Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Tag Archives: Central Bank

IMF’s Toolkit Inadequate for Next Housing Bubble, Official Admits

 

Bubbles.

This article was first published at The McAlvany Intelligence Advisor on Monday, June 16, 2014:

Last month, the Financial Times saw what’s coming: Housing prices rose last year at the fastest rate since 1995, setting the stage for the next global bust. Eleven countries they were watching had year-over-year rises in double digits, adding:

Even Germany, known for its stable housing market, is prompting concern, with the Bundesbank warning that valuations are as much as 25 percent too high in [some] big cities.

It admitted great concern that regulators won’t be able to do anything about it, either, just like last time:

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Chinese Economist at IMF warns of Global Housing Bubble

Board of Governors - International Monetary Fu...

Board of Governors – International Monetary Fund (IMF) (Photo credit: Wikipedia)

The false assumption that regulators can be safely counted upon to steer economies – local, national or global – to full employment with minimal inflation while avoiding booms and busts was unknowingly exposed in the latest yelp from the Deputy Managing Director of the International Monetary Fund (IMF), Zhu Min. In Chinese, his name means “people rule” or “democracy” but his ideology is firmly rooted in the Keynesian fallacy that economies can be successfully managed by experts without assistance or input from the common folk.

In announcing that the IMF has launched a new website, Global Housing Watch, Min delights in thinking that the world’s economy can be driven by looking through the rear view mirror. He said:

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The IMF threatens a dangerous “wealth tax” proposal

The populist notion of taxing the rich once again turned up in the International Monetary Fund’s “Fiscal Monitor Report” released in October, but scarcely anyone noticed. In an arcane chart-laden 107-page long report that was competing at the time with the government shutdown, the failing rollout of Obamacare, and other concerns, crises and disasters, why would they?

Here’s why.

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As Bitcoin prices increase so do concerns

With the price of a single Bitcoin exploding by 4000% just since January and by 400% in the last month, concerns about its legitimacy as a viable internet money that could effectively serve as an alternative to central banks’ currencies are increasing.

The Bitcoin has morphed from an internet algorithm to legitimacy beginning in August when

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The Bitcoin and Paris Hilton

This article first appeared in The McAlvany Intelligence Advisor on Wednesday, November 27th, 2013: 

 

In a dismissive article in The New York Times on Monday, the author quoted a Bitcoin skeptic who predicted: “In a matter of months you won’t be hearing about it. It will go the same way of Paris Hilton.” He failed to follow the old rule: keep your words sweet and tender because someday

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The Feds are trying to regulate the Bitcoin – good luck

Senators attending this week’s hearing entitled “Beyond Silk Road: Potential Risks, Threats and Promises of Virtual Currencies” being held by the Senate Homeland Security and Governmental Affairs Committee already knew what they were going to hear: the Securities and Exchange Commission (SEC) was going to make the case that

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Former Treasury Secretary Geithner to head up private equity firm Warburg Pincus

Former Treasury Secretary Timothy Geithner announced his plans to join the Wall Street private equity firm Warburg Pincus in March 2014 where he will serve as president and managing director.

Geithner is the proto-typical insider with establishment ties that follow almost exactly

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Treasury Refuses to Sell Its Gold Even in the Event of Default

It took more than six months for the Department of the Treasury to answer Utah Republican Senator Orrin Hatch’s questions about how the Treasury would respond to a government shutdown or the failure of the Congress to raise the debt limit. But its response is revealing:

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Federal Court Rules that the Bitcoin is Money

When the Securities and Exchange Commission (SEC) charged that Trendon Shavers, the founder of Bitcoin Savings and Trust (BTCST) was running a Ponzi scheme, Shavers challenged the agency by claiming that bitcoins didn’t fall under their definition of securities and so therefore he and his company were exempt from SEC rules. Federal Judge Amos Mazzant ruled otherwise, which was bad news for Shavers but good news for

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The Modern German Economic Model is a Myth – revised and updated

Dessau, a small and steadily shrinking town in the German state of Saxony-Anhalt in what used to be East Germany, is doing the best it can. Ten years after the fall of the Berlin Wall the anticipated “miracle” enjoyed by West Germany following World War II failed to materialize for Dessau and so it is in the process of demolishing some 10,000 empty homes and

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If you were sick, what would you do if your doctors told you this?

You’re sick. You’ve been sick for several weeks now. You’re long past the “take two aspirin and call me in the morning” protocol. You’re jaundiced, you’re not sleeping well, you’re losing weight, people are asking if you’re ok, the whole deal. You decide to find a doctor. You find four, all in the same office.

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The Modern German Economic Model is a Myth

Dessau, a small and steadily shrinking town in the German state of Saxony-Anhalt in what used to be East Germany, is doing the best it can. Ten years after the fall of the Berlin Wall the anticipated “miracle” enjoyed by West Germany following World War II failed to materialize for Dessau and so it is in the process of

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Bank of Cyprus Expands Robbery of Depositors’ Money

Outrage upon outrage. Audacity upon audacity. In an email to its depositors last week, the wonderful amazing Bank of Cyprus informed its trusting depositors that it was going to take more of their money. Instead of limiting the theft of amounts over $130,000 to 40% the BOC is raising the amount of the robbery to 60%!

But there’s good news!  37.5% of the theft will be converted into ownership in the wonderful amazing bank with – ready? – full voting rights! And, in addition – wait for it! – they will receive any dividends the bank might declare in the future accruing to that ownership!

Oh, but there’s bad news as well. Sorry. The wonderful amazing BOC is going to withhold “temporarily” an additional 22.5% to “ensure” that the bank can meet the terms imposed by its new true real owners: the Eurozone commission, the International Monetary Fund and the European Central Bank.

It gets even better. The BOC is setting up a commission (always good to hear that) to study 1) just how long that “temporary” hold will be, and 2) the possibility that that additional amount will also be converted into ownership of the wonderful amazing bank. Here’s how Bloomberg phrased it:

The Central Bank of Cyprus will appoint an independent valuer for the commercial lender and all or part of the 22.5 percent additional haircut may also be converted into shares within 90 days of that process being completed, according to the statement. Any remaining amount will be returned to customers with interest, the central bank said.

But not everyone gets to participate in this wonderful amazing opportunity to own a part of a wonderful amazing bank. Only if you have more than $130,000 in your account do you get to participate. If you have less than that, well, too bad, you’ll just have to muddle through without being offered this grand opportunity:

The so-called bail-in won’t apply to Bank of Cyprus account holders whose debts to the lender bring their net balance below the 100,000-euro threshold, according to the statement. Holders of accounts at other banks on the Mediterranean island aren’t being touched.

Well, shoot! It must mean that only depositors at the wonderful etc. BOC will be able to participate. This is discrimination! This is unfair! There ought to be a law!

The message being sent via email by the BOC is being received by every bank depositor in the world: your bank can take your money and keep it. That’s just how things are these days. Get used to it.

 

 

 

Feulner’s farewell letter is a good reminder

Ed Feulner leaves The Heritage Foundation today as former Senator Jim DeMint takes over, and his farewell letter is a good reminder of how the freedom fight has been doing over the past 35 years.

First, his letter sounds

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Phony “Capital Controls” in Cyprus

The wealthy really are different from the rest of us. They have money and they have connections. With those connections they are able to keep their money. The rest of us?

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Cyprus Deal Turns Bank Depositors into Lenders, Abolishes National Sovereignty

Late Sunday night the president of Cyprus, Nicos Anastasiades, was officially informed of the deal the unelected Eurogroup had come up with in order for Cyprus to receive its bailout from the European Central Bank. Anastasiades flew to Brussels on Sunday to meet with Mario Draghi, the president of the European Central Bank (ECB), Christine Lagarde, the managing director of the International Monetary Fund (IMF), and Jose Barroso, the president of the European commission. The meeting was run by Herman Van Rompuy, the president of the European Council. On his way to the meeting, Anastasiades admitted that

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Britain enters third recession in four years

You would think that politicians and central bankers would learn from their mistakes, wouldn’t you? They would learn that if something doesn’t work then try something else (or try doing nothing, instead!). But no, despite warnings from Moody’s (I wrote about their downgrade of Great Britain on Monday here), which is simply a rear-view mirror of what’s already happened and their very late recognition of their faltering economy, they continue to

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Gold Standard Arguments Being Promoted Again

Two years ago Steve Forbes, two-time candidate for nomination for president by the Republican Party and Editor of Forbes magazine, predicted “a return to the gold standard by the United States within five years … [because it would] help the nation solve a variety of economic, fiscal and monetary ills.” It’s now two years into his prediction and articles explaining how such a return would work, and why, are beginning

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Is the Fed running out of bullets?

MarketWatch is run by competent commentators with a slight conservative cast to their writings. It’s part of the Wall Street Journal’s online offerings. With that in mind, I take an exception to two points of view expressed yesterday in its article about the Fed “running out of bullets.”

First, the article says that the Fed is going to

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Proposed Changes to US Currency Symptom of Much Larger Disease

US Currency in UV, visible and IR light

US Currency in UV, visible and IR light (Photo credit: xxv)

Within days of each other, two announcements concerning the future of the US currency appeared in the popular press, and each avoided any mention whatsoever of the primary driver of the changes.

First was the announcement on November 26th from Secretary of the Treasury Timothy Geithner that the U.S. Mint will begin removing pennies and nickels from circulation starting the first of the year, allegedly that they’re too expensive to make. It costs the mint nearly 5 cents to make each penny while it costs more than 16 cents to make a nickel. This is costing the mint a lot of money, an estimated $187 million last year alone.

Two days later CNN reported that the Government Accountability Office (GAO) has called on the Congress to stop printing one-dollar bills and switch instead to one-dollar coins. The GAO claimed that such a move could actually make the government some money:

A $1 coin typically costs about 30 cents for the U.S. Mint to produce, but then the government can sell them to Americans for a dollar each. That financial gain is called seigniorage, and over a period of 30 years, it could [make] the U.S. government about $4.4 billion, the GAO said.

Avoiding the real issue, the GAO said that although the coins cost more to make, they would last longer, thus turning a profit to the government:

We continue to believe that replacing the note with a coin is likely to provide a financial benefit to the government if the note is eliminated and negative public reaction is effectively managed through stakeholder outreach and public education.

Unfortunately there is little likelihood that any of that “outreach” and “education” will include any attempt at explaining why the change is necessary.

The real issue is the declining purchasing power of the currency. And that goes back to the year 1913 when the Federal Reserve System was

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Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.