Every place you can invest your money has risks and reqrds, Usually, the higher the reward, the higher the risk.
Banks deposits have traditionally been low risk, low reward.
Banks shares have a higher risk and a higher reward.
A bail in reverses this natural economic law by transfering the shareholder risk to the depositors. This makes the depositors liable for what would otherwise be shareholder losses with no offsetting reward to the depositors.
The conclusion I have come to is that the politicians are serving their campaign donors more than their electorate (a system that desperately needs to change). Therefore they are proposing to prop up the banks at the expense of the depositors, as has been done in Cyprus where bank depositors lost a percentage of their deposits. Cronyism at its unconscionable worst!
The government of the United States is clearly in demonic hands. We are overflowing with proof. Take today (2-2-18) for example. A report from the House Intelligence Committee was released that is proof that the Federal Bureau of Investigation, the Department of Justice (sic), and the Democratic National Committee are engaged in a conspiracy against American democracy and the President of the United States with the full support of the presstitute media.
As if that is not enough, also released today is the Pentagon’s new Nuclear Posture Review. A nuclear posture review specifies a country’s attitude toward nuclear weapons and their use. In past posture reviews, nuclear weapons were regarded as unusable except in retaliation for a nuclear attack. The assumption was that no one would use them. There was always the possibility that false warnings of incoming ICBMs would result in the nuclear button being pushed, thus setting off Armageddon. There were many false warnings during the Cold War. President Ronald Reagan was very concerned about a false warning resulting in mass death and destruction. This is why his principal goal was to end the Cold War, which he succeeded in doing. It did not take successor governments long to resurrect the Cold War.
The new US nuclear posture is a reckless, irresponsible, and destabilizing departure from the previous attitude toward nuclear weapons. The use of even a small part of the existing arsenal of the United States would be sufficient to destroy life on earth. Yet, the posture review calls for more weapons, speaks of nuclear weapons as “usable,” and justifies their use in First Strikes even against countries that do not have nuclear weapons.
This is an insane escalation. It tells every country that the US government believes in the first use of nuclear weapons against any and every country. Nuclear powers such as Russia and China must see this to be a massive increase in the threat level from the United States. Those responsible for this document should be committed to insane aslyums, not left in policy positions where they can put it into action.
President Trump is being blamed for the aggressive US nuclear posture announced today. However, the document is a neoconservative product. Trump, perhaps, could have prevented the document’s release, but under pressure as he is by the accusation that he conspired with Putin to steal the US presidential election from Hillary, Trump cannot afford to antagonize the neoconized Pentagon.
The neoconservatives are a small group of conspirators. Most of the neoconservatives are Jews allied with Israel. Some are dual-citizens. They created an ideology of American world hegemony, specifying that the chief goal of US foreign policy is to prevent the rise of any other power that could serve as a constraint on US unilateralism. As neoconservatives control US foreign policy, this explains US hostility toward Russia and China and also the neoconservatives’ use of the US military to remove governments in the Middle East regarded by Israel as obstacles to Israeli expansion. For two decades the US has been fighting wars for Israel in the Middle East. This fact proves the power and influence of the insane neoconservatives. It is certain that people as insane as the neoconservatives would launch a nuclear attack on Russia and China. The Russian and Chinese governments seem to be completely unaware of the threat that the neoconservatives pose to them. I have never experienced in my interviews with Russians and Chinese any awareness of the neoconservative ideology. Possibly, it is too insane for them to grasp.
Ideologues such as the neoconservatives are not fact-based. They are chasing their dream of world hegemony. Russia and China are in the way of this hegemony. Having learned the limits of US conventional military power—after 16 years the US “superpower” has been unable to defeat a few thousand lightly armed Taliban in Afghanistan—the neoconservatives know that conventional invasions of Russia or China would lead to the total defeat of US forces. Therefore, the neoconservatives have elevated nuclear weapons to a First Strike, usable, arsenal that in the neoconservative dream of world hegemony can be used to destroy Russia and China.
Ideologues who divorce themselves from the facts create a virtual world for themselves. Their belief in their ideology blinds them to the risks for themselves and others that they impose on the world.
It is clear enough that without the utterly corrupt Obama Department of Justice (sic) and FBI, the utterly corrupt Clinton-controlled Democratic National Committee, and the utterly corrupt American and European presstitute media working to destroy Trump’s presidency by framing him up as “a Russian agent,” President Trump, understanding that the Pentagon’s posture review would worsen, not normalize, relations with Russia, would have deep-sixed the demonic document that threatens all life on earth.
Thanks to the American liberal/progressive/left, the entirely of the world is faced with a far more likely nuclear demise than ever threatened us during the Cold War with the Soviet Union.
By its collaboration with the military/security complex and the corrupt Hillary DNC, the liberal/progressive/left has forever discredited itself. It is now seen by every thinking person worldwide as an insane propaganda ministry for the neoconservatives’ plan to use nuclear weapons to eliminate constraints on US unilateralism. The liberal/progressive/left has endorsed “hegemony or death.”
They will get death. For all of us.
The US stock market has underscored the urgency of the government acting to protect the public from a financial crash by enacting a Glass-Steagall banking separation and scrapping its “bail-in” bill. The Down Jones Index plunged 1,177 points on Monday, the largest single one-day points drop ever, following its 666-point drop on Friday. The Australian Securities Exchange fell sharply upon opening today, after losing $30 billion on Monday.
As the CEC and numerous experts have long warned, the meteoric rise of the US stock market has been one of the insane speculative bubbles in the global economy. Others include the property bubbles in Australia and some other countries, the US corporate debt bubble, the Bitcoin bubble and the big one—the US$1.2 quadrillion global derivatives bubble. All of these bubbles effectively constitute one great big “everything bubble” that has been fed by the US$14 trillion of so-called quantitative easing (QE) money that central banks have “printed” since the global financial crash in 2008.
The everything bubble has depended entirely on the ultra-low QE interest rates. For instance, the rise of the US stock market has never reflected an economic recovery, but has come from banks and corporations borrowing at very low rates to buy back their own shares; consequently, US corporate debt increased from US$8 trillion in 2008, to US$13.5 trillion in 2017. Likewise Australia’s property bubble, and similar bubbles in Canada, New Zealand and Sweden, expanded under record low rates—the only way borrowers have been able to afford to buy houses that are 10-12 times income, compared with the historical average of 3-4 times.
Rising rates will prick the bubble
The biggest worry about the global financial system right now is that the people in charge in megabanks, central banks, regulators and governments believe their own propaganda. They act as if 2008 never happened, and deny that these bubbles exist. Pretending that there is a recovery, the US Federal Reserve has started to slightly reduce the US$4.5 trillion of QE assets on its balance sheet, the amount of the securities it purchased from the banks since 2009 with newly printed money. This is pushing interest rates higher—effectively a pin in the bubble.
There have been countless warnings that this would happen. In May 2017, the CEC’s Australian Alert Service reported the International Monetary Fund’s warning in its “Global Financial Stability Report, 2017” that if US interest rates rose sharply, defaults on the US$13.5 trillion in corporate debt could reach 20 per cent—far higher than the mortgage default rate in 2007 that triggered the 2008 crash.
William White, the former chief economist at the Bank for International Settlements (BIS) who was one of the few experts to forewarn about the 2008 crash, said in a 22 January interview with London’s Telegraph that “Central banks have been pouring more fuel on the fire”—referring to the expansion of QE. “Should regulators really be congratulating themselves that the system is now safer?” he asked. “Nobody knows what is going to happen when they unwind QE. The markets had better be very careful because there are a lot of fracture points out there.”
White warned that surging global debt levels could be detonated by just a 1 per cent US rate rise, setting off massive losses throughout stock, bond, mortgage and derivatives markets and triggering a liquidity crunch. “All the market indicators right now look very similar to what we saw before the Lehman crisis, but the lesson has somehow been forgotten”, he said.
Australia heading off a cliff
QE has also fed Australia’s mortgage bubble, through the 30-40 per cent of their funding that Australia’s banks have been borrowing at cheap interest rates from overseas. As Robert Gottliebsen noted in the 30 January Australian, this dependence on foreign borrowing exposes Australia’s banks to US rate rises. Australian borrowers cannot afford rate rises. ME Bank’s latest Household Financial Comfort Report reveals rising mortgage stress, with 46 per cent of homeowners paying 30 per cent or more of household income on their mortgage, 26 per cent of households paying more than 40 per cent, and 14 per cent of households paying more than half of their income on their mortgage. According to a finder.com.au survey from November 2017, 54 per cent of households reported that just a $100 per month increase in mortgage payments would push them over the edge.
The impending disaster for Australia’s banks has been noticed in London. Today’s Australian Financial Review reports that London investment consultancy Absolute Strategy Research (ASR) has warned its clients that Australia’s banks, like the banks in Canada and Sweden—the other countries with huge housing bubbles—may become a global systemic threat, due to their disproportionate size in their domestic economies and in the global financial system. ASR notes that no major economy has been able to sustain a banking sector that is 20 per cent of its stock market capitalisation, but Australia’s Big Four banks account for more than 25 per cent of the ASX!
Financial authorities will be scrambling to arrest the stock market fall, but at best they might be able to buy a bit of time. The reality is the next crash is inevitable, because all bubbles burst. This means the Australian government’s bill giving the bank regulator APRA sweeping powers to prop up failing banks by confiscating the public’s savings is not an academic exercise—APRA and the banks need such powers now.
It is urgent that Australians force the government to change its policies, by forcing changes on the banks that protect the people, and not the other way around. This means scrapping the APRA bill, and implementing a full separation of commercial banks with deposits from all other financial services, modelled on the USA’s successful Glass-Steagall Act of 1933.
Don’t wait until it’s too late—join the CEC’s fight today!
This is absolutely deplorable! If you want to jump on the bandwagon and help with this petition we need to hold the politician’s feet to the fire to represent US, not some overseas celebrity!
I have incredible news from Louisiana. Last week, net neutrality supporters from across the Bayou State rallied at Sen. John Kennedy’s offices to deliver petitions calling on him to be the critical 51st vote in the Senate to overturn the FCC’s disastrous repeal of net neutrality. In true New Orleans fashion, even a brass band showed up.
We are closer than ever to getting the 51st vote we need to pass the resolution to restore net neutrality in the Senate.
But we still need a majority in the House of Representatives, and a large margin in the Senate will help us get there – it will take a flood of grassroots energy to win this fight.
Tell Congress: Stop the FCC. Support the resolution to restore net neutrality! https://stopthefcc.net/?source=demandprogress
As hard as we are working to win support for the net neutrality CRA in both the House and Senate, Big Cable is dispatching their lobbyist spinmasters to congressional offices across Capitol Hill.
They may have lobbying power, but we have people power.
If enough people like you call on Congress to support the CRA, Senator Kennedy and other members of Congress will realize the only people who stand with Ajit Pai and the FCC on this are Big Telecom and Cable lobbyists and executives.
Click here to tell your members of Congress to support the CRA resolution to overturn the FCC’s repeal of net neutrality.
Thanks for standing with us,
Carli and the Demand Progress Team
Toxins are one reason general health is deteriorating.
Combined with Vitamin D3, K is important for bone health. Far more so than calcium, of which most of us receive more than adequate amounts in our daily diet.