A World of “Fiat” Currencies: Collateral and Confidence Crumbling Down

""We live in a world where all currencies are “fiat”, none backed by gold, silver, oil or anything else.  Yes of course the dollar, otherwise known as the “petrodollar” has functioned and survived (so far) based on oil revenues being recycled back into U.S. Treasury bonds, but this has been changing over recent years.  The change has accelerated greatly over the last five years.  This era of “fiat” everywhere and real money nowhere is now 44 years long in the tooth and the very first time in human history there was no alternative currency with a real foundation.

Before you tell me “the U.S. is the most powerful military nation in the world, we don’t need no stinkin’ backing”, think this through.  Though for a time, this “arrangement” worked and no one could stand up to the U.S., is this still true?  Can we impose our will with everyone and everywhere on the planet?  Or has our military technology been leapfrogged as evidenced by the USS Donald Cook last year?  Can’t countries just decide to do business with each other …at the exclusion of the U.S. and use their own currencies to settle?  Isn’t this what has begun to happen with China and other nations doing individual trade deals?  Countries’ trade moving away from the U.S. and away from using dollars is as simple as grade school kids gravitating away from the schoolyard bully and deciding to play in harmony amongst themselves.

This 44 year old experiment has always needed “confidence” to exist.  At first it worked because the U.S. was not over indebted and had plenty of room to lever up or “reflate” if you will.  We still had plenty of untapped or unencumbered collateral left to borrow against, this is no longer so.  Once the 2nd Great Depression kicked off in 2007, the Treasury started to run trillion dollar deficits and have now doubled our indebtedness.  The Federal Reserve has more than quadrupled their balance sheet to well over $4 trillion that sits on the head of an equity needle of less than $70 billion, they are THE largest and most leveraged hedge fund in the world!  The monetary lunacy by no means is confined to the U.S., it spans the globe and is practiced everywhere.  Europe and Japan’s central banks have done the same, so has China to some extent but with a couple of large caveats.

In order to have monetary confidence, there are two prime necessities, collateral and credibility.  In other words, who wants to do business with a bankrupt or someone who cheats or lies?  Any business partner or someone you will do business with must be both solvent and truthful, neither of these conditions still exist in the big three monetary nations of the West.  Each and every year since 2011 we have been told the Federal Reserve would end QE, begin to tighten and thus normalize interest rates.  As I have written several times before, the Fed cannot ever raise interest rates again, this would destroy derivatives, the economy, the Fed’s own balance sheet and create a situation where tax revenues would not be enough to pay the interest on federal debt.  Raising rates is not an option.  Unfortunately, it is the same situation in both Europe and Japan, they have no options left either http://www.zerohedge.com/news/2015-04-10/japan-qe-limit-approaching-goldman-says-boj-risks-losing-crediblity  .  Japan began a very outsized QE operation last year while the ECB began theirs just two months ago.

Both of these central banks are running into the same problem the Fed did, namely they are and have already taken too much collateral out of the system.  “Collateral” is what underlies the shadow banking system’s ability to lend, without it credit dries up.  It is so bad in Japan that the BOJ is buying more treasuries than are even issued.  Not only are they at 100% monetization, they are beyond this.  In Europe, the situation is so bad that market participants don’t expect a tightening until 2020, (we’ll never get there).  This is the reason for the euro’s recent marked weakness, the realization of how poor business really is and the lack of any options available.

My point for writing this very basic (maybe even boring) piece is to remind those who have been distracted by the propaganda.  The bottom line is this, the collateral necessary for the “grand plan” of reflation does not exist.  The available collateral has already been encumbered and used in previous efforts.  The answer, which has always been “reflation” is now an impossibility.""

http://www.globalresearch.ca/gold-silver-and-oil-credibility-collateral-and-confidence-in-a-world-of-fiat-currencies/5442706

White House 4 Sale: America is an Oligarchy, Big Banks the Criminal Syndicates

""Senior SEC employees spent up to 8 hours a day surfing porn sites instead of cracking down on financial crimes
Nuclear Regulatory Commission workers watch porn instead of cracking down on unsafe conditions at nuclear plants
NSA spies pass around homemade sexual videos and pictures they’ve collected from spying on the American people

NSA employees have also been caught using their mass surveillance powers to spy on love interests, such as girlfriends, obsessions or former wives … and to eavesdrop on American soldiers’ intimate conversations with their wives back home. And see this  (“routinely shared salacious or tantalizing phone calls that had been intercepted” …  “‘Hey, check this out … there’s good phone sex’”)
An employee of the Transportation Security Administration admitted that TSA agents share – and laugh at – nude scans of passengers.

Investigators from the Treasury’s Office of the Inspector General found that some of the regulator’s employees surfed erotic websites, hired prostitutes and accepted gifts from bank executives … instead of actually working to help the economy

The Minerals Management Service – the regulator charged with overseeing BP and other oil companies to ensure that oil spills don’t occur – was riddled with “a culture of substance abuse and promiscuity”, which included “sex with industry contacts”
Agents for the Drug Enforcement Agency had sex parties with prostitutes hired by the drug cartels they were supposed to stop
Federal agents with the Drug Enforcement Administration and Secret Service investigating Bitcoin money laundering extorted and stole over $1 million in Bitcoin

Police have been busted framing innocent people
Warmongerers in the U.S. government knowingly and intentionally lied us into a war of aggression in Iraq.  The former head of the Joint Chiefs of Staff – the highest ranking military officer in the United States – said that the Iraq war was “based on a series of lies”. The same is true in Libya and other wars
The government lied when it said it doesn’t conduct mass surveillance on Americans, lied about the extent of the torture program, and lied when it said torture was aimed at protecting America against terrorists

The government made sure that false claims were made about the amount of oil spilled by BP in the Gulf
The government has framed whistleblowers with false evidence
The Pentagon falsely smeared USA Today reporters because they investigated illegal Pentagon propaganda

The Commodity Futures Trading Commission has conspired with big banks to manipulate commodities prices for decades
The government-sponsored rating agencies committed massive fraud (and see this)

The Treasury department allowed banks to “cook their books”
Regulators knew of and allowed the use of debt-hiding accounting tricks by the big banks

The Secretary of Treasury (Tim Geithner) was complicit in Lehman’s accounting fraud, (and see this)

The former chief accountant for the SEC says that Bernanke and Paulson broke the law and should be prosecuted

The government knew about mortgage fraud a long time ago. For example, the FBI warned of an “epidemic” of mortgage fraud in 2004. However, the FBI, DOJ and other government agencies then stood down and did nothing. See this and this. For example, the Federal Reserve turned its cheek and allowed massive fraud, and the SEC has repeatedly ignored accounting fraud. Indeed, Alan Greenspan took the position that fraud could never happen

Paulson and Bernanke falsely stated that the big banks receiving Tarp money were healthy, when they were not. The Treasury Secretary also falsely told Congress that the bailouts would be used to dispose of toxic assets … but then used the money for something else entirely

A high-level Federal Reserve official says quantitative easing is “the greatest backdoor Wall Street bailout of all time”
The non-partisan Government Accountability Office calls the Fed corrupt and riddled with conflicts of interest. Nobel prize-winning economist Joe Stiglitz says the World Bank would view any country which had a banking structure like the Fed as being corrupt and untrustworthy. The former vice president at the Federal Reserve Bank of Dallas said said he worried that the failure of the government to provide more information about its rescue spending could signal corruption. “Nontransparency in government programs is always associated with corruption in other countries, so I don’t see why it wouldn’t be here,” he said

Arguably, both the Bush and Obama administrations broke the law by refusing to close insolvent banks

Congress may have covered up illegal tax breaks for the big banks
The biggest companies own the D.C. politicians.  Indeed, the head of the economics department at George Mason University has pointed out that it is unfair to call politicians “prostitutes”.  They are in fact pimps … selling out the American people for a price.""

http://www.globalresearch.ca/government-corruption-has-become-rampant-america-is-an-oligarchy/5439709

7 Core Demands From The Occupy Wall Street Movement

 1) End the Collusion Between Government and Large Corporations/Banks, So That Our Elected Leaders Are Actually Representing the Interests of the People (the 99%) and Not Just Their Rich Donors (the 1%).

 2) Investigate Wall Street and Hold Senior Executives Accountable for the Destruction in Wealth that has Devastated Millions of People.

3) Return the Power of Coining Money to the U.S. Treasury and Return to Sound Money

4) Limit the Size, Scope and Power of Banks so that None are Ever Again “Too Big to Fail” and in Need to Taxpayer Bailouts

5) Eliminate “Personhood” Legal Status for Corporations

6) Repeal the Patriot Act, End the War on Drugs and Protect Civil Liberties

7) End All Imperial Wars of Aggression, Bring the Troops Home from All Countries, Cut the Military Budget and Limit The Military Role to Protection of the Homeland

Additional Details From The Seven Demands
http://dailybail.com/home/7-core-demands-from-the-occupy-wall-street-movement.html