The Beginning Of The End
The Beginning Of The End By Michael T. Snyder - Kindle Version

The Prepper's Blueprint

The Mystery Of The Shemitah
Don't Buy Survival Food Until You Read This - If you stockpile the wrong foods, you could be setting your family up to starve. It sounds harsh, but the truth is too many people with good intentions are making critical mistakes with their food stockpiles. Watch this video now >>
Gold Buying Guide: Golden Eagle Coins

Recent Posts

Archives

Federal Reserve Whistleblower Tells America The REAL Reason For Quantitative Easing

Wheelbarrow of MoneyA banker named Andrew Huszar that helped manage the Federal Reserve’s quantitative easing program during 2009 and 2010 is publicly apologizing for what he has done.  He says that quantitative easing has accomplished next to nothing for the average person on the street.  Instead, he says that it has been “the greatest backdoor Wall Street bailout of all time.”  And of course the cold, hard economic numbers support what Huszar is saying.  The percentage of working age Americans with a job has not improved at all during the quantitative easing era, and median household income has actually steadily declined during that time frame.  Meanwhile, U.S. stock prices have doubled overall, and the stock prices of the big Wall Street banks have tripled.  So who benefits from quantitative easing?  It doesn’t take a genius to figure it out, and now Andrew Huszar is blowing the whistle on the whole thing.

From 2009 to 2010, Huszar was responsible for managing the Fed’s purchase of approximately $1.25 trillion worth of mortgage-backed securities.  At the time, he thought that it was a dream job, but now he is apologizing to the rest of the country for what happened…

I can only say: I’m sorry, America. As a former Federal Reserve official, I was responsible for executing the centerpiece program of the Fed’s first plunge into the bond-buying experiment known as quantitative easing. The central bank continues to spin QE as a tool for helping Main Street. But I’ve come to recognize the program for what it really is: the greatest backdoor Wall Street bailout of all time.

When the first round of quantitative easing ended, Huszar says that it was incredibly obvious that QE had done very little to benefit average Americans but that it had been “an absolute coup for Wall Street”…

Trading for the first round of QE ended on March 31, 2010. The final results confirmed that, while there had been only trivial relief for Main Street, the U.S. central bank’s bond purchases had been an absolute coup for Wall Street. The banks hadn’t just benefited from the lower cost of making loans. They’d also enjoyed huge capital gains on the rising values of their securities holdings and fat commissions from brokering most of the Fed’s QE transactions. Wall Street had experienced its most profitable year ever in 2009, and 2010 was starting off in much the same way.

You’d think the Fed would have finally stopped to question the wisdom of QE. Think again. Only a few months later—after a 14% drop in the U.S. stock market and renewed weakening in the banking sector—the Fed announced a new round of bond buying: QE2. Germany’s finance minister, Wolfgang Schäuble, immediately called the decision “clueless.”

That was when I realized the Fed had lost any remaining ability to think independently from Wall Street.

Of course the fact that the Fed cannot think independently from Wall Street should not be a surprise to any of my regular readers.  As I have written about repeatedly, the Federal Reserve was created by the Wall Street bankers for the benefit of the Wall Street bankers.  When the Federal Reserve serves the interests of Wall Street, it is simply doing what it was designed to do.  And according to Huszar, quantitative easing has been one giant “subsidy” for Wall Street banks…

Having racked up hundreds of billions of dollars in opaque Fed subsidies, U.S. banks have seen their collective stock price triple since March 2009. The biggest ones have only become more of a cartel: 0.2% of them now control more than 70% of the U.S. bank assets.

But Huszar is certainly not the only one on Wall Street that acknowledges these things.  For example, just check out what billionaire hedge fund manager Stanley Druckenmiller told CNBC about quantitative easing…

 

This is fantastic for every rich person,” he said Thursday, a day after the Fed’s stunning decision to delay tightening its monetary policy. “This is the biggest redistribution of wealth from the middle class and the poor to the rich ever.

“Who owns assets—the rich, the billionaires. You think Warren Buffett hates this stuff? You think I hate this stuff? I had a very good day yesterday.”

Druckenmiller, whose net worth is estimated at more than $2 billion, said that the implication of the Fed’s policy is that the rich will spend their wealth and create jobs—essentially betting on “trickle-down economics.”

“I mean, maybe this trickle-down monetary policy that gives money to billionaires and hopefully we go spend it is going to work,” he said. “But it hasn’t worked for five years.”

 

And Donald Trump said essentially the same thing when he made the following statement on CNBC about quantitative easing…

“People like me will benefit from this.”

The American people are still being told that quantitative easing is “economic stimulus” which will make the lives of average Americans better.

That is a flat out lie and the folks over at the Federal Reserve know this.

In fact, a very interesting study conducted for the Bank of England shows that quantitative easing actually increases the gap between the wealthy and the poor…

It said that the Bank of England’s policies of quantitative easing – similar to the Fed’s – had benefited mainly the wealthy.

Specifically, it said that its QE program had boosted the value of stocks and bonds by 26 percent, or about $970 billion. It said that about 40 percent of those gains went to the richest 5 percent of British households.

Many said the BOE’s easing added to social anger and unrest. Dhaval Joshi, of BCA Research wrote that  “QE cash ends up overwhelmingly in profits, thereby exacerbating already extreme income inequality and the consequent social tensions that arise from it.”

And this is exactly what has happened in the United States as well.

U.S. stocks have risen 108% while Barack Obama has been in the White House.

And who owns stocks?

The wealthy do.  In fact, 82 percent of all individually held stocks are owned by the wealthiest 5 percent of all Americans.

Meanwhile, things have continued to get even tougher for ordinary Americans.

While Obama has been in the White House, the percentage of working age Americans with a job has declined from 60.6% to 58.3%, median household income has declined for five years in a row, and poverty has been absolutely exploding.

But the fact that it has been very good for Wall Street while doing essentially nothing for ordinary Americans is not the biggest problem with quantitative easing.

The biggest problem with quantitative easing is that it is destroying worldwide faith in the U.S. dollar and in the U.S. financial system.

In recent years, the Federal Reserve has started to behave like the Weimar Republic.  Just check out the chart below…

M1 Money Supply 2013

The rest of the world is watching the Fed go crazy, and they are beginning to openly wonder why they should continue to use the U.S. dollar as the de facto reserve currency of the planet.

Right now, most global trade involves the use of U.S. dollars.  In fact, far more U.S. dollars are actually used outside of the United States than are used inside the country.  This creates a tremendous demand for U.S. dollars around the planet, and it keeps the value of the U.S. dollar at a level that is far higher than it otherwise would be.

If the rest of the world decides to start moving away from the U.S. dollar (and this is already starting to happen), then the demand for the U.S. dollar will fall and we will not be able to import oil from the Middle East and cheap plastic trinkets from China so inexpensively anymore.

In addition, major exporting nations such as China and Saudi Arabia end up with giant piles of U.S. dollars due to their trading activities.  Instead of just sitting on all of that cash, they tend to reinvest much of it back into U.S. Treasury securities.  This increases demand for U.S. debt and drives down interest rates.

If the Federal Reserve continues to wildly create money out of thin air with no end in sight, the rest of the world may decide to stop lending us trillions of dollars at ultra-low interest rates.

When we get to that point, it is going to be absolutely disastrous for the U.S. economy and the U.S. financial system.  If you doubt this, just read this article.

The only way that the game can continue is for the rest of the world to continue to be irrational and to continue to ignore the reckless behavior of the Federal Reserve.

We desperately need the rest of the planet “to ignore the man behind the curtain”.  We desperately need them to keep using our dollars that are rapidly being devalued and to keep loaning us money at rates that are far below the real rate of inflation.

If the rest of the globe starts behaving rationally at some point, and they eventually will, then the game will be over.

Let us hope and pray that we still have a bit more time until that happens.

41 IMF Bailouts And Counting – How Long Before The Entire System Collapses?

Nuclear Sign And Money Symbols - Photo by CannedcatBroke nations are bailing out other broke nations with borrowed money.  Round and round we go – where we stop nobody knows.  As of April, 41 different countries had active financial “arrangements” with the IMF.  Sometimes they are called “bailouts” and sometimes they are called other things, but in every single case they involve loans.  And most of the time, these loans come with very stringent conditions.  It is a form of “global governance” that most people don’t even know about.  For decades, the IMF has been able to use money as a way to force developing nations to do what it wants them to do.  But up until fairly recently, this had mostly only been done with poor nations.  But now an increasing number of wealthy nations are turning to the IMF for help.  We have already seen Greece, Portugal, Ireland and Cyprus receive bailouts which were partly funded by the IMF, Spain has received a bailout for its banking sector, and as I noted yesterday, it is being projected that Italy will need a major bailout within six months.  How long can this go on before the entire system collapses?

Well, that would depend on how much money the lender has.

And so where does the IMF get their money?

The IMF gets their money from a bunch of nations that are absolutely drowning in debt themselves.

The IMF is funded by “wealthy” nations that dominate the global economy.  The following is how Wikipedia describes the IMF’s quota system…

The IMF’s quota system was created to raise funds for loans. Each IMF member country is assigned a quota, or contribution, that reflects the country’s relative size in the global economy. Each member’s quota also determines its relative voting power. Thus, financial contributions from member governments are linked to voting power in the organization.

These are the five largest contributors to IMF funding…

United States – 16.75%

Japan – 6.23%

Germany – 5.81%

France – 4.29%

UK – 4.29%

But those countries are in trouble themselves.  The U.S. has a debt to GDP ratio of over 100%.  Japan has a debt to GDP ratio of over 200%.

The truth is that these countries are funding the IMF with borrowed money.

So what happens when the contributors run out of money and can’t contribute anymore?

All over the globe, an increasing number of countries are reaching out to the IMF for help.  For example, on Thursday we learned that Pakistan is getting a new bailout from the IMF…

Pakistan and the International Monetary Fund have reached an initial agreement on a bailout of at least $5.3 billion.

Pakistani Finance Minister Muhammad Ishaq Dar and IMF mission chief Jeffrey Franks announced the agreement at a press conference Thursday.

And the new government in Egypt is hoping that the revolution that just occurred will not stop the flow of IMF funds…

In recent months, a handful of neighboring countries such as Qatar have been keeping Egypt’s economy afloat by loaning the country’s central bank cash. That has bought Morsi government time to delay implementing the politically-sensitive measures the IMF has sought as a precondition before it gives Cairo a $4.8 billion credit line. In particular, the IMF had said that Egypt must raise taxes and begin phasing out fuel subsidies.

It’s not the only cash at stake. Other international donors have vowed another $9.7 billion for the country once the IMF program is in place. Roughly $1.55 billion in bilateral aid from Washington could also be held up: under U.S. law, the administration can’t loan money to countries where the military is involved in an unconstitutional change in government.

But what often happens with these bailouts is that the “conditions” that are imposed prove extremely difficult to meet.  For example, Greece has not implemented all of the “reforms” that they were ordered to implement, and so the flow of future funds may be threatened…

As Greece looks set to miss a key reform deadline set by international lenders, which could jeopardize further financial aid, a Greek government minister said it wasn’t Greece’s fault that it couldn’t live up to the demands of a flawed bailout program.

“There are failures [by Greece],but you assume that the program that has been effectively imposed on us is perfect, which is far from the case,” Nikos Dendias, minister of Public Order and Citizen Protection, told CNBC on Thursday.

His comments come after Greek finance ministry officials said on Wednesday that Greece would not meet targets on reforming its public sector by the deadline set by international lenders, putting further financial aid in jeopardy.

Once a nation gets hooked on bailout money from the IMF or from other international sources, it can be very hard to get off of it.  But that is what these globalist organizations like – they want to be able to use money as a form of control.

As we saw with Greece, sometimes a nation will need bailout after bailout.  And it appears that is also going to be the case with Portugal.  The Portuguese government is on the verge of collapsing and their financial situation is being described as “very fragile”

Portugal had been held up as an example of a bailout country doing all the right things to get its economy back in shape. That reputation is now harder to sustain and even before this latest crisis, the International Monetary Fund reported last month that Lisbon’s debt position was “very fragile”.

Coming soon after the near-collapse of the Greek government, which has been given until Monday to show it can meet the demands of its own EU-IMF bailout, the euro zone may be on the brink of falling back into full-on crisis.

Right now, Portuguese bond yields are absolutely soaring and the Portuguese economy is rapidly heading into depression.

Portugal is going to desperately need the assistance of the IMF.

But what happens when the nations that primarily fund the IMF start failing themselves?

The U.S. is a complete and total financial disaster and so is Japan.  Much of Europe is already experiencing a full-blown economic depression and even China is showing signs of trouble.

So if the “wealthy” nations fail, who is going to be there to help the “poor” nations?

Forget The Election Results – Greece Is Still Doomed And So Is The Rest Of Europe

The election results from Greece are in and the pro-bailout forces have won, but just barely.  It is being projected that the pro-bailout New Democracy party will have about 130 seats in the 300 seat parliament, and Pasok (another pro-bailout party) will have about 33 seats.  Those two parties have alternated ruling Greece for decades, and it looks like they are going to form a coalition government which will keep Greece in the euro.  On Monday we are likely to see financial markets across the globe in celebration mode.  But the truth is that nothing has really changed.  Greece is still in a depression.  The Greek economy has contracted by close to 25 percent over the past four years, and now they are going to stay on the exact same path that they were before.  Austerity is going to continue to grind away at what remains of the Greek economy and money is going to continue to fly out of the country at a very rapid pace. Greece is still drowning in debt and completely dependent on outside aid to avoid bankruptcy.  Meanwhile, things in Spain and Italy are rapidly getting worse.  So where in that equation is room for optimism?

Right now the ingredients for a “perfect storm” are developing in Europe.  Government spending is being slashed all across the continent, ECB monetary policy is very tight, new regulations and deteriorating economic conditions are causing major banks to cut back on lending and there is panic in the air.

Unless something dramatic changes, things are going to continue to get worse.

Yes, the Greek election results mean that Greece will stay in the euro – at least for now.

But is that really a reason for Greeks to celebrate?

Right now, the unemployment rate in Greece is about 22 percent.  Businesses continue to shut down at a staggering rate and suicides are spiking.

So far this month, about 500 million euros a day has been pulled out of Greek banks.  The entire Greek banking system is on the verge of collapse.

Meanwhile, the Greek government is still running up more debt.  It is being projected that the Greek budget deficit will be about 7 percent of GDP this year.

The Greeks went to the polls and they voted for more of the same.

Are they crazy?

Someone once said that the definition of insanity is doing the same thing over and over again and expecting different results.

Unfortunately, it looks like things are going to continue to get worse in Greece for quite some time.

And the rest of Europe is heading into a very bleak economic future as well.

At the moment, unemployment in the eurozone is at a record high.

Most analysts expect it to go even higher.

To say that Spain has an unemployment problem would be a massive understatement.  The unemployment rate in Spain is even higher than the unemployment rate in Greece is.  In fact, unemployment in Spain is the highest that it has ever been since the introduction of the euro.

The Spanish banking system is a complete and total disaster at this point.  The Spanish government has already asked for a 100 billion euro bailout for its banks.

But that might not be nearly enough.

Spain is facing a housing collapse similar to what the United States went through back in 2008 and 2009.  Right now, home prices in Spain are absolutely collapsing….

Fresh data yesterday shows how desperate the crisis is becoming in Spain. The property crash is accelerating. House prices fell at a 12.6pc rate in the first quarter of this year, compared to 11.2pc the quarter before, and 7.4pc in the quarter before that. Prices have fallen 26pc from their peak.

“Fundamentals point to a further 25pc decline,” said Standard & Poor’s in a report on Thursday. It may take another four years to clear a glut of one million homes left from the building boom.

Meanwhile, money is being pulled out of banks in Spain at a very alarming rate.  As panic spreads we are seeing slow motion bank runs all over Europe.  Over the past few months massive amounts of money have been moved from troubled nations to “safe havens” such as Switzerland and Germany.

Investors are getting very nervous and yields on Italian and Spanish debt are spiking again.

Last week yields on Spanish debt hit their highest levels since the introduction of the euro.  Without massive ECB intervention the yield on 10 year Spanish bonds will almost certainly blow well past the 7 percent danger mark.

The credit rating agencies are indicating that there is danger ahead.  Moody’s recently downgraded Spanish debt to just one notch above junk status.  Spain is heading down the exact same road that Greece has gone.

The situation in Europe is very grim.

Greece is going to need bailouts for as far as the eye can see.

Spain is almost certainly going to need a huge bailout.

Italy is almost certainly going to need a huge bailout.

Ireland and Portugal look like they are going to need more money.

France is increasingly looking vulnerable, and Francois Hollande appears to have no real solutions up his sleeve.

As I have said so many times before, watch Europe.

Every few weeks there are headlines that declare that “Europe has been saved” but things just keep getting worse.

The governor of the Bank of England, Mervyn King, said the following a few weeks ago….

“Our biggest trading partner is tearing itself apart with no obvious solution.”

And that is the truth.  There is no obvious solution to the problems in Europe.  The politicians could kick the can down the road for a while longer, but in the end there will be no avoiding the pain that is coming.

The equation for what is happening in Europe that I have shared before still applies….

Brutal austerity + toxic levels of government debt + rising bond yields + a lack of confidence in the financial system + banks that are massively overleveraged + a massive credit crunch = A financial implosion of historic proportions

We are watching a slow-motion financial train wreck that is absolutely unprecedented happen right in front of our eyes and our politicians are powerless to stop it.

It is going to be a long, hot summer for the European financial system.

On election day in Greece, the mood was incredibly somber.  Instead of celebrating, most Greeks seemed resigned to a very hard future.  As an article in the Telegraph described, the entire nation seems to be grinding to a halt….

This is the election that is supposed to decide whether Greece stays in the euro. Yet as it, and Europe, face what could be their Katrina moment, the dominant sense here is not of panic, or fear, or even hope – but of a country in suspended animation, grinding to a halt.

The Athens Heart shopping centre, in the southern suburbs, is polished, full of big brands, and almost totally empty of customers. “We’ve had five sales all day,” says Steryiani Vlachakou, the assistant in the Champion sportswear store. “It’s been getting a lot, lot worse.”

Sadly, it is not only Greece that is doomed.

The truth is that all of Europe is doomed, and when Europe falls the entire globe is going to feel it.

So get ready for the hard times that are coming.  The pain is going to be immense and most people are not even going to see it coming.

Uh Oh – Italy Is Coming Apart Like A 20 Dollar Suit

Did anyone really think that Italy would be able to get through this thing without needing a bailout?  Just when you thought that things in Europe could get back to normal for a little while, here comes Italy.  On Friday, there was a bit of a “mini-panic” as investors started dumping Italian financial assets.  European officials are concerned that the sovereign debt crisis that has ravaged Greece, Ireland and Portugal will now put the Italian economy through the wringer.  European Council President Herman Van Rompuy has called an emergency meeting for Monday morning.  He is denying that the meeting is about Italy, but everyone knows that Italy is going to be discussed.  European Central Bank President Jean-Claude Trichet and European Commission President Jose Manuel Barroso along with a host of other top officials will also be at this meeting.  If it does turn out that Italy needs a bailout, it is going to change the entire game in Europe.

What is going on in Italy right now is potentially far more serious than what has been going on in Greece.  Italy is the fourth largest economy in the European Union.  If Italy requires a bailout, the rest of Europe might not be able to handle it.

An anonymous European Central Bank source told one German newspaper the following on Sunday….

“The existing rescue fund in Europe is not sufficient to provide a credible defensive wall for Italy”

The source also added that the current bailout fund “was never designed for that“.

Italy has already implemented austerity measures.

This was not supposed to happen.

But it is happening.

This latest crisis was precipitated by a substantial sell-off of Italian financial assets on Friday.  An article posted by Bloomberg described the pounding that the two largest Italian banks took….

UniCredit SpA (UCG) and Intesa Sanpaolo SpA (ISP), Italy’s biggest banks, fell to the lowest in more than two years in Milan yesterday as contagion from Europe’s debt crisis threatened to spread to the region’s third-largest economy.

UniCredit plunged 7.9 percent, the biggest decline since March 30, 2009, while Intesa dropped 4.6 percent. Both hit lows not seen since the period when markets were emerging from the crisis spawned by the collapse of Lehman Brothers Holdings Inc.

Unfortunately, this is just the continuation of a trend that has been going on for a while.

When you look at them as a group, the stocks of the five largest Italian banks have lost 27% since the beginning of 2011.

That is not a good sign.

Also, investors are starting to dump Italian government debt.  Reuters says that the yield on 10 year Italian bonds is approaching the danger zone….

The spread of the Italian 10-year government bond yield over benchmark German Bunds hit euro lifetime highs around 2.45 percentage points on Friday, raising the Italian yield to 5.28 percent, close to the 5.5-5.7 percent area which some bankers think could start putting heavy pressure on Italy’s finances.

The Italian national debt is now up to about 120 percent of GDP.  The Italian government would be able to manage it if interest rates were very, very low.  But unfortunately they are rising fast and if they get too much higher they are going to become suffocating.

As I have written about previously, government debt becomes very painful once you take low interest rates out of the equation.  For example, if Greece could borrow all of the money that it wanted to borrow at zero percent interest, it would not have a debt problem.  But now the yield on 2 year Greek bonds is over 30 percent, and there is not a government on the face of the earth that can afford to pay interest that high for long.

Unfortunately for Italy, this could just be the beginning of rising interest rates.  Just recently, Moody’s warned that it may be forced to downgrade Italy’s Aa2 debt rating at some point within the next couple of months.

If things continue to unravel in Italy, all of the credit agencies may downgrade Italy sooner rather than later.

The frightening thing about Italy is that a financial crisis has a way of exposing corruption, and there are very few countries that can match the kind of corruption that goes on in Italy.

As a child, I had the chance to live in Italy.  I love Italy.  The people are friendly, the weather is great, the architecture is amazing and the food is spectacular.  I will always have great affection for Italy and I will always cheer for the Italian national team when the World Cup rolls around.

However, I also know that corruption is deeply ingrained into Italian culture.  It is simply a way of life.

Just check out the prime minister of Italy.  Silvio Berlusconi is the consummate Italian politician.  He is greatly loved by many, but it would take days to detail all of the scandals that he has been linked to.

At this point, Berlusconi has become a parody of himself.  Each new sex scandal or financial scandal just adds to his legend.  Italy is one of the only nations in Europe where such a corrupt politician could have stayed in office for so long.

Not that the U.S. government is much better.  Our government becomes more corrupt with each passing year.

But the point is that if a financial collapse happens in Italy and people start “turning over rocks” it could turn up all sorts of icky stuff.

So what is Europe going to do if Italy needs a bailout?

Well, they are probably going to have to fire up the printing presses because it would probably take a whole lot more euros than they have right now.

The truth is that the EU has now entered a permanent financial crisis.  You have a whole bunch of nations that have accumulated unsustainable debts and that cannot print their own currencies.  The financial system of the EU as it is currently constructed simply does not work.

Some believe that the sovereign debt crisis will eventually cause the breakup of the EU.  Others believe that this crisis will cause it to be reformed and become much more integrated.

In any event, what just about everyone can agree on is that the financial problems of Europe are not going away any time soon.  For now, EU officials are keeping all of the balls in the air, but if at some point the juggling act falters, the rest of the world better look out.

A financial crash in Europe would be felt in every nation on earth and it would be absolutely devastating.  Let’s hope that we still have some more time before it happens.

Shocking Forecast
Thrive Life
FEMA Hates This

Austin Coins
High Blood Pressure?
FINCA BAYANO
Survive After Collapse

Silver.com

Camping Survival
GunMagWarehouse.com
SFC_The-Video-They-Tried-To-Ban_125
Print Friendly and PDF
Facebook Twitter More...