Archive for the Banks and Banking System Category

Terrorized By Trumpi’s Tariffs (March 5, 2018)

Posted in Automobiles/Automobile Industry, Banks and Banking System, Blue States / Red States, Currency, Kleptocracy, South, Tariffs, Trumpi, War on March 5, 2018 by e-commentary.org

. . .

K          “In his latest Twitter tantrum, Trumpi announced that he is going to terrorize the world with tariffs.”

J          “He is a twit.  Everyone but Trumpi knows that tariffs are tarrible.”

. . .

K          “Trumpi may place tariffs on foreign cars.  The BMWs manufactured in the foreign country of South Carolina and the Volkswagens made in the foreign country of Tennessee and the Mercedes made in the foreign country of Alabama all will be tariffed.”

J          “The South is the New Germany.  Lindsay Graham is the Senator from South Carolina, New Germany.”

K          “The South is also the New Japan.  The Toyotas from the foreign country of Kentucky also will be tariffed.  Mitch McConnell is the Senator from Kentucky, New Japan.  Someone said that other countries may place a tariff on Kentucky bourbon.  That will get Mitch in a tither.”

J          “What if other nations boycott Harley-Davidson?  They are made in Paul Ryan country.”

. . .

K          “Makes you wonder if most of the Red States are actually foreign countries.  We may soon need a passport to visit and transit.”

. . .

J          “Tariffs are a toll that takes such a toll.”

. . .

K          “A boycott of Harley-Davidson . . . now them is fighin’ words.  And that’s the problem.  A trade war often becomes a war war.”

J          “Trade wars often become currency wars.  Currency wars often become trade wars.  A currency war combined with a trade war almost always becomes a war war.”

. . .

K          “Putin sent a message on March 1 to the U.S. that seems to have been lost in translation and buried in the cacophony of chaos.  If the U.S. attacks, Russia will respond.”

J          “No one is listening over the din.”

K          “No one is listening.  Too many hurricanes are hurling toward the house of cards.”

. . .

[March 8 – International Women’s Day]

[See the e-commentary at “Bankruptcy Auto Companies (December 8, 2008)” on the auto industry in the South.]

Bumper stickers of the week:

The chaos is getting even more chaotic.

Trade War -> Currency War; Currency War -> Trade War; Trade War + Currency War -> War War

Divas And Divos At Davos (January 29, 2018)

Posted in Antitrust, Banks and Banking System, Globalization, Kleptocracy, Rackets on January 29, 2018 by e-commentary.org

. . .

K          “I like their knife.”

J          “The common folk need a people’s Davos.”

. . .

K          “The world is not flat.  From afar, it is a mysterious big blue marble with swirling white clouds.  Up close, it is one long unlevel playing field with all the big players playing a game with the little players.”

J          “When you think about it, ‘globalization’ is an anagram derived from neo-colonialism and neo-imperialism and neo-capitalism and neo-consumerism.”

. . .

K          “When the one one-thousandths of one percent (.001 %) get together, you know they are up to no good.”

J          “They fix prices, but they do not fix problems.”

. . .

K          “They say that a conspiracy is two or more people working together for one end.”

J          “My theory is that they are conspiring to put the fix on us.”

. . .

[See the e-commentary at “Humanity’s Motto:  To Enslave And To Colonize (January 27, 2014)”, “The ‘Superfluous Consumer’ (July 27, 2015)” and “Is The American Consumer Irrelevant? (December 12, 2011)”.]

Bumper sticker of the week:

“Qu’ils mangent de la brioche”

One World Currency? (January 8, 2018)

Posted in Banks and Banking System, Cryptocurrency, Currency, Cyberactivities, Dollar - World's Reserve Currency, Magazine Reference, Money, Petrodollar, Special Drawing Rights (SDR), Universal Monetary Unit, World's Reserve Currency on January 8, 2018 by e-commentary.org

. . .

K          “Thirty years ago tomorrow, The Economist magazine uploaded an article titled ‘Get Ready for the Phoenix’ with a cover proclaiming ‘Get ready for a world currency’ and featuring a rising Phoenix.”

J          “Get ready.  The Phoenix, the Bancor, the S.D.R., the Universal Monetary Unit, the Bobcoin, the Something Else is likely to replace the PetroDollar in the near future.  Stay tuned.” 

. . .

K          “On a simple level, ‘cryptocurrencies’, etc. are digital and gold, etc. is analog.  Blockchain technology underlying ‘cryptocurrencies’ is likely to be supplanted by a fast, fair, sustainable, scalable, guaranteed Byzantine fault tolerant consensus digital technology using gossip protocols and virtual votes such as Hashgraph.  And Hashgraph is likely to be supplanted by even more advanced and sophisticated technologies.” 

J          “That’s what everyone is saying.  Get ready.  Stay tuned.”

. . .

[See a related and more recent article “One world, one money” in The Economist magazine dated September 24, 1998.  First published as a five-part series punctuated with reprints of paintings by Gustave Courbet, “Bitcoin Doesn’t Exist – The Full Story” written by “Dr. D” for “The Automatic Earth” project/site provides some perspective on the phenomenon known as ‘cryptocurrencies’.  The comments to the series and the comments on the sites that reprint the series provide some robust ideas and opinions.  Much is happening quickly.]

[See the e-commentary titled “‘Bitcoin’, ‘Ethereum’ . . . ‘Blockchain Technology’  Say What? (July 3, 2017)”, “The Mandibles, FRNs, SDRs, IMF, G20, WTD! (September 5, 2016)” and “USA + FRN/PD — > IMF + SDR — > NDB + UMU? The “Universal Monetary Unit” . . . Coming To a Planet Near You (January 2, 2017)”.]

Bumper stickers of the week:

Want to improve your love life?  Change your handle to “Blockchain”

. . .

The Economist, January 9, 1988, Vol. 306, pages 9-10; Cover:  “Get ready for a world currency”; Title of the article:  “Get Ready for the Phoenix”

THIRTY years from now, Americans, Japanese, Europeans, and people in many other rich countries, and some relatively poor ones will probably be paying for their shopping with the same currency.  Prices will be quoted not in dollars, yen or D-marks but in, let’s say, the phoenix.  The phoenix will be favoured by companies and shoppers because it will be more convenient than today’s national currencies, which by then will seem a quaint cause of much disruption to economic life in the last twentieth century.

. . .

At the beginning of 1988 this appears an outlandish prediction.  Proposals for eventual monetary union proliferated five and ten years ago, but they hardly envisaged the setbacks of 1987.  The governments of the big economies tried to move an inch or two towards a more managed system of exchange rates – a logical preliminary, it might seem, to radical monetary reform.  For lack of co-operation in their underlying economic policies they bungled it horribly, and provoked the rise in interest rates that brought on the stock market crash of October.  These events have chastened exchange-rate reformers.  The market crash taught them that the pretence of policy co-operation can be worse than nothing, and that until real co-operation is feasible (i.e., until governments surrender some economic sovereignty) further attempts to peg currencies will flounder.

. . .

The new world economy

The biggest change in the world economy since the early 1970’s is that flows of money have replaced trade in goods as the force that drives exchange rates.  As a result of the relentless integration of the world’s financial markets, differences in national economic policies can disturb interest rates (or expectations of future interest rates) only slightly, yet still call forth huge transfers of financial assets from one country to another.  These transfers swamp the flow of trade revenues in their effect on the demand and supply for different currencies, and hence in their effect on exchange rates.  As telecommunications technology continues to advance, these transactions will be cheaper and faster still.  With unco-ordinated economic policies, currencies can get only more volatile.

. . .

In all these ways national economic boundaries are slowly dissolving.  As the trend continues, the appeal of a currency union across at least the main industrial countries will seem irresistible to everybody except foreign-exchange traders and governments.  In the phoenix zone, economic adjustment to shifts in relative prices would happen smoothly and automatically, rather as it does today between different regions within large economies (a brief on pages 74-75 explains how.)  The absence of all currency risk would spur trade, investment and employment.

. . .

The phoenix zone would impose tight constraints on national governments.  There would be no such thing, for instance, as a national monetary policy.  The world phoenix supply would be fixed by a new central bank, descended perhaps from the IMF.  The world inflation rate – and hence, within narrow margins, each national inflation rate – would be in its charge.  Each country could use taxes and public spending to offset temporary falls in demand, but it would have to borrow rather than print money to finance its budget deficit.  With no recourse to the inflation tax, governments and their creditors would be forced to judge their borrowing and lending plans more carefully than they do today.  This means a big loss of economic sovereignty, but the trends that make the phoenix so appealing are taking that sovereignty away in any case.  Even in a world of more-or-less floating exchange rates, individual governments have seen their policy independence checked by an unfriendly outside world.

. . .

As the next century approaches, the natural forces that are pushing the world towards economic integration will offer governments a broad choice.  They can go with the flow, or they can build barricades.  Preparing the way for the phoenix will mean fewer pretended agreements on policy and more real ones.  It will mean allowing and then actively promoting the private-sector use of an international money alongside existing national monies.  That would let people vote with their wallets for the eventual move to full currency union.  The phoenix would probably start as a cocktail of national currencies, just as the Special Drawing Right is today.  In time, though, its value against national currencies would cease to matter, because people would choose it for its convenience and the stability of its purchasing power.

. . .

The alternative – to preserve policymaking autonomy – would involve a new proliferation of truly draconian controls on trade and capital flows.  This course offers governments a splendid time.  They could manage exchange-rate movements, deploy monetary and fiscal policy without inhibition, and tackle the resulting bursts of inflation with prices and incomes polices.  It is a growth-crippling prospect.  Pencil in the phoenix for around 2018, and welcome it when it comes.

USA + FRN/PD – – > IMF + SDR – – > NDB + UMU? The “Universal Monetary Unit” . . . Coming To a Planet Near You (January 2, 2017)

Posted in AIIB, Banks and Banking System, Book Reference, BRICS, CFETS, CIPS, Dollar - World's Reserve Currency, Gold, Gold Standard, Hyperdive Economic Collapse, International Finance, International Monetary Fund, Money, Petrodollar, SDR - Special Drawing Rights, Special Drawing Rights (SDR), Trade, Universal Monetary Unit, World's Reserve Currency on January 2, 2017 by e-commentary.org

. . .

K          “Remember way back on October 1 when the International Monetary Fund (IMF) implemented the modified composition of the Special Drawing Rights (SDR) that includes for the first time the Chinese Renminbi (RMB) along with the United States Dollar (FRN/PD), the Euro (€), the British Pound Sterling (£) and the Japanese Yen (¥) in the Great Valuation Basket?”

J          “Couldn’t forget.  To celebrate the transition, we got the entire day off.”

K          “The Federal Reserve Note/PetroDollar maintained its percentage share of the portfolio with the Euro, Pound and Yen yielding room for the new kid on the block.  The way I see it, the evolution of the SDR may be too slow for Brazil, Russia, India, China and South Africa (the BRICS countries) and other countries (the BRICS+ countries) and still leaves the FRN/PD as the world’s reserve currency.”

J          “They say more countries are getting cranky that the FRN/PD remains the mandatory currency peg for trade on the global market.  Last Thursday, the China Foreign Exchange Trade System (CFETS), the foreign exchange trading platform operator, announced that it is adjusting the way it calculates the CFETS Yuan Index which is a critical measure of the Yuan against a basket of currencies, starting yesterday.”

K          “And you got the entire day off.” 

J          “And today, for good measure.  They say that the USA will not allow the IMF to revisit the composition of the SDRs again for years.  The problem for the BRICS+ countries is that the United States has veto power over the composition of the SDR and will block any attempt to accelerate the transition to incorporate other currencies.”

K          “Think about this possible scenario.  The BRICS+ countries may make an end run and expand the mandate and activities of what is now known as the New Development Bank (NDB) and create a Universal Monetary Unit (UMU) constituted of the Chinese RMB, Russian Ruble, Indian Rupee, South African Rand, Brazilian Real, good old gold (Alpha uniform) and a smorgasbord of other currencies.”     

J          “While they are at it, the South African Kruggerand could supplant the Rand and serve as the gold component or part of the gold component.”

K          “Who knows, when they do that, you may get the week off of work.”

J          “Count me in and count me off.  And to provide for a smoother transition, include in the new generation UMU the current currencies in the SDR in diluted amounts.  A measured and gradual approach is prudent.  Interdependent economies and unintended consequences, you know.”

K          “While they are at it, they could go full in.  The Cross-Border Inter-Bank Payment System sometimes known as the China Interbank Payment System (CIPS) could develop into a comparable transnational multilateral payment system as a complement to and to compete with the Society for Worldwide Interbank Financial Telecommunication (SWIFT).”

J          “That’s exactly what I was going to suggest.  An economy needs a ‘thing’ to serve as money/currency/chits/script/wampum and a means to reconcile payments.  The BRICS+ countries have no reason to wait another half decade when they can do it themselves.”

. . .

J          “Or the BRICS+ countries may force the issue at the IMF meeting in Rome, District of Columbia on April 21 – 23.”

K          “And you will get at least two days off of work.”

J          “Can’t forget.  Stay tuned.”

. . .

K          “Someone surely has thought and wondered about these possible developments.”

J          “You think?  I wonder if anyone cares.  What’s on tv?”

. . .

[See the e-commentary at “The Mandibles, FRNs, SDRs, IMF, G20, WTD! (September 5, 2016)” and “Dollar – World’s Reserve Currency”.]

Bumper stickers of the week:

The “Universal Monetary Unit” . . . Coming To a Planet Near You

Paper [Money] Is Patriotic

Fight the War on Cash

 

Musings On Silver (November 21, 2016)

Posted in Banks and Banking System, Gold, Gold Standard, Money, Silver, Silver Standard on November 21, 2016 by e-commentary.org

. . .

_          “First place among the losers?”

_          “Dismissed as the ‘also-ran’ of precious metals?”

_          “Chump change or chump’s change?”

. . .

_          “I view gold as the farm and silver as the crops and the animals.  You do not sell the farm.  You do buy, sell and exchange the crops and the animals.”  

_          “So gold is the store of value and silver is the medium of exchange.  But what is the unit of account – hectares or hogs . . . or flashy pretentious paper with no real underlying value other than faith that is often misplaced by the populace?”

. . .

_          “The historic price relationship between gold and silver is way out of kilter.  Gold should be priced lower or silver should be priced higher.  If you account for the cost of production, gold is not priced too low and cannot be priced much lower without impacting the supply which will . . . drive up the price and further distort the price and the historic price relationship.  Ergo, silver should be priced much higher.”

_          “Everything is out of kilter.  Like so many other ostensible markets, we are dealing with rigged rackets.  Both prices are held artificially low by the powers that control price and sell paper precious metals.  But the prices cannot be held low forever.”

_          “Mr. Supply and Ms. Demand are not in the game.”

_          “Except to the extent that if a miner cannot make any money from mining, the miner will not mine.”

. . .

_          “Gold is for kings and silver is for royalty.”

. . .

_          “And there are some pure silver mines, yet silver is usually a byproduct of other mining for gold and copper.  The economics are intertwined and interdependent.”

. . .

_          “Someone said that roughly seventy percent of gold is used in jewelry and roughly seventy percent of silver is used in electronics and other commercial uses.”  

_          “Silver was once used in large quantities for analog photography.”

_          “Many digital devices use a speck of silver.  Those specks add up to a peck.”

. . .

_          “She reported back to her students that during her field trip to China fifteen years earlier, some shopkeepers exchanged her pre-1965 Washington silver quarters for two dollars and fifty cents in credit for her purchases in the shop that day.  Think about it, on average, the Chinese shopkeepers offered the tenfold premium without even a prod or a prompting.  They are in the know and they know it.”

_          “The Chinese shop keepers’ take on the pre-1965 two bits is revealing.  They will take them in exchange for twenty bits worth of products.”  

. . .

_          “That Series 1935 A silver certificate framed in the den is from a Hong Kong shopkeeper who swiftly slipped the certificate with the lapis lazuli Treasury seal in among the other unpretentious camo-colored Federal Reserve Notes she dealt and dropped in front of me.  She appeared to be sloughing it off on someone who might not notice the outlier dealt to him.  I pulled it out of the stack, stared at it and could hear its story and feel its history.” 

. . .

_          “And silver is shinier than gold.”

_          “Describing a silver salmon as ‘dime bright’ invokes and evokes a clear image.”

. . .

[See the e-commentary at “The Silver Standard:  The Value Of (Sort Of) Real Money (July 15, 2013)”, “Is The Gold Standard Really The Gold Standard? (January 18, 2010)”, “The Gold Standard Revisited (August 15, 2015)”, “‘Fiat Gold’ / Fool’s Gold (May 2, 2011)”, and “The Mandibles, FRNs, SDRs, IMF, G20, WTD! (September 5, 2016).”]

[JFK – May 29, 1917 – November 22, 1963]

Bumper stickers of the week:

Silence is golden; gold is silent

What is the gold standard again?

First Annual Noble Prize In Eco-nomics (October 10, 2016)

Posted in Awards / Incentives, Banks and Banking System, Courage, Credit Unions, Crime/Punishment, Economics, Economics Nobel, FDIC, Journalism, Kleptocracy, Law, Newspapers, Nobel Prize, Noble Prize, Noble Prize in Eco-nomics, Press/Media, Rule of Law, Song Reference on October 10, 2016 by e-commentary.org

. . .

K          “An award dedicated to acknowledging and celebrating the work of someone on the planet who really knows something about eco-nomics.”

J          “Novel.  Appropriate.  Necessary.  And unprecedented.”

K          “The recipient of the first annual Noble Prize In Eco-nomics is . . . Professor William Kurt Black, Esq. professor of law and economics with the University of Missouri at Kansas City.  With decades of substantial and substantive real world experience, Professor Black examines and explicates the workings of banks and the banking system in the United States and the world with insight and conviction.  In his classic, timely and timeless magnum opus The Best Way to Rob a Bank is to Own One, he advances the conservative notion that those in the banking industry who commit systematic and rampant fraud should be convicted.  In an inspiring TEDxUMKC presentation available at TED the national public forum, he notes that bankers deploy banks as weapons of mass destruction against the public.  Unlike so many other law professors and judges who explore the interface of law and economics, he contends that law and economics should serve more than the interests of the wealthy and the powerful.  A felicitous contributor to the public discourse and dialogue, Professor Black’s continuing academic and personal commitment to the common weal and greater good is a good thing.”

. . .

[“This is Walter Kingsbury Brinkley, XYZ News, New York.  Earlier today, the highly coveted Noble Prize In Eco-nomics was awarded to Professor William K. Black, Esq. of the University of Missouri at Kansas City.  In his most celebrated work, Professor Black contends among other observations that the adoption of the rule of law in America is a swell idea.  In a related development, the Swedish bankers convened and announced the 2016 Nobel Prize in E-con-omics given to the individual who has or individuals who have done the most during his, her or their career to advance the interests of the wealthy and powerful.  . . . “]

[See the e-commentary at “Announcing The First Annual Noble Prize In Eco-nomics (May 2, 2016)”, “Award Deadlines (Livelines?) (July 25, 2016)”, “From e-con-omics to eco-nomics? (August 1, 2011)” and “Skip the Nobel in Economics (Oct. 6, 2009).”]

Bumper stickers of the week:

“Yes, as through this world I’ve wandered I’ve seen lots of funny men; Some will rob you with a six-gun, and some with a fountain pen.”  “The Ballad of Pretty Boy Floyd” by Woody Guthrie (c) 1958 (renewed) Woody Guthrie Publications, Inc.

Give a man a gun and he can rob a bank; give a man a bank and he can rob the world.

A Second Party:  Trump or Sanders? (March 14, 2016)

Posted in Banks and Banking System, Democrats, Elections, Federal Courts, Freedom / Liberty, Republicans, Stock Market, Supreme Court, Tea Party, Voting, Wall Street, War, War and Wall Street Party on March 14, 2016 by e-commentary.org

. . .

J          “Do political ideas proceed along a line/continuum or around a circle?”

K          “The ACLU card-carrying citizen turns around and bumps into a ‘Who is John Galt?’ hat-wearing libertarian sporting an ‘Ayn Rand Paul’ button.  Each should wonder whether they have something in common.”

. . .

K          “Trump supporters yearn for someone who speaks his mind – right or wrong – rather than a politician who only lies and lies and lies and lies to them.”

J          “Can you blame them.  But it is still a message of hate and fear.  I can blame them.”

K          “Disturbing message and tone, I agree.  And then Sanders notes that socialism/crony capitalism has made the wealthy even wealthier and thus socialism without crony capitalism may offer some promise for the non-wealthy.”

J          “Two strains of populist messages at a strained time in the Republic.  Yet Trump’s authoritarian message is disturbing and threatening.  The message is no longer conveyed with dog whistles.”

. . .

J          “The two-ring circus to select the ‘D’ representative and the ‘R’ representative of the ‘War and Wall Street’ Party grinds forward.”

K          “Sanders is not the War candidate and not the Wall Street candidate, so he is doomed.”

J          “In the FIRE (‘Finance, Insurance, Real Estate’) World, Trump is more of a ‘Real Estate’ person than a Wall Street/‘Finance’ person, yet he is not interested in or even able to reign in the systematic criminal activities on Wall Street.  He is belligerent and he is bellicose, yet he does not fit in with the Neo-Cons who seek war everywhere all the time.”

K          “‘Belli’ means ‘war’.”

J          “Trump is mean and Trump means war on some groups.”

K          “So he is the Quasi-War and Quasi-Wall Street Party candidate.”

. . .

K          “The real war is over the Supreme Court.  In past years, the Democrats tended to appoint slightly less dishonest federal appellate and district court judges, although recent Democratic appointments are as dishonest as the Republican appointments.”

J          “They vitiated the last remaining tie breaker.  Now who do you vote for?”

. . .

J          “The Owners own Clinton, Cruz, Rubio, Bush, Romney and their ilk.  Sanders and Trump are speaking too freely.”

K          “Hillary Cruz, Ted Rubio, Marco Bush, Jeb Romney and Mittens Clinton.  No matter how you mix it up, it is all the same.”

. . .

[See the e-commentary at Tea Party And Innocence Project Form ‘Liberty Alliance’ (September 9, 2013) and The “War and Wall [Street] Party” On The War Path (February 1, 2016).]

Bumper sticker of the week:

Nihilism as a response to the deeply-entrenched Kleptocrary is not always irrational.