First let me say sorry for putting words in your mouth...my fault.
1. I read all the links that were on this post.
2. She is a whistleblower that has been wronged according to the way we in the US believe this should be handled. The case involved a loan for a couple hundred million that she questioned to a dictator in the Philippines; I looked for the information on this loan or any backlash from it not happening and could not find any, that doesn’t mean anything except that either way it went down there should be some information on it somewhere. I just couldn’t find any. The World Bank has long been known as a conduit for payoffs and bribes to dictators to get them to conform to the American System. (if you are not aware of the America System, google it and Alexander Hamilton). This is not a conspiracy theory it is the founding of the government. But KH broke the first rule of fight club.
3. The USG was holding up funding until she was reinstated as a protected employee whistleblower…….well wait a second, isn’t she accusing the USG and Eric Holder of blocking her return. So Congress approved the funding but held it up until she was reinstate. So the executive branch is blocking something the legislative branch approved. I will give you this point……but the question should be asked……why? The legislative branch has the authority to ask the executive branch the question and demand an answer.
4. Sounds to me like the only reason she was reinstated to the World Bank, was so the World Bank would get their funding and there are 188 leaders of countries that want this money. Hell I bet they would reinstate Hitler to get their hands on this money, doesn’t make them right.
5. The World Bank is not a bank. It is a loan administrator…..kind of like Fannie and Freddie but way smaller. 180 billion is nothing it terms of the world finance, hell Fan/Fred lose more than that every year…..if you want to scream about corruption….HOW ABOUT WE SCREAM ABOUT THIS ! HOW ABOUT THE FACT THAT THE USG CANNOT ACCOUNT FOR 10% OF ITS BUDGET EVERY YEAR….THAT’S 370 BILLION DOLLARS A YEAR THAT DISAPPEARS……..THIS SHOULD MAKE ALL AMERICANS PULL THEIR HAIR OUT. WHERE IS THIS MONEY GOING? AAAAAAAAAAWWWW NO ONE CARES………Does the World Bank deserve to be taken to the wood shed……yeah….but how about we just close it down…….since we provide 70% of the funding anyway.
6. On the matter of the white paper on the “interconnectedness” of the players and how they control the world. Ok if this is the case and we are against “one world government” then why in the world (so to speak) would we want the World Bank to survive. I know these sounds like two different things…..but she brought this up as a warning to us of the dangers of these people…..but the World Bank is not the organization that can do anything about it. She quoted the Swiss Report stating:
Hudes claims that an international conglomerates, identified by the Federal Institute of Technology in Zurich, Switzerland, corrupted the World Bank and was responsible for state capture in a number of its member countries, including the United States.
Nowhere in the report is the words “state capture” used…..she is misleading you on what the report says….here is what the report says:
Linkages among financial institutions have been recognized to have ambiguous effects on their financial fragility [15, 16]. Verifying to what extent these implications hold true in the global economy is per se an unexplored field of research and is beyond the scope of this article. However, as a necessary precondition to such investigations to uncover the worldwide structure of corporate control. This was never performed before and it is the aim of the present work.
So what they are saying in this whitepaper is that it is not an attempt to discover nefarious activity but only to establish that corporation has some interconnectedness. And the results of the research these two problems were pointed out:
A) decreases in competitiveness
B) Systemic rick.
Ground breaking……we need to enforce international anti-trust laws and reduce cross holding of corporate debt and equity to eliminate financial contagion. Do you know that most of the largest corporation operates more like venture capital firms and hedge funds then operators of a business? Let me give you a taste of what I mean. Coke(KO)……largest beverage company in the world. Warren Buffet says they are a growth company. Does anyone know what this means? Growth companies are usually small startups with revenue growth of 20% or more because of some fantastic new product or service. Well KO is a 100+ year old company with sales of product growth of about 4 to 5 %.......where is the other growth coming from. It could come from productivity enhancements……but really 15 to 16 % every year in increased productivity…doesn’t fly. If you look at the Cash Flow statement it is broken up into three categories. Cash flow from Operations, Investing and Financing. If sales growth is 4 to 5 % and earnings growth is 20% plus then the company is using it’s capital to invest in other companies…….and using financial engineer to grows its earnings….because it surely is not coming from operation (which I call organic growth)……the reason for telling you all this……is this could easily explain the interconnectness of the largest corporations without it being a conspiracy. People that want it to be a conspiracy will always see it as a conspiracy……when in fact it’s just people being people using the path of least resistance to get what they want.
7. Now we come to the claims of permanent backwardation and Professor Antal E. Fekete and currency wars. I will start with the latter, with a definition of currency wars and why they occur. I will refer to Wikipedia because their explanation is just as good as mine and I am tired of typing.
• Currency war, also known as competitive devaluation, is a condition in international affairs where countries compete against each other to achieve a relatively low exchange rate for their own currency. As the price to buy a particular currency falls so too does the real price of exports from the country. Imports become more expensive. So domestic industry, and thus employment, receives a boost in demand from both domestic and foreign markets. However, the price increase for imports can harm citizens' purchasing power. The policy can also trigger retaliatory action by other countries which in turn can lead to a general decline in international trade, harming all countries.
This is the definition of currency wars and here are the reasons they occur and although he does not mention balance of payments in the second video it’s still a better explanation then what is on this thread.
Ok good videos…….. But here is where I differ with the analysis. Around the 11:30 mark the speaker (on the first video) makes a statement that the Chinese are “managing their currency”. But what China is really doing is “fixing” it exchange rate to the dollar to preserve their purchasing power of the trillion plus accumulated dollar dominated assets. If they did not do this then all the money they have basically made over the last 20 years would be worth much less. Now a side benefit of this philosophy is that the US continues to import cheaper products from China. Why would the USG allow this? Because it holds down inflation on consumer products, It gives the USG someone to finance it huge budget deficits, and they don’t care if it hurts employment in this country. This is perverse reminisces of Pre-Revolutionary War British Mercantilism.
• Mercantilism is the economic doctrine that government control of foreign trade is of paramount importance for ensuring the military security of the country. In particular, it demands a positive balance of trade. Mercantilism dominated Western European economic policy and discourse from the 16th to late-18th centuries. Mercantilism was a cause of frequent European wars in that time and motivated colonial expansion. Mercantilist theory varied in sophistication from one writer to another and evolved over time. Favors for powerful interests were often defended with mercantilist reasoning.
The reason for calling it “perverse” is under a gold standard a positive balance of trade brought gold in and therefore allowed the banking system to expand credit because of the inflow of reserves…..ie gold. But under the system I called perverse……since we are not on a gold standard the reserves expand when the debtor nation can convince the creditor nation to keep the money in the debtor nation. This is exactly what happened to Greece until Greece couldn’t keep it together anymore, because of huge government budget deficits. What do you think will happen here?……we have a net balance of payment deficit position to other countries of about 11 trillion dollars. I posted a piece on here explaining this called “The deficit no one talks about”. But this is what causes currency wars. The imbalance of payments is exactly what cause WW1 and really WW2 because the pause in between was really just half time.
There is no empirical evidence that a permanent backwardation will cause a currency war.
To my second point, in this interview the word currency war does not appear.
GOLD BACKWARDATION AND THE COLLAPSE OF THE TACOMA BRIDGE
THE DAILY BELL INTERVIEW with Professor Antal E. Fekete
of the New Austrian School of Economics May 5, 2013
He does not state that permanent backwardation will cause a currency war in this white paper either
But here is what the professor wrote:
Practically nobody realizes that the root cause of all the bubbles, price-shocks, currency crises, as well as the more recent deflation in Japan, Europe and America was the secular decline in the
gold basis. (The professor refers to the gold standard as the gold basis) The “Big Bang” occurred in 1971, when the U.S. defaulted on its international gold obligations.
Now I couldn’t agree more with the fine Professor with that statement.
So he does explain the linchpin of our demise….I would add the lead up was the notion that we could fight a war on poverty and overseas at the same time (Running huge budget deficits)…..in the 60’s. Not to mention the unifying budget( which gave the USG cover for the huge budget deficits) which was when congress robbed us of our SS trust fund…..oh yeah it did exist at one time and it was way over funded, or in the 80’s when they sold us on Reganomics…which actually was financial deregulation…….which repealed the 40 years of disintermedation laws and usher in the securitization process…and a rekindling of the belief that debt is good …….actually the budget deficit exploded by 100 % under Regan.....Obama has only expanded it by 40%. Don’t get me wrong I am no fan of Obama….but I tell the truth when it comes to it.
But I digressed.
The Professor is an Austrian and I couldn’t be happier to have found his work. Although I am a Rothbarian Austrian, I have always disagreed with Rothbard on the “Real Bills Doctrine”. I think the system of Rothbard “Free Banking Principal” with the Real Bills Doctrine is the only way to go. I don’t think the Professor is a proponent of Free Banking….but I would love to talk to him about it…….but let’s get back to the point at hand.
The statement that “permanent backwardation” will cause currency wars just does not hold water for me. Now if it was stated that the permanent backwardation will be a mechanization in which a repudiation of fiat currencies can be seen while it is happening……Now I could wrap my head around that. According to this article written by an associate of the professor Keith Weiner he states:
The Root of the Problem Is Debt
Worldwide, an incredible tower of debt has been under construction since President Nixon's 1971 default on the gold obligations of the US government. His decree severed the redeemability of the dollar for gold and thus eliminated the extinguisher of debt. Debt has been growing exponentially everywhere since then. Debt is backed with debt, based on debt, dependent on debt and leveraged with yet more debt. For example, today it is possible to buy a bond (i.e., lend money) on margin (i.e., with borrowed money).
I guess my problem with this is that permanent backwardation is being promulgated as the reason for what will be the repudiation of fiat currencies…..when clearly this may only be one mechanization which will illustrate the demised of the world’s reserve currency,…..and maybe for all fiat currencies….. but the cause is the lack of an anchor that limits the insidious scourge of mankind called inflation……an anchor called the gold standard….as the good professor calls for.
I added this quote from the professor and why he disagrees with von Mises on “marginal utility” because it discredits the opponent of the gold standard.
“ concept of constant marginal utility is not contradictory, because the rate of interest is obstruction to gold hoarding. If it is sufficiently high, gold hoarding fades out and gives way to dishoarding.
Equally important is the fact that if the rate of interest is too low or, more precisely, if the government and the banking system pushes it down to a level lower than the rate of marginal time preference, then gold hoarding kicks in. People present their bank notes to the banks for redemption, or withdraw gold
coins against their bank deposits. Bank reserves contract.(money supply contracts…my emphasis) The banks must call their marginal loans. Gold hoarding is not an aberration: it is one of the main excellences of the gold standard. It is an essential part of the system of checks and balances. It constrains the banks and the government preventing them from expanding credit or running open-ended budget deficits and going into debt without seeing how the debt will be retired. It gives teeth to time preference which would otherwise be just a pious wish. Take gold out of the hand of the people, and you give free rein to the banks for unlimited credit expansion, and to the government for constructing a Babelian Tower of Debt.”
I would add that you repeal the disintermedation laws and give the financial institution’s free rein to create credit/debt and you lose the last vestiges of any control on fiat currency and they will obliterate themselves……it has happened so many times before……research John Law and see how he singlehandedly did it to France in the 1720’s……history repeats itself!
if you read all this..... congrats……I don’t think in sound bits.
"Before we can ever ask how things might go wrong; we must first explain how they could ever go right"
Want DP delivered to your inbox daily? Subscribe here: