World Financial Crisis (and fallout) Part 5

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And this too -


IMF arrives to take over Ireland 


For a decade the country rode a seemingly never-ending boom, fuelling prosperity that previous generations could scarcely have dreamed of. Today reality kicked in. The 12 men and women from the International Monetary Fund, in suits and sensible coats, arrived in Dublin to clear up the mess.


World Bank A Security Risk to the World Order?

"Former senior legal counsel at the World Bank turned whistleblower Karen Hudes talks about the corruption inside the World Bank..."

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An infographic that accompanies our report, Guns, Debt and Corruption, illustrating the role of military spending in causing and perpetuating the economic crisis.

Military spending in the EU Infographic


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IMF chief Lagarde heckled by students in Amsterdam (includes video)

Christine Lagarde, the former French Finance Minister and current Managing Director of the International Monetary Fund, was treated to an Occupy-style mic-check at the University of Amsterdam on Tuesday. During a lecture at the university’s economics department, a group of students rose up to interrupt (or rather start) the discussion, confronting the Fund’s chief with a number of inconvenient questions.

Attendees had been asked to send in questions before the “debate”, but the protesters were angry that their critical notes appeared to have been ignored. By standing up and submitting the IMF chief to a mic-check, they tried to get their concerns across anyway: “why is technocracy better than democracy?” one activist asked. Another asked Lagarde why the IMF submits developing countries to Western imperialism, to which the upper-class moderator tellingly responded that “we will not do that question”....

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Pete Peterson Exposed: The "Grand Bargain" Hoax

The "Grand Bargain" is a hoax. Find out more about who's behind the push for austerity in deficit hawk America. Learn more about billionaire Pete Peterson and his "Fix the Debt" group of manipulators here:


China, Gold Prices and US Default Threats  -  by F William Engdahl

"In the very days when a deep split in the US Congress threatened a US government debt default, the gold price should normally jump through the roof, yet the opposite was the case. It is worth a closer look why..."


Interesting article on gold. The question of whether the US even owns any substantial reserve of gold is intriguing.


According to unofficial calculations, the Peoples’ Bank of China today holds about 3,500 tons of monetary gold, surpassing Germany, to make it number two in the world after the Federal Reserve.

And there are grave doubts whether the Federal Reserve actually holds the 8,044 tons of gold it claims it does. The former International Monetary Fund director, France’s Dominique Straus-Kahn, demanded an independent audit of the Federal Reserve gold after the US refused to deliver to the IMF 191 tons of gold agreed to under the IMF Articles of Agreement signed by the Executive Board in April 1978 to back Special Drawing Rights issuance. Immediately before he could rush back to Paris, he was hit by a bizarre hotel sex scandal and abruptly forced to resign. Straus-Kahn had been shown a secret Russian intelligence report prepared for President Vladimir Putin in which ‘rogue’ CIA agents revealed that the US Federal Reserve had no gold reserves and only lied that it did.

The stakes for Washington and Wall Street in depressing the gold price are staggering. Were gold to soar to $10,000 or more, where many believe current demand-supply pressures would find it, there would be a panic selloff of the dollar and of US Treasury bonds. China now holds a record $3.7 trillion of foreign currency reserves and the US Treasury bonds and bills are about half that.

That selloff would send US interest rates sky-high, forcing a chain-reaction of corporate and personal bankruptcies that have been avoided since the financial crisis broke in 2007 only owing to record near-zero Federal Reserve interest rates. That selloff, in turn, would be the end of the US as the world’s sole superpower. Little wonder the Obama Administration is manipulating gold. It cannot last very long at this pace, however.



Here is a great graphic on the wealth inequality in the US. I would love to see the Canadian numbers in this format.


No Silk Road?


World's first Bitcoin ATM goes live in Vancouver next week


Federal Reserve Says Banks Need to Brace For Economic Impact  -  by Susanne Posel

"...The European Central Bank (ECB) is setting the stage of a complete financial collapse of fiat currencies across the globe. Joining in the scheme are other technocratic institutions such as the Federal Reserve, the Bank of Canada, the Bank of England, the Bank of Japan and the Swiss National Bank..."

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“Emerging market bloodbath” as crisis enters new phase

“An emerging market bloodbath”. That’s how Reuters described the mass sell-off that rattled global financial markets on Thursday and that deepened dramatically on Friday. Wall Street was down and European markets sank sharply as investors took flight from the periphery on fears that the scaling back of the US Federal Reserve stimulus program, combined with a Chinese growth slowdown, will negatively affect the ability of developing countries to repay the debts they accrued up in the past decade of easy credit. Concerns over China’s $4.8 trillion shadow banking debt further compounded the sense of fear.

On Thursday, Argentina’s peso lost 14% of its value — its greatest single-day collapse since the country’s disastrous 2001-’02 crisis — as the Central Bank was forced to abandon its attempts to defend the currency in the face of mounting pressures. Meanwhile, the Turkish Central Bank was forced to intervene to the tune of $2 billion to prop up the lira, which has lost nearly a quarter of its value since mass protests shook the country back in June last year. The intervention failed to stabilize the sell-off, however, and the lira plunged for an 11th straight day to hit a new record low at the end of the week.

“A decade long bull market has come to an end,” the official of a large hedge told the Financial Times at the World Economic Forum in Davos. The Russian ruble and South Africa’s rand took a nosedive down to their lowest levels since 2008, and the Brazilian real fell to its lowest levels in five months as well following the Argentine devaluation. Even the Mexican peso — considered to be one of the strongest and most reliable currencies in the Global South — took a plunge for a fourth straight day. Meanwhile, the cost of insuring emerging market debt spiked as investors took fright over the increased risk of default.

Large-scale social unrest and anti-government protests in Thailand and Ukraine further undermined investors’ confidence in emerging market debt. As Asian investors fled into the Japanese yen (traditionally considered a regional safe haven), the Nikkei dropped as the country’s chances of an export-led recovery seemed to dim. Shares in Hong Kong, South Korea, Australia, New Zealand, Singapore, Malaysia, Indonesia and the Philippines all sagged. The spillover effect also hit the Hungarian forint and the Polish zloty, and even the Indian rupee and the Israeli shekel were affected by the pressure on Friday.

“Global emerging markets are now trading in full-blown panic mode,” declared Benoit Anne, head of emerging market strategy at Société Générale. The Financial Times headlined that “the emerging market tumble carries echoes of 1990s crisis,” (only to tone this down later and change the title to “emerging markets carry a developing hangover”). Whatever echoes there may or may not be, what is clear is that the global financial crisis — which many analysts declared to be at end now that the European debt saga finally seemed to be “under control” — is far from over, and may just have entered into a new phase....


The New Wave of Financial Instability  -  by Mike Whitney

"Is this the Big One?"


Currency Crisis At Chinese Bank 'Could Trigger Global Meltdown'

"...growing problems in the Chinese banking system could spill over into a wider financial crisis..."


The problems have been only papered over with liquidity.  They can hardly turn off the stimulus spigots without bursting the bond bubble, and they can't continue printing tens of billions of make believe stimulus money each month without increasing the risk that other markets will flee dollar holdings and dollar based trading, as some have already been doing, namely Russia and China.


IMF says tax the rich!!/content/1.2552141

[i] Taxing the rich is good for the economy, IMF says: Research paper debunks theory that taxing rich people slows overall growth[/i]

This seems significant to me, but I'm interested in what others think.


Buying Up the Planet: Out of Control Central Banks on a Corporate Buying Spree  -  by Ellen Brown

"Finance is the new form of warfare..."


Cheaper Oil Takes Russian Ruble To New Lows (and vid)

"This year the ruble has lost more than 40 percent of its value - the fastest decline since the 1998 currency crisis.

The less wealthy OPEC countries that depend on crude exports for the majority of their income are likely to be hit the most by the cartel's decision not to cut production.

Other countries outside OPEC which rely on income from oil have also experienced a negative reaction.

Some experts describe the current situation with oil prices as the result of OPEC squeezing out 'frackers' and trying to establish a monopoly in the conventional oil market..."


Crude Decision (and vid)

"Energy exporters OPEC decide to keep oil prices low - we explain why YOU should care..."




Submitted by Tyler Durden on 12/02/2014 10:47 -0500
Wondering where the inflationary impact of The Fed's massive monetary policy experiment is leaking out (aside from stock prices)... Look no further...

What happens when too much cheap money chases a limited asset? Just like housing, 'cost' of Shale Oil wells have become about the monthly nut, not the all-in as The Fed-fueled pump focuses everyone on the short-term gains (ignorant of long-term pains). As the following chart shows, this credit-fueled exuberance has inflated basic costs for US oil producers dramatically...



...and with their costs of funding exploding higher, the vicious circle of higher costs and lower revenues for these levered firms is spinning faster and faster.





Submitted by Tyler Durden on 12/02/2014 10:47 -0500
Wondering where the inflationary impact of The Fed's massive monetary policy experiment is leaking out (aside from stock prices)... Look no further...



...and with their costs of funding exploding higher, the vicious circle of higher costs and lower revenues for these levered firms is spinning faster and faster.



Collapse of the oil derivative trade means collapse of the big banks and the system...from Michael Snyder of Economic Collapse...... is difficult to convey the multi ways that the collapsing oil prices are collapsing the system.....

Russia at least appreciates the degree of the peril we face, by going into war emergency government for their economic survival...

If Chona de pegs the yuan from the dollar, as they seem to be doing, this will collapse the china yuan US dollar carry trade...

The global banking system is now facing immediate peril.....and this time, there is not enough financial assets in existence of any remaining value, that will bail them out...

If the yuan continues to lose its value and or their government is forced to continue lowering interest rates...if the price of oil and gas continue to drop......good by whatever s left of the US economic expansion, the US dollar creditworthiness

How the elites are going to salvage the system again for the umpteenth time is beyond my s now out of their control

Perhaps to most my thoughts have no credit.......but I ll tell you I m pretty scared..this time we re toast!


Loss Of Control  -  by Bill Holter

"All bubbles eventually burst...and it looks like this one is bursting now.

If this is true and I firmly believe it is, we are on the doorstep of the worst financial panic event in all of human history.

Only a small part of the global population ever evan played in this game but everyone will be affected by it."


Gold, Financial Markets and the International Monetary System: One Foot on a Banana Peel, the Other In the Grave  -  by Bill Holter

"The crash in oil all by itself is enough to ruin the financial system but by no means was alone this past week. We now have a monetary system with one foot on a banana peel and the other in a grave.

Something is very wrong, something very bad is going to happen and it is going to happen very soon..."


Ruble Plummets Losing More Than 20% in a Day, Hitting New Dollar and Euro Lows (and vid)

"No end seems to be in sight for the plight of the Russian ruble which slumped to new record lows..."


Club Orlov: Can Anybody Find Me... A Central Banker to Love?

"Ruble and oil are continuing to plunge amid increasing financial market turmoil throughout the world..."


Keiser Report: Oil Can Combust and Blow It All

Max Keiser and Stacy Herbert discuss the blood-bathing in the oil related markets


Western Banks Cut Off Liquidity To Russian Entities  -  by Tyler Durden

"Presenting Russia's banks: now cut off from the outside world as the second cold war goes nuclear, at least when it comes to the financial system.

Such banks as Goldman Sachs Group Inc this week started rejecting requests from institutional clients to engage in certain ruble-denominated repurchase agreements and other transactions designed to raise cash, according to people familiar with the matter.

And where Goldman goes, everyone else follows...

Meanwhile, the entire Russian capital market, and not just its currency, is becoming isolated from the rest of the Western world.

As for the death of the Petrodollar we warned about, a death which has resulted in the disintegration of market volume, just as warned, suddenly everyone is noticing.

Regardless, what all of the above means is that Russia now has at best a few weeks in which to find an alternative source of short-term funding.

One coming from the East..."


West Behind Falling Ruble, Oil Prices - Russia Spy Chief

"Washington and its allies are pursuing a regime change policy towards Russia, deliberately introducing sanctions and attacking the ruble through manipulation of world oil prices, the head of Russia's external intelligence agency has said

Michael Fradkov, the head of Foreign Intelligence Service warned that Moscow is aware of US moves to oust Putin from power."


Russia Crisis Leave Banks Around the World Exposed By the Billions

"Major banks across Europe, as well as the UK, US, and Japan are at major risk should the Russian economy default, according to a new study by Capital Economies.

Ruble Crisis: *LIVE UPDATES*

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The Oil Coup

“John Kerry, the US Secretary of State, allegedly struck a deal with King Abdullah in September under which the Saudis would sell crude at below the prevailing market price. That would help explain why the price has been falling at a time when, given the turmoil in Iraq and Syria caused by Islamic State, it would normally have been rising.” (Stakes are high as US plays the oil card against Iran and Russia, Larry Eliot, Guardian)

U.S. powerbrokers have put the country at risk of another financial crisis to intensify their economic war on Moscow and to move ahead with their plan to “pivot to Asia”.

Here’s what’s happening: Washington has persuaded the Saudis to flood the market with oil to push down prices, decimate Russia’s economy, and reduce Moscow’s resistance to further NATO encirclement and the spreading of US military bases across Central Asia. The US-Saudi scheme has slashed oil prices by nearly a half since they hit their peak in June. The sharp decline in prices has burst the bubble in high-yield debt which has increased the turbulence in the credit markets while pushing global equities into a tailspin. Even so, the roiled markets and spreading contagion have not deterred Washington from pursuing its reckless plan, a plan which uses Riyadh’s stooge-regime to prosecute Washington’s global resource war. Here’s a brief summary from an article by F. William Engdahl titled “The Secret Stupid Saudi-US Deal on Syria”:

“The details are emerging of a new secret and quite stupid Saudi-US deal on Syria and the so-called IS. It involves oil and gas control of the entire region and the weakening of Russia and Iran by Saudi Arabian flooding the world market with cheap oil. Details were concluded in the September meeting by US Secretary of State John Kerry and the Saudi King…

..the kingdom of Saudi Arabia, has been flooding the market with deep discounted oil, triggering a price war within OPEC… The Saudis are targeting sales to Asia for the discounts and in particular, its major Asian customer, China where it is reportedly offering its crude for a mere $50 to $60 a barrel rather than the earlier price of around $100. That Saudi financial discounting operation in turn is by all appearance being coordinated with a US Treasury financial warfare operation, via its Office of Terrorism and Financial Intelligence, in cooperation with a handful of inside players on Wall Street who control oil derivatives trading. The result is a market panic that is gaining momentum daily. China is quite happy to buy the cheap oil, but her close allies, Russia and Iran, are being hit severely…

According to Rashid Abanmy, President of the Riyadh-based Saudi Arabia Oil Policies and Strategic Expectations Center, the dramatic price collapse is being deliberately caused by the Saudis, OPEC’s largest producer. The public reason claimed is to gain new markets in a global market of weakening oil demand. The real reason, according to Abanmy, is to put pressure on Iran on her nuclear program, and on Russia to end her support for Bashar al-Assad in Syria….More than 50% of Russian state revenue comes from its export sales of oil and gas. The US-Saudi oil price manipulation is aimed at destabilizing several strong opponents of US globalist policies. Targets include Iran and Syria, both allies of Russia in opposing a US sole Superpower. The principal target, however, is Putin’s Russia, the single greatest threat today to that Superpower hegemony. (The Secret Stupid Saudi-US Deal on Syria, F. William Engdahl, BFP)


China Prepares To Bailout Russia  -  by Tyler Durden

"Is 'isolated' Russia about to be bailed out by the world's largest economy China?"


The stock market has had the highest 2 days rise since 2009

Is the financial crisis over?


The financial crisis appears to be over, at least in North America, where there has been a huge rebound in their stock markets. 

If this continues we may well finally see interest rate increases in 2015.


Rigging The Market  -  by Paul Craig Roberts

"..The American attack on the ruble is also teaching sovereign governments that are not US vassals the extreme cost of allowing their currencies to trade in currency markets dominated by the US.

The greatest harm that is being done to the Russian economy is not due to sanctions and the US attack on the ruble. The greatest harm is being done by Russia's neoliberal economists.

As Michael Hudson has shown, neoliberal economics is 'junk economics'. But it is also a tool of American financial imperialism, and this makes neoliberal Russian economists tools of American imperialism.

Washington intends to subvert Russia and to turn Russia into a vassal state like Germany, France, Japan, CANADA, Australia, the UK and Ukraine.

If Russia is to survive, Putin must protect Russia from Western economic institutions and Western trained economists..."


Keiser Report (E695 and vid)

The ruble's 'baptism by fire'


financial crisis over, at least in North America......

yes we can all go back to sleep....except 2 minor problems...the financial crisis isn't over...what's happening is that the world speculator community with quadrillions sloshing around in their accounts, thanks primarily to their takeover of Governments after the private capitalist collapse in 2007/2008 (I admit I was about 4 months too hasty in that prediction) is fleeing the high end profits from their carry trades in the emerging economies (borrow at zero in the USA, Canada and Germany and Japan, loan at big rates everywhere else....including China, putting their bets in the safety of the US economy...meanwhile the virus of the energy bubble collapse is gradually eating its way through to the destruction of the US economy...

and secondly the idea that our North American economy is separate from the rest?

Welcome to the world of globalization....the bankrupting oil and energy governments and corporations will work their way through to the financials and drivative and high end speculating hedge fund industry, the other boom industry of the USA

...yes for the moment there is a stimulus to the West for the decereasing oil and gas prices, so we can continue to buy more imports?

Not yet sure when the slower effects to the energy industry and its bubble finances will hit.....but for sure next year sometime...

we've got to take our heads out of the sands, look around and start preparing for the collapse of North America's economy.....

I can assure you that the corporatocracy has their plans well advanced!


Wealth of World's 400 Richest Billionaires Rose $92B in 2014  -  by Andre Damon

"The combined net worth of these 400 individuals is greater than the gross domestic product of Germany, the fourth largest economy in the world..."

high time for a hostile takeover


Oil Falls Below $50 As Global Financial Markets Begin to Unravel

"On Monday, the price of oil fell below $50 for the first time since April 2009, and the Dow dropped 331 points. Meanwhile, the stock market declines over in Europe were even larger on a percentage basis and the euro sank to a fresh nine year low on concerns that the anti-austerity Syriza party will be victorious in the upcoming elections in Greece.

These are precisely the kinds of things we would expect to happen, if a global financial crash was coming in 2015..."


It's a crapshoot.

Everything is fine until it isn't, like today when NA markets dropped like a stone due to the continuation of the plunging oil prices.

Goldman forecast $40 oil a while back and we're not far off from that now.

Like the weather pattern changes it appears we are in for some serious financial markets volatility as well.

Just remember the old addage: "Stocks were made to be sold". Get it.


It is indeed NR and we're going to be some of the 'collateral damage'...


This Oil Thing Is the Real Deal

"It's no longer about which factors bring down oil prices, that's old news; it's about what oil prices bring down. The oil price drop is a much bigger event than the US subprime housing crisis, it's bigger than everything put together...

If this keeps going, someday soon somebody's going to go to war...Maybe domestically, maybe across borders, but it'll happen.

The move is just too big not to lead to bloodshed."

iyraste1313's a crapshoot....yes that is the essential why do we play all these political games with supposedly left humanitarian type institutions which bow down to the sanctity of this casino criminal conspiracy?

The unfolding catastrophe for Canada and North America demands some serious political proposals!


I couldn't agree more. And voting for Coke, Pepsi or the NDP isn't one of them.


Russia, China Currency Agreement to Promote 'De-Dollarization': Economist (and vid)

"A recent agreement between Russia and China to switch to domestic currencies in bilateral trading will pave the way for the 'de-dollarization' of the global economy, a Finnish political economist says..."


What in the World Just Happened in Switzerland?  -  by Michael Snyder

"So now there is panic all over Europe. On Thursday the Swiss franc rose a staggering 30 percent against the euro, and the Swiss stock market plunged by 10 percent. Meanwhile, the euro is in greater danger than ever..."


Bowing to the inevitable, Switzerland has ditched an increasingly expensive policy to limit the export-sapping rise of the Swiss franc — a decision that propelled the currency a whopping 30 percent higher against the euro within minutes.

Thursday's decision by the Swiss National Bank, or SNB, to end its efforts to keep the euro from trading below 1.20 francs came amid mounting speculation that the European Central Bank will next week back a big stimulus program that will put more euros in circulation, which would further dilute their value.

That expectation has seen the euro face intense selling pressure in currency markets, particularly against the dollar. The euro has fallen to nine-year lows against the dollar and below its launch rate in 1999.

Swiss franc booming

As the outlook for the euro has darkened, the cost for the Swiss central bank of defending the peg by buying euros or selling francs has risen. Though the timing of the Swiss decision proved a surprise, most foreign exchange experts thought the peg would have to be abandoned, just as previous such efforts had.

The scale of the Swiss central bank's task was evident in the franc's movements in the markets after it abandoned the peg. In some of the most dramatic moves seen in currency markets for decades, the euro plunged a stunning 30 percent against the franc in the minutes after the decision. It has since recovered somewhat to trade 13 percent lower at 1.04 francs.

It wasn't just the euro that got caught up in the franc's frenzied moves. The dollar plunged by a similar amount, though it also recouped some of its kneejerk losses to trade 15 percent lower 0.8884 francs.

moved from duplicate thread in which Montreal58 responded to me:

Simplistically, we can look at it as the exit of one of the major buyers of the Euro, as the Swiss had to buy Euros (sell Francs) to keep the Franc down. This in turn will tend to mean the Euro will trade lower without a raise in interest rates in that area. 

If you have a lot of debt denominated in a given currency, it is probably to your advantage if that currency is somehow discounted, especially if you have the ability to earn other currencies it trades against.

What would be bad for Greece would be a rise in Euro interest rates. What would not be so bad would be a fall in the Euro.


Michael Hudson on Crisis in Europe and the Machinations of the Rentier Class (and vid)

"The wild swing in the Swiss currency hit global banks with tens of millions of dollars in losses and triggered the collapse of several brokerage firms..."


Dr Roberts Says China Can Ruin US Dollar, Economy

"A former US administration official says China can ruin the US dollar and economy by dumping its 'massive dollar-denominated financial assets on the market..."


NDPP wrote:

Dr Roberts Says China Can Ruin US Dollar, Economy

"A former US administration official says China can ruin the US dollar and economy by dumping its 'massive dollar-denominated financial assets on the market..."

It's all a game. China is holding huge debt in dollars. They don't want to devalue it by mass dumping and they don't want the States to crash. North America is 100% self-sufficient. I'm not saying it wouldn't be painful to switch to an internal economy but it could be done and with relative ease. If Greece leaves the Euro they will re-create their own currency.

Wealth isn't money. Money isn't even money anymore. Most of it doesn't physically exist. It's all electronic IOUs. It only exists because we agree that it does. If the US decided they couldn't afford to pay China they simply wouldn't, or they would "print" trillions of dollars to clear the debt.The US will never pay off it's debt to China but what could China do about it? Stop sending us cheap goods? Invade?

North America has enormous wealth in the form of endless energy, plenty of arable land and water, and knowledge. We may have closed a lot of factories but we could have Detroit churning out America's cars again in no time.The states has a 1000 bases around the world and its military is bigger than all the rest of the world put together. We are on the most secure continent in the world by every measure, even ability to adjust to climate change.

Canada is politically independent but when push comes to shove we are as closely bound as two countries can be without being one. If the US dollar tanks so will the Canadian dollar because the US is our biggest trading partner by far. We are in a unique situation in that the continent is self-sufficient and unified by a common security perimeter.

The hypothetical of China dumping US debt so dramatically devaluing the dollar is an unrealistic hypothetical. The fallout would hit the entire world. It wouldn't make China and Russia more powerful it would isolate them. The World Bank and the IMF and other puppeteers would immediately rejig the system and make up new rules to suit the western world.


CrossTalk: Wealth Abyss (and vid)

"One percent already has half the world's wealth under its thumb and at this rate is set to accumulate even more. Is this global system rigged to their advantage?" (do fish swim?)

CrossTalking with Max Lawson, Richard Wellings and Michael Hudson