Has The Great Shaking Of The Financial Markets Finally Begun?

A whole host of prominent voices have been warning that volatility and chaos would be returning to Wall Street, and that is precisely what has happened.  But is this just a temporary blip, or has the great shaking of the financial markets finally begun?  Many stock market investors are very much hoping for the former, because the pain is already becoming quite severe.  The Nasdaq has fallen more than 5 percent this week, and it is headed for its second consecutive weekly loss.  But the bond market has actually been making even bigger news.  On Thursday, the yield on 10-year U.S. Treasuries actually exceeded 1.6% at one point, and that was the highest level that we have seen in quite a long time.  Some pundits are calling what just took place a “flash crash”, but it certainly appears that yields could move even higher in the days ahead.

Throughout the COVID pandemic, stock prices have just gone higher and higher, but everyone knew that the party would end eventually.

Have we now reached that point?  The numbers tell us that Thursday was the single worst day for stocks so far in 2021

The Dow Jones Industrial Average dropped 559.85 points, or 1.8%, to 31,402.01, slipping from a record high. The S&P 500 lost 2.5% to 3,829.34 in its worst day since Jan. 27. The tech-heavy Nasdaq Composite slid 3.5% to 13,119.43, posting its biggest sell-off since Oct. 28. Alphabet, Facebook, and Apple all fell more than 3%, while Tesla dropped 8.1%. Microsoft shed 2%.

We are being told that the biggest reason why stocks were falling so much was because of “a full on rout in the bond market”

It’s “just a full on rout in the bond market. So that filters into everything else,” said Evercore ISI strategist Dennis DeBusschere. “It looks like we just had a flash move in bonds. With a puke move that drove [10-year] yields to 1.6%… We just have to wait for some form of equilibrium in bonds.”

Considering how much our money supply has been rising, there was simply no way that bond yields could stay where they were.  It was just a matter of time before inflation fears scared investors, and finally on Thursday the rush for the exits became a stampede

“It is all about bond yields today,” said Ryan Detrick, chief market strategist for LPL Financial. “There was a flash spike in the 10-year yield and that upset the apple cart, as higher yields are spooking the stock market. Could there be more inflation coming than what most think?”

I can answer Detrick’s question in one word.

Yes.

Eventually, we are going to see inflation rise to levels that most people never dreamed would be possible in the United States.

Meanwhile, the real economy continues to rapidly deteriorate all around us.

One day after Fry’s Electronics announced that it would be going out of business, Best Buy revealed that it will be letting 5,000 workers go

Best Buy said Thursday that it laid off 5,000 workers this month and is planning to close more stores this year as more consumers buy electronics online.

The news comes at a time when big chains face growing competition from Amazon and other sites that sell items like TVs and laptops. Fry’s Electronics said Wednesday that it would abruptly close all of its stores overnight, ending nearly four-decades in business.

I have always had a soft spot for Best Buy, and so this made me quite sad.

So many iconic businesses are crumbling, and America will never be the same.

Of course one of the primary reasons why so many traditional retailers are failing is because online shopping has surged during this pandemic.  But as online shopping becomes increasingly dominant, it has created an epidemic of package thefts

Forty-three percent of Americans shopping online experienced package theft last year, up from 36 percent in 2019, according to a recent market research study. Of that 43 percent, almost two-thirds reported packages having been stolen more than once. The New York Police Department does not keep data to that level of specificity, I was told, and the most recent figures available for the city estimated that 90,000 packages had disappeared every day in 2019.

90,000 packages a day?

The number really shocked me.

That means that on average at least 90,000 crimes are committed in just one of our major cities every single day.

If things are that bad in New York, what would the number for the entire nation be?

Everywhere you look, the social decay that is eating away at our society like cancer is getting worse and worse.  At one time you could trust that most Americans were law abiding citizens that would consistently try to do the right thing, but those days are long gone.

And as economic conditions get even bleaker, that is just going to feed even more crime, civil unrest and social decay.

In the short-term, a very large proportion of the U.S. population is counting on the federal government to bail them out…

Almost one-third, or 29%, of U.S. adults are counting on another round of government relief to get by, and another 24% say they need it but doubt it will happen, a new CNBC + Acorns Invest in You survey conducted by SurveyMonkey found.

People of color are more likely to be relying on the relief, especially Black women. Half of Black Americans and 40% of Hispanics said they were counting on it, while 57% of Black women said the same. Additionally, 24% of Blacks and Hispanics need it but don’t think it will come to fruition.

All the way back when the first round of “stimulus payments” was being proposed, I warned that we were opening up Pandora’s Box.

I warned that the American people would be demanding more payments in the future, and they will reward politicians that are able to deliver those payments at the ballot box.

Of course by borrowing and spending trillions of dollars that we do not have, we are destroying the reserve currency of the world and we are setting the stage for horrific inflation in the future.

In fact, the inflation that is already here is now causing a tremendous amount of instability in the financial markets.

But the “great shaking” is not here quite yet.  What we are experiencing now are early warning signs, and hopefully people are paying attention.

***Michael’s new book entitled “Lost Prophecies Of The Future Of America” is now available in paperback and for the Kindle on Amazon.***

About the Author: My name is Michael Snyder and my brand new book entitled “Lost Prophecies Of The Future Of America” is now available on Amazon.com.  In addition to my new book, I have written four others that are available on Amazon.com including The Beginning Of The EndGet Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned)  By purchasing the books you help to support the work that my wife and I are doing, and by giving it to others you help to multiply the impact that we are having on people all over the globe.  I have published thousands of articles on The Economic Collapse BlogEnd Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe.  I always freely and happily allow others to republish my articles on their own websites, but I also ask that they include this “About the Author” section with each article.  The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions.  I encourage you to follow me on social media on FacebookTwitter and Parler, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with as many people as we possibly can.

Someone Please Tell Powell, Yellen And Biden That We Are Going To Need A Lot More “Weimar Money”…

Volatility has returned to Wall Street, and it appears that our absolutely epic stock market bubble may be in serious trouble.  The S&P 500 closed down for the fifth trading session in a row on Monday, and that represents the longest losing streak that we have seen since last February.  Investors are starting to get quite nervous, because for most of the past year stock prices have gone in just one direction.  Even as the real economy has imploded all around us, there has been tremendous euphoria on Wall Street as stock prices have surged to dizzying heights.  If stock prices were allowed to crash, that would definitely not be good for the national mood at all.

So what is the solution?

This stock market bubble was originally created by unprecedented intervention by the Federal Reserve and by extremely wild borrowing and spending by the U.S. government, and in order to keep the bubble going we are going to need a lot more of the same.

So someone needs to tell Federal Reserve Chair Jerome Powell that it is time to go “full Weimar” so that we can prop up this bubble for as long as humanly possible.

For a while there in 2020, the Fed’s balance sheet was increasing at a nearly vertical pace, but in recent months it has only been going up at an exponential rate

If the Fed wants to keep stock prices at their current levels, Powell and his minions need to fire up the engines again.

Meanwhile, the federal government has work to do as well.  If our politicians in Washington really want stock prices to remain ridiculously high, they need to send more checks to the American people as soon as possible.

The effects of the last round of checks is already starting to wear off, and retail investors need more “stimulus money” to fritter away in their Robinhood accounts.

The good news for Wall Street is that Treasury Secretary Janet Yellen has reiterated her call for a large stimulus package, and Joe Biden has said that he is ready to sign one into law.

Of course at this point poor old Joe signs anything that his handlers put on his desk.

We haven’t added another trillion dollars to the national debt in a few months, and investors are quite eager to see our grand total cross the 28 trillion dollar mark.  Most of them believe that more stimulus money will mean higher stock prices, but more stimulus money will also cause our money supply to grow even larger.

Since the start of the pandemic, M1 has been growing at a rate that would put the Weimar Republic to shame…

When I look at that chart, I feel like I am going to throw up.

But the only way to “save Wall Street” is to throw more giant mountains of money on to the fire.  If we don’t go “full Weimar”, stock prices might crash to reasonable levels, and investors would be absolutely horrified.

And we are already starting to see warning signs.  Just look at what happened to Tesla on Monday

Shares of Tesla closed down 8.55% on Monday, as investors betting on a pandemic comeback rotated out of Big Tech and piled into cyclical stocks.

It’s Tesla’s biggest drop since Sept. 23, 2020, when it closed down 10.34%.

Do you want to be responsible for Tesla investors losing hundreds of billions of dollars in paper profits?

If not, then you need to support more printing, more borrowing and more spending.

Of course I am being facetious in this article.

By going down the road of hyperinflation, we are systematically destroying the value of the reserve currency of the world, we are piling up trillions of dollars of debt that future generations would never possibly be able to repay, and we are setting the stage for the inevitable meltdown of our current financial system.

In other words, we are literally committing national suicide.

Following World War I, they did the exact same thing in Germany.

The Weimar Republic created money like there was no tomorrow, and at first it fueled a tremendous speculative boom.  Just a couple days ago, Michael Burry posted about this on his Twitter account

“Speculation alone, while adding nothing to Germany’s wealth, became one of its largest activities. The fever to join in turning a quick mark infected nearly all classes..Everyone from the elevator operator up was playing the market.”

But that bubble didn’t last, did it?

Germany plunged into a horrific economic depression that shocked the entire world.  Eventually, people were running around with wheelbarrows full of cash to pay for things, but nobody wanted the money because it was so worthless.

And of course the collapse of the Weimar Republic set the stage for World War II.

So why do we refuse to learn from history?

Sadly, it isn’t just the U.S. that is going down a hyperinflationary path.  Governments all over the globe have been printing, borrowing and spending money at unprecedented levels, and now the ratio of the world’s debt to GDP has reached a staggering 356 percent

The world’s debt-to-GDP ratio rose to 356% in 2020, a new report from the Institute of International Finance finds, up 35 percentage points from where it stood in 2019, as countries saw their economies shrink and issued an ocean of debt to stay afloat.

We all know how this story ends.

It ends with an absolutely nightmarish global economic collapse.

I have been sounding the alarm for years, and many others have as well.

Unfortunately, those warnings have gone unheeded.

Even though our forefathers handed us the keys to the greatest economic machine the world had ever seen, in our insatiable greed we always had to have more.

We just kept borrowing and spending, and many of us assumed that our self-destructive behavior would never actually catch up with us.

Disaster didn’t strike when our national debt hit 10 trillion dollars, and it didn’t strike when it hit 20 trillion dollars either.

To a lot of Americans, it seemed like we could keep this charade going indefinitely.

But now we are facing a day of reckoning, and the price for going “full Weimar” is going to be very bitter indeed.

***Michael’s new book entitled “Lost Prophecies Of The Future Of America” is now available in paperback and for the Kindle on Amazon.***

About the Author: My name is Michael Snyder and my brand new book entitled “Lost Prophecies Of The Future Of America” is now available on Amazon.com.  In addition to my new book, I have written four others that are available on Amazon.com including The Beginning Of The EndGet Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned)  By purchasing the books you help to support the work that my wife and I are doing, and by giving it to others you help to multiply the impact that we are having on people all over the globe.  I have published thousands of articles on The Economic Collapse BlogEnd Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe.  I always freely and happily allow others to republish my articles on their own websites, but I also ask that they include this “About the Author” section with each article.  The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions.  I encourage you to follow me on social media on FacebookTwitter and Parler, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with as many people as we possibly can.

Who Controls The Money? An Unelected, Unaccountable Central Bank Of The World Secretly Does

The Bank For International Settlements at Night - Photo by WladyslawAn immensely powerful international organization that most people have never even heard of secretly controls the money supply of the entire globe.  It is called the Bank for International Settlements, and it is the central bank of central banks.  It is located in Basel, Switzerland, but it also has branches in Hong Kong and Mexico City.  It is essentially an unelected, unaccountable central bank of the world that has complete immunity from taxation and from national laws.  Even Wikipedia admits that “it is not accountable to any single national government.”  The Bank for International Settlements was used to launder money for the Nazis during World War II, but these days the main purpose of the BIS is to guide and direct the centrally-planned global financial system.  Today, 58 global central banks belong to the BIS, and it has far more power over how the U.S. economy (or any other economy for that matter) will perform over the course of the next year than any politician does.  Every two months, the central bankers of the world gather in Basel for another “Global Economy Meeting”.  During those meetings, decisions are made which affect every man, woman and child on the planet, and yet none of us have any say in what goes on.  The Bank for International Settlements is an organization that was founded by the global elite and it operates for the benefit of the global elite, and it is intended to be one of the key cornerstones of the emerging one world economic system.  It is imperative that we get people educated about what this organization is and where it plans to take the global economy.

Sadly, only a very small percentage of people actually know what the Bank for International Settlements is, and even fewer people are aware of the Global Economy Meetings that take place in Basel on a bi-monthly basis.

These Global Economy Meetings were discussed in a recent article in the Wall Street Journal

Every two months, more than a dozen bankers meet here on Sunday evenings to talk and dine on the 18th floor of a cylindrical building looking out on the Rhine.

The dinner discussions on money and economics are more than academic. At the table are the chiefs of the world’s biggest central banks, representing countries that annually produce more than $51 trillion of gross domestic product, three-quarters of the world’s economic output.

The article goes on to describe the room that these Global Economy Meetings are held in.  It sounds like something out of a novel…

The Bank of England’s Mr. King leads the dinner discussions in a room decorated by the Swiss architectural firm Herzog & de Meuron, which designed the “Bird’s Nest” stadium for the Beijing Olympics. The men have designated seats at a round table in a dining area scented by white orchids and framed by white walls, a black ceiling and panoramic views.

The central bankers that gather for these meetings are not there just to socialize.  No staff members are allowed into these meetings, and they are conducted in an atmosphere of absolute secrecy…

Serious matters follow appetizers, wine and small talk, according to people familiar with the dinners. Mr. King typically asks his colleagues to talk about the outlook in their respective countries. Others ask follow-up questions. The gatherings yield no transcripts or minutes. No staff is allowed.

So the fate of the world economy is determined by unelected central bankers in secret meetings that nobody ever hears about?

That certainly does not sound very “democratic”.

But this is the direction that “global governance” is taking us.  The elite believe that the “big decisions” are far too important to be left “to the people”, and so most of the “international institutions” that have been established by the elite operate independently of the democratic process.

Sadly, the truth is that all of this has been planned for a very long time.

In a recent article entitled “Who Runs The World? Solid Proof That A Core Group Of Wealthy Elitists Is Pulling The Strings“, I included a quote from Georgetown University history professor Carroll Quigley from a book that he wrote all the way back in 1966 in which he discussed the big plans that the elite had for the Bank for International Settlements…

[T]he powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basle, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations.

Back then, the Bank for International Settlements was only just starting to play a major role in global affairs.  But over the years the BIS began to become increasingly important.  The following is an excerpt from an article by Ellen Brown

For many years the BIS kept a very low profile, operating behind the scenes in an abandoned hotel.  It was here that decisions were reached to devalue or defend currencies, fix the price of gold, regulate offshore banking, and raise or lower short-term interest rates.  In 1977, however, the BIS gave up its anonymity in exchange for more efficient headquarters.  The new building has been described as “an eighteen story-high circular skyscraper that rises above the medieval city like some misplaced nuclear reactor.”  It quickly became known as the “Tower of Basel.”  Today the BIS has governmental immunity, pays no taxes, and has its own private police force.  It is, as Mayer Rothschild envisioned, above the law.

Yes, it most definitely does bear a striking resemblance to the Tower of Babel as you can see from the photo in this article.  Once again the global elite are trying to unite humanity under a single system, and that is most definitely not a good thing.

But many of these elitists are entirely convinced that “global governance” is what humanity desperately needs.  They even publicly tell us what they plan to do, but most people are not listening.

For example, the following is an excerpt from a speech that former president of the European Central Bank Jean-Claude Trichet delivered to the Council On Foreign Relations in New York…

In the area of central bank cooperation, the main forum is the Global Economy Meeting (GEM), which gathers at the BIS headquarters in Basel. Over the past few years, this forum has included 31 governors as permanent members plus a number of other governors attending on a rotating basis. The GEM, in which all systemic emerging economies’ Central Bank governors are fully participating, has become the prime group for global governance among central banks.

The speech was entitled “Global Governance Today”, and you can find the full transcript right here.  But most people have never even heard that such a thing as a “Global Economy Meeting” even exists because the mainstream media rarely discusses these sorts of things.  They are too busy focusing on the latest celebrity scandal or the latest cat fights between the Republicans and the Democrats.

If you go to the official BIS website, the purposes of the organization sound fairly innocent and quite boring…

The mission of the Bank for International Settlements (BIS) is to serve central banks in their pursuit of monetary and financial stability, to foster international cooperation in those areas and to act as a bank for central banks.

In broad outline, the BIS pursues its mission by:

  • promoting discussion and facilitating collaboration among central banks;
  • supporting dialogue with other authorities that are responsible for promoting financial stability;
  • conducting research on policy issues confronting central banks and financial supervisory authorities;
  • acting as a prime counterparty for central banks in their financial transactions; and
  • serving as an agent or trustee in connection with international financial operations.

The head office is in Basel, Switzerland and there are two representative offices: in the Hong Kong Special Administrative Region of the People’s Republic of China and in Mexico City.

But when you start looking into the details, things get much more interesting.

So exactly how does the BIS achieve “monetary and financial stability”?  An article posted on investorsinsight.com described how this is accomplished…

It accomplishes this through control of currencies. It currently holds 7% of the world’s available foreign exchange funds, whose unit of account was switched in March of 2003 from the Swiss gold franc to Special Drawing Rights (SDR), an artificial fiat “money” with a value based on a basket of currencies (44% U.S. dollar, 34% euro, 11% Japanese yen, 11% pound sterling).

The bank also controls a huge amount of gold, which it both stores and lends out, giving it great leverage over the metal’s price and the marketplace power that brings, since gold is still the only universal currency. BIS gold reserves were listed on its 2005 annual report (the most recent) as 712 tons. How that breaks down into member banks’ deposits and the BIS personal stash is unknown.

By controlling foreign exchange currency, plus gold, the BIS can go a long way toward determining the economic conditions in any given country. Remember that the next time Ben Bernanke or European Central Bank President Jean-Claude Trichet announces an interest rate hike. You can bet it didn’t happen without the concurrence of the BIS Board.

In recent years, it has become increasingly obvious who really has power over our economy.

When Barack Obama speaks, the markets usually move very little.

When Ben Bernanke speaks, the markets often respond with wild gyrations.

A recent CNBC article entitled “Central Banks: How They Are Ruling the Financial World” detailed the enormous impact that central banks had on the global financial system during 2012…

In all, 13 other central banks in the world have followed the Fed’s lead and set interest rates at or near zero in an effort to keep the liquidity spigots open and prop up their ailing economies. Those 14 economies represent a staggering $65 trillion in combined equity and bond market capitalizations, according to Bank of America Merrill Lynch.

Later on in that same article, the author discussed the enormous amounts of money that global central banks were creating out of thin air…

“When you add up all the central banks in the world, it’s going to be over $9 trillion,” said Marc Doss, regional chief investment officer for Wells Fargo Private Bank. “That’s like creating the second-largest economy in the world out of thin air.”

Indeed, central banking has become an economy unto itself, a multi-trillion-dollar empire that massages and manipulates markets, which respond to the slightest news out of the respective entities’ policy making committees.

So who controls the money?

The central banks of the world do.

And who controls those central banks?

The Bank for International Settlements does.

If we don’t like what the Bank for International Settlements is doing, can we do anything about it?

Nope.  The Bank for International Settlements is above the law

Maybe we’d feel better about the BIS if it were more transparent, but most everything about it, including its bi-monthly member and board meetings, is shrouded in secrecy. And perhaps more worrisome is that the BIS is free from oversight. By rights granted under its agreement with the Swiss Federal Council, all of the bank’s archives, documents and “any data media” are “inviolable at all times and in all places.” Furthermore, officers and employees of BIS “enjoy immunity from criminal and administrative jurisdiction, save to the extent that such immunity is formally waived . . . even after such persons have ceased to be Officials of the Bank.” Finally, no claims against BIS or its deposits may be enforced “without the prior agreement of the Bank.”

In other words they can do whatever they want, without consequences. How’s that for a leak-proof legal umbrella?

If the BIS wants to “intervene” in the financial markets, they simply just do it.

If the BIS wants to bail out big banks or even entire nations, they simply just do it.

The BIS reminds me of this old joke…

Q: Where does an 800 pound gorilla sit?

A: Anywhere it wants to.

So what is next for the Bank for International Settlements?

Well, many have speculated that eventually the goal is to have just a single global currency which will be administered by a single global central bank.  The BIS is already using Special Drawing Rights (SDRs), which are considered to be a precursor to the coming global currency.  The BIS played a big role in the adoption of the euro, and more currency integration is almost certainly on the way in future years

But in the end, how you feel about the BIS may come down to how you feel about a one-world currency. The bank was a major player promoting the adoption of the euro as Europe’s common currency. There are rumors that its next project is persuading the U.S., Canada and Mexico to switch to a similar regional money, perhaps to be called the “amero,” and it’s logical to assume the bank’s ultimate goal is a single world currency. That would simplify transactions and really solidify the bank’s control of the planetary economy.

But if the United States ever did give up the U.S. dollar, it would be a massive blow to our national sovereignty.

When someone else controls your money, it doesn’t really matter that much who makes the laws.

Unfortunately, the global elite seem absolutely obsessed with the idea of a global currency, a one world economic system and a global government.

None of those things will happen this year, but that is where we are moving.  With each new crisis that arises, the solutions that we will be given will always involve more centralization and more globalization.

So what do you think about all of this?

Please feel free to share your thoughts by leaving a comment below…

Your Central Banking Overlords Meet Here - Photo by Yago Veith

Wow That Was Fast! Libyan Rebels Have Already Established A New Central Bank Of Libya

The rebels in Libya are in the middle of a life or death civil war and Moammar Gadhafi is still in power and yet somehow the Libyan rebels have had enough time to establish a new Central Bank of Libya and form a new national oil company.  Perhaps when this conflict is over those rebels can become time management consultants.  They sure do get a lot done.  What a skilled bunch of rebels – they can fight a war during the day and draw up a new central bank and a new national oil company at night without any outside help whatsoever.  If only the rest of us were so versatile!  But isn’t forming a central bank something that could be done after the civil war is over?  According to Bloomberg, the Transitional National Council has “designated the Central Bank of Benghazi as a monetary authority competent in monetary policies in Libya and the appointment of a governor to the Central Bank of Libya, with a temporary headquarters in Benghazi.”  Apparently someone felt that it was very important to get pesky matters such as control of the banks and control of the money supply out of the way even before a new government is formed.

Of course it is probably safe to assume that the new Central Bank of Libya will be 100% owned and 100% controlled by the newly liberated people of Libya, isn’t it?

Most people don’t realize that the previous Central Bank of Libya was 100% state owned. The following is an excerpt from Wikipedia’s article on the former Central Bank of Libya….

The Central Bank of Libya (CBL) is 100% state owned and represents the monetary authority in The Great Socialist People’s Libyan Arab Jamahiriya and enjoys the status of autonomous corporate body. The law establishing the CBL stipulates that the objectives of the central bank shall be to maintain monetary stability in Libya , and to promote the sustained growth of the economy in accordance with the general economic policy of the state.

Since the old Central Bank of Libya was state owned, it was essentially under the control of Moammar Gadhafi.

But now that Libya is going to be “free”, the new Central Bank of Libya will be run by Libyans and solely for the benefit of Libyans, right?

Of course it is probably safe to assume that will be the case with the new national oil company as well, isn’t it?

Over the past couple of years, Moammar Gadhafi had threatened to nationalize the oil industry in Libya and kick western oil companies out of the country, but now that Libya will be “free” the people of Libya will be able to work hand in hand with “big oil” and this will create a better Libya for everyone.

Right?

Of course oil had absolutely nothing to do with why the U.S. “inva—” (scratch that) “initiated a kinetic humanitarian liberty action” in Libya.

When Barack Obama looked straight into the camera and told the American people that the war in Libya is in the “strategic interest” of the United States, surely he was not referring to oil.

After all, war for oil was a “Bush thing”, right?  The Democrats voted for Obama to end wars like this, right?  Surely no prominent Democrats will publicly support this war in Libya, right?

Surely Barack Obama will end the bombing of Libya if the international community begins to object, right?

Obama won a Nobel Peace Prize.  He wouldn’t deeply upset the other major powers on the globe and bring us closer to World War III, would he?

Russian Foreign Minister Sergei Lavrov has loudly denounced “coalition strikes on columns of Gaddafi’s forces” and he believes that the U.S. has badly violated the terms of the UN Security Council resolution….

“We consider that intervention by the coalition in what is essentially an internal civil war is not sanctioned by the U.N. Security Council resolution.”

So to cool off rising tensions with the rest of the world, Obama is going to call off the air strikes, right?

Well, considering the fact that Obama has such vast foreign policy experience we should all be able to rest easy knowing that Obama will understand exactly what to do.

Meanwhile, the rebels seem to be getting the hang of international trade already.

They have even signed an oil deal with Qatar!

Rebel “spokesman” Ali Tarhouni has announced that oil exports to Qatar will begin in “less than a week“.

Who knew that the rag tag group of rebels in Libya were also masters of banking and international trade?

We sure do live in a strange world.

Tonight, Barack Obama told the American people the following….

“Some nations may be able to turn a blind eye to atrocities in other countries. The United States of America is different.”

So now we are going to police all of the atrocities in all of the other countries around the globe?

The last time I checked, the government was gunning down protesters in Syria.

Is it time to start warming up the Tomahawks?

Or do we reserve “humanitarian interventions” only for those nations that have a lot of oil?

In fact, atrocities are currently being committed all over Africa and in about a dozen different nations in the Middle East.

Should we institute a draft so that we will have enough young men and women to police the world with?

We all have to be ready to serve our country, right?

The world is becoming a smaller place every day, and you never know where U.S. “strategic interests” are going to be threatened next.

The rest of the world understands that we know best, right?

Of course the rest of the world can surely see our good intentions in Libya, can’t they?

Tensions with Russia, China and the rest of the Arab world are certainly going to subside after they all see how selfless our “humanitarian intervention” has been in Libya, don’t you think?

In all seriousness, we now live in a world where nothing is stable anymore.  Wars and revolutions are breaking out all over the globe, unprecedented natural disasters are happening with alarming frequency and the global economy is on the verge of total collapse.

By interfering in Libya, we are just making things worse.  Gadhafi is certainly a horrible dictator, but this was a fight for the Libyan people to sort out.

We promised the rest of the world that we were only going to be setting up a “no fly zone”.  By violating the terms of the UN Security Council resolution, we have shown other nations that we cannot be trusted and by our actions we have increased tensions all over the globe.

So what do all of you think about what is going on in Libya?  Please feel free to leave a comment with your opinion below….

One Out Of Every Ten U.S. Banks Is Now On The FDIC’s Problem List – Do You Know If Your Bank Is Safe?

Do you know if your bank will be there next month?  For a growing number of Americans, that is becoming a very real question.  The Wall Street Journal is reporting that 775 banks (approximately ten percent of all U.S. banks) are now on the Federal Deposit Insurance Corporation’s list of “problem” banks.  This year we have already seen more than six dozen banks fail, and the frightening thing is that we are seeing a rapid acceleration in bank failures even though we are supposedly in a “recovery” right now.  So what happens if the economy takes a bad turn and hundreds of these banks that are barely surviving start failing?

Right now an increasing number of Americans are not paying their loans, and this is shredding the balance sheets of small and medium size banks all over the United States.  In fact, during the first quarter of 2010, the total number of loans that are at least three months past due increased for the 16th consecutive quarter.

16 consecutive quarters?

Once is a coincidence.

Twice is a trend.

Sixteen times in a row is a total nightmare.

Is there anyone out there that is still convinced that the economy is getting better?

If so, perhaps this will convince you otherwise….

There were 252 banks on the FDIC’s “problem list” at the end of 2008.

There were 702 banks on the FDIC’s “problem list” at the end of 2009.

Now there are 775 banks of the FDIC’s “problem list”.

Are you starting to see a trend?

Federal regulators have already closed 73 banks in 2010, more than double the number shut down at this time last year.

The truth is that the U.S. banking system is coming apart like a 20 dollar suit.

So is the FDIC worried?

No, they insist that they have plenty of money to cover all of the banks that are going to fail.

After all, the FDIC’s deposit insurance fund now has negative 20.7 billion dollars in it, which represents a slight improvement from the end of 2009.

Yes, you read that correctly.

Negative 20.7 billion dollars.

That should be enough to cover the hundreds of banks that are in the process of failing, right?

Well, if not, the FDIC can just run out and ask the U.S. government for a big, juicy bailout.

After all, can’t the U.S. government borrow an endless amount of money with absolutely no consequences?

Well, no.

Debt always catches up with you sooner or later.

In fact, the IMF is warning that that the gross public debt of the United States will hit 97 percent of GDP in 2011 and 110 percent of GDP in 2015.

Meanwhile, the U.S. financial system continues to shrink even after the unprecedented amount of “stimulus money” that the U.S. government has been shoveling into the economy.

The M3 money supply is now contracting at a frightening pace.

In fact, the current rate of monetary contraction now matches the average rate of monetary contraction the U.S. experienced between 1929 and 1933.

But don’t worry.

We aren’t going into a Depression.

Everything is going to be just fine.

Just look deep into Obama’s eyes and keep repeating the word “change” to yourself over and over.

According to a report in The Telegraph, the M3 money supply declined from $14.2 trillion to $13.9 trillion in the first quarter of 2010.

That represents an annual rate of contraction of 9.6 percent.

In case you were wondering, that is a lot.

Not only that, but the assets of institutional money market funds declined at a 37 percent annual rate.

That was the sharpest drop ever.

Yes, it is time for the alarm bells to start going off.

The Telegraph recently quoted Professor Tim Congdon from International Monetary Research as saying the following about the deep problems that the U.S. is facing….

“The plunge in M3 has no precedent since the Great Depression. The dominant reason for this is that regulators across the world are pressing banks to raise capital asset ratios and to shrink their risk assets. This is why the US is not recovering properly.”

If banks continue to cut their lending, the M3 is going to continue to shrink.

But as noted above, Americans are increasingly getting behind on their loans, so why should banks loan money to a bunch of deadbeats?

Right now U.S. banks are increasingly tightening their lending standards, and this is making it much tougher to get a loan.

In fact, in 2009 the biggest U.S. banks posted their sharpest decline in lending since 1942.

But there is only one problem.

The U.S. economy is completely and totally dependent on credit.

Without easy credit, the entire U.S. economic machine is going to slowly grind to a halt.

So what do you do?

The reality is that we have one gigantic financial mess on our hands, and in many ways it is starting to look like the 1930s all over again.

But perhaps someone out there has a way to get us out of this nightmare.  Please feel free to leave a comment with your thoughts, opinions or solutions….

If The Money Supply Is Exploding Why Are We Not Seeing Rampant Inflation?

The U.S. money supply has been expanding at an absolutely unprecedented rate.  So why are we not experiencing rampant inflation?  Why is the U.S. dollar not falling through the floor?  Well, the truth is that all of this new money has gotten into the U.S. financial system but it is not getting into the hands of U.S. businesses and consumers.  In fact, even though the money supply is exploding, U.S. banks have dramatically decreased lending.  This has brought us to a very bizarre financial situation as a nation.

What we have seen is the U.S. government shovel massive amounts of cash into the U.S. financial system and then watch as the big banks sit on that cash and refuse to lend it. The biggest banks in the U.S. reduced their collective small business lending balance by another 1 billion dollars in November 2009.  That drop was the seventh monthly decline in a row.  In fact, in 2009 as a whole U.S. banks posted their sharpest decline in lending since 1942.

So all of this money that the U.S. government pumped into the financial system has been doing American businesses and consumers very little good.  That is why we can have a vastly increased money supply (as you can see from the chart below) and very little inflation.

So if the banks are not lending the money to the American people, what are they doing with it?  One of the things they are doing with it is buying U.S. government debt.  As you can see from the chart below, U.S. banks have cut business lending by approximately 350 billion dollars since early 2009 and they have purchased approximately 300 billion dollars worth of U.S. Treasury securities.

So instead of loaning money to American businesses and consumers who desperately need it, a ton of this new money is being used to pump up yet another bubble.  This time the bubble is in U.S. Treasuries.  Asia Times recently described how this trillion-dollar carry trade in U.S. government securities works….

Remarkably, the most aggressive buyers of US government debt during the past several months have been global banks domiciled in London and the Cayman Islands. They borrow at 20 basis points (a fifth of a percentage point) and buy Treasury securities paying 1% to 3%, depending on maturity.

This is the famous “carry trade”, by which banks or hedge funds borrow short-term at a very low rate and lend medium- or long-term at a higher rate. This works as long as short-tem rates remain extremely low. The moment that borrowing costs begin to rise, the trillion-dollar carry trade in US government securities will collapse.

So what happens when this bubble collapses?

Nobody knows for sure.  But anyone who has dealt with carry trades in the past knows that when carry trades unwind they can do so very, very quickly and the results can be nightmarish.

The truth is that the U.S. financial system is a house of cards that could fall at any time.  A lot of economic pain is on the horizon – it is only a matter of when it comes and how bad it is going to get.  Trends forecaster Gerald Celente is predicting that it could be as soon as this year….

All Money In The United States Comes Into Existence As Debt – So What Will Happen Now That Bank Lending In The U.S. Is Contracting At The Fastest Rate In History?

Most Americans who closely follow economics understand that all money in the United States comes into existence as debt.  Either the Federal Reserve creates it when the U.S. government borrows money, or private banks create it when they use fractional reserve banking to make loans to customers.  If lending increases, it is going to create new money and increase the money supply.  But if lending declines, it is going to take money out of the system and will decrease the money supply.  So why is this important?  It is important because without sufficient lending, the U.S. economy will seize up and grind to a standstill.  Unfortunately, we have created an economic system that is fueled by credit, and without enough credit businesses can’t expand or hire more workers, individuals can’t buy homes and cars and there will not be any hope that the U.S. economy will function at previous levels.

If you will remember, this is what happened at the beginning of the Great Depression.  The big banks severely tightened credit and it created a deflationary depression.

Unfortunately, the same thing is happening again.  In 2009 U.S. banks posted their sharpest decline in lending since 1942.  In 2010 so far, bank lending in the U.S. has contracted at the fastest rate in recorded history.  A “credit freeze” has struck the entire banking industry.  One indication of just how bad the credit freeze has gotten is to look at a graph of the M1 Money Multiplier.  It is now at the lowest point it has been in decades.  Why?  Because banks are simply not lending money….

But didn’t Bush and Obama insist that if we got cash into the hands of the bankers that they would lend it out and help all of us “Main Street” folks out?

It didn’t work out that way, did it?

Instead, the banks (especially the big banks) are reducing their lending, hoarding cash and shrinking the money supply.

If this continues, we may very well experience a 1930s-style deflationary depression, at least for a while.

Already we are seeing the effects of tighter credit hitting the economy….

*Federal regulators on Friday shuttered banks in Florida, Illinois, Maryland and Utah, boosting to 26 the number of bank failures in the United States so far in 2010.  The closing of numerous banks on Friday is almost becoming a weekly ritual now.

*The FDIC is planning to open a massive satellite office near Chicago that will house up to 500 temporary staffers and contractors to manage receiverships and liquidate assets from what they are expecting will be a gigantic wave of failed Midwest banks over the next few years.

*The U.S. Postal Service, facing a $238 billion budget deficit by 2020, is being urged to consider cutting delivery to as few as three days a week.  As money continues to get tighter, we should expect even more government services to be cut.  In fact, some local governments around the U.S. are considering bulldozing whole neighborhoods just so they don’t have to spend money on providing those neighborhoods with essential services.

So will the U.S. government come to the rescue?

Well, some would argue that the unprecedented spending by the U.S. government over the past several years is the only reason why the U.S. economy has not already plunged into a full-blown depression.

But of course all of this government debt is only going to make our long-term problems even worse.

The Congressional Budget Office is projecting that Barack Obama’s proposed budget plan would add more than $9.7 trillion to the U.S. national debt over the next decade.

That is not good news.

Especially if the Federal Reserve refuses to keep “monetizing” all of this debt.

During a recent hearing, Federal Reserve Chairman Ben Bernanke warned Congress that the Federal Reserve does not plan to continue to “print money” to help Congress finance the exploding U.S. national debt.

So if the Federal Reserve will not finance this gigantic pile of U.S. debt, who will?

Already China and some other major foreign powers have reduced their holdings of U.S. Treasuries.

So who is going to borrow the trillions upon trillions that the U.S. government is going to have to borrow?

Perhaps the U.S. government will decide to stop spending so much and will start cutting back and will start being more fiscally responsible.

But don’t count on it.

You see, if the U.S. government does not keep borrowing insane amounts of money to pump up the U.S. economy the whole thing could come down like a house of cards.

Of course it is all going to come down like a house of cards eventually anyway.

There are several ways that all of this could play out (deflationary depression, hyperinflationary implosion, societal collapse, etc.), but all of them are bad.

The truth is that an economic collapse is coming whether you or I like it or not.  We had all better get ready while we still can.

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