Category Archives: Economy

Financial market manipulation is the new trend: can it continue?

Financial imperialists attack Russia

A dangerous new trend is the successful manipulation of the financial markets by the Federal Reserve, other central banks, private banks, and the US Treasury. The Federal Reserve reduced real interest rates on US government debt obligations first to zero and then pushed real interest rates into negative territory. Today the government charges you for the privilege of purchasing its bonds. Continue reading

Bail-in and the Financial Stability Board: The global bankers’ coup

On December 11, 2014, the US House of Representatives passed a bill repealing the Dodd-Frank requirement that risky derivatives be pushed into big-bank subsidiaries, leaving our deposits and pensions exposed to massive derivatives losses. Continue reading

Another fabricated jobs report

Friday’s payroll jobs report is another government fairy tale or, to avoid polite euphemisms, another packet of lies just like the House of Representatives Resolution against Russia and every other statement that comes out of Washington. Continue reading

US resorts to illegality to protect failed policies

In a blatant and massive market intervention, the price of gold was smashed last Friday. Right after the Comex opened on Friday morning 7,008 paper gold contracts representing 20 tonnes of gold were dumped in the New York Comex futures market at 8:50 a.m. EST. At 12:35 a.m. EST 10,324 contracts representing 30 tonnes of gold were dropped on the Comex futures market. Continue reading

New G20 rules: Cyprus-style bail-ins to hit depositors and pensioners

On the weekend of November 16, the G20 leaders whisked into Brisbane, posed for their photo ops, approved some proposals, made a show of roundly disapproving of Russian President Vladimir Putin, and whisked out again. It was all so fast, they may not have known what they were endorsing when they rubber-stamped the Financial Stability Board’s “Adequacy of Loss-Absorbing Capacity of Global Systemically Important Banks in Resolution,” which completely changes the rules of banking. Continue reading

Swiss gold referendum: What it really means

In a few days, the Swiss people will go to the polls to decide whether the Swiss central bank is to be required to hold 20% of its reserves in the form of gold. Polls show that the gold requirement is favored by the less well off and opposed by wealthy Swiss invested in stocks. These poll results provide new insight into the real reason for Quantitative Easing by the Federal Reserve and European Central Bank. Continue reading

WSJ reports: Bank of North Dakota outperforms Wall Street

While 49 state treasuries were submerged in red ink after the 2008 financial crash, one state’s bank outperformed all others and actually launched an economy-shifting new industry. So reports the Wall Street Journal this week, discussing the Bank of North Dakota (BND) and its striking success in the midst of a national financial collapse led by the major banks. Continue reading

Ideological foundations of the mainstream neoclassical economics: Class interests as ‘economic theory’

There is now a widespread consensus that mainstream/neoclassical economists failed miserably to either predict the coming of the 2008 financial implosion, or provide a reasonable explanation when it actually arrived. Not surprisingly, many critics have argued that neoclassical economics has created more confusion than clarification, more obfuscation than elucidation. Economic “science” has, indeed, become “an ideological construct which serves to camouflage and justify the New World Order.” Continue reading

A global house of cards

As most Americans, if not the financial media, are aware, Quantitative Easing (a euphemism for printing money) has failed to bring back the US economy. Continue reading

More lies from ‘our’ government: The latest jobs report

Just as the German media have destroyed their credibility with lies, the US government is consistently destroying Washington’s credibility both with its own citizens and the rest of the world. Continue reading

Making sense of the simultaneous inflation and deflation

While the financial sector of the core capitalist economies is enjoying escalating asset price inflation, the real sector of these economies, especially those of Europe and Japan, is suffering from deflation, that is, stagnation and high unemployment. Continue reading

Why do banks want our deposits?

Hint: it’s not to make loans

Many authorities have said it: banks do not lend their deposits. They create the money they lend on their books. Continue reading

Challenging corporate power in a not-for-profit world

Does changing the way we do business hold the key to creating a world where resources are shared more equitably and consumed within planetary limits? According to Professor Donnie Maclurcan of the Post Growth Institute, the answer is a definitive yes—but only if we can fully embrace a business model that doesn’t require profits to be distributed to shareholders, and works instead to reinvest revenues back into the company. Increasingly, socially and environmentally conscious entrepreneurs are adopting not-for-profit (NFP) business practices across the whole spectrum of traditionally for-profit sectors. Maclurcan, whose book ‘How on Earth’ co-authored with Jennifer Hinton is due out next year, firmly believes that the NFP model presents an alternative macroeconomic framework with the potential to revolutionise how we produce goods and services, and thereby pave the way for an ‘economics of enough.’ Continue reading

Why President Rouhani’s ‘economic package’ is empty

Tired of the oppressive financial hardship, wrought largely by the imperialist economic war against Iran, the Iranian people elected Hassan Rouhani president (June 2013) as he promised economic revival. Continue reading

It’s time for a post-Piketty vision of shared wealth

There is no doubt that Thomas Piketty’s best-seller, Capital in the Twenty-First Century, has done a great deal of good in highlighting the urgency of tackling spiralling levels of global inequality. But could his main policy prescription—an annual global tax on capital—lead to a genuine sharing of wealth within and across societies? Continue reading

Building an ark: How to protect public revenues from the next meltdown

Concerns are growing that we are heading for another banking crisis, one that could be far worse than in 2008. But this time, there will be no government bailouts. Instead, per the Dodd-Frank Act, bankrupt banks will be confiscating (or “bailing in”) their customers’ deposits. Continue reading

The lie machine

Corporations, trade pacts and the media

I have come to the conclusion that the West is a vast lie machine for the secret agendas of vested interests. Consider, for example, the Transatlantic Trade and Investment Partnership and the Transpacific Trade and Investment Partnership. Continue reading

Towards one quadrillion US dollars in derivatives

A quadrillion figure seems far-fetched, one to be used only when referring to distances in the confines of intergalactic travel, and not the world of international finance. After all, Mars is just a measly 34 million miles away (at perihelion—when at its closest point to the sun); and the edge of our solar system barely reaches 9 or 10 billion miles. So, when talking about a quadrillion dollars, we need to reset our financial minds from the microscopic minimum wage to the mach-speed technology of the Enterprise; and leave behind the Good Ship Lollypop, where most of us uninitiated, financially-duped, yokels travel these days. Continue reading

More bad news from the jobs front

The Bureau of Labor Statistics headline Friday morning read: “Payroll employment increases by 248,000 in September; unemployment rate declines to 5.9%.” Continue reading

Poverty report contradicts GDP claims

It is amazing how the government manages to continue selling Brooklyn Bridges to a gullible public. Americans buy wars they don’t need and economic recoveries that do not exist. Continue reading

Preparing to asset-strip local government?

In an inscrutable move that has alarmed state treasurers, the Federal Reserve, along with the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency, just changed the liquidity requirements for the nation’s largest banks. Municipal bonds, long considered safe liquid investments, have been eliminated from the list of high-quality liquid collateral. assets (HQLA). That means banks that are the largest holders of munis are liable to start dumping them in favor of the Treasuries and corporate bonds that do satisfy the requirement. Continue reading

Keynes is dead; long live Marx

Many liberal economists envisioned a new dawn of Keynesianism in the 2008 financial meltdown. Nearly six years later, it is clear that the much-hoped-for Keynesian prescriptions are completely ignored. Why? Keynesian economists’ answer: “neoliberal ideology,” which they trace back to President Reagan. Continue reading

Colonization by bankruptcy: The high-stakes chess match for Argentina

Argentina is playing hardball with the vulture funds which have been trying to force it into an involuntary bankruptcy. The vultures are demanding what amounts to a 600% return on bonds bought for pennies on the dollar, defeating a 2005 settlement in which 92% of creditors agreed to accept a 70% haircut on their bonds. A US court has backed the vulture funds; but last week, Argentina sidestepped its jurisdiction by transferring the trustee for payment from Bank of New York Mellon to its own central bank. That play, if approved by the Argentine Congress, will allow the country to continue making payments under its 2005 settlement, avoiding default on the majority of its bonds. Continue reading

Cry for Argentina: Fiscal mismanagement, odious debt or pillage?

Argentina was the richest country in Latin America before decades of neoliberal and IMF-imposed economic policies drowned it in debt. A severe crisis in 2001 plunged it into the largest sovereign debt default in history. In 2005, it renegotiated its debt with most of its creditors at a 70% “haircut.” But the opportunist “vulture funds,” which had bought Argentine debt at distressed prices, held out for 100 cents on the dollar. Continue reading

Don’t be fooled: Banks still too big to fail

Analyzing a government report is like eating and digesting a meal—better to take it slowly than gobble quickly and suffer the possible consequences. Continue reading

Defining away economic failure

Redefinition is America’s most powerful factor of production

Last week’s government guesstimate that second quarter 2014 real GDP growth will be 4% seems nonsensical on its face. There is no evidence of increases in real median family incomes or real consumer credit that would lift the economy from a first quarter decline to 4% growth in the second quarter. Continue reading

You can’t taper a Ponzi scheme: Time to reboot

One thing to be said for the women now heading the Federal Reserve and the IMF: compared to some of their predecessors, they are refreshingly honest. Continue reading

Did the other shoe just drop?

Black Rock and PIMCO sue banks for $250 billion

For years, homeowners have been battling Wall Street in an attempt to recover some portion of their massive losses from the housing Ponzi scheme. But progress has been slow, as they have been outgunned and out-spent by the banking titans. Continue reading

The deteriorating economic outlook

The third and final estimate (until the annual GDP revisions) of first quarter 2014 real GDP growth released June 25 by the US Bureau of Economic Analysis was a 2.9% contraction in GDP growth, a 5.5 percentage point difference from the January forecast of 2.6% growth. Apparently, the first quarter contraction was dismissed by those speculating in equities as weather related, as stock averages rose with the bad news. Continue reading

Asset price inflation and inequality

It is now common knowledge that the U.S. economy has, in recent years, been experiencing extremely uneven developments. While the financial sector has been enjoying enormously high rates of growth, the real sector is mired in stagnation or dismal growth rates. Accordingly, while the financial oligarchy is reaping the lion’s share of this fantastic growth of asset-price inflation, the overwhelming majority of citizens are suffering from the systematically declining standards of living. Continue reading

The looming foreclosure crisis: As the Fed runs out of bullets, local governments are stepping in

Former Assistant Treasury Secretary Paul Craig Roberts wrote last month that real US GDP growth for the first quarter of 2014 was a negative 2.9%, off by 5.5% from the positive 2.6% predicted by economists. If the second quarter also shows a decline, the US will officially be in recession. That means not only fiscal policy (government deficit spending) but monetary policy (unprecedented quantitative easing) will have failed. The Federal Reserve is out of bullets. Continue reading

Virtual economy’s phantom job gains are based on statistical fraud

And more fraud is in the works

Washington can’t stop lying. Don’t be convinced by last Thursday’s job report that it is your fault if you don’t have a job. Those 288,000 jobs and 6.1% unemployment rate are more fiction than reality. Continue reading