central - Blog - Global Risk Community2024-03-28T08:14:12Zhttps://globalriskcommunity.com/profiles/blogs/feed/tag/centralNegative Interest Rates: The Real Reasonhttps://globalriskcommunity.com/profiles/blogs/negative-interest-rates-the-real-reason2016-02-10T17:45:28.000Z2016-02-10T17:45:28.000ZEnrique Raul Suarezhttps://globalriskcommunity.com/members/EnriqueRaulSuarez<div><p></p><p><a href="{{#staticFileLink}}8028242879,original{{/staticFileLink}}"><img width="340" class="align-center" src="{{#staticFileLink}}8028242879,original{{/staticFileLink}}" alt="8028242879?profile=original" /></a></p><p></p><h3 class="center" style="text-align:center;"><span class="font-size-4"><strong>Negative Interest Rates Aimed at Driving Small Banks Out of Business and Eliminating Cash: Economics Professor</strong></span></h3><p class="center" style="text-align:center;"><span class="font-size-4"> </span></p><p class="center" style="text-align:center;"><span class="font-size-4">Source:</span></p><p class="center" style="text-align:center;"></p><p class="center" style="text-align:center;"><span class="font-size-4"><strong>Washington's Blog</strong></span></p><p class="center" style="text-align:center;"></p><p class="center" style="text-align:center;"><span class="font-size-4">February 9, 2016</span></p><p class="center" style="text-align:center;"></p><p>More than one-fifth of the world’s total GDP is in countries which have imposed negative interest rates, including Japan, the EU, Denmark, Switzerland and Sweden.</p><p>Negative interest rates are spreading worldwide.</p><p>And yet negative interest rates – supposed to help economies recover – haven’t prevented Japan and Europe’s economies from absolutely tanking.</p><p>Nor have they even stimulated spending. As ValueWalk points out:</p><p>Japan has had ultra-low rates for years and its economy has been terrible. Trillions of debt in Europe now trades at negative interest rates and its economy isn’t exactly booming. Denmark, Sweden and Switzerland all have negative interest rates, but consumer spending isn’t going up there. In fact, savings rates have been going up in lockstep with the decrease in interest rates, exactly the opposite of what the geniuses at the various central banks expected.</p><p>Why is this happening? Simply, savers are scared. Lower interest rates have wrecked their retirement plans. Say you were doing some financial planning 10 years ago and plugged in 3% from your savings account. Now its 0%. You still have to plan for your retirement. Plug in 0%. What happens to your planning now? 0% compounded for X years is 0%. The math is simple. So in order to have your target savings at retirement, you need to save more, not spend more. But for some reason, the economists that run central banks around the world can’t see this. They are all stuck in their offices talking to one another and self-reinforcing this myth that they can drive spending up by reducing the rate of return on investments. Want to see consumer spending go up? Don’t wreck their savings plans so that they are too scared to spend. But that’s too simple. Instead, central banks use a chain of causation that doesn’t exist to try to create change 3 or 4 steps down the line. It hasn’t worked, and it won’t work. It isn’t in an individual’s self-interest to go out and spend their money on more “stuff” in order to spur economic growth.</p><p>So what’s really going on? Why are central banks worldwide pushing negative interest rates?</p><p><strong>Economics professor Richard Werner – the creator of quantitative easing – notes:</strong></p><p>The experience of Switzerland [shows that] negative rates raise banks’ costs of doing business. The banks respond by passing on this cost to their customers. Due to the already zero deposit rates, this means banks will raise their lending rates. As they did in Switzerland. In other words, reducing interest rates into negative territory will raise borrowing costs!</p><p>If this is the result, why do central banks not simply raise interest rates? This would achieve the same result, one might think. However, there is a crucial difference: raised rates will allow banks to widen their interest margin and make their business more profitable. With negative rates, banks’ margins will stay low and the financial situation of the banks will stay precarious and indeed become ever more precarious.</p><p>As readers know, we have been arguing that the ECB has been waging war on the ‘good’ banks in the eurozone, the several thousand small community banks, mainly in Germany, which are operated not for profit, but for co-operative members or the public good (such as the Sparkassen public savings banks or the Volksbank people’s banks). The ECB and the EU have significantly increased regulatory reporting burdens, thus personnel costs, so that many community banks are forced to merge, while having to close down many branches. This has been coupled with the ECB’s policy of flattening the yield curve (lowering short rates and also pushing down long rates via so-called ‘quantitative easing’). As a result banks that mainly engage in traditional banking, i.e. lending to firms for investment, have come under major pressure, while this type of ‘QE’ has produced profits for those large financial institutions engaged mainly in financial speculation and its funding.</p><p>The policy of negative interest rates is thus consistent with the agenda to drive small banks out of business and consolidate banking sectors in industrialised countries, increasing concentration and control in the banking sector.</p><p>It also serves to provide a (false) further justification for abolishing cash. And this fits into the Bank of England’s surprising recent discovery that the money supply is created by banks through their action of granting loans: by supporting monetary reformers, the Bank of England may further increase its own power and accelerate the drive to concentrate the banking system if bank credit creation was abolished and there was only one true bank left – the Bank of England. This would not only get us back to the old monopoly situation imposed in 1694 when the Bank of England was founded as a for-profit enterprise by private profiteers. It would also further the project to increase control over and monitoring of the population: with both cash and bank credit alternatives abolished, all transactions, money creation and allocation would be implemented by the Bank of England.</p><p>If this sounds like a “conspiracy theory”, the Financial Times argued in 2014 that central banks would be the real winners from a cashless society:</p><p>Central bankers, after all, have had an explicit interest in introducing e-money from the moment the global financial crisis began…</p><p>The introduction of a cashless society empowers central banks greatly. A cashless society, after all, not only makes things like negative interest rates possible, it transfers absolute control of the money supply to the central bank, mostly by turning it into a universal banker that competes directly with private banks for public deposits. All digital deposits become base money.</p><p></p></div>A Loophole Allows Banks – But Not Other Companies – to Create Money Out of Thin Airhttps://globalriskcommunity.com/profiles/blogs/a-loophole-allows-banks-but-not-other-companies-to-create-money2016-01-18T23:27:24.000Z2016-01-18T23:27:24.000ZEnrique Raul Suarezhttps://globalriskcommunity.com/members/EnriqueRaulSuarez<div><p></p><p><a href="{{#staticFileLink}}8028239483,original{{/staticFileLink}}"><img width="297" class="align-center" src="{{#staticFileLink}}8028239483,original{{/staticFileLink}}" alt="8028239483?profile=original" /></a></p><p></p><p class="center" style="text-align:center;"><span class="font-size-3"><strong>A Loophole Allows Banks – But Not Other Companies – to Create Money Out of Thin Air</strong></span></p><p class="center" style="text-align:center;"></p><p class="center" style="text-align:center;"><span class="font-size-3">One of the Main Causes of Our Economic Problems</span></p><p class="center" style="text-align:center;"><span class="font-size-3"> </span></p><p class="center" style="text-align:center;"><span class="font-size-3">Source:</span></p><p class="center" style="text-align:center;"></p><p class="center" style="text-align:center;"><span class="font-size-3"><strong>Washington's Blog</strong></span></p><p class="center" style="text-align:center;"></p><p class="center" style="text-align:center;"><span class="font-size-3">J</span><span class="font-size-3">anuary 15, 2016</span></p><p class="center" style="text-align:center;"></p><p>The central banks of the United States, England, and German – as well as 2 Nobel-prize winning economists – have all shown that banks create money out of thin air … even if they have no deposits on hand.</p><p>The failure of most governments and most mainstream economists to understand this fact – they instead believe the myth that people make deposits at their bank, and these deposits are then lent out to new borrowers – is the main cause of our rampant inequality and economic problems.</p><p>But how do banks actually make loans before they have sufficient deposits on hand?</p><p><em>Economics professor Richard Werner – the creator of quantitative easing</em> – noted in September that the field of economics has been lost in the woods for an entire century because it has failed to understand how banks actually create money.</p><p><strong>Professor wrote an academic paper in 2014 concluding:</strong></p><p>What banks do is to simply reclassify their accounts payable items arising from the act of lending as ‘customer deposits’, and the general public, when receiving payment in the form of a transfer of bank deposits, believes that a form of money had been paid into the bank.</p><p>***</p><p>The ‘lending’ bank records a new ‘customer deposit’ and informs the ‘borrower’ that funds have been ‘deposited’ in the borrower’s account. Since neither the borrower nor the bank actually made a deposit at the bank—nor, in connection with this transaction, anyone else for that matter, it remains necessary to analyze the legal aspects of bank operations. In particular, the legality of the act of reclassifying bank liabilities (accounts payable) as fictitious customer deposits requires further, separate analysis. This is all the more so, since no law, statute or bank regulation actually grants banks the right (usually considered a sovereign prerogative) to create and allocate the money supply. Further, the regulation that allows only banks to conduct such creative accounting (namely the exemption from the Client Money Rules) is potentially being abused through the act of‘ renaming’ the bank’s own accounts payable liabilities as ‘customer deposits’ when no deposits had been made, since this is also not explicitly referred to in the banks’ exemption from the Client Money Rules, or in any other statutes, laws or regulations, for that matter.</p><p>Professor Werner explained:</p><p>Although the implementation of banking services relies heavily on accounting, hardly any scholarly literature exists that explains in detail the accounting mechanics of bank credit creation and precisely how bank accounting differs from corporate accounting of non-bank firms.</p><p>***</p><p>It can be deduced that this ability of banks is likely derived from the operational, that is, accounting conventions and regulations of banking. These either differ from those of non-banks, so that only banks are able to create money, or else non-banks have missed out on the significant opportunities money creation may afford.</p><p>In order to identify the difference in accounting treatment of the lending operation by banks, we adopt a comparative accounting analysis perspective.</p><p>***</p><p><strong>When the non-financial corporation</strong>, such as a manufacturer, <strong>grants a loan</strong> to another firm, the loan contract is shown as an increase in assets: the firm now has an additional claim on debtors — this is the borrower’s promise to repay the loan. The lender purchases the loan contract, treated as a promissory note. Meanwhile, when the firm disburses the loan (and hence discharges its obligation to make the money available to the borrower), it is drawing down its cash reserves or monetary deposits with its banks. As a result, <strong>one gross asset increase is matched by an equally-sized gross asset decrease, leaving net total assets unchanged.</strong></p><p>In the second case, of a non-bank financial institution, such as a stock broker engaging in margin lending, the loan contract is the claim on the borrower that is added as an asset to the balance sheet, while the disbursement of the loan – for instance by transferring it to the client or the stock exchange to settle the margin trade conducted by its client – reduces the firm’s monetary balances (likely held with a bank). As a result, total assets and total liabilities remain unchanged.</p><p>While the balance sheet total is not affected by the granting and disbursement of the loan in the case of firms other than banks, <strong>the picture looks very different in the case of a bank</strong>. While the loan contract shows up as an increase in assets with all types of corporations, <strong>in the case of a bank the disbursement of the loan … appears as a positive entry on the liability side of the balance sheet, as opposed to being a negative entry on the asset side, as in the case of non-banks. As a result, it does not counter-balance the increased gross assets</strong>. Instead, both assets and liabilities expand. The bank’s balance sheet lengthens on both sides by the amount of the loan (see the empirical evidence in Werner, 2014a and Werner, 2014c). Thus it is clear that banks conduct their accounting operations differently from others, even differently from their near-relatives, the non-bank financial institutions.</p><p>***</p><p>Surprisingly, we find that unlike the other firms whose balance sheets shrank back in Step 2, the bank’s accounts seem in standstill, unchanged from Step 1. The total balance sheet remains lengthened. <strong>No balance is drawn down to make a payment to the borrower.</strong></p><p>So how is it that the borrower feels that the bank’s obligation to make funds available are being met? (If indeed they are being met). This is done through the one, small but <strong>crucial accounting change that does take place on the liability side of the bank balance sheet in Step 2: the bank reduces its ‘account payable’ item by the loan amount, acting as if the money had been disbursed to the customer, and at the same time it presents the customer with a statement that identifies this same obligation of the bank to the borrower, but now simply re-classified as a ‘customer deposit’ of the borrower with the bank.</strong></p><p>The bank, having ‘disbursed’ the loan, remains in a position where it still owes the money. <strong>In other words, the bank does not actually make any money available to the borrower: No transfer of funds from anywhere to the customer or indeed the customer’s account takes place. There is no equal reduction in the balance of another account to defray the borrower. Instead, the bank simply re-classified its liabilities, changing the ‘accounts payable’ obligation arising from the bank loan contract to another liability category called ‘customer deposits’.</strong></p><p>While the borrower is given the impression that the bank had transferred money from its capital, reserves or other accounts to the borrower’s account (as indeed major theories of banking, the financial intermediation and fractional reserve theories, erroneously claim), in reality this is not the case. <strong>Neither the bank nor the customer deposited any money, nor were any funds from anywhere outside the bank utilized to make the deposit in the borrower’s account. Indeed, there was no depositing of any funds.</strong></p><p>In Step 1 the bank had a liability — an obligation to pay someone. How can it discharge this liability? A law dictionary states:</p><p>“The most common way to be discharged from liability … is through payment.” 1</p><p>And yet, no payment takes place in Step 2 (and hence in the entire ‘lending’ process), which is why the bank’s balance sheet in total remains stuck in Step 1, when all lenders still owe the money to their respective borrowers. <strong>The bank’s liability is simply re-named a ‘bank deposit’</strong>. However, bank deposits are defined by central banks as being part of the official money supply (as measured in such official ‘money supply’ aggregates as M1, M2, M3 or M4). This confirms that banks create money when they grant a loan: <strong>they invent a fictitious customer deposit, which the central bank and all users of our monetary system, consider to be ‘money’, indistinguishable from ‘real’ deposits not newly invented by the banks</strong>. Thus <strong>banks</strong> do not just grant credit, they <strong>create credit, and simultaneously they create money</strong>.</p><p>***</p><p><strong>Instead of discharging their liability to pay out loans, the banks merely reclassify their liabilities originating from loan contracts from what should be an ‘accounts payable’ item to ‘customer deposit’</strong> (in practice of course skipping Step 1 entirely and thus neglecting to record the accounts payable item). The bank issues a statement of its liability to the borrower, which records its liability as a ‘deposit’ of the borrower at the bank.</p><p>***</p><p><strong>What enables banks to create credit and hence money is their exemption from the Client Money Rules. Thanks to this exemption they are allowed to keep customer deposits on their own balance sheet. This means that depositors who deposit their money with a bank are no longer the legal owners of this money</strong>. Instead, they are just one of the general creditors of the bank whom it owes money to. It also means that the bank is able to access the records of the customer deposits held with it and invent a new ‘customer deposit’ that had not actually been paid in, but instead is a re-classified accounts payable liability of the bank arising from a loan contract.</p><p>***</p><p><strong>What makes banks unique and explains the combination of lending and deposit-taking under one roof is the more fundamental fact that they do not have to segregate client accounts, and thus are able to engage in an exercise of ‘re-labelling’ and mixing different liabilities, specifically by re-assigning their accounts payable liabilities incurred when entering into loan agreements, to another category of liability called ‘customer deposits’.</strong></p><p><strong>What distinguishes banks from non-banks is their ability to create credit and money through lending, which is accomplished by booking what actually are accounts payable liabilities as imaginary customer deposits, and this is in turn made possible by a particular regulation that renders banks unique: their exemption from the Client Money Rules</strong>. [Werner gives a concrete example on British law for banking and non-banking institutions.]</p><p>***</p><p>It would appear that those who argue that bank regulations should be liberalized in order to create a level playing field with non-banks have neglected to demand that the banks’ unique exemption from the Client Money Rules – a regulation benefitting only banks – needs to be deregulated as well, so that <strong>banks must also conform to the Client Money Rules.</strong></p><p>***</p><p><strong>Alternatively, one could argue that it would level the playing field, if the banks’ current exemption from the Client Money Rules was also granted to all other firms — in other words, if the Client Money Rules themselves were abolished</strong>. This would allow all firms to also engage in the kind of creative accounting that has become an established practice among banks. It would certainly ensure that competition between banks and non-bank financial institutions would become more meaningful, since the exemption from the Client Money Rules, together with the banks’ deployment of this exemption for the purpose of re-labelling their liabilities, has given significant competitive advantages to banks over all other types of firms: <strong>banks have been able to create and allocate money – virtually the entire money supply in the economy – while no other firm is able to do the same.</strong></p><p>***</p><p><strong>Basel rules were doomed to failure</strong>, since they consider banks as financial intermediaries, when in actual fact they are the creators of the money supply. Since banks invent money as fictitious deposits, it can be readily shown that capital adequacy based bank regulation does not have to restrict bank activity: banks can create money and hence can arrange for money to be made available to purchase newly issued shares that increase their bank capital.</p><p>In other words, banks could simply invent the money that is then used to increase their capital. This is what Barclays Bank did in 2008, in order to avoid the use of tax money to shore up the bank’s capital: Barclays ‘raised’ £5.8 bn in new equity from Gulf sovereign wealth investors — by, it has transpired, lending them the money! As is explained in Werner (2014a), Barclays implemented a standard loan operation, thus inventing the £5.8 bn deposit ‘lent’ to the investor. This deposit was then used to ‘purchase’ the newly issued Barclays shares.</p><p>Thus in this case the bank liability originating from the bank loan to the Gulf investor transmuted from (1) an accounts payable liability to (2) a customer deposit liability, to finally end up as (3) equity — another category on the liability side of the bank’s balance sheet. Effectively, Barclays invented its own capital. This certainly was cheaper for the UK tax payer than using tax money.</p><p>As publicly listed companies in general are not allowed to lend money to firms for the purpose of buying their stocks, it was not in conformity with the Companies Act 2006 (Section 678, Prohibition of assistance for acquisition of shares in public company). But regulators were willing to overlook this. As Werner (2014b) argues, using central bank or bank credit creation is in principle the most cost-effective way to clean up the banking system and ensure that bank credit growth recovers quickly. The Barclays case is however evidence that stricter capital requirements do not necessary prevent banks from expanding credit and money creation, since their creation of deposits generates more purchasing power with which increased bank capital can also be funded.</p><p>In other words, banks have been granted a loophole – not available to other businesses – to use a fiction that the banks’ liabilities are really assets -which has given them a huge competitive advantage over everyone else.</p><p>No wonder banks now literally own the country … including the entire political system.</p><p>But why don’t mainstream economists understand how banks actually create money?</p><p><strong>Economics professor Steve Keen explained last week in Forbes:</strong></p><p>In any genuine science, empirical data like this would have forced the orthodoxy to rethink its position. But in economics, the profession has sailed on, blithely unaware of how their model of “banks as intermediaries between savers and investors” is seriously wrong, and now blinds them to the remedy for the crisis as it previously blinded them to the possibility of a crisis occurring.</p><p>A wit once defined an economist as someone who, when shown that something works in practice, replies “Ah! But does it work in theory?”</p><p>Mainstream economic models are fundamentally wrong. The theories taught in economics programs are riddled with errors. For example, they don’t take into account such basic factors as private debt.</p><p>That’s why the 2008 crash happened … and that’s why the economy is heading south now.</p><p>So things are going to get worse and worse until they’re fixed to account for how banks actually create money.</p><p></p><p></p></div>“The Banksters Did It”: The Central Banks Have Engineered This Financial Collapsehttps://globalriskcommunity.com/profiles/blogs/the-banksters-did-it-the-central-banks-have-engineered-this2015-08-28T22:31:44.000Z2015-08-28T22:31:44.000ZEnrique Raul Suarezhttps://globalriskcommunity.com/members/EnriqueRaulSuarez<div><p style="text-align:center;"><a href="{{#staticFileLink}}8028234271,original{{/staticFileLink}}"></a><a href="{{#staticFileLink}}8028239861,original{{/staticFileLink}}"></a></p><p style="text-align:center;"><img class="cover-image" alt="“The Banksters Did It”: The Central Banks Have Engineered This Financial Collapse" src="https://media.licdn.com/mpr/mpr/jc/AAEAAQAAAAAAAATZAAAAJDNkZWQ1ODJkLTkxMTEtNGRiOC1iZGExLTM5MjIyZTRjNjQ1YQ.jpg" /></p><p></p><p></p><p class="center" style="text-align:center;"><span class="font-size-3">Enrique Suarez Presenting:</span></p><p class="center" style="text-align:center;"></p><p class="center" style="text-align:center;"><span class="font-size-3"><em><strong>“The Banksters Did It”: The Central Banks Have Engineered This Financial Collapse</strong></em></span></p><p class="center" style="text-align:center;"></p><p class="center" style="text-align:center;">Source:</p><p class="center" style="text-align:center;"></p><p class="center" style="text-align:center;"><a href="https://www.corbettreport.com/never-forget-the-central-banks-have-engineered-this-collapse/" target="_blank"><span><span>The Corbett Report</span></span></a></p><p class="center" style="text-align:center;">25 August 2015</p><p></p><p><em>Good news, everybody! The <a href="http://www.bloomberg.com/news/articles/2015-08-25/s-p-500-futures-rally-3-after-worst-2-day-selloff-since-2008" target="_blank"><span><span>markets are rebounding</span></span></a>! Yes, we just a hit a minor bump in the road there, but don’t worry, everything is <a href="http://www.morningstar.com/news/dow-jones/TDJNDN_201508253310/markets-stabilize-despite-china-fall.html" target="_blank"><span><span>back to normal</span></span></a> now. Let’s forget about the tail end of last week and this week’s Black Monday, shall we? Pay no mind to the uncomfortable low lights of the global stock rout:</em></p><ul><li>The <a href="http://www.ibtimes.com/black-monday-global-stocks-have-lost-5-trillion-chinas-yuan-devaluation-2065343" target="_blank"><span><span>staggering $5 trillion</span></span></a> wipeout of funny money paper promise “wealth” since the yuan deflation began (<a href="http://www.bloomberg.com/news/articles/2015-08-24/asia-wakes-to-u-s-meltdown-as-futures-mixed-on-what-comes-next" target="_blank"><span><span>$2.7 trillion on Monday alone</span></span></a>).</li><li>The <a href="http://www.washingtonsblog.com/2015/08/stock-market-volatility-skyrockets-most-in-history.html" target="_blank"><span><span>all-time record spike</span></span></a> on the volatility index (aka the “Fear Index”).</li><li>The <a href="http://abcnews.go.com/Business/dow-falls-whopping-1000-points-opening-bell/story?id=33279661" target="_blank"><span><span>1000 point Dow plunge</span></span></a> off the opening bell on Monday morning.</li><li>The halting of <a href="http://www.zerohedge.com/news/2015-08-24/panic-all-major-us-equity-indices-halted" target="_blank"><span><span>every major US index</span></span></a> during the market mayhem.</li><li>The <a href="http://www.zerohedge.com/news/2015-08-24/meanwhile-beneath-surface-market-liquidity-worse-during-flash-crash" target="_blank"><span><span>4500 mini crash events</span></span></a> that forced indices worldwide to halt and unhalt at a dizzying pace.</li><li>The <a href="http://www.zerohedge.com/news/2015-08-24/dow-1000-points-opening-lows" target="_blank"><span><span>amazing magic levitating act</span></span></a> courtesy of our friends at the <a href="https://www.corbettreport.com/how-the-markets-are-manipulated/" target="_blank"><span><span>Plunge Protection Team</span></span></a> that brought about the <a href="https://en.wikipedia.org/wiki/List_of_largest_daily_changes_in_the_Dow_Jones_Industrial_Average#Largest_intraday_point_swings" target="_blank"><span><span>largest intraday point swing</span></span></a> in Dow history.</li></ul><p>Nope, nothing to see here. And now that this dead cat bounce is underway, surely there will be no more <a href="https://www.gomarketsaus.com/marketwrap/2015/08/18/around-the-grounds-the-crash-in-commodities-continues-deflation-a-rising-risk/" target="_blank"><span><span>commodity deflation</span></span></a> or <a href="http://gcaptain.com/asia-europe-container-freight-rates-have-fallen-off-a-cliff/" target="_blank"><span><span>global economic slowdown</span></span></a> or <a href="https://www.corbettreport.com/china-just-started-a-currency-war-heres-what-it-means-for-you/" target="_blank"><span><span>worldwide currency war</span></span></a> or <a href="http://www.zerohedge.com/news/2013-06-12/bank-englands-haldane-weve-intentionally-blown-biggest-bond-bubble-history" target="_blank"><span><span>historically unprecedented bond bubbles</span></span></a> to worry about, right?</p><p></p><p><a href="{{#staticFileLink}}8028239496,original{{/staticFileLink}}"><img width="300" class="align-center" src="{{#staticFileLink}}8028239496,original{{/staticFileLink}}" alt="8028239496?profile=original" /></a>OK, enough sarcasm. Readers of this column will know by now that the phony baloney stock markets, manipulated as they are from top to bottom and juiced as they are on the Fed’s QE heroin, are no longer reflective of economic reality. The only question is how far this particular dead cat market will bounce, and whether it will be helped along with more heroin from the Fed.</p><p>But there is already one vitally important take away from these events that the independent media must articulate now, before it’s too late. Namely: This crisis was engineered by the central banks. It is their fault.</p><p>Let me repeat that again in case you missed it: This crisis was engineered by the central banks.</p><p></p><p><a href="{{#staticFileLink}}8028239672,original{{/staticFileLink}}"><img width="239" class="align-center" src="{{#staticFileLink}}8028239672,original{{/staticFileLink}}" alt="8028239672?profile=original" /></a></p><p>This point is not even controversial. It has been the universal consensus of institutions ranging from the <a href="http://uk.mobile.reuters.com/article/article/idUKKBN0H909N20140914" target="_blank"><span><span>Bank for International Settlements</span></span></a> to the <a href="http://omfif.createsend1.com/t/ViewEmail/j/AD679A12EEB1FB26" target="_blank"><span><span>Official Monetary and Financial Institutions Forum</span></span></a>, and from <a href="http://www.telegraph.co.uk/finance/economics/11358316/Central-bank-prophet-fears-QE-warfare-pushing-world-financial-system-out-of-control.html" target="_blank"><span><span>OECD officials</span></span></a> to<a href="http://www.cnbc.com/2015/06/08/fed-needs-to-take-away-the-punch-bowl-lindsey.html" target="_blank"><span><span>former Fed Governors</span></span></a> and even <a href="https://www.youtube.com/watch?v=Iup05yEKmCI" target="_blank"><span><span>Alan “Bubbles” Greenspan</span></span></a> himself.</p><p> </p><p>In fact, <a href="http://www.forbes.com/sites/jessecolombo/2015/04/05/disaster-is-inevitable-when-the-two-decade-old-stock-bubble-bursts/" target="_blank"><span><span>analyst</span></span></a> after <a href="http://www.cnbc.com/2015/04/16/three-signs-the-equity-bubble-grenade-will-pop-commentary.html" target="_blank"><span><span>analyst</span></span></a> and <a href="http://moneymorning.com/2015/06/08/are-we-in-a-stock-market-bubble/" target="_blank"><span><span>pundit</span></span></a> after <a href="http://davidstockmanscontracorner.com/the-implosion-is-near-signs-of-the-bubbles-last-days/" target="_blank"><span><span>pundit</span></span></a>–including <a href="http://ftalphaville.ft.com/2015/08/05/2136501/bubble-threshold-watch/" target="_blank"><span><span>the most mainstream</span></span></a> of <a href="http://money.cnn.com/2014/08/19/investing/market-bubble-warnings/" target="_blank"><span><span>mainstream publications</span></span></a>–have been sounding the alarm on the stock market bubble for much of the past year.</p><p>This tells us two things: the current market mayhem was perfectly predictable (and predicted), and the central banks not only stayed the course but actually <a href="http://www.cnbc.com/2015/05/19/euro-yields-slide-as-ecb-gets-heavy-on-qe.html" target="_blank"><span><span>doubled down</span></span></a> with <a href="http://www.wsj.com/articles/sweden-cuts-rate-announces-qe-1423731254" target="_blank"><span><span>more</span></span></a> and <a href="http://www.bloomberg.com/news/articles/2015-08-13/japan-can-offset-china-s-yuan-move-by-easing-says-abe-adviser" target="_blank"><span><span>more</span></span></a> QE injections.</p><p>It is the central banks that have created this mess, and what’s more they have created this mess in the full knowledge that their actions would lead to disaster. And now, one can be sure, the same central bankers and their political puppet mouthpieces will use this crisis to continue the construction of the “<a href="http://www.bloomberg.com/apps/news?pid=newsarchive&sid=axEnb_LXw5yc" target="_blank"><span><span>New World Order</span></span></a>” that <a href="http://www.telegraph.co.uk/finance/g20-summit/5097195/G20-summit-Gordon-Brown-announces-new-world-order.html" target="_blank"><span><span>they called for</span></span></a> in the wake of the 2008 collapse.</p><p>Anyone who can’t see the endgame now–global government by the bankers, of the bankers and for the bankers–is either blind or wilfully ignorant.</p><p>It is especially important to state these obvious truths now, because we can already see a false narrative underway. This narrative has two main thrusts: one is to paint China as the culprit for the global downturn and the other is to assume that only central banks can save the day (with even greater liquidity injections and even deeper rate cuts).</p><p>The China-as-economic-villain narrative ranges from the subdued (“<a href="http://www.theguardian.com/business/live/2015/aug/24/global-stocks-sell-off-deepens-as-panic-grips-markets-live" target="_blank"><span><span>China’s ‘Black Monday’ sends markets reeling across the globe</span></span></a>“) to the blatant (“<a href="http://www.expressnews.com/news/us-world/article/Chinese-Economy-Causes-Markets-to-Fall-6463330.php" target="_blank"><span><span>Chinese Economy Causes Markets to Fall</span></span></a>“) to the silly (“<a href="https://twitter.com/DavidKeo/status/636047874980122625" target="_blank"><span><span>Don Yuan Causes Heartbreak</span></span></a>“), but they all convey the same message: China has brought this on the world all by itself. It’s not that China is reacting to a global monetary environment created by the Fed and fostered by other central banks, or a global economic slowdown that is biting into a heavily export-driven economy, or the conflicting pressures on the country as it tries to navigate its way toward global reserve currency status. Nope, it’s just a bull in a china shop (or is that a China in a bull market?) knocking things over and causing mayhem (<a href="http://www.marketwatch.com/story/watch-donald-trump-warn-china-will-bring-us-down-2015-08-24" target="_blank"><span><span>Trump was right</span></span></a>!).</p><p></p><p style="text-align:center;"><a href="{{#staticFileLink}}8028239861,original{{/staticFileLink}}"><img width="228" src="{{#staticFileLink}}8028239861,original{{/staticFileLink}}" alt="8028239861?profile=original" /></a></p><p></p><p></p><p>The only-central-banks-can-save-us narrative is even more infantile, but also more dangerous. We are told that the crash came because China’s central bank <a href="http://uk.reuters.com/article/2015/08/24/uk-china-markets-idUKKCN0QT0D320150824" target="_blank"><span><span>failed to act</span></span></a>. We are told that it’s now up to Turkey’s central bank to <a href="http://www.bloomberg.com/news/articles/2015-08-24/turkish-lira-drops-1-5-to-2-9614-per-dollar" target="_blank"><span><span>bolster the flagging lira</span></span></a>. We are told that the Lehman collapse occurred because of <a href="http://www.independent.ie/opinion/editorial/central-bank-found-napping-on-the-job-31436250.html" target="_blank"><span><span>too little central bank intervention</span></span></a>. We are told that <a href="http://www.cnbc.com/2015/08/24/the-only-thing-that-can-save-this-market-commentary.html" target="_blank"><span><span>only the European Central Bank</span></span></a> is capable of “riding to the rescue” and preventing a market rout.</p><p>In other words the very same institutions that engineered this crisis are the only ones that can save us.</p><p>It is the height of insanity that anyone would believe this nonsense, but then again the world fell for it after Lehman, and they’re likely to fall for it again. Unless we spread the word.</p><p>The banksters did it. And unless we derail their agenda, they’re going to do it again.</p><p></p></div>Conflict Minerals and Supply Chain Riskhttps://globalriskcommunity.com/profiles/blogs/conflict-minerals-and-supply-chain-risk2014-04-22T19:30:00.000Z2014-04-22T19:30:00.000ZJames McCallumhttps://globalriskcommunity.com/members/JamesMcCallum<div><div class="separator" style="clear:both;text-align:center;"><a href="http://3.bp.blogspot.com/-tSdlNDkAIHQ/U1ad28H9LtI/AAAAAAAAE2E/Yf6NTNgtx9o/s1600/5stepprocessadvanced.png" style="clear:left;float:left;margin-bottom:1em;margin-right:1em;"><br /> <img border="0" src="http://3.bp.blogspot.com/-tSdlNDkAIHQ/U1ad28H9LtI/AAAAAAAAE2E/Yf6NTNgtx9o/s1600/5stepprocessadvanced.png" height="212" width="320" alt="5stepprocessadvanced.png" /></a></div><div style="text-align:justify;">Conflict Minerals Reporting Requirement Struck Down</div><div style="text-align:justify;"><span style="font-family:Arial, Helvetica, sans-serif;"> </span></div><div style="text-align:justify;"><span style="font-family:Arial, Helvetica, sans-serif;">Received a timely Good Friday Alert from Nixon Peabody about a recent district court ruling on regulations concerning Conflict Minerals. Conflict minerals are mined in areas where conditions of armed conflict exist. The minerals, extracted with forced labor under conditions employing human rights abuse, is common in the Democratic Republic of the Congo. Rebel groups use the proceeds from the sale of conflict minerals to finance armies to enrich leaders and gain political power.</span></div><div style="text-align:justify;"><span style="font-family:Arial, Helvetica, sans-serif;"> </span></div><div style="text-align:justify;"><span style="font-family:Arial, Helvetica, sans-serif;">A provision in the Dodd-Frank Wall Street Reform and Consumer Protection Act required companies to publish notice that minerals acquired for use in production must be certified as being sourced from a conflict free zone. The National Association of Manufacturers brought suit against the Securities and Exchange Commission that the Conflict Mineral Disclosure provisions in the Dodd-Frank law violates the First Amendment right of free speech of corporations. The DC District Court agreed and overturned the reporting provision. </span></div><div style="text-align:justify;"><span style="font-family:Arial, Helvetica, sans-serif;"> </span></div><div style="text-align:justify;"><span style="font-family:Arial, Helvetica, sans-serif;">Nixon Peabody’s note makes clear that other provisions of the law still stand. Though the ruling provides relief from the reporting requirement, firms remain obligated to audit their supply chain to determine the source of conflict minerals and what economic and political interests are engaged in the sale. </span></div><div style="text-align:justify;"><span style="font-family:Arial, Helvetica, sans-serif;"> </span></div><div style="text-align:justify;"><span style="font-family:Arial, Helvetica, sans-serif;">The Treasury Department’s Office of Foreign Assets Control (OFAC) publishes a list of people and corporations, Specially Designated Nationals (SDN) that have been identified as affiliates of terrorist organizations, known to engage in money laundering activities. Proceeds derived from the sale of Conflict Minerals like Blood Diamonds are sources of terrorist financing and financial crime. Proceeds from the sale of Conflict Minerals underwrite black market activities relating to counterfeiting, drugs, restricted chemicals, uranium, guns and slave trading. Global Financial Intelligence Units (FIU) like Financial Action Task Force (FATF) and FInCEN oversee and enforce regulations concerning money laundering to prohibit proceeds of illicit transactions from entering the regulated economy. </span></div><div style="text-align:justify;"><span style="font-family:Arial, Helvetica, sans-serif;"> </span></div><div style="text-align:justify;"><span style="font-family:Arial, Helvetica, sans-serif;">Manufacturers and commodity merchants engaging in transactions involving Conflict Minerals from the Central African Republic and its surrounding countries must consult the OFAC’s SDN List, conduct PEP Checks (Politically Exposed People) and certify that source of materials, countries and banking institutions comply with the provisions concerning money laundering and reporting compliance with the Dodd-Frank law. </span></div><div style="text-align:justify;"><span style="font-family:Arial, Helvetica, sans-serif;"> </span></div><div style="text-align:justify;"><span style="font-family:Arial, Helvetica, sans-serif;">Though the law only lists four minerals its applications span a wide range of industry groups. The following is a list of Conflict Minerals and its applications. Source is Wikipedia. </span></div><div style="text-align:justify;"><span style="font-family:Arial, Helvetica, sans-serif;"> </span></div><div style="text-align:justify;"><span style="font-family:Arial, Helvetica, sans-serif;">Columbite-tantalite (or coltan, the colloquial African term) is the metal ore from which the element tantalum is extracted. Tantalum is used primarily for the production of capacitors, particularly for applications requiring high performance, a small compact format and high reliability, ranging widely from hearing aids and pacemakers, to airbags, GPS, ignition systems and anti-lock braking systems in automobiles, through to laptop computers, mobile phones, video game consoles, video cameras and digital cameras. In its carbide form, tantalum possesses significant hardness and wear resistance properties. As a result, it is used in jet engine/turbine blades, drill bits, end mills and other tools. </span></div><div style="text-align:justify;"><span style="font-family:Arial, Helvetica, sans-serif;"> </span></div><div style="text-align:justify;"><span style="font-family:Arial, Helvetica, sans-serif;">Cassiterite is the chief ore needed to produce tin, essential for the production of tin cans and solder on the circuit boards of electronic equipment. Tin is also commonly a component of biocides, fungicides and as tetrabutyl tin/tetraoctyl tin, an intermediate in polyvinyl chloride (PVC) and high performance paint manufacturing. </span></div><div style="text-align:justify;"><span style="font-family:Arial, Helvetica, sans-serif;"> </span></div><div style="text-align:justify;"><span style="font-family:Arial, Helvetica, sans-serif;">Wolframite is an important source of the element tungsten. Tungsten is a very dense metal and is frequently used for this property, such as in fishing weights, dart tips and golf club heads. Like tantalum carbide, tungsten carbide possesses hardness and wear resistance properties and is frequently used in applications like metalworking tools, drill bits and milling. Smaller amounts are used to substitute lead in "green ammunition". Minimal amounts are used in electronic devices, including the vibration mechanism of cell phones. </span></div><div style="text-align:justify;"><span style="font-family:Arial, Helvetica, sans-serif;"> </span></div><div style="text-align:justify;"><span style="font-family:Arial, Helvetica, sans-serif;">Gold is used in jewelry, electronics, and dental products. It is also present in some chemical compounds used in certain semiconductor manufacturing processes. </span></div><div style="text-align:justify;"><span style="font-family:Arial, Helvetica, sans-serif;"> </span></div><div style="text-align:justify;"><span style="font-family:Arial, Helvetica, sans-serif;">SME's with supply chain exposures need to audit its supply chain to assure compliance with the in force provisions of Dodd Frank and Treasury Department anti-money laundering provisions. </span></div><div style="text-align:justify;"><span style="font-family:Arial, Helvetica, sans-serif;"> </span></div><div style="text-align:justify;"><span style="font-family:Arial, Helvetica, sans-serif;">Sum2’s Credit|Redi offers managers tools to gain better insights into supply chain risk. </span></div><div style="text-align:justify;"><span style="font-family:Arial, Helvetica, sans-serif;"> </span></div><div><div style="text-align:justify;"><span style="font-family:Arial, Helvetica, sans-serif;">Sum2's also offers an AML compliance tool to screen</span> <a href="https://play.google.com/store/apps/details?id=com.rtken23.Sum2LLC.pacosar" style="font-family:Arial, Helvetica, sans-serif;">OFAC and SDN</a> <span style="font-family:Arial, Helvetica, sans-serif;">lists. </span></div><div style="text-align:justify;"></div><div style="text-align:justify;"></div><div style="text-align:justify;"></div><div style="text-align:justify;"><a href="https://play.google.com/store/apps/details?id=com.wCreditRediMobileOffice&hl=en"><img border="0" src="https://images-blogger-opensocial.googleusercontent.com/gadgets/proxy?url=http%3A%2F%2F3.bp.blogspot.com%2F-rmQTfahhS5o%2FU1ab748osCI%2FAAAAAAAAE18%2F5Ic18TZJqnA%2Fs1600%2Fcredit%2Breadi%2B100.png&container=blogger&gadget=a&rewriteMime=image%2F*" alt="proxy?url=http%3A%2F%2F3.bp.blogspot.com%2F-rmQTfahhS5o%2FU1ab748osCI%2FAAAAAAAAE18%2F5Ic18TZJqnA%2Fs1600%2Fcredit%2Breadi%2B100.png&container=blogger&gadget=a&rewriteMime=image%2F*" /></a></div><div style="text-align:justify;"></div><div style="text-align:justify;"></div></div><div><div style="text-align:justify;"><span style="font-family:Arial, Helvetica, sans-serif;">Risk, Dodd-Frank, Conflict Minerals,</span> <a href="http://www.nixonpeabody.com/public_companies_must_disclose_source_of_conflict_materials" style="font-family:Arial, Helvetica, sans-serif;">Nixon Peabody</a><span style="font-family:Arial, Helvetica, sans-serif;">, Central African Republic, OFAC, SDN, FATF, supply chain, AML, money laundering, AML BSA Reporting, Credit|Redi</span></div><div style="text-align:justify;"></div></div><div style="text-align:justify;"></div><div style="text-align:justify;"><span style="font-family:Arial, Helvetica, sans-serif;">Graphic: Source Intelligence</span></div></div>Global Clearing House Ruleshttps://globalriskcommunity.com/profiles/blogs/global-clearing-house-rules2012-04-26T11:47:28.000Z2012-04-26T11:47:28.000ZMartin Davieshttps://globalriskcommunity.com/members/MartinDavies92<div><p><span style="font-family:arial, helvetica, sans-serif;" class="font-size-2">When it comes to central clearing houses and regulation, it has been a hive of activity this year.</span></p><p><span style="font-family:arial, helvetica, sans-serif;" class="font-size-2">Literally every jurisdiction is in the midst of trying in someway to fit swap contracts from the OTC domain into a clearing house. It appears however, that some clearing houses seem to be having better luck at doing this than others. </span></p><p><span style="font-family:arial, helvetica, sans-serif;" class="font-size-2">For those interested in a quick update of global developments, please follow <span style="color:#3366ff;"><a href="http://quantogate.blogspot.com/2012/04/global-clearing-house-rules.html" target="_blank"><span style="color:#3366ff;">this link</span></a></span>.</span></p></div>