Friday, 2 January 2009

zero tolerance to martial law

Zero percent interest rates are in the offing on both sides of the pond:

Savers facing accounts with no interest

More than 7 million people have saving accounts which already pay interest of 1 per cent or less. If a cut is passed on in full by banks, these accounts will dive towards negative territory for the first time on record.

Mark Dampier, of asset managers Hargreaves Lansdown, said: "It is a dire times for savers, especially for elderly people who rely on their income. They have already seen a sharp drop in excess of 50 per cent and can anyone tell me of someone in the public or private who would put up with a 50 per cent pay cut?"

A cut in interest rates raises the bizarre possibility that some savers may soon end up having to pay banks to keep money with them.

Savers pay already - bank charges and annual card fees for a start.... how much does it cost to keep your money under the mattress?

While in the US zero interest has global implications:

The Shadow Money Lenders: The Real Significance of The Fed’s Zero-Interest-Rate Policy (ZIRP)

To secure their global agenda, the shadow money-lenders needed a national base to first consolidate their power and to legislate laws that would secure their monopoly to issue money and credit. The target country was England and that is why the first central bank was the Bank of England. Almost all the laws that secured the money-lenders their unbridled economic and political power can be traced back to the legal basis for the establishment of the Bank of England as a central bank and their unfettered right to create “credits”.

The £ was the currency of choice for world conquest and the result was the mighty British Empire, where the sun never sets! It was an empire based on debt. When the £ Ponzi scheme unraveled, Britain outlived its usefulness and the shadow money-lenders relocated to structure another Ponzi scheme.

The next target country was the United States and the vehicle was the Federal Reserve System.

What is important to understand is that the shadow money-lenders are parasitic in nature and they have to feed on a continuous diet of debts. The financing of military adventures ensures a continuous stream of debts and compound interests. Debts beget more debts!

When the debts reach saturation point, the Ponzi scheme will collapse and hence, the need to revive and or re-establish another Ponzi scheme, failing which the shadow money-lenders’ financial empire cannot be sustained.

THE SHADOW MONEY-LENDERS’ LAST GAMBIT

The Fed’s decision to cut the Fed Fund Rates to 0.25 percent means that the Fed has embarked on a Zero-Interest-Rate Policy (ZIRP) and to proceed with the policy of Quantitative Easing (QE) – to turn on the spigot for “limitless supply of credit”.

In layman’s jargon, to encourage more debts – mortgage debts, credit-card debts, car loans, and more importantly to revive the derivative casino, presently on life support. This was the drug addiction that sustained the global financial system in the last twenty years and more intensely in the last seven years!

The announced policy (ZIRP / QE) is the last bullet in the Fed’s arsenal or as I have stated earlier, using another analogy, the final gamble, the last chip on the betting table. There will be no more ammunition left after this.

This huge gamble will take six months to play out but it will end in failure as surely as the sun will rise in the East tomorrow.

But a more sinister aspect of the zero-interest-rate policy which has not been highlighted by any economist or financial commentator is that the United States under the present Bush regime has declared to the entire world that the United States cannot and will not service anymore interest payments on the nation’s outstanding debts amounting to trillions.

Bush has declared that the United States for all intent and purposes is bankrupt and have no means to service the interest due, what more the principal sum.

Bush, Bernanke and Paulson have therefore collectively agreed to give the “two-finger sign” to the world’s creditors and in no uncertain terms are saying that:

You creditors, you a@#holes, you can jerk off. You know, I know and the whole bloody world knows that the US of A have no income to even service the interest which amounts to a few hundred billion a year.
So let us stop the pretense. We owe trillions and interest on top of that runs to hundreds of billions, which when unpaid is capitalized. And every year we have to borrow from you guys just to pay the interest so as to avoid a call on default. There were so many occasions when we have defaulted, but you guys allowed us to roll over to maintain the fa├žade that the US of A is still floating.
We ain’t floating like a bee, but we are sinking fast! Let’s cut the crap and be real.
So this is the offer. And you jerks better listen good because this will be said once and once only.
You guys should be more than happy with so much interests already accruing on the outstanding. All these years, you guys have been only too happy to see us print the toilet papers in payment of your goods and to service the interests. It was an incredible con and what a free ride we had all these years. You guys were part of the con as well.
If you insist that I continue to pay you in toilet papers, why do you insist that we issue more toilet papers as interest payments? It is just more toilet papers. You guys are swarmed with toilet papers!
The toilet paper is worthless. So what is the point of paying “toilet paper interest” on outstanding toilet papers?
This is it! We are not paying anymore toilet paper interest. We are going to print more toilet papers to pay for whatever we want to purchase. If you want to sell to us, you will get toilet papers but with no interest. Period!

This is the greatest irony. The Fed, the world’s biggest money-lender and its partners-in-crime are telling their creditors to stuff it! When debtors cannot pay the exorbitant interests and the principal, these financial predators demand that the debtors give their pound of flesh in lieu of cash. But when they borrow, they repay in toilet paper money abd get away with it!

And now they even have the audacity to give an ultimatum:

We are the biggest buyers in town. If you don’t want toilet papers from us, that is fine by us. You can get tissue papers from the Europeans, bamboo papers from the Japanese and whatever that is on offer. Who is going to argue whether tissue paper would do a better job than plain toilet paper? Hey, this is a free market. Pick your choice!

This is the ultimate poker game. Bush, Bernanke and Paulson is betting that no one will call their bluff, turn away and stop selling anymore goods to the US of A. Bush is counting that the fear of recession and or social unrest in the creditors’ countries will force the creditors to capitulate.

Unfortunately, this gambit will fail. The reason is simple. The US cannot supply the goods that the American consumers want, even the most basic stuff. The manufacturing industries are all anemic, while others are on life support. Without imports, the United States will have to shut down within six months.

There will be massive riots all over the US, with people killing for food and other basic necessities. Basic raw materials, commodities for manufacturing etc. will be unavailable. There will be no more cars on the freeways! Millions of Americans licensed to carry arms will stalk the streets for whatever scrap they can get their hands on.

You can bet your bottom dollar, the Shadow Money-Lenders and its military partner will impose martial law.

From zero tolerance to martial law.... 2009 is sizing up to be an interesting year!

HAPPY NEW FEAR!

4 comments:

Shalom P. Hamou said...

Sorry! Quantitative Easing Won't Work

In a Liquidity Trap although Saving (S) is abnormally high investment (I) is next to 0.

Hence, the Keynesian paradigm I = S is not verified.

The purpose of Quantitative Easing being to lower the yield on long-term savings it doesn't create $1 of investment.

It does diminish the yield on long-term US Treasury debt but lowers marginally, if at all, the asked yield on savings.

This and other issues are explored in my tract:

A Specific Application of Employment, Interest and Money
Plea for a New World Economic Order



Abstract:

This tract makes a critical analysis of credit based, free market economy, Capitalism, and proves that its dysfunctions are the result of the existence of credit.

It shows that income / wealth disparity, cause and consequence of credit and of the level of long-term interest-rates, is the first order hidden variable, possibly the only one, of economic development.

It solves most of the puzzles of macro economy: among which Business Cycles, Stagflation, Greenspan Conundrum, Deflation and Keynes' Liquidity Trap...

It shows that no fiscal or monetary policy, including the barbaric Quantitative Easing will get us out of depression.


A Credit Free, Free Market Economy will correct all of those dysfunctions.


The alternative would be, on the long run, to wait for the physical destruction (through war or rust) of most of our productive assets. It will be at a cost none of us can afford to pay.

A Specific Application of Employment, Interest and Money

Brett said...

A truy free market would really help unfortunately the only thing free these days is the air we breathe. I am certain the government is working on a plan to charge us for that too!

Amberen said...

It's surprising to see how much of this article, over 2 years later, still stands.

I thought Obama was supposed to change things. Well...the more things "change" the more they stay the same, I guess.

I keep hearing that the Federal Reserve is in a peculiar situation, because there's inflation (as we all know).

Now, to curb the inflation, they're going to have to increase the interests rates, but there are problems with increasing rates, too.

I don't know man...serious stuff's going on.

Jo said...

Yep. Obama has only brought cosmetic change.


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