I found a number of articles which explained things clearly and this one underlines why the Basel II directive helped trigger the crisis. Basically, Basel II concerned the amount of capital reserves required by all banks across the EU, in order to officially trade:
In June 2004, the Basel committee agreed updated rules - Basel II. These had to be applied in the EU and in July 2004, the Commission set out proposals for a new Capital Requirements Directive (CRD) which would apply Basel II to all banks, CIs and investment firms in the EU.
The problem was, these new rules created a situation which was:
1. more risk sensitive;
2. costs to smaller banks and consequently to small-company growth, where the EU lags other regions, and;
3. moral hazard concerns in that risks are partly passed to insurers and banks, unlike insurers have potential last resort support from central banks.
To reiterate, should any sort of sharp downturn arise [remember this was promulgated in June 2004 and had to have been worked out long before then] then the banks [and ultimately major corporations] had CB fallback but everyone else, particularly small business, would go to the wall.
Now my question is whether this was sheer bad luck that 2008 saw precisely such a crisis or was something anticipated? Moving on, there is the question of the EU's own accounts which failed audit for the 14th year in a row.
This beggars belief. Open Europe says:
Speaking to MEPs, [Siim] Kallas, [the EU Commissioner for audit], admitted that there were “real and unquestioned” weaknesses in 17 areas including research policy, the European refugee fund, structural funds, external actions and rural development.
For the Common Agricultural Policy - which amounted to 12.4 bn euros in 2007 - the auditors found that rural development expenditure, was “particularly prone to errors” because of the complexity of rules for complying with the programme.
So, in the light of this, the EU blithely went out spending and to fund it, the UK partly pays by the weak pound against the Euro. What sort of things are they spending on?
* The European Parliament has stepped up efforts to legalise the use of the European flag and hymn as official Union symbols - something that was removed from the EU Constitution.
* European finance ministers backed plans to hike public lending to credit-starved small and mid-sized firms.
At the same time, the EU has stepped up the move towards greater "transparency and ethics", whilst at the same time, placed greater restrictions on lobbyists and anyone trying to find out what they've been up to. This is being handled by the same Siim Kallas.
On top of this, funds continue to be pumped in, on EU terms, into the UK regions, for example the West Midlands, through the Structural Funds, together with the Common Purpose management structure [more than enough articles on this on both this site and in the blogosphere].
So, which rock do we look under?
ReplyDeleteTry, CFR.
We're naturally skeptical toward conspiracy theories. Experience shows most of them are just rationalizations for mistakes and stupidity, which are much simpler, down-to-earth explanations which fit many situations. It takes quite a bit of evidence to convince us that a conspiracy theory is the best explanation to fit the facts.
Is the credit crisis just the culmination of a long-planned campaign to transfer wealth from the many to the few? While any conspiracy theory must meet the test of hard evidence to be considered valid, we've pointed out over the years the juxtaposition of illogical events and decisions which seemed to indicate that America's persons of influence (Federal Reserve Chairmen, Presidents, Treasury Secretaries, Congressmen and other bureaucrats holding various posts of authority over the financial system) were acting in very "strange" ways, even incredibly stupid ways for anyone with even a subpar IQ. Just as when the evidence pointing toward a turn in the markets coalesces into a coherent whole, the evidence has been coalescing for years that the country is being led toward a debacle of immense proportion, whether via ignorance or intelligent direction. Many have warned that this path would lead to disaster, yet no one in authority has been willing to do much more than seemingly patch the system while watching it get ready to implode.
Why is that? Is it laziness? That seems unlikely for persons of ambition who have devoted themselves to public service, an activity which takes a great deal of time and resources to attain. Is it stupidity? In their writing and speech, that doesn't seem to be the answer, since they all went to college and have attained substantial measures of achievement in their chosen avocations. Stupidity has a great advantage as an explanation: it lets the powers-that-be off the hook as simply irresponsible and not criminal. As in, "We can't blame the poor creatures for they know not what they do."
But, there is a point beyond which we cannot look the other way and rationalize the intentions of these people who are in charge. The actions of these so-called "leaders" and their hangers-on, including 42,000 Washington lobbyists, have gone far beyond stupid. They have done things so incredibly stupid that we have to admit they must have known exactly what they were doing in order to create the credit crisis. Things make a lot more sense when you realize that America has been "directed" into this crisis by the deliberate actions of a group of people who are bent on getting what they want. The form of government in America had been too restrictive for this group of people. They found it onerous to convince the public of what we should do. So, they have taken it upon themselves to coerce the public into giving them the power to make decisions. In other words, forget "democracy" completely now. We never even had a real democracy in the first place. We had a republican form of government which worked as long as the people were mostly kept in the dark.
In other words, as long as the elites could make decisions that weren't popular, the public protests could be essentially ignored and defused via mass media which parrotted the party line (in other words, both wings of our Republican-Democratic party---the so-called "Silent Majority"). Today, we have the Internet and instant communications which is less and less controlled by the mass media opinion makers. We have alternative sources of information from other countries which provides a balance for the pre-digested pablum that's typical of American mass media. American citizens are not isolated from the world, although many still retain the idea that their country is always right when it comes to military affairs in other countries. In fact, many still believe that what the President says is the truth, strange as that may seem to many who understand the lessons of Vietnam and other military fiascos this country constantly engages in.
For example, America's addiction to foreign oil requires that we send our soldiers to the Middle East to take control of the region in order to assure ourselves of a stable oil supply. The powers-that-be can't simply directly explain this and ask the public to approve, for most of the people are moral people who think that course of action is simply the wrong course of action---especially when their sons and daughters are being shipped home in boxes. It's obvious that, by their actions and decisions, the powers-that-be never intended to wean America from its dependence by switching to alternative forms of energy. Just look at the evidence. During the oil crises of the 'Seventies, many government-sponsored programs were started to produce alternative fuel. Many succeeded. One of those programs, for instance, came up with a way to turn agricultural waste products into gasoline at 50¢ per gallon. We're not talking about corn to ethanol, we're talking waste products to ethanol. That program built a prototype plant which proved the concept was valid. What happened? The project was shut down and closed permanently by the government lackeys in charge. Was that program revived when the price of oil soared in recent years? No, nobody in government took the responsibility of reviving that program. Instead, they appropriated billions to bribe farmers to grow Corn to produce ethanol in a misguided attempt to rid ourselves of our addiction, resulting in soaring food prices on a global basis. There was never any intention to switch to alternative fuels---the billions spent on alternative energy research forty years ago was just another transfer of wealth to the rich.
President Eisenhower warned the country in the middle of the last century of the dangers associated with what he called the "Military-Industrial Complex" and what we are seeing today is the logical outgrowth of that insidious influence on our society. Why is America constantly at war around the globe? It feeds the megacorporate coffers with money and keeps the super-rich in power. They make the decisions in this society, it's not a democracy and never was. And, that's just what this latest credit crisis is all about.
We were reminded of this grand conspiracy theory by Paul B. Farrell's latest piece, Wall Street's 'Disaster Capitalism for Dummies'---14 reasons Main Street loses big while Wall Street sabotages democracy, which provides more evidence of this idea that the whole "credit crisis" is an entirely manufactured crisis designed to transfer the wealth of the country (maybe the entire planet) to a small group of people who are planning to rule it like the lords of the middle ages. Far-fetched? We're heading in that direction and who's to say they aren't planning for a day in the future which looks like something out of medieval times? Can you guarantee that's not what's happening?
As the article points out,
So you, me and the other 300 million better get out of denial. America is no longer a democracy. Voting is irrelevant. Best case scenario: We're a plutocracy, a government ruled by the wealthy, the richest 1%, the Forbes 400, the influential wealthy elite, while the other 99% are their "servants." Meanwhile, the inflation-adjusted income of wage-earners has declined for three decades.
Worst case scenario: America's no democracy and as a result of the meltdown and the surrender of our power to Wall Street's new Disaster Capitalism we are morphing into what one WWII dictator called "corporatism," a "merger of state and corporate power," kind of like what's going on now with Goldman Sachs' ex-boss as de facto president.
Now, the onus is on those who claim the credit crisis isn't a grand conspiracy. The evidence may be circumstantial, but it all points in just one direction.
Here
Just check Wikipedia. UK banks work under a regime of no reserve ratio requirements. Meaning consumers are subject to the whim of the banks management on how much of their money is gambled.
ReplyDeletePeople must get to grip with the idea that if you put money in a bank you are an investor. Not a saver.
I'm going to run this comment as a post in itself unabridged - probably tomorrow morning, after letting it sink in today.
ReplyDeleteAs with everyone else, I've been studying the incredible stupidity of people who keep their positions due to their supposed superior operating ability.
Anon - yo mention sub par IQs. You know the criteria by which people are now employed in the private sector - doctorates, MBAs and the like.
These are not unintelligent people and yet the erros in the financial sector have been mindboggling.
I, for one, simply don't buy it. As you say, "we simply made a mistake" doesn't cut it.
It is so frustrating to have seen this in 2006 and yet not be able to convince anyone it's going on. By next year, when it will be painfully obvious to blind freddy and his cat, it will be too late for any "I told you so".
And the worst of it is that it is in the area of social engineering that the worst things are being done.
Heaven help us, for no one else will.
Yes, Rob. We must have commented simultaneously. The renaming of the saver is another aspect here.
ReplyDeleteNaturally, the events in Corfu, with Rothschild, Mandelson, and the idiot conservative, confirm all earlier suspicions.
ReplyDeleteThere IS NO CHOICE IN UK ELECTIONS that will avoid the outcome that I believe is planned.
All UK politicians at a senior level have been bought and paid for, in advance.
For me, at least, there is no doubt, the entire scenario is well choreographed, certainly for decades.
Also the evidence that authorities/oversight bodies, have been aware of this for years, and have sat on their hands at best, and at worst, encouraged it by their actions, and helped finance certain activities, is overwhelming.
Research notes now indicate a US currency collapse by summer 2009, following an international refusal to purchase T bills, and a US default on its debt obligations, to roughly 10% of its current value.
A similar collapse is projected for the UK.
These mirror the Iceland collapse.
Looking for more confirmation.....
If Buffet is going into equities, they should be in emerging countries, rich in resources, denominated in other than G7 currencies.
And that is where any UK resident, with the ability, should also be moving his ass.
Sigh!
All aspirations vanish, all retirement plans are aborted.
An absolute determination to beat these bastards is taking shape.
There are too many meetings and movements, semi secret to track, right now.
This is a post I recently put up on CU blog, for regenerating UK, sensibly, rather than throwing money at idiot "public" schemes, that would re-create Wiemar.
ReplyDeleteIt failed to get much response there.
It is brief, there are shortcomings, but the pattern is judge-able.
Although you have considerable overlap of readers, maybe.......
Eliminate EVERY quango, now.
Stop funding regional assembly slush funds, Now.
Stop funding all ODPM founded/funded money sinks, Now.
Stop funding un-married mothers, Now. Let family fund them and family re-introduce social sanctions Now.
Flat rate tax (10% first £15,000, 12%, thereafter)with high taxfree earnings threashhold (£15,000), spouse earned income allowance to be added to working partner allowance if only one working, Now. - would get rid of one millions of public serpents, Now.
Cap council expenditure, and council tax per head of population, with built in reductions each year - 15%, year 1, 10% reducing balance thereafter for 5 years. Same levels of reduction from central gov't.
Make councilors personally liable for gross mismanagement of council functions (tight definitions)
Ring fence police, fire, health, at current levels frozen for 5 years.
Abolish human rights laws, Now.
Abolish failed Monarchy, Now.
Ship 'em all back to Europe, at their expense. Reclaim lands and estates, sell off to bidders, - corporate or indigenes, if corporate, UK listed. (Price of signing Lisbon, lizzie!!)
Install non functional figure head if populace needs one.
Immigation frozen, absolutely, whatever the pretext. (see industry exceptions below.)
Leave Europe, Now, - Keep collected VAT, see taxes above.
£100,000 max income tax payable on GLOBAL income for tax UK domiciles.
Re-training to grad level, maths, phys, chem, biol, civil, elect, mechanical engineering, etc. fully granted. Open funded new facilities, fund existing Unis.
Soft subjects, media studies, etc, - pay for yourself.
Corporation tax, flat level 10% first 3 years, 5% thereafter. absolutely no pork. If "listed companies", must be UK market listed, with HQ in UK.
Income from dividends for taxable persons, etc, treated with earned income, above.
Depreciation for tax purposes 60% year one, remaining year 2, on capital expenditure for MANUFACTURING, with tight definitions, absolutely no pork.
Grants for incoming manufacturers (tightly defined), 50% of capital costs first 3 years, 20% second three.
100% grant senior staff relocation costs from overseas for incoming manufacturers.(tight regulations re indigenes employment first))
Develop national energy policy, NOW.
Build electricity generating capacity Now, new planning regs for national energy security, screw nimbys/europe.
Re open coal mines.
Global warming is a myth, depends on sun-spots.
Build tide, wind, solar, wave, all with feed-in tariffs, using tax changes (here) to attract foreign Co's/brains.
Build oil/gas storage capacity for 150 days each.
8 to 1 gearing for bank balance sheets, reserves held at central bank to control. Separate bank brokerage from fund management from clearing activities (as G S used to be in US) re-jig business model of building societies. Wholesale sacking of bank management, and prosecutions for fraudulent trading, etc, for fraudulent balance sheets.
Cap remuneration.
Free-up short selling.
abolish rules on AIM for Isas.
Increase Isas annual limits.
abolish rules for areas of investment for pension co's, etc.
Scrap regional assemblies and ALL associated costs.
Re-take national sovereignty from Europe, re-parliamentary legislation, etc.
Scrap ID cards, data-bases, national and local snooping legislation TOTALLY.
SMALLER GOV'T,
Arms length gov't.
Give it 5 years.
Hope you're reading this, UK gov't denizens.
Sheesh!
A new Gold Futures trading platform has opened in Hong Kong.
ReplyDeleteI would hope that this proves a counter balance to the blatant fraud of the Wall Street dominated commodity futures COMEX.
The Head of oversight for this US. market is also on the Presidential Plunge Protection Team, hence no action on blatant positions on COMEX.
Time will tell.
Here
I would like to suggest that the financial system are undergoing a structural change, and as usual, the politicians ignored the issue for political expediency, or completely missed recognizing what was happening--possibly a combination of both. In addition, there is the usual corruption that is always associated with our dearly beloved politicians.
ReplyDeleteThe peoeple who are first to yell 'conspiracy theory' are always the ones who have something to hide.
ReplyDeletePeople don't want to see, or admit they have been duped, unless it affects them directly-by then too late.
And right on time, here comes an oblique warning to fraud on COMEX.
ReplyDeleteHere
Better behave boyz, or the Chinese will slap you down
More facts on Gold price suppression.
ReplyDeleteHere
Why Gold all the time?
Read Greenspans words on gold in 1966, before he was appointed to the corrupt Fed.
Here
In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.
This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard.
Why Gold?
Because the suppression of the price of gold by monetary authorities is so obvious, all around the globe. it is their enemy, it enforces financial discipline, where they would prefer none.
The suppression, by central authorities is illegal, per se, and indicates their complete disregard for the rule of law in commodity/legislative markets.
The law, is a piece of paper, oversight, - an inconvenience to be bought off.
This is the more obvious state corruption, fully sanctioned, and free for all to witness, blatantly executed in full view.
Where is the MSM?
Brown nosing!
They are pissing off so many powerful SEA interests....
I confess to not looking properly at gold. I mean in this context. Yes I know, and many do, of the gold and silvert standards and fiat money but not to this extent.
ReplyDeleteIt's an avenue to explore - the full implications of gold. I'd really like to know the current and future planned regulations in regard to it.
For example - how much cn any one person hold?
In any case, there is a golden opportunity to vote about the EU - online:
ReplyDeleteVote YES or NO to Free Europe at www.FreeEurope.info
James, Gold.
ReplyDeleteGold coins in the UK.
Anyone can own them for investment.
They carry NO VAT.
Favourite bullion coins are Krugs,(1 oz) but none left.
Next favourites are UK Sovereigns (8 grams) - rapidly running out.
Note, in gold 31.1grams = 1 oz.
All silver, coins or bull attracts VAT.
But when trading back to the dealer, you can't add VAT. (Unless you are a registered business, obviously)
I believe there is a regulation that anyone buying more than £10,000 of gold at anyone time, the retailer must notify "someone".
Not many retailers know this, and why tell them.
Sometimes they want ID, but often will accept any name.
I believe the threat of confiscation, in extremis, is real, as in the past - holding gold coins in the UK in the past, under the "House of Hanover", once carried the death penalty, - so anxious to preserve their fiat inflation confiscation were they!.
But if the authorities don't know......
Gold helped many escape Germany in WW11, it is a true world currency!
Basically the country is drained, but
these guys appear to be able to keep going with limited supplies.
Their phone number is on the website, talk to them, they are quite open, and well aware of US Comex manipulation.
They maintain that gold bull. bought for investment purposes does NOT attract VAT on re-entry to UK, - I don't know.
A good site to monitor gold, and see daily manipulation is below. At the top graph is the US$/UK£ conversion. In the summer the rate was 0.50. The current rate gives the £ depreciation against the $.
These are Comex prices, incidentally, NOT the prices that will be quoted by ANYONE for physical supply.
Here
You can watch the manipulation every morning when the London bullion exchange gets hold of the price, from Asia, and again at about 3pm UK time, when London closes, and Comex, which waits in the wings 'til 3pm, takes over.
Say hello to manipulation.
I would add.
ReplyDeleteAt Comex prices, many mines, particularly silver, are being shuttered.
Many juniors, gold and silver, have gone into "cash preservation" mode.
The manipulations to preserve fiat are actually destroying jobs, and in both metal cases (industrial uses-superior electricity conductors), destroying chance of future industrial recovery. This is criminality, (not just exchange fraud) on a monstrous scale, in order to preserve a private banking monopoly/cartel disguised as a federal reserve.
The way to destroy COMEX is for producers whose marginal costs exceed comex prices to buy physical supplies (currently less than 5%, it's a paper manipulation pure and simple) and TAKE DELIVERY, from Comex warehouse at Comex prices, and then to use those supplies in the REAL PHYSICAL WORLD.
Currently, no one seems to have thought about that. but I could be wrong.
When Comex warehouse runs dry, Comex would collapse almost immediately, and prices would probably double, overnight.
And best of all, Wall street would suffer large loses.
That was the effect of The Hunt Brothers, with Silver.
Oh, well.
But in sorting out world finances, the BOJ yen carry trade needs to be ceased, forthwith.
The current market volatility is this carry trade reversing. When this is finished, the BOJ must face extreme international sanctions should they try to re-commence the lending at 0.5% to all and sundry, including global hedgies, etc. 1,000s of the buggers.
The 2 engines, mentioned in a post I did a few weeks ago, are destroying the world!
Deliberately.