Financial topics

[Higgenbotham]

When is the question and the only thing I can say about that is it's already taken much longer than I ever could have imagined. In 2008, I gave it 3 years, tops. And I attribute the reason I was wrong to what you stated - these markets are much less free than I estimated. The government does in fact have very tight control of these markets and the population seems quite willing to let the government exert that control, with short bouts of panic confined to the stock market.

[Reality Check]

It is also true that the biggest banks in the United States that were insolvent, may no longer be insolvent.

They have had since 2007 to re-finance houses purchased with private label insured mortgages, with government backed insured mortgages, during a period where the mortgage market has been supported by over a Trillion dollars in printed money.

During the same period mortgage interest rates have been at historic record lows, propping up the inflated prices of Real Estate, making refinancing at inflated prices possible.

Helicopter Ben, and his printing presses have been very busy.

[Higgenbotham]

Based on what has happened since 2008, it would appear the opposite is true.

The free market hasn't prevailed yet and 5 years is a long time, which attests to your point about the power of the government to define this situation and this being a matter of perception, and I also think faith in the FDIC has kept the lid on things in the US.

It's a part of the "business as usual" phenomenon.

I think your reasoning also applies to some past debates such as what is "monetary base" or what is a "primary business" where I took the stance that these terms are whatever the Fed or the US government defines them to be, as a practical matter, because the government has the power to define it.

Consistent with that, as you have stated, the government is defining what "insolvency" means, and the government for 5 years has obviously shown the power to be able to do that because the marketplace has accepted that definition and acted as if the banks are in fact solvent.

[Reality Check]

Cyprus is the immediate crisis.

Cyprus is still ongoing, and how exactly what is coming plays out is still unknown.

Russian strategic interests in Cyprus's ports and natural resources , as well as the money of wealthy Russian businessmen, is in play, and will likely be lost to the powers that be in the Euro-Zone.

As John has pointed out, there may be a price for that coming due.

[Reality Check]

I think your reasoning also applies to some past debates such as what is "monetary base" or what is a "primary business"

...

In my opinion there was not a whole lot of reasoning going on, on either side, related to the "primary business" debate.

Just proving that both parties could equally destroy the cohesiveness of any reasoned argument.

I do not recall any debate over "monetary base", but I am old, and relying solely on recollection has it's limits.

My back ground is as a Systems Analyst and I analyze any system, such as the Federal Reserve System, or the banking statutory and regulatory environment, in terms of how they could be abused by people with no morals, such as the stereo-typical Generation Xer in a position of power or authority.

What the "primary business" of banks was historically, was not really relevant to my analysis, what the possible, purported primary business of a subsidiary of a bank holding could be ( under the current legislative and regulatory environment ), and how excess reserves held at the Federal Reserve, could be shifted to, and fire walled within, such a subsidiary of the bank holding company, during a pre-packaged bankruptcy ( prepared by the bank, and approved in advance by the Obama administration ) of a different subsidiary ( one engaged in the "primary business of banking" ) under Dodd-Frank was relevant.

[Reality Check]

It should be noted that one, of the three, most effective limitations on federally insured banks put in place during ( or immediately after ) the Great Depression was the restriction that a bank corporation's one and only business was banking ( what you would describe as the primary business of banking ). The second was the restriction that a bank corporation could only operate in a single state and that they could not share assets or liabilities with any other banking corporation, even if operated by the same holding company. The third was the criminal prohibition against the slightest conflict of interest between any officer of a bank corporation and the opposite party(s) in any transaction the bank had. Give a loan to your brother - thirty years in federal prison. Conduct a transaction with another corporation owned by the same holding company - thirty years in federal prison.

Draconian rules but they worked. No too big to fail bank corporations. No non-criminal conflicts of interest within the bank holding companies.

Those limitations were systematically loosened and then eliminated in the 70s, 80s and 90s.

When they were loosened we had the Savings and Loan mess.

When they were eliminated we got the current, ongoing, Financial crisis.

[Higgenbotham]

I do not recall any debate over "monetary base", but I am old, and relying solely on recollection has it's limits.

That was with malleni in 2008. He had a definition of monetary base that might apply to a monetary system generally and I said in the US monetary system the Fed runs the show and they define the terms, so monetary base is whatever the Fed says it is, whether we like it or not. I'm getting older too (51) and finding that my memory is not as good as it used to be and my mind is not as quick either. Anything I remember from here might have as much to do with having reviewed it more recently to see how bad my thinking was at the time as having actually remembered it.

[aedens]

http://www.thegoldstandardnow.org/the-c ... greenbacks

It was over then and has been for a long time anyway.

Cyprus is a resourse war and nothing else, nothing more. The people lost billions to fiat deceptions and land theft.
Nothing will stop them but a rope or lead. Call it as it is.

controlled by the government of Cyprus No way.
It is important to distinguish between financial and economic systems. Blocking bank accounts and disrupting money flows is a sharp instrument that goes after those in power who are calling the shots. In many respects, conventional economic warfare is like carpet bombing; financial warfare is like precision strike. Neither one guarantees success, but the latter approach is usually more attractive. Another aspect of placing financial warfare in an
escalation framework is that it doesn’t just play the game, it reshapes it. Financial warfare is an expanding arena of conflict. Understanding financial vulnerabilities requires thinking across departments that have not historically been well coordinated—e.g., Defense, Treasury, and the intelligence community. Since money in the modern era can be instantly moved electronically, even the appearance of a threat to accounts can lead to large outflows into safer banks in safer countries. Eisenhower ordered the Treasury Department to dump British Sterling on the international market. This depressed the value of the British pound, causing a shortage of reserves needed to pay for imports. If this financial situation had continued for much longer, it would have also increased British inflation. The message quickly got through to London, which, along with Paris, soon pulled out of the Canal.
In the aftermath of Iran’s seizure of U.S. hostages in 1979, President Jimmy Carter ordered Iranian government bank accounts frozen in the U.S. and the UK. Recently, the U.S. has acted to block North Korean bank accounts linked to illegal activities and the financing of its nuclear program. The U.S. Treasury Department blocked $25 million in accounts held in Banco Delta Asia in Macao. This Department also pressured other banks to stop dealing with the banks of Iran and Syria, as well as those of certain Russian companies involved in the arms trade. This pressure has made it more difficult for them to use the global financial system for letters of credit, trade finance, and remittances from their overseas citizens. It also has increased the risk premium and interest rates on any financing they are able to secure from other sources. Just change some dates and digital footprints today.

https://www.youtube.com/watch?v=uM0MmEIaIrk

[Carl Lieberman]

When is the question and the only thing I can say about that is it's already taken much longer than I ever could have imagined. In 2008, I gave it 3 years, tops. And I attribute the reason I was wrong to what you stated - these markets are much less free than I estimated. The government does in fact have very tight control of these markets and the population seems quite willing to let the government exert that control, with short bouts of panic confined to the stock market.

This has gone on much longer than I too could ever have imagined. The fed has intervened in the markets with the most quantity and sophistication in the history of the world. I attribute the delay to that. I love Higgy's "cyclic numerology" predictions, but they have not panned out. I am still completely committed to the coming generational collapse, but remain fully in the Taleb black swan camp. Something will trigger the demise, but none of us can possibly know what it will be. Why ArchDuke Ferdinand? Why anything? Only through hindsight will it be explainable. The generational cycles are as close to prediction as is possible. Reversion to the mean implies one hell of a huge collapse.

[aedens]

We are all rather close on our references of time targets. They know this also....