Tag Archives: Slovakia

Dexia Nationalized, Occupy Wall Street Appears to misinterpret the Monetary Roots of Widespread Discontent

10/11/2011 Portland, Oregon – Pop in your mints…

The big news over the weekend was the partial nationalization of the Belian Bank, Dexia.  What?  You’ve never heard of Dexia?  Most people this side of the pond hadn’t up until a few weeks ago.  This tiny $707 Billion hedge fund disguised as a bank, which just months ago passed the European bank stress tests with flying colors, has become the first official victim of the dearth of interbank funding in the Eurozone.

In a world full of potential butterfly effects, Dexia’s staggering juggernaut could have a knock-off effect for the US Municipal bond market.

Following a familiar script into unfamiliar territory, the Governments of France, Belgium, and Luxembourg jumped in and provided guaranties (ala Fannie Mae and Freddie Mac, which ironically are currently regurgitating their guaranties back onto US Banks) to the tune of $122 Billion until things settle down.

Unfortunately for France, Belgium, and Luxembourg, things will not settle down in time for their governments to remain solvent.  Chalk another set of Eurozone governments up to the “effective loss of sovereignty club.”  Surrendering sovereignty to international banking interests seems to be working out well for Greece, Ireland, Portugal, and Italy, so why not join the fun?

Slovakia appears to be the only nation willing to stand up against the wave of bailouts and subsequent loss of sovereignty as the bailouts costs crush already strained government balance sheets.  It appears that they may hold out a couple more days, enough time to find a compliant government (the current one was voted out in a confidence vote tied to the EFSF earlier today).

The situation in Europe is giving the world a frightening message:  When push comes to shove, the governments can be counted on to work in the interests of the banks.  How long this untenable situation can last is anybody’s guess, but if the Occupy Wall Street movement continues to gain traction, it is clear that the situation, if properly understood, could change very quickly.

The Euro Prepares to Claim More Sovereignty

Observant fellow taxpayers will note that we have qualified our previous statement with the words “if properly understood” because, at the moment, the Occupy Wall Street movement appears to misunderstand the roots of their many and varied forms of discontent.

Protesters apparently see nothing wrong with the government selectively fleecing the productive class as long as they receive their “fair share.”  If we have correctly identified the Socialist tendencies of these protests (as last check they had not adopted a manifesto), then the logical outcome is simply the ouster of one form of parasite, the banking interests, for another.

The problem, of course, lies in what we use as money.  Placing the power to create money in the hands of a Central Bank and then turning a blind eye as they shamelessly debauch the currency, giving an inordinate amount of purchasing power to those closest to the money printing operation (banks and government) and placing an inordinate amount of regulatory and tax burden to those farther away from the money printing operation (that would be you and I, fellow taxpayer), is perhaps the surest way to destroy man’s faith in the capitalistic system, and in the process lay the blame for every evil unleashed by the debauching of the currency on the capitalistic system.

Rothchild, Marx, and Keynes understood this.  They also understood that only one man in a million would be able to understand how debauching the currency serves to concentrate power in the hands of few at the expense of many.

Are you one of them?

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for October 11, 2011

Copper Price per Lb: $3.30
Oil Price per Barrel:  $85.81

Corn Price per Bushel:  $6.45  
10 Yr US Treasury Bond:  2.16%


Gold Price Per Ounce:  $1,663 PERMANENT UNCERTAINTY

MINT Perceived Target Rate*:  2.00%
Unemployment Rate:  9.1%
Inflation Rate (CPI):  0.4%!!!   UP UP UP!!!
Dow Jones Industrial Average:  11,416  

M1 Monetary Base:  $2,144,500,000,000 RED ALERT!!!
M2 Monetary Base:  $9,473,100,000,000 YIKES!!!!!!!

If the FED is the only Lender of US Dollars, the System has Collapsed

10/4/2011 Portland, Oregon – Pop in your mints…

The dust is beginning to settle after what must have been a tense weekend for bank execs on both sides of the Atlantic.  We can only imagine that banks pulled out all the stops to somehow make their numbers for the third quarter end.  In a practical sense this meant putting the stranglehold on equity and commodity positions and hanging on to dollars with all their might.

The vacuum action in the dollar funding markets was so extreme that at one point it was rumored that US dollar funding for banks in Europe was apparently non-existent.  We speculated that banks were holding on to cash in the absence of clear direction from the Eurozone as to how they intend to bail out their large institutions and governments.

The action looks like a sumo wrestling battle royal on the edge of a cliff.

The FED came to the rescue and re- opened its swap lines with European banks to provide dollars and avoid widespread panic.  According to a report that we saw from Bloomberg, the FED had gone from its role as the lender of last resort to a role as the lender of ONLY resort.

We left off with a question which we will consider today:

Does the fact that the FED is the only institution willing to lend dollars indicate that the US Dollar system has technically collapsed?

On the surface, it would appear that the evidence points to just the opposite.  The US Dollar index has gone through the roof which would indicate a preference for dollars, making them more valuable.  Doesn’t this prove that the US Dollar is alive and well?

Bernanke Readies his Helicopters

Were the Dollar backed by something real, the above would be true.  However, in the current, insane, “Debt is Money” currency regime, it tells us quite the opposite.  The fact that the Federal Reserve, the creator of the current version of the US Dollar, is the only institution willing to lend said Dollars is in fact evidence that the system has failed.

It has failed because it is no longer self sustaining.  The willingness to take on new debt, which is the life blood of a debt based currency regime, is non-existent.  The usurers need fresh blood in order to sustain themselves and finding no new victims, are beginning to feed on each other.

Financial Institutions are attempting to hoard dollars on a net basis.  Instead of lending them to productive enterprises, they are paying down their dollar denominated liabilities.  In other words, the productive classes have begun to shun the dollar on a net basis and the ultra leveraged financial sector is beginning to vaporize as the productive debts are cancelled.

Financial institutions see this vaporization taking place at their counterparties and are unwilling to extend them credit on any terms.  The financial institutions which cannot meet their day to day funding requirements then turn to the Federal Reserve to lend them the Dollars necessary to meet their commitments.

The inter day funding action has, in effect, become a high stakes game of musical chairs.

While musical chairs is fun to watch, it is not evidence in and of itself of the collapse.  The evidence of the collapse emerges as we fix our gaze on the logical end of this vicious feedback loop.  The logical end is this:  The Federal Reserve ends up holding every worthless paper asset on the planet on its balance sheet which theoretically backs the dollars which it is emitting in exchange.  The banks, which are left with the dollars as their own “paper asset” and the Federal Reserve are left with staggering liabilities which they pass back and forth as investors, businesses, and consumers increasingly shun their paper.

For the moment, the world may have reached a peak in monetization, and the FED’s money machine is now backing up as the sewage of every bad loan on the planet begins to flood their balance sheet.

It is getting ugly.  How ugly?  So ugly that Bank of America’s website has been down for three straight days, presumably for technical reasons but avoiding an online bank run and forcing customers to pay $8 to bank at the branches come to mind as compelling technical reasons for a website failure.

Meanwhile, Europe is having their own “TARP moment” as Slovakian resistance is sure to be swiftly dealt with.  We know where that will lead.

Yes, the end of the insane system is approaching.  It won’t be long now until the authorities pull out their ultimate trump card, a wholesale change of the currency.  With nearly every government and bank on the planet heading to the poorhouse, it is the only trick that the currency regime has left.

Don’t fall for it, fellow taxpayer, for it too shall fail.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for October 4, 2011

Copper Price per Lb: $3.05
Oil Price per Barrel:  $78.31

Corn Price per Bushel:  $5.88  
10 Yr US Treasury Bond:  1.78%


Gold Price Per Ounce:  $1,624 PERMANENT UNCERTAINTY

MINT Perceived Target Rate*:  2.00%
Unemployment Rate:  9.1%
Inflation Rate (CPI):  0.4%!!!   UP UP UP!!!
Dow Jones Industrial Average:  11,011  

M1 Monetary Base:  $2,052,100,000,000 RED ALERT!!!
M2 Monetary Base:  $9,511,300,000,000 YIKES!!!!!!!