Putin BRICS Remarks Imply Need for New Monetary System

Putin BRICS Remarks Imply Need for New Monetary System

Friday’s 4.1% GDP growth rate announcement was an encouraging sign for President Trump’s #MAGA agenda, as are the first signs of real wage growth in over a decade. But the core problems of massive debt at all levels of government, plus the unfunded liabilities of bloated American military and ‘health care’ spending remain. Private borrowing — particularly in the overheated Anglosphere housing markets from London to Vancouver — is also unsustainable (including the stupid headlines about how Millennials should throw fewer bachelor parties if they want to save for a house and inexplicably sluggish sales amidst 2007-08 exceeding prices for homes). Commercial real estate from failing North American shopping malls represent the first canaries dropping in the coal mine before a worse crash than the 2008 collapse — though President Trump is buying Americans critical time.

Emerging market crises, while beneficial to the dollar in the short run, remain corrosive to the greenback’s dominance over the long haul, as countries like Turkey and Argentina seek to escape the boom-bust dollar loans cycle. Another factor undermining King Dollar is of course, the failing U.S./EU sanctions imposed on Eurasian energy giant Russia as part of Cold War II, which have spurred Moscow to make oil transactions outside of the SWIFT payments structure and in rubles, yuan or local currencies. Mindful of the foreign debt and liquidity traps Latin Americans (including the Brazilians) have repeatedly fallen into through the 20th and 21st centuries, Russian President Vladimir Putin spoke on the topic of inevitable de-dollarization at this year’s BRICS Summit in Johannesburg. — JWS

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China Issues Challenge to World Community to Fix the Financial System

China Issues Challenge to World Community to Fix the Financial System

While Chinese President Xi Jinping was not present at this year's World Economic Forum in Davos, much of the focus of the event was  nevertheless very much on China. The Chinese delegation, which consisted both of Chinese officials and a large business delegation, was headed up by economist Liu He, who, while not so well known, has been the chief economic advisor to President Xi for a good number of years, but was only this year elected to the Political Bureau, the highest body of the Chinese Communist Party. It is generally understood that the major changes in China over the last five years have, to a certain extent, been due to Liu's advice. A leading economist, educated at Harvard among other institutions, he has written extensively on the 2008 crisis and its aftermath, and seems to refer mostly in his writings to economists like Joseph Schumpeter and Peter Romer. In his speech at Davos, he really issued what can only be considered the biggest challenge facing the world community, making fundamental changes in the present world financial system.

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With the government finally addressing fiscal policy for first time in 8 years, the ball is now back in the Fed's court

One of the primary reasons why the Federal Reserve has become so powerful in the last two decades is because the Legislative and the Executive Branches of government have passed the buck of fiscal responsibility over to the hands of the central banks.  In fact, following the taxpayer funded bailout known TARP, the long-time Senator from New York publicly told the central bank it was their time to 'get to work'.

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Team Rogue Money Radio with Producer CJ, Deb "Bankster Slayer" Caruthers and Ken Schortgen Jr.

RogueMoney radio is joined by Team RM's Ken @FinanceExaminer Schortgen Jr., Deb @BanksterSlayer Caruthers and Producer CJ for an hour discussing the massive November Treasury bond dump, China's accelerating yuan-ization, the weakening euro and the Eurasian Economic Union (EEU). Deb Caruthers discusses Russian President Vladimir Putin's visit to Prime Minister Shinzo Abe in Japan and the prospect of a permanent peace treaty formally ending WWII between Moscow and Tokyo with economic development deals for the Kuriles/Sakhalin Islands.

The Guerrilla discusses the collapse of no toilet paper 'Bolivarian socialism' in Caracas, Venezuela, as well as pining for the Hawaii golf courses lame duck Barry Obama's pathetic declaration of cyber war with Russia in retaliation for alleged hacking of the Democrats. Deb Caruthers also addresses potential secession for the people's republic of northern Mexico formerly known as California, and its huge mild climate camping homeless population.

If you could take away one idea from this show, it's use the strong dollar to travel in Europe, Latin America and Asia or to buy what you want and need while you can, before monetary hypoxia kicks in! -- JWS

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Draghi channels his Rahm Emmanuel and seeks to use Brexit vote to call for single global central bank

Draghi channels his Rahm Emmanuel and seeks to use Brexit vote to call for single global central bank

President Barack Obama's former Chief of Staff Rahm Emmanuel once famously said, never let a crisis go to waste.  And following the referendum vote by the British people to leave the European Union in the coming months, the European Central Bank (ECB) head Mario Draghi is channeling his inner Rahm Emmanuel to use this event as a clarion call to bring all global central banks under one roof to create one massive financial institution for monetary policy.

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China devalues currency then tells the U.S. they want involved in dollar policy changes

After a subsidiary of the Chinese state purchased the J.P. Morgan HQ building directly across and connected to the New York Federal Reserve a few years ago, it was rumored that China not only held a large stake in the bank itself, but are also now a partial shareholder with ties directly to America's central bank.

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Said Right Fed: I'm too sexy for my... interest rates

Dow Chart

Last week, CNBC tried to milk the most out of an interview between Steve L(ies)man and Federal Reserve Vice-Chairman Stanley Fischer, and sure enough, the 15 minute segment caused the algo's to soar, and stocks on all three indices to move into the green.  But when you actually look at what Fischer said about the potential raising of interest rates in September, it was absolutely nothing different than what has been said by all Fed officials going back to October of last year.

In the chart if you look at the first dip, you can see several times where the markets rose in spurts, and ironically, they occurred each time they re-ran the interview on Friday.

Stanley Fischer is considered by the mainstream to be the 'most reasonable' of the Fed heads, but in reality he is simply a tool for the elite.  In fact, David Stockman wrote this today after watching the escapades of the American-Israeli citizen, and former Chairman of Israel's central bank.

Stanley Fischer Speaks - More Drivel From A Dangerous Academic Fool

With every passing week that money markets rates remain pinned to the zero bound by the Fed, the magnitude of the financial catastrophe hurtling toward main street America intensifies. That’s because 80 months—– and counting—–of zero interest rates are fueling the most stupendous gambling frenzy that Wall Street has ever witnessed or even imagined. Sooner or later, therefore, this mother of all financial bubbles will splatter, bringing untold harm to millions of households which have been lured back into the casino.

Accordingly, after 80 months of showering Wall Street with what is a wholly unnatural and perverse financial windfall—-that is, zero cost in the money market—–the Fed has ignited a rip-roaring inflation. But the inflation is in the financial market, not the supermarket.

Needless to say, there was not even a faint trace of recognition of this fundamental reality in Stanley Fischer’s much heralded Jackson Hole speech on inflation. As usual, it was an empty bag of quasi-academic wind about utterly irrelevant short-term twitches in various inadequate measures of consumer inflation published by the Washington statistical mills. Indeed, Fischer went so far as to acknowledge that one of the more plausible consumer prices indices—–the Dallas Fed’s “trimmed mean” measure of the PCE deflator—–was up 1.6% in the past year.

Here’s the thing. No one except the modern equivalent of medieval theologians counting angels on the head of a pin could think that the difference between this reading and the Fed’s arbitrary 2.0% inflation target is of significance to any economic actor in the real world. - David Stockman's Contra Corner

But alas, Stanley Fischer is not the only idiot clown controlling the world's financial spigot and monetary policy.  For nearly a year Janet Yellen has played her best imitation of Mario Draghi, and jawboned over and over how great the economy is, how great unemployment numbers are, and how deflation is killing asset prices.

And with hedge funds, stock investors, and the entire Western financial world in fact waiting for some small bit of guidance from the Fed, it is unlikely that it will come anytime soon.  Just ask several financial reporters who no longer believe a single word from the world's primary central bank.

Now comes one of the world’s top monetary reporters, Ylan Q. Mui, to make a delicate observation at the Washington Post’s Wonkblog, in Why nobody believes the Federal Reserve’s forecasts. Mui:

“The market recognizes that the Fed has repeatedly erred on the optimistic side,” said Eric Lascelles, chief economist at RBC Global Asset Management. “Fool me 50 times, but not 51 times.”

Even the government’s official budget forecasters are dubious of the Fed’s own forecast.

This is a theme that Mui has touched on before. In 2013, she wrote Is the Fed’s crystal ball rose-colored?:

The big question is whether Fed officials can get it right after years in which they have regularly predicted a stronger economy than the one that materialized. In January 2011, Fed officials predicted that GDP would grow around 3.7 percent that year. It clocked in at 2 percent. In January 2012, they anticipated growth of about 2.5 percent. We ended up with 1.6 percent.

To give Ms. Mui’s competition its due, Dr. Richard Rahn at the Washington Times last April crisply noted:

The Federal Reserve had forecast the U.S. economy to grow about 4 percent near the beginning of each year for the last five years. But during each year, the Fed was forced to reduce its forecast until it got to the actual number of approximately 2 percent. (Other government agencies have been making equally bad forecasts.) These mammoth errors clearly show that the forecast models the official agencies use are mis-specified and contain incorrect assumptions. - Forbes

The reason I point this out is because right now, the Fed, mainstream media, and even politicians are trying to put the recent stock market declines on China, and their economic slowdowns and equity crashes.

But China does not control global monetary policy... the United States does through the reserve currency and the petro-dollar.  And since they couldn't blame the real culprits (themselves) when dollar policy back in 2009 led to global commodities being too high for many Arab countries and resulted in massive protests and even revolutions, blaming a country like China, who's currency floats far less than even the Euro or Yen, as the catalyst for the ongoing breakdowns proves that either the Fed is no longer in control, or is working extremely hard to deceive the public and Wall Street that they do not know what they are doing.

Watching events unfold around the world is important, including ANOTHER chemical warehouse explosion that took place just today in mainland China because these events are being orchestrated by intelligence services attempting to keep the world's eyes off the real instigator of the coming collapse, and to try to create a war or conflict to pacify the citizens who are growing more and more fearful as the Autumn comes upon us.  But make no mistake, it is not China, nor oil prices, nor Ukraine and Yemen that are at the heart of what is coming, and instead keep the focus on the Federal Reserve, because their actions in the coming weeks will decide just how long, and just how difficult the next global collapse will be.  Because if we learned anything from last Friday, the markets and the algo's are tied intrinsically to what comes out of the mouth of the most ignorant people on the planet.