CHINA & JACKSON HOLE: Fischer of the Fed stirs the asian brew with some neat geopolitics about rates.

When Reality riles the élites, they will turn it off. When Debt War roils the Brics, they will turn it on.

The Slog argues that US Quantitative Teasing and crumbling Brics may not be accidental. The more the American élite sees an opportunity to screw up emerging nations and shut up its own citizens, the more they will exploit it. Media control, geopolitical ambitions, fiscal management and individual liberty are ineluctably intertwined to an extent that is unique in human history.

Asian stock markets weakened again earlier today, following U.S. Federal Reserve official Stanley Fischer suggesting there was a “pretty strong case” for raising rates in September. It was a surprising thing to say, but either way, all four Chinese stock indexes headed south until the Beijing  shi-o-fou-shi Shanghai Defence was been applied to the afternoon session as per last Friday:

shang331815So the PBOC used the last ninety minutes of bulk buying trading to make things look alright again. Consequently, the Shanghai closed 1.3% down.

Meanwhile, all four Japanese markets were off around 1%+, with exactly the same position on the four Australian bourses.

It doesn’t take much to spook people at the moment. Spooky people panic and cause nasty outbreaks of reality. And as always, the desire of the élites to disguise reality at all costs is a threat to our liberties.

∇∇∇∇∇∇∇∇∇∇∇

Just as the Gujurati élite three days ago turned off all mobile phones to stop digital protest, George Chen reports that China’s Public Security Ministry says it will continue to investigate & arrest all those who spread rumours on social media ‘to cause market panic, misleading society and investors – and thus deserve to be arrested’. So far, nearly 200 people have been banged up. Here in France, as I’ve posted before, suggesting that French banks have liquidity or solvency problems is also against the law.

Under a dictatorial economic system that has gone awry, the alteration of reality becomes a de facto truth. French retailing remains in a dire state. Two DIY managers told me bluntly that sales have collapsed: “in this area, only the British owners and professionals are buying materials” said one. Everywhere in every shop, everything is on sale. This merely reflects what the French ISEE gdp data just released makes clear: such pitiful growth as France has shown this year went back to a big fat zero in Q2 2015.

And although I have finally been allowed into the CPAM – the French version of the NHS or Obamacare – three separate sources have all confided in me as follows: your CPAM won’t be enough, subscribe to private mutual health cover as well. “France,” said my gp, “is bankrupt, and the day of reckoning is approaching very quickly”.

The more the reckoning approaches, the fewer our freedoms of speech will be. For three weeks now I have been trying to point out how many Dollars are getting out of equities….but the newest data sets are way beyond even those we have seen so far: $29.5 billion burst out of equity funds last week – easily the highest exodus since such data began being collected in 2002.

How long will it be before this too will be a fact we aren’t allowed to debate or publish? Under the May/Cameron NVE legislation being planned, such observations would be a threat to the State…and thus subject to censorship. The highly effective digital censorship still in the pipeline (and which must be attacked by the good and true) is the segmentation of internet service such that the big money gets better quality and higher speeds and privileged access to sensitive information first.

The principle at stake here is ‘Net Neutrality’ (another Slog hobby-horse going back five years) – a level playing field in which everyone gets the same speed and access. Think the Barclay twins, Murdoch, Trump and Camerlot able to get bad news in advance and plaster the media with spin designed to minimise its impact. What chance do you think there is of the Sleeple paying any attention to later rebuttals?

So while we still have roughly equal access, here’s one to think about: were Fischer’s remarks (made at Jackson Hole) really that surprising? Think of the timeline involved…he steps up to the lectern Saturday afternoon local time and says the Fed’s still on course to raise rates. Six hours later, Chinese traders open their laptops and read the speech. The bullish QT attitude of the Americans spells trouble for Beijing.

As Willem Buiter the Chief Economist at Citigroup said in New York last week, the dollar “will go through the roof” if the US Federal Reserve does lift interest rates this year. This will only make things worse for the Brics. The ‘C’ in Brics stands for China, of whom Buiter said “China has bungled both fiscal and monetary policy, and is now sliding into recession”. Professor Zhiwu Chen from Yale University told the same event that China will be doing well if it can contain its slow-motion crisis to mere stagnation for the next 10 years, “given the dangerous levels of debt in the system”.

24 hours after Stanley Fischer makes the speech, the folks in Shanghai go to work, and the composite plummets 4%. So Beijing has to step in with yet more money.

All down the line – since around 2011 – every time Beijing did something in its own interests, Washington squawked and blustered and said how unfair it was to have an ‘undervalued’ Yuan rendering its exports artificially cheap. (Pretty much, in fact, as Germany did by exploiting the euro after dumping its expensive Mark). Now, it seems to me at times, an alliance has been formed between the State Department, the Fed and Wall Street – via which come what may, China winds up between a rock and a hard place. Maybe the ‘bungled’ devaluation of the Yuan was the last straw for those who insist that the US and the US alone must run the World.

I’ll return to a recently established theme here: we can no longer divorce or even separate geopolitical debt from financialised capitalism’s markets in stocks, commodities and energy. A war is taking place here, and it isn’t a currency war, its a debt war.

All last week we were told that China had “no effect” on the West, despite this being obvious bollocks. Here’s a chart that shows just what utter drivel that idea is: how long will it be before displaying this sort of evidence will be deemed NVEism and thus ‘just cause’ for being silenced and/or imprisoned?

chinaexposure30815

For years now, I’ve been boffing on about Australia’s ridiculous overdependence on China as an export market. Here we see a complete vindication of that opinion. Do you really think Abbott the Ant-Brain and his mining mates will be happy to let this one run and run in open media once the breasts are pointing to the heavens?

As I noted earlier, everyone in key fiscal and financial posts around the world is now nervous bordering on neurotic. The neoliberal socio-economic model retains its self-defeating mass consumption flaw. The hastily glued together global banking farce and euro fiasco are leaking glue under every shoe on every market floor. Civil unrest is in the air in ClubMed, US police forces are being militarised, China’s bourses are Canute’s waves being ordered to retreat, and Africa’s torture at the hands of religious fanatics has physically inserted the tragedy onto every borderline in Europe.

Realities, fundamentals, cans kicked to death, Sovereigns trying to vapourise debt, and corporacratic politicians fearing both bourse panics and citizen violence. Given the context, liberty and democracy don’t have a snowball in Hell’s chance of remaining intact.

And on that cheery note, I wish you all a fruitful week.

Yesterday at The Slog: Rebekah Wading-in-the-Brooks, media Unperson

72 thoughts on “CHINA & JACKSON HOLE: Fischer of the Fed stirs the asian brew with some neat geopolitics about rates.

  1. “France,” said my gp, “is bankrupt, and the day of reckoning is approaching very quickly”

    And what did you gp mean by France is bankrupt? I agree the day of reckoning may be getting close. But it can be delayed as required as long as required by the ruling elite if they want to. But do they want to. I think at this point yes they do. But I’m unsure for how much longer.

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  2. “Sovereigns trying to vapourise debt,”
    And what evidence have you to support this comment. And how are the sovereigns planning to do this?

    And what exactly are these realities and fundamentals? Most when I ask haven’t a clue. Or rabbit on about too much debt without even knowing why we need debt and what the debt benefits are (some think debt is only bad and completely forget about the equal debt asset). And it’s this confusion as much as anything that is causing our current issues. That could eventually destroy the West if it isn’t addressed and understand. That is why we need ever growing debt as a population ages and saves. And why the ONLY option now is to provide this debt from Govt yearly deficits.

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  3. Since the late 1970s the major central banks, led by the Fed, have wrested control of interest rates from markets believing that economic activity and price inflation can be managed by the state. The policy is very different from the way interest rates are set in free markets. Since central banks have controlled interest rates they have always favoured borrowers over savers, with the predictable result that global debt has expanded without the underlying production to support it. Without earnings set aside from production, debt cannot be repaid, so it must default and preventing this default has become the primary task facing central banks. The only means they can employ is the creation of yet more money, and to foster the expansion of bank credit at an ever-increasing pace, a remedy that was spectacularly confirmed as effective by the Fed’s management of the Lehman crisis and the rounds of quantitative easing that followed. Zero interest rates have ensured that compounding unpaid interest is kept to a minimum, but at the same time they have encouraged yet more unproductive borrowing. Markets are signalling that we are arriving at a new financial crisis, and soon it will be time to unleash the monetary weapon again.
    Each crisis is of a greater magnitude than the previous one. The trigger undermining the global debt problem this time is a sharp slowdown in global production. Without the fig-leaf of increasing productive output, the precariousness of the global debt problem has become all too evident to ignore, even for perpetual optimists.
    Taken from:
    http://uk.investing.com/analysis/economics-of-a-crash-4034

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  4. Debt is needed for 3 main reasons

    1 It backs money (bank credit) as an asset. Without debt (= a liability) we have no money.
    2 It backs savings. As we age people want to save. Any savings is always backed by another entity holding the debt liability.
    3 Company profits. Just like one countries trade surplus = other counties trade deficits. One companies profit = other companies losses or capitalized asset increases or debt increases. Most company profits today comes from yearly increasing debt. So no yearly debt increases = a massive depression.

    NB A $1 trillion US yearly deficit = $1 trillion worldwide savings and / or company profits. If the US runs a surplus then these profits and not only wiped out but the surplus also results in either less saving or company losses. Thats why a depression often follows a Govt surplus.

    Increasing yearly debt is essential. A key question for the West is how to achieve this.

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  5. Monday 31 st august circa 10.30 am, a bank holiday but BBC Market Watch is showing that the Russian Rouble has depreciated by over 3 % today!

    No news item, does anyone know why this has occurred or is it a short squeeze on very thin trading?

    Russia is a top ten country in the GDP league table if you can believe GDP figures.

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  6. RJ – well that’s really put my mind at rest; thank you. Hitherto I’d always thought that debt was iniquitous and a tool used by a cynical banking system (and their servant governments) to control – and ultimately pauperise and enslave – largely passive populations while at the same time enriching themselves and their chums. I can see now how wrong I was. Thank heaven for the banks – their diligence, their undoubted altruism and their dedicated pursuance of our best interests are plain to see … I will now go out and increase my indebtedness to all and sundry. It is the very least I can do to help everyone along. Trebles all round, chaps.

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  7. @ caratacus
    I’m just posting an economic fact. That most (including many economists) are not aware of and even when explained to them prefer to hold onto a badly flawed belief that all debt is bad even if this stupidity results in a major depression.. Rather than accepting an economic reality and asking what can be done. They instead bury their head in the sand and play lets pretend.

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  8. China, it just took a while has caught the same discease of a modern society just like the west.

    For every 100 people only a few produce, by inflating the economy and borrowing, increasing the money supply through DEBT you can stuff more jobs into services if you are lucky, but you are still left with a growing number who can never support themselves financially.

    Looks like it is the same fate for all nations of today Cina no exception, adopt the modern world in full with all its gadgets the true cost of the gadget (gadget is a car not just a PC or smartphone) has never been paid. Now bring on the robot please that can do my job, nice saving there but who then pays my income? That last point whoever creates the first efficient robot or the company that uses it will never explain.

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  9. @ RJ
    You’re actually posting not a fact but your economic belief with which economists of the ‘sound money’ persuasion would disagree.
    It remains the case today that financial instability is the consequence of excessive debt, and the global financial system is inherently more risky today than it was at the time of the Lehman Crisis.
    Reliance on debt as an economic driver is the other side of the expansion of the total quantity of money. This can only continue so long as people accept that money maintains its objective exchange-value.

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  10. Is it me, or do others find RJ’s argument for why debt is required a little hard to understand? I don’t mean any disrespect to RJ, I’m sure he understands complex economics better than I but, I don’t understand it. Perhaps someone could explain to me why if a country is running a surplus, business can’t make a profit?
    ‘So no yearly debt increases = a massive depression.’ So, how does that end? More and more debt, isn’t that to blame for the mess we are in now? What have I missed here?
    I’ll just stick to home economics, I clearly understand those!

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  11. A fine attempt to defend the indefensible, RJ, which depends on the hackneyed gobbledegook of accounting convenience. Debt could only ever be reliably viewed as an asset if there were any possibility of repayment: repayment can only happen when the profits of production allow, without which the debt must accumulate infinitely. Any fiat currency depends on it’s users having confidence in the currency representing a store of value, otherwise they will find something else. Thus, every fiat currency the world has ever seen – and there are numerous historical examples – has only survived by allowing the boom and bust cycle to take place so that the effects of misallocated capital, an intrinsic and inescapable feature of such currencies, can be reduced or neutralised. Debasing the currency through printing excess of it and subjecting people to ever greater and more draconian controls in order to force them to believe in an increasingly obvious lie is the last refuge of scoundrels.

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  12. @RJ – Forgive me, I am stricken in years and tend not to jettison ideas and values just because they may be old, unfashionable or unpopular with souls infinitely better educated than I. I learnt early on that to be indebted to someone is to be in that person’s or organisation’s control; they have a ‘handle’ on the debtor. Therefore in all my adult life I have avoided debt and if I couldn’t afford to buy it I couldn’t have it, it was as simple as that. I have run my business on exactly the same line for many years and refuse point-blank to use bank loans or any other form of borrowing. All investment is from profit generated, including vehicles. I don’t like being beholden to anyone, least of all snotty holier-than-thou smirking grey men who believe in their superiority over hoi polloi. Because I am a simple soul I tend to apply principles which suit the individual (me, in this case) to the greater whole. I fully accept that I am no economist – but I understand human nature very well!

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  13. KJH
    Sound money supporters are either fools or deliberately mislead people. They often do not know what money is (it’s a financial asset. Financial assets are always supported by a financial liability = debt). What or how double entry book keeping works. Are often clueless as to how money is created and destroyed. Do not understand the different between bank credit (our money) and central bank reserves (the banks and treasuries money) and how they relate. And especially what the difference is between a monetary sovereign Govt (UK/US/NZ/Aust) and a non monetary sovereign Govt (Euro countries/countries on a gold standard/countries that currency does not float etc) and what this means. And even what is the difference between ‘sound money’ and not sound money. But especially why we need ever increasing debt and how it can be achieved if we want to avoid an unavoidable massive depression.

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  14. The world is one big connected balance sheet. Where one companies revenue = another companies expenses. For example to earn revenue one company A sells good to another B.
    The JEs are
    A–>DEBIT Debtors CREDIT Revenue (P+L profit). But debtor are ALWAYS backed by another companies creditor
    B–> DEBIT Expense (P+L loss) or debit Asset (b/s) CREDIT Creditors

    This goes on and on

    If a Govt runs a deficit
    DEBIT Expense CREDIT Bond liability = debt
    the non Govt sector
    CREDIT Revenue DEBIT Bond asset

    One entity ALWAYS has a matching equal opposite entities. (or entries). This accounting just reflects economic reality. It can’t be avoided. Its like day time follows night time.

    BUT VERY FEW UNDERSTAND THIS. So form flawed beliefs

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  15. RJ,
    I have read lots on MMT from Mosler’s 7 Deadly Frauds to Bill Mitchell’s blog with an open mind, and happen to disagree.

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  16. And most people do stick to home economics. And that will lead to disaster. The depression will be massive if Govt world wide balance their books.

    A great simple to understand free download book to read on this subject is Warren Moslers The 7 Deadly Innocent Frauds. Or its cheap to download on Amazon.

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  17. RJ is both right & wrong debt is important to create new money or growth of money in a monetary system,but by not restricting it growth to say ave income to keep it at close to a real value it has been allowed to run away on the supply side from the demand side,forcing cost to be cut to sustain the debt repayments ,whilst destroying the very fabric that will actually pay the debt off,destroying true values & causing the depression,it is wrong to think that maintaining debt of false values is good in anyway at all,Helicopter money is now muted a great deal in some economic circles,but in reality all that does is restore some of the true value lost in the false valuations of supplied debt that was lost by creating it in the first place,unless the fundamentals are restored ,helicopter money will become normal every few years to balance the books but never to create real growth let alone real wealth,like the burning of crops forced up the victors price & income for a short while it never really increased there wealth or growth in anyway.

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  18. I happen to know that MMT is correct in this respect. And have challenged people to explain why they disagree. And they can not even give anything close to a sound economic reason.

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  19. I agree. Debt has grown far too quickly until times. But this is another issue. Debt MUST increase every year otherwise a depression result. But the rate of debt increase and how to achieve this is another but key issue. It’s this topic we should be debating not whether debt is needed.

    http://moslereconomics.com/2014/02/06/bill-gross-on-credit-expansion/
    It used to grow pre-Lehman at 810% a year, but now it only grows at 34%. Part of that growth is due to the government itself with recent deficit spending. A deficit of one trillion dollars in 20092010 equaled a 2% growth rate of credit by itself.

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  20. Excellent post the ghost. Minsky would argue that there are two types of debt. Good debt where the government and businesses use debt to expand their productivity and generate income to more than pay off the debt eg. America in the 19th century and Ponzi debt where an expansion in debt is used to speculate on rising asset prices leading to the Minsky Moment (see 1998, Lehman, 2015/16). The Ponzi scheme collapses when the newer levels of debt are unsustainable as productive increases haven’t matched the growth in the Ponzi debt.

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  21. And debt IN TOTAL will never be paid off. Nor should it be as reducing debt = company losses / reduced savings = very tough times.

    Due to an irrational fear of journal entries. Because that’s how both the debt asset and debt liability is created today.

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  22. Thank you RJ – never let it be said that ole Caratacus is not open to inspecting fresh sources of understanding. Downloaded and will form my afternoon’s reading. With a restorative to hand of course …

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  23. I suppose if Country A] exports most of its products to Country B & C] but does not import much from Countries B & C]
    Country B & C] must either pay cash? transfer assets, or borrow.
    Country B & C] decide to borrow from Country A] to import Country A’s products.
    Country B & C] have country A’s products in exchange for an IOU and a promise to repay in ??years @ ??% pa
    Simple question;
    What happens when Country B & C] decide not to import any more products from Country A] because either;
    No one is working in service or manufacturing sectors, [so no one as any purchasing power to buy Country A’s products?
    No one is working in service or manufacturing sectors, [so no taxes are paid to the governments of Country B & C, so they cannot service the IOU’s to Country A]

    Then again what if Country B & C] find that it requires to import 60% of the foodstuffs it requires to feed its ever increasing population.
    Then Country B & C finds that it does not manufacture sufficient exports to pay for these food stuffs.
    Nor can Country B & C] borrow [give IOU’s] to pay for these imported foodstuffs

    So Country B & C] then allow the cost of foodstuffs to increase to cut consumption.
    Then Country introduces a form of rationing to cut foodstuff consumption to the level of Country B & C] foodstuff production.

    What will be the reaction of the population of Country B & C] to this, if 40%+ of the population are second, or third immigrants who have not had the centuries of inbreeding and social engineering that the 60% of the original population of Country B & C] have had?

    I suppose they answer maybe, We are all Stuffed.

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  24. It is if it isn’t linked to economic reality or is leveraged beyond economic reality!
    When you go to market & the prices are falsified by debt the consumers has to pick carefully what they need & soon it is impossible for all the market stalls to trade closing the window of opportunity to both traders & consumers & that is were we are,fewer & fewer companies fewer & fewer consumers & economic disaster

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  25. Been scratching my head on RJ’s arguments too. If an economy is the total of financial activity of people be they individuals or collectives (companies) and economics is the theory of how they will behave with their munnee; then it can never be a precise science or mathematic fact but a prediction. Once upon a time The Masters of The Universe (derivatives and all that crap) were worshipped by the avaricious and held to have supernatural wealth generating powers. Well that all went tits up didn’t it? I’m just an Old Girl, shrewd enough to know when I’m being sold a pup. If its so complex that Old Girl’s can’t understand it experience has taught it is likely to be a pup.

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  26. Your only using one half of the variables,debt only has to increase to such great amounts because of the failure of true valuations,ie it now only grows at 34%,now how fast is wages growing in real terms to pay this extortionate valuation?

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  27. Please read the Mosler book above. It is the key issue that needs to be understood today. Most peoples understanding about UK Govt debt is the exact opposite to how it is. The world could collapse into a major devastating depression all because of confusion about monetary sovereign Govt debt. (Private/household debt is very different to Govt debt but many including economists think there is no difference).

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  28. If all money is credit, which in turn is debt, how the hell do we pay off the f*****g debt when that is what we are forced to use in order to survive. Pound notes are promises to pay which are paper slips that authorise permission to live!

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  29. I see a similarity with MMTers and Islamic extremists who ‘know’ that theirs is the only true path to salvation and anyone who disagrees is condemned as a fool or a fraud?
    Keynes advocated saving in the booms to spend in the busts. Fine idea, except it is never implemented because in practice governments spend in both.
    Increasing debt is fine in theory also, as long as the money created is then cancelled out later which means that it has to be invested where it will generate tax revenue or savings. This too doesn’t happen in practice. and the debt pile keeps rising.
    Keynesians and MMTers can argue that it’s not their fault that the rules aren’t followed but that doesn’t alter the outcome which is a debasement of currency.

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  30. I’m no economist either but what hasn’t been mentioned above is the role of Fractional Reserve Banking. If a bank can produce money out of thin air at a ratio of 1:10 or 12 against capital held where is the balance on other side of the ledger? You might say that the debt created is used to purchase physical assets such as car or other but these have a tendency to depreciate rapidly thus creating an inbalance which may be the heart of the problems e find ourselves in today.

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  31. When a bank loans money the banks JE is

    DEBIT Loan account theguvnor (banks asset/ your liability = DEBT)
    CREDIT theguvnor bank account (your MONEY asset / banks liability)

    So new money is created and at the same time new debt. This money can be used to purchase say a new car from company B. Company B then has a revenue entry WITHOUT AN OFFSETTING EXPENSE BY ANOTHER COMPANY. Your debt in effect creates a collective profit and / or increased total savings. Govt debt increases has the same impact. But we focus on the debt liability but ignore the new debt asset and increased saving and / or profits.

    Those that support Govt debt decreases in effect back a poorer non Govt sector. Without often realizing what the impact is.

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  32. Top post, JW, thanks.

    Yes the Banksters’ endgame is a world totalitarian Govt, which means the destruction of both Russia & China.
    All nations in turn.

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  33. What I think you’re missing, RJ, is the fact that money can be created without debt, “on the credit of the nation”, as the US colonies issued their scrip.
    Also Lincolns’ Greenbacks & the Bradbury £ in this country, 1913.

    Issuing money without debt is of course anathema to the Banksters

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  34. Money without debt is impossible nonsense. Despite what some sites like positive money claim. Debt is a financial asset. Financial assets are always without exception backed by a financial liability = debt except for a small provision for LOST notes and coins or fraudulent accounting.

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  35. The Bank doesn’t own the new money that is created(certain Banks have the Right to create money by lending it into existence and they have a fraction of the new monies created as a asset in order to create the new monies. as in, £100 in assets on hand, levered at 20:1, allows The certain Banks to create out of nothing £2000 of new monies, created when lending it to a borrower), they get the interest on the new monies, paid by the borrower (even though the interest is never created with the new money) and as the borrower pays back the monies(with interest).That monies goes back to the naught, from which is was created, and is no longer in the economy.

    Why do Certain Banks get the Right to create New monies at interest that is not created with the new monies?

    So apart from cash all money is debt money?

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  36. RJ

    You make various declamatory statements which you ask to be accepted as unassailable fact but do not provide meaningful answers to the numerous observations made above; you merely repeat or add to the jargon you have already submitted. As a director of two companies, like many others, I am all too familiar with what works and what doesn’t work when it comes to the mechanics of keeping those businesses operational and solvent. It appears that you see solvency as being unnecessary and irrelevant. You will never convince people who have first hand experience of budgeting (practically everyone on the planet) that there is some mystical disconnect between micro and macro economics or that two mutually exclusive sets of rules apply. There are certainly differences of course, but, in the end, real sustainable value cannot be created in a vacuum, where there is no equivalent production to support it, without rigging the game . Clearly, Warren Mosler and his ilk (who have successfully rigged the game) like to think differently, which is why we are in such a dreadful mess and they aren’t. If we could all just agree to delude ourselves along the lines which you suggest, that would never change. In a nutshell, what you are saying is directly contradicted by both events on the ground and by the empirical knowledge of vast numbers of people living in the real world. No matter your fancy jargon and pretend formulas, it’s snake oil and we ain’t buying any more of it. Just content yourself with the satisfaction that, as an elite monetary theorist, your knowledge is superior and that we fools are simply not yet evolved enough to understand it.

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  37. @ RJ

    Double entry book-keeping does NOT reflect economic reality. It is merely a system to maintain a reliable record of transactions.

    Everything you assert amounts to nothing more than accounting principles. It’s completely meaningless.

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  38. Hieronimusb
    Stop equating a business or household to a monetary sovereign Govt. Otherwise you will not have a business when the inevitable crash happens.

    What you write DOES APPLY to a household, business, state Govt, Microsoft, Euro countries, countries that have a fixed currency etc. But it will have truly awful consequences if its also applied to the US and UK Govt etc. Greece’s situation will apply world wide but much worse if all countries in the world run a budget surplus.

    All because of ignorance and pigheadedness.

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  39. Accounting reflect banking and money reality. Its not a system that can be ignored unless we move TOTALLY away from the current capitalist and monetary system and move to one small group owning everything in the world and just allocating housing etc etc etc to people as they see fit. A totally planned economy with no ownership or money whatsoever. It would be a disaster.

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  40. @RJ speaking on behalf of the ignorant and pigheaded you seem to assert that auditing is a waist of time. You just make everything up and it will all be fine. It is a giant slush fund where printing paper is the answer you advocate. Its all claptrap and it seems to be endless coming from you. You also keep saying that we will experience a monster recession if we don’t borrow more money so that eventually all of our lives are dedicated to paying for debt. How much a year does the UK pay as interest on the national debt. You want to increase it. we will have a major setback but its because of debt not the absence of it.

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  41. I have never mentioned auditing. Read Warren Mosler’s book mentioned above as you seem to have either not read my posts. Or do not understand what I have written.

    Like this
    What you write DOES APPLY to a household, business, state Govt, Microsoft, Euro countries, countries that have a fixed currency etc.

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  42. :) RJ economics is no longer taught at university has part of business studies & accountancy other than one syllabus on accountancy because Friedman followers believe only one thing maximise profit there be all & end all,so that is the limit of there economic knowledge & that is where your wrong!

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  43. thank you for your last sentence. i have read all your posts and i understand that international finance is evolving in ways never before experienced. however if that subject loses the confidence of the general public it cannot continue. people have no confidence when the household finance gets worse as it has been doing since 2008. if most cannot comprehend because you cannot communicate in a way that is understood, then you are trying to sell snake oil to the same most people in their understanding. Books and words won’t cut it. People need to feel better off or else you are on a loser. force is not an option in this or any day and age. The auditing is a consequence of what you are saying. to wit ‘the euro, the fed the gold etc. it would all be fine without corruption but that is not an option or ever has been.

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