be issued. The discussion of negative interest rates in Jackson Hole was accompanied by a white paper produced by a professor of economics.

The underlying reality is that these astonishingly comprehensive solutions don’t provide a choice. Even negative interest can be seen not as a monetary/policy response but as a kind of tax. An article by Christopher J. Waller (here) characterizes low rates as nothing more than a disguised money grab:

Negative Interest Rates: A Tax in Sheep’s Clothing … A negative interest rate is just a tax on the banks’ reserves. The tax has to be borne by someone: The banks can choose not to pass it on and just have lower after-tax profits. This will depress the share price of banks and weaken their balance sheets by having lower equity values.

This is true – and is an outcome of the way the Fed works. Imposing rates via monopoly authority always constitutes a tax, though this is not something regularly discussed when it comes to Fed “policy.”

Generally speaking, mainstream media coverage wants to present monetary discussions in ways that emphasize its theoretical aspects. But the bottom line is that what’s being discussed is not going to end up as suggestions. Whatever is decided on will have the force of law.

And if we look beyond “theory” to reality, the outcome of these kinds of discussions is invariably bad. Central bank monetary mayhem is everywhere you look. The West – the world, really – is locked into a quasi-depression as a result of a century of failing policies and monetary manipulation.

In the US, Janet Yellen wants to pretend that a “recovery” is ongoing. But if so, it one that does without some 90 million potential workers who choose not to participate – either because they cannot or because they wish to participate outside of the formal economy.

We recently posted an article entitled “Is the Fed Being Torn Down in Order to Create a New, Powerful Global Entity?” (here). When one examines the behavior of the Fed, and of central banks generally, it’s hard to conclude that their real mission is the one presented to us.

Step back far enough to contemplate a century’s worth of results and the reality is clear: Central banks are supposed to destroy the economies they supposedly serve. Ironically, the destruction then provides the opportunity for them to expand.

Giving a small group of individuals the power to decide on the value and volume of money is a ludicrous concept from any standpoint. But he problem is abetted by the mainstream narrative that never discusses the underlying lack of logic.

And so we observe Jackson Hole, which is presented to us as a conclave of elite thinking but which is actually nothing more than high-brow propaganda for a system that has already failed and – as compensation for its failings – now contemplates even more radical “solutions” that will give rise to even worse problems.

Conclusion: The mechanism of central banking is purposeful ruin. The end-result of this ruin is global governance. In the short-term this goal is disguised by an academic patina. But the long-term goal, an increasingly apparent one, is a brutal restructuring of the lives of seven billion people to benefit a handful of elite controllers.

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