investmentwatchblog--2020-04-21--If you left NYC out — even keeping in those other dysfunctional blue areas — the US would be a shini

It seems to me , he ’ s assuming the conditions of contagion are the same in red and blue states and only the politics are different .
But I think the reason the red states are getting closer to reopening is that there ’ s good reason to think that it can be done carefully and that — with some distancing , a lot of masks , lots of hand-washing and sanitizing , and containment — the number of new cases can be kept down .
And there are blue states and blue cities — notably New York City @ @ @ @ @ @ @ t be enough , because people go to work on the subway and ride in elevators together .
But Silver looks ahead and imagines red states screwed by their own ignorance of science and blue states looking way smarter and — what does he mean by “ weird dynamics ” ?
Is he hoping it will become painfully , wretchedly clear that the red-state people are deplorable ?
What do you think ?
Plus , from the comments : New York City is getting absolutely hammered , though things are definitely improving .
@ @ @ @ @ @ @ a city with very high population density , a very high reliance on mass transportation ( which is still running ) , and a mayor who is a moron .
It is basically the worst case scenario and if it was its own country it would be the worst hit place in the world by a large margin .
The next two worst states are New Jersey and Connecticut .
Northern New Jersey is basically New York City West and western Connecticut is basically New York City East .
So there you go @ @ @ @ @ @ @ are Louisiana , Massachusetts , and Michigan .
Louisiana is being driven almost entirely by New Orleans , which foolishly let Mardi Gras go forward because their mayor is even worse than New York ’ s .
Massachusetts was the unfortunate location of a super spreader event .
Michigan has Detroit , which is usually sufficient explanation for anything .
As for the rest of the states , they are doing reasonably or very well .
Indeed .
If you left NYC out — even keeping in those other dysfunctional blue areas — @ @ @ @ @ @ @ to the world .

ANN ALTHOUSE CALLS OUT NATE SILVER FOR GHOULISHNESS:
It seems to me, he’s assuming the conditions of contagion are the same in red and blue states and only the politics are different. But I think the reason the red states are getting closer to reopening is that there’s good reason to think that it can be done carefully and that — with some distancing, a lot of masks, lots of hand-washing and sanitizing, and containment — the number of new cases can be kept down. And there are blue states and blue cities — notably New York City — where the same approach won’t be enough, because people go to work on the subway and ride in elevators together. But Silver looks ahead and imagines red states screwed by their own ignorance of science and blue states looking way smarter and — what does he mean by “weird dynamics”? Is he hoping it will become painfully, wretchedly clear that the red-state people are deplorable?
What do you think? Plus, from the comments:
We are primarily funded by readers. Please subscribe and donate to support us!
New York City is getting absolutely hammered, though things are definitely improving. But NYC is a unique situation: a city with very high population density, a very high reliance on mass transportation (which is still running), and a mayor who is a moron. It is basically the worst case scenario and if it was its own country it would be the worst hit place in the world by a large margin. The next two worst states are New Jersey and Connecticut. Northern New Jersey is basically New York City West and western Connecticut is basically New York City East. So there you go. The only other states of note are Louisiana, Massachusetts, and Michigan. Louisiana is being driven almost entirely by New Orleans, which foolishly let Mardi Gras go forward because their mayor is even worse than New York’s. Massachusetts was the unfortunate location of a super spreader event. Michigan has Detroit, which is usually sufficient explanation for anything. As for the rest of the states, they are doing reasonably or very well.
Indeed. If you left NYC out — even keeping in those other dysfunctional blue areas — the US would be a shining example to the world.
h/t GR


investmentwatchblog--2020-04-21--4 Families have controlled California for over 80 years

It ’ s the 4 families in conjunction with apple , Google , Facebook , Twitter , Hollywood , Harris @ @ @ @ @ Schiff , who control what you see on TV , The internet , movies , @ @ @ @

It’s the 4 families in conjunction with apple, Google, Facebook, Twitter, Hollywood, Harris, waters, Feinstein, Schiff, who control what you see on TV, The internet, movies, newspapers and magazines.
Independent media is the key.
We are primarily funded by readers. Please subscribe and donate to support us!
h/t Venus230


investmentwatchblog--2020-04-21--Navigating Uncertainty: Leadership Accountability in Times of Crisis

As the workforce pivots to remote working arrangements , the benefits of flexible working policies are coming into sharper focus .
Research shows that these policies can lower overhead costs , reduce commuting times and increase employee satisfaction—in addition to attracting top talent .
Moreover , the shift to working remotely could boost the U.S. economy by $ 4.5 trillion annually by 2030 .
But achieving these benefits requires accountability from everyone in an organization , and in an increasingly virtual world , that can become difficult to manage .
Leaders are already subject to an array of challenges that @ @ @ @ @ @ @ • The pressure to differentiate : Leaders feel an unrelenting pressure to innovate and help their organizations stand out in a sea of ruthless competitors .
• Executing the strategy : Leaders must align the organization to ensure employees are clear about what needs to get done to execute priorities seamlessly .
• Leading transformational change : With so many moving parts , constant change across several aspects of a business can be difficult for leaders to manage .
• Creating enduring value : Customers , boards , and shareholders have high expectations @ @ @ @ @ @ @ .
• Building future talent : Leaders must build and nurture the next generation of leaders in addition to managing the day-to-day .
These mounting pressures can have a detrimental impact on a business leader ’ s performance , so it is crucial that they get the support they need now , more than ever .
Truly accountable leadership is the only way an organization can weather uncertainty in a world that has been upended .
Research reveals that among the strongest performing companies , accountable leaders consistently demonstrate five behaviors that set @ @ @ @ @ @ @ others accountable for high standards of performance Good leaders make mutual expectations clear by consistently reinforcing what is important , and what employees should prioritize in their roles .
• Tackle tough issues and make difficult decisions Technology is hugely beneficial , but it should never replace the human element .
Picking up the phone or having a Skype call is more immediate and personal , especially when it comes to problem solving and making tough decisions .
• Communicate the strategy across the organization Leaders must ensure that employees have complete clarity @ @ @ @ @ @ @ vision to do their jobs effectively .
Creating a set of well-defined goals can help people stay engaged and decrease their stress levels .
• Express optimism about the company and its future Many employees can feel isolated and disconnected in the virtual world , so leaders must provide support , positive energy , and a sense of hope for the future .
• Display clarity about external trends in the business environment Finally , it is critical to help employees make sense of the current situation right now .
Leaders must provide @ @ @ @ @ @ @ that manages fear , stress , and anxiety .
This encourages employees ’ s determination to help the organization succeed .
As we embrace the unknown , it is clear that leadership accountability will become more important than ever .
In fact , it has become a crucial element for future-proofing organizations in times of crisis or drastic change .
Perhaps more importantly , it is necessary for encouraging teams to emerge more connected and resilient than ever before .

by visualcapitalist
The Impact of Leadership Accountability
As the workforce pivots to remote working arrangements, the benefits of flexible working policies are coming into sharper focus.
Research shows that these policies can lower overhead costs, reduce commuting times and increase employee satisfaction—in addition to attracting top talent. Moreover, the shift to working remotely could boost the U.S. economy by $4.5 trillion annually by 2030.
But achieving these benefits requires accountability from everyone in an organization, and in an increasingly virtual world, that can become difficult to manage.
Challenges Facing Leaders Today
Leaders are already subject to an array of challenges that they must overcome, such as:
We are primarily funded by readers. Please subscribe and donate to support us!
The pressure to differentiate: Leaders feel an unrelenting pressure to innovate and help their organizations stand out in a sea of ruthless competitors.
Leaders feel an unrelenting pressure to innovate and help their organizations stand out in a sea of ruthless competitors. Executing the strategy: Leaders must align the organization to ensure employees are clear about what needs to get done to execute priorities seamlessly.
Leaders must align the organization to ensure employees are clear about what needs to get done to execute priorities seamlessly. Leading transformational change: With so many moving parts, constant change across several aspects of a business can be difficult for leaders to manage.
With so many moving parts, constant change across several aspects of a business can be difficult for leaders to manage. Creating enduring value: Customers, boards, and shareholders have high expectations for leaders in exchange for their loyalty.
Customers, boards, and shareholders have high expectations for leaders in exchange for their loyalty. Building future talent: Leaders must build and nurture the next generation of leaders in addition to managing the day-to-day.
These mounting pressures can have a detrimental impact on a business leader’s performance, so it is crucial that they get the support they need now, more than ever.
The Characteristics of Accountable Leaders
Truly accountable leadership is the only way an organization can weather uncertainty in a world that has been upended. Research reveals that among the strongest performing companies, accountable leaders consistently demonstrate five behaviors that set them apart from others.
Hold others accountable for high standards of performance
Good leaders make mutual expectations clear by consistently reinforcing what is important, and what employees should prioritize in their roles. Tackle tough issues and make difficult decisions
Technology is hugely beneficial, but it should never replace the human element. Picking up the phone or having a Skype call is more immediate and personal, especially when it comes to problem solving and making tough decisions. Communicate the strategy across the organization
Leaders must ensure that employees have complete clarity in terms of the company’s vision to do their jobs effectively. Creating a set of well-defined goals can help people stay engaged and decrease their stress levels. Express optimism about the company and its future
Many employees can feel isolated and disconnected in the virtual world, so leaders must provide support, positive energy, and a sense of hope for the future. Display clarity about external trends in the business environment
Finally, it is critical to help employees make sense of the current situation right now. Leaders must provide honest and transparent communication in a way that manages fear, stress, and anxiety. This encourages employees’s determination to help the organization succeed.
Leading The Future
As we embrace the unknown, it is clear that leadership accountability will become more important than ever.
In fact, it has become a crucial element for future-proofing organizations in times of crisis or drastic change. Perhaps more importantly, it is necessary for encouraging teams to emerge more connected and resilient than ever before.


investmentwatchblog--2020-04-21--Isn’t it time the President fired Dr. Fauci?

— William Binney , High Level NSA Official And Critic of Bush Administration Policy Turned Whistleblower “ I believe that science should be accepted without question .
I ’ m a doctor .
I ’ m a scientific expert .
I decide what science is .
You , on the other hand , are only a parent .
If you don ’ t respect my scientific and medical credentials or refuse to follow my advice , I think the state should take your children from you.
” “ I had to be restrained by 3 other presenters on stage from @ @ @ @ @ @ @ off of his neck 17 years ago in Verona Italy , where I was one of 2 Key Note Speakers at a pediatric neurological medical conference.
” This Coronavirus pandemic narrative is looking more and more suspect with each passing day , and nearly a month after I wrote that Bio-Weapons expert Dr. Frank Boyle believed COVID-19 was clearly a weaponized virus that possibly leaked from the sloppy level 4 Bio-Lab in Wuhan , it was breaking news on Fox ’ s Tucker Carlson Show and the Sean Hannity Show .
Like the @ @ @ @ @ @ @ , this pandemic has a lot of credibility problems as well .
That ’ s not to say that people haven ’ t died , but since it was revealed that that the CDC was instructing doctors to count anyone who had a typical cold or flu symptom when they passed away as a COVID-19 casualty , we know these numbers coming from the CDC are bogus !
Why has this revelation not changed the narrative ?
This was confirmed by Dr. Deborah Birx days later in a press conference with the President @ @ @ @ @ @ @ red flag to everybody watching but not one reporter there that day questioned it !
Doctors , scientists and researchers , however , have come forward and said this edict is insane and a major departure from the way it ’ s always been done .
The question every American should be asking is : Why are they deceptively inflating the number of deaths from COVID-19 ?
And , why are these Doctors and other professionals being ignored by the media ?
Something else that researchers are finding is that those countries which @ @ @ @ @ @ @ and other police-state measures have not experienced much higher infection or death rates than those which have .
The question is : Why is the media keeping these important facts from the public , and is there another agenda at play here ?
Dr. Frank Boyle says yes !
Dr. Boyle , a Bio-Weapons expert with 3 degrees from Harvard and the man who wrote the Biological Weapons And Anti Terrorism Act in 1989 during the Reagan Administration said in a recent interview with Alex Jones , the Neo-Cons in George W. Bush @ @ @ @ @ @ @ Bio-Warfare arms race to the American people and Congress as a defensive strategy which was in violation of the law that Dr. Boyle authored years before .
Boyle believes the people around the President are traitors , and are lying to him about everything !
He told Alex Jones that these Bio-Labs need to be closed and scientists like Dr. Fauci and Dr. Birx need to be purged from the government .
He agrees that the Chinese government is lying right along with our government and the mainstream media .
Trump , whose @ @ @ @ @ @ @ crisis started has been falling lately , no doubt due to the constant attacks from the media .
It should surprise no one that the disrespectful Fauci and Birx were Obama supporters , and both supported Hillary Clinton ’ s ill-fated run for the White House .
In his book , ” Bio-Warfare And Terrorism ” Dr. Boyle said that “ the Agenda pushed by the Bush Administration would render a Bio-Warfare incident a statistical certainty.
” He went on to say that “ If a catastrophic incident were to occur , it @ @ @ @ @ @ @ human rights , the rule of law and the Constitution ” , which was already greatly diminished by Bush after 9/11 .
South Korea , Taiwan and Sweden , among other nations , have successfully contained this virus without implementing lockdowns , quarantines , and unconstitutional police state measures , so what is really going on ?
Why is the President and the mainstream media ignoring every expert on the planet with the exception of Dr. Anthony Fauci and his team of Gates Foundation minions who clearly have an agenda to continue this @ @ @ @ @ @ @ digitally track them with Bill Gates “ Mark Of The Beast ” chip to be injected into their system ?
The Gates Foundation has already called for “ global solidarity to vaccinate 7 billion people from this virus ” !
When Alex Jones asked Dr. Boyle what he thought about Dr. Fauci ’ s handling of this crisis he replied , “ Fauci was installed by the Neo-Cons and if they keep doing what they are doing , they are going to kill us all ” .
He also said that what Fauci @ @ @ @ @ @ @ needs new leadership immediately .
Robert Kennedy Jr. recently said that Fauci is poised to make millions of dollars from Bill Gates new vaccines .
Why does the President trust him ?
Why does anyone trust him ?
I wrote in my article , “ COVID-19 : Was This Medical Police State Planned ” that Dr. Shiva Ayyadurai , a Fulbright Scholar who holds 4 degrees from MIT , and is running for the US Senate believes Dr. Fauci should be criminally indicted for his mishandling of this crisis .
Dr. Rashid Buttar @ @ @ @ @ @ @ international best-selling author , and serves as the Medical Director of the “ Center For Advanced Medicine ” specializing in the needs of patients with immune dysfunction and toxicity issues .
Dr. Buttar has called out the fraud perpetuated by the WHO , Bill Gates , the Deep State , the mainstream media and the criminal CDC .
He believes this is a conspiracy , and that they are using false data to perpetuate this fraud on the American people and the world .
They aren ’ t telling us that the Bio-Lab @ @ @ @ @ @ @ an existing , relatively benign strain of Coronavirus that can do harm but is not deadly , and genetically modified it through “ Gain of Function ” research to make it more deadly , more virulent and more resistant ?
Dr. Buttar also believes that what Dr. Fauci has done is criminal , and said the testing being used is inadequate and should never be used for the purposes of diagnosis .
He says Fauci knows this and said that people who have received a flu shot over the years are testing positive @ @ @ @ @ @ @ to find out how many of these people who have tested positive for COVID-19 had a flu shot in the last ten years !
In a study done by German virologist Hendrik Streeck , he found that the lethality of this virus based on cases was 0.37 % , and the mortality rate based on population was 0.06 which corresponds to a strong seasonal flu .
In a recent interview , Dr. Sherri Tenpenny discussed the legislation that allows the government to legally mass vaccinate , not only children , but also adults @ @ @ @ @ @ @ legislation that most Americans know nothing about .
Usually when Americans read something they know nothing about they label it a conspiracy theory , but Project BioShield and the PREP Act are no conspiracy theory .
*Both BioSheild and the PREP Act would set the course to legally force mass vaccinations during pandemics and biological attacks .
What is going on now has been planned for years .
A top virus expert in England , Professor John Oxford , has called this virus a “ media epidemic ” and said that “ COVID-19 @ @ @ @ @ @ @ flu season ” .
Emergency rooms in America are empty and hospitals are laying off nurses and other employees .
Why is the media ignoring the fact that Dr. Fauci broke the law when he sent $ 3.75 million of National Institute of Health funds to the Bio-Lab in Wuhan ?
Why , after dozens of press conferences , has no reporter shown any interest in this treachery ?
Why is Trump not making a bigger deal of it ?
Doctor Fauci continues to spread fear , and the Democrat Governors have doubled @ @ @ @ @ @ @ measures since Trump announced he would open the country .
The hostile media continues to attack Trump and refuses to ask relevant questions about this hidden agenda .
No questions about the Gates Foundation ’ s pandemic simulation ; no questions about the Rockefellers ’ “ Lockstep ” simulation that mirrors what is going on right now ; and no questions about Johns Hopkins Clade X pandemic flu simulation .
Its time America has an awakening and realizes we have the power !
We must never lose our freedoms and we must never @ @ @ @ @ @ @ it ’ s more important than any time in our lives .
If Trump continues to support Dr. Fauci ’ s and Bill Gates insane plan to vaccinate and chip the world , how long can Americans continue to support him ?
Follow Patrick J. McShay and get his daily takes on Twitter If you ’ d like to support my work , any contribution no matter how small would be greatly appreciated .
Thanks , Pat – PayPal.Me/PatrickJMcShay Jeffrey Epstein , The FBI , And The Uncomfortable reality Of Conspiracy Theories The @ @ @ @ @ @ @ Be Illegal

by Patrick J. McShay
“The NSA’s goal is total population control”
— William Binney, High Level NSA Official And Critic of Bush Administration Policy Turned Whistleblower
“I believe that science should be accepted without question. I’m a doctor. I’m a scientific expert. I decide what science is. You, on the other hand, are only a parent. If you don’t respect my scientific and medical credentials or refuse to follow my advice, I think the state should take your children from you.”
— Doctor Paul Offit
“I had to be restrained by 3 other presenters on stage from ripping this idiot’s head right off of his neck 17 years ago in Verona Italy, where I was one of 2 Key Note Speakers at a pediatric neurological medical conference.”
— Doctor Rashid Buttar (Referring to Doctor Paul Offit)
This Coronavirus pandemic narrative is looking more and more suspect with each passing day, and nearly a month after I wrote that Bio-Weapons expert Dr. Frank Boyle believed COVID-19 was clearly a weaponized virus that possibly leaked from the sloppy level 4 Bio-Lab in Wuhan, it was breaking news on Fox’s Tucker Carlson Show and the Sean Hannity Show.
Like the Russia collusion hoax and the impeachment hoax, this pandemic has a lot of credibility problems as well. That’s not to say that people haven’t died, but since it was revealed that that the CDC was instructing doctors to count anyone who had a typical cold or flu symptom when they passed away as a COVID-19 casualty, we know these numbers coming from the CDC are bogus! Why has this revelation not changed the narrative?
This was confirmed by Dr. Deborah Birx days later in a press conference with the President. That should have been a major red flag to everybody watching but not one reporter there that day questioned it! Doctors, scientists and researchers, however, have
come forward and said this edict is insane and a major departure from the way it’s always been done.
The question every American should be asking is: Why are they deceptively inflating the number of deaths from COVID-19? And, why are these Doctors and other professionals being ignored by the media?
Something else that researchers are finding is that those countries which chose not to implement lockdowns, quarantines and other police-state measures have not experienced much higher infection or death rates than those which have. The question is: Why is the media keeping these important facts from the public, and is there another agenda at play here?
Dr. Frank Boyle says yes! Dr. Boyle, a Bio-Weapons expert with 3 degrees from Harvard and the man who wrote the Biological Weapons And Anti Terrorism Act in 1989 during the Reagan Administration said in a recent interview with Alex Jones, the Neo-Cons in George W. Bush’s Administration tried to sell this Bio-Warfare arms race to the American people and Congress as a defensive strategy which was in violation of the law that Dr. Boyle authored years before.
Boyle believes the people around the President are traitors, and are lying to him about everything! He told Alex Jones that these Bio-Labs need to be closed and scientists like Dr. Fauci and Dr. Birx need to be purged from the government. He agrees that the Chinese government is lying right along with our government and the mainstream media. Trump, whose popularity was on the rise when this crisis started has been falling lately, no doubt due to the constant attacks from the media.
It should surprise no one that the disrespectful Fauci and Birx were Obama supporters, and both supported Hillary Clinton’s ill-fated run for the White House.
In his book, ” Bio-Warfare And Terrorism” Dr. Boyle said that “the Agenda pushed by the Bush Administration would render a Bio-Warfare incident a statistical certainty.” He went on to say that “If a catastrophic incident were to occur, it would mark the end of democracy, human rights, the rule of law and the Constitution”, which was already greatly diminished by Bush after 9/11.
South Korea, Taiwan and Sweden, among other nations, have successfully contained this virus without implementing lockdowns, quarantines, and unconstitutional police state measures, so what is really going on?
Why is the President and the mainstream media ignoring every expert on the planet with the exception of Dr. Anthony Fauci and his team of Gates Foundation minions who clearly have an agenda to continue this police state, vaccinate every citizen and digitally track them with Bill Gates “Mark Of The Beast” chip to be injected into their system? The Gates Foundation has already called for “global solidarity to vaccinate 7 billion people from this virus”!
When Alex Jones asked Dr. Boyle what he thought about Dr. Fauci’s handling of this crisis he replied, “Fauci was installed by the Neo-Cons and if they keep doing what they are doing, they are going to kill us all”. He also said that what Fauci is doing is criminal and that Trump needs new leadership immediately.
Robert Kennedy Jr. recently said that Fauci is poised to make millions of dollars from Bill Gates new vaccines. Why does the President trust him? Why does anyone trust him?
I wrote in my article, “COVID-19: Was This Medical Police State Planned” that Dr. Shiva Ayyadurai, a Fulbright Scholar who holds 4 degrees from MIT, and is running for the US Senate believes Dr. Fauci should be criminally indicted for his mishandling of this crisis.
We are primarily funded by readers. Please subscribe and donate to support us!
Dr. Rashid Buttar is a board certified surgeon, an international best-selling author, and serves as the Medical Director of the “Center For Advanced Medicine” specializing in the needs of patients with immune dysfunction and toxicity issues. Dr. Buttar has called out the fraud perpetuated by the WHO, Bill Gates, the Deep State, the mainstream media and the criminal CDC.
He believes this is a conspiracy, and that they are using false data to perpetuate this fraud on the American people and the world. They aren’t telling us that the Bio-Lab at the University of North Carolina took an existing, relatively benign strain of Coronavirus that can do harm but is not deadly, and genetically modified it through “Gain of Function” research to make it more deadly, more virulent and more resistant?
Dr. Buttar also believes that what Dr. Fauci has done is criminal, and said the testing being used is inadequate and should never be used for the purposes of diagnosis. He says Fauci knows this and said that people who have received a flu shot over the years are testing positive for COVID-19. He said we need to find out how many of these people who have tested positive for COVID-19 had a flu shot in the last ten years!
In a study done by German virologist Hendrik Streeck, he found that the lethality of this virus based on cases was 0.37%, and the mortality rate based on population was 0.06 which corresponds to a strong seasonal flu.
In a recent interview, Dr. Sherri Tenpenny discussed the legislation that allows the government to legally mass vaccinate, not only children, but also adults. She talked about two pieces of legislation that most Americans know nothing about. Usually when Americans read something they know nothing about they label it a conspiracy theory, but Project BioShield and the PREP Act are no conspiracy theory.
*Both BioSheild and the PREP Act would set the course to legally force mass vaccinations during pandemics and biological attacks. What is going on now has been planned for years.
A top virus expert in England, Professor John Oxford, has called this virus a “media epidemic” and said that “COVID-19 will be no worse than a normal flu season”. Emergency rooms in America are empty and hospitals are laying off nurses and other employees.
Why is the media ignoring the fact that Dr. Fauci broke the law when he sent $3.75 million of National Institute of Health funds to the Bio-Lab in Wuhan? Why, after dozens of press conferences, has no reporter shown any interest in this treachery? Why is Trump not making a bigger deal of it?
Doctor Fauci continues to spread fear, and the Democrat Governors have doubled down on the insane unconstitutional police state measures since Trump announced he would open the country. The hostile media continues to attack Trump and refuses to ask relevant questions about this hidden agenda.
No questions about the Gates Foundation’s pandemic simulation; no questions about the Rockefellers’ “Lockstep” simulation that mirrors what is going on right now; and no questions about Johns Hopkins Clade X pandemic flu simulation. Its time America has an awakening and realizes we have the power! We must never lose our freedoms and we must never relinquish our right to bear arms; it’s more important than any time in our lives.
If Trump continues to support Dr. Fauci’s and Bill Gates insane plan to vaccinate and chip the world, how long can Americans continue to support him?
Follow Patrick J. McShay and get his daily takes on Twitter
@PMcshay
If you’d like to support my work, any contribution no matter how small would be greatly appreciated. Thanks, Pat – PayPal.Me/PatrickJMcShay
Recent Articles by Patrick J McShay
Jeffrey Epstein, The FBI, And The Uncomfortable reality Of Conspiracy Theories
stateofthenation2012.com/?p=126816
The Truth Is Not Anti-Semitic And Should Never Be Illegal
stateofthenation2012.com/?


investmentwatchblog--2020-04-21--The Oil Price Collapse Is Yet Another Sign That Economic Activity Is Crashing Dramatically All Over

The Oil Price Collapse Is Yet Another Sign That Economic Activity Is Crashing Dramatically All Over The World

The insanity that we are currently witnessing in the financial markets is difficult to believe .
Personally , even though I operate a website called “ The Economic Collapse Blog ” and I write about these things every day , when someone told me that the price of oil had fallen below minus 30 dollars a barrel on Monday I initially didn ’ t think that it could possibly be true .
Yes , I always knew that it was theoretically possible that the price of oil could go into negative territory , but we had never seen such a @ @ @ @ @ @ @ knew that a crunch was coming as futures contracts expired , but I certainly did not expect the extreme carnage that we witnessed on Monday … West Texas Intermediate crude for May delivery fell more than 100 % to settle at negative $ 37.63 per barrel , meaning producers would pay traders to take the oil off their hands .
This negative price has never happened before for an oil futures contract .
Futures contracts trade by the month .
The June WTI contract , which expires on May 19 , fell about @ @ @ @ @ @ @ per barrel .
This contract , which was more actively traded , is a better reflection of the reality in the oil market .
The July contract was roughly 11 % lower at $ 26.18 per barrel .
When global economic activity is rising , that usually creates an increased demand for oil .
And when global economy activity is declining , the demand for oil also tends to drop .
Thanks to the coronavirus lockdowns , global demand for oil has dropped to levels that are absolutely unprecedented .
The amount of @ @ @ @ @ @ @ , far greater than the amount that the world can use right now , and storage space has been rapidly running out .
Speculators that found themselves stuck with oil contracts that they were not able to resell went into panic mode on Monday , and that created the most memorable day for oil trading in history .
I would like to share what a couple of experts are saying about this absolutely crazy oil price crash .
This first comment comes from Wolf Richter… It seems some oil trading firms and hedge @ @ @ @ @ @ @ of heavily leveraged bets , and couldn ’ t roll over their contracts due to a liquidity crunch and horrible market conditions in that space .
But if they can ’ t sell the contracts by tomorrow , they ’ ll have to take delivery of the physical oil at the delivery point for NYMEX futures , namely in Cushing , Oklahoma .
The delivery time is in May .
But storage in Cushing for May seems to have been spoken for , and now these traders see that they have no place @ @ @ @ @ @ @ might have to take delivery of in May .
And this next comment comes from Roger Diwan… What is happening today is trades or speculators who had bought the contract are finding themselves unable to resell it , and have no storage booked to get delivered the crude in Cushing , OK , where the delivery is specified in the contract .
This means that all the storage in Cushing is booked , and there is no price they can pay to store it , or they are totally inexperienced in this game @ @ @ @ @ @ @ did not understand the full physical aspect of as the time clock expires .
The contract roll and liquidity crunch that made the extreme sell-off today possible but it DOESN ’ T necessarily represent futures market conditions : NYMEX June settled today at $ 21.13 .
Last week , Russia , Saudi Arabia and other major oil producers cut a deal to significantly reduce global oil production , but it wasn ’ t nearly enough to match the nightmarish decline in global economic activity that we have been witnessing .
So right now @ @ @ @ @ @ @ than the world can currently use , and that has become a massive problem .
And if things don ’ t turn around quickly , we could soon see hundreds of bankruptcies in the energy industry… In the short-term , what the energy industry desperately needs is for the lockdowns to end and for people to resume their normal economic patterns .
But as one analyst has pointed out , getting people to do that would be extremely difficult even if all of the lockdowns were lifted immediately… In the long run , @ @ @ @ @ @ @ is that there are several reasons why the price of oil will eventually be going back up to higher levels .
First of all , economic activity will rise as lockdowns are lifted all over the world , and hopefully all of the lockdowns will be over by the end of this calendar year .
Secondly , central banks and national governments around the globe are flooding the system with massive amounts of fresh money , and this will eventually cause very painful inflation .
But for the energy industry this will actually @ @ @ @ @ @ @ because it will cause upward pressure on oil prices .
Thirdly , it is just a matter of time before a major war erupts in the Middle East , and once that happens the price of oil will immediately shoot into the stratosphere .
So the truth is that this is just a temporary downturn for the energy industry , but a lot of energy companies are so deep in debt that they may not be able to ride this storm out .
For the U.S. economy as a whole , it is @ @ @ @ @ @ @ that things are never going to go back to exactly the way they were before COVID-19 came along .
All of the financial dominoes are starting to tumble , all of the economic momentum is heading in the wrong direction , and there will be many more challenges that we will have to face after this current pandemic is over .
There will be a lot more wild ups and downs in the months ahead , but this is what an economic collapse looks like , and it is just getting started .

by Michael Snyder
The insanity that we are currently witnessing in the financial markets is difficult to believe. Personally, even though I operate a website called “The Economic Collapse Blog” and I write about these things every day, when someone told me that the price of oil had fallen below minus 30 dollars a barrel on Monday I initially didn’t think that it could possibly be true. Yes, I always knew that it was theoretically possible that the price of oil could go into negative territory, but we had never seen such a thing actually happen before. And I knew that a crunch was coming as futures contracts expired, but I certainly did not expect the extreme carnage that we witnessed on Monday …
West Texas Intermediate crude for May delivery fell more than 100% to settle at negative $37.63 per barrel, meaning producers would pay traders to take the oil off their hands. This negative price has never happened before for an oil futures contract. Futures contracts trade by the month. The June WTI contract, which expires on May 19, fell about 18% to settle at $20.43 per barrel. This contract, which was more actively traded, is a better reflection of the reality in the oil market. The July contract was roughly 11% lower at $26.18 per barrel.
When global economic activity is rising, that usually creates an increased demand for oil.
And when global economy activity is declining, the demand for oil also tends to drop.
Thanks to the coronavirus lockdowns, global demand for oil has dropped to levels that are absolutely unprecedented. The amount of oil that is being produced is far, far greater than the amount that the world can use right now, and storage space has been rapidly running out.
Speculators that found themselves stuck with oil contracts that they were not able to resell went into panic mode on Monday, and that created the most memorable day for oil trading in history.
I would like to share what a couple of experts are saying about this absolutely crazy oil price crash. This first comment comes from Wolf Richter…
It seems some oil trading firms and hedge funds were caught on the wrong side of heavily leveraged bets, and couldn’t roll over their contracts due to a liquidity crunch and horrible market conditions in that space. But if they can’t sell the contracts by tomorrow, they’ll have to take delivery of the physical oil at the delivery point for NYMEX futures, namely in Cushing, Oklahoma. The delivery time is in May. But storage in Cushing for May seems to have been spoken for, and now these traders see that they have no place to go with this oil that they might have to take delivery of in May.
And this next comment comes from Roger Diwan…
What is happening today is trades or speculators who had bought the contract are finding themselves unable to resell it, and have no storage booked to get delivered the crude in Cushing, OK, where the delivery is specified in the contract. This means that all the storage in Cushing is booked, and there is no price they can pay to store it, or they are totally inexperienced in this game and are caught holding a contract they did not understand the full physical aspect of as the time clock expires. The contract roll and liquidity crunch that made the extreme sell-off today possible but it DOESN’T necessarily represent futures market conditions: NYMEX June settled today at $21.13.
Last week, Russia, Saudi Arabia and other major oil producers cut a deal to significantly reduce global oil production, but it wasn’t nearly enough to match the nightmarish decline in global economic activity that we have been witnessing.
So right now oil producers are pumping far more oil than the world can currently use, and that has become a massive problem.
We are primarily funded by readers. Please subscribe and donate to support us!
And if things don’t turn around quickly, we could soon see hundreds of bankruptcies in the energy industry…
Many oil companies took on too much debt during the good times. Some of them won’t be able to survive this historic downturn. In a $20 oil environment, 533 US oil exploration and production companies will file for bankruptcy by the end of 2021, according to Rystad Energy. At $10, there would be more than 1,100 bankruptcies, Rystad estimates.
In the short-term, what the energy industry desperately needs is for the lockdowns to end and for people to resume their normal economic patterns.
But as one analyst has pointed out, getting people to do that would be extremely difficult even if all of the lockdowns were lifted immediately…
“The government can declare whatever they want in terms of encouraging people to get out and do stuff,” said Willie Delwiche, investment strategist at Baird. “Whether or not broad swaths of society do that remains to be seen. It’s going to take seeing people start to get out and do stuff again. That will be the necessary positive development, not just declaring getting things open.”
In the long run, the good news for the energy industry is that there are several reasons why the price of oil will eventually be going back up to higher levels.
First of all, economic activity will rise as lockdowns are lifted all over the world, and hopefully all of the lockdowns will be over by the end of this calendar year.
Secondly, central banks and national governments around the globe are flooding the system with massive amounts of fresh money, and this will eventually cause very painful inflation. But for the energy industry this will actually turn out to be a good thing because it will cause upward pressure on oil prices.
Thirdly, it is just a matter of time before a major war erupts in the Middle East, and once that happens the price of oil will immediately shoot into the stratosphere.
So the truth is that this is just a temporary downturn for the energy industry, but a lot of energy companies are so deep in debt that they may not be able to ride this storm out.
For the U.S. economy as a whole, it is critical for all of us to understand that things are never going to go back to exactly the way they were before COVID-19 came along. All of the financial dominoes are starting to tumble, all of the economic momentum is heading in the wrong direction, and there will be many more challenges that we will have to face after this current pandemic is over.
There will be a lot more wild ups and downs in the months ahead, but this is what an economic collapse looks like, and it is just getting started.


investmentwatchblog--2020-04-21--NAPOLITANO: Dem Governors’ Trampling Of Civil Liberties An “Impeachable Offense”…

‘ Impeachable Offense ’ : Fox ’ s Judge Nap Says NJ , MI Govs Violating The Law With CV Lockdowns Fox News legal analyst Judge Andrew Napolitano angered a lot of people earlier this year when he said President Donald Trump committed impeachable offenses regarding his July 25 phone call with the Ukrainian president .
Now , Napolitano is saying another “ impeachable offense ” has been committed — but not by the president .
During an interview Thursday on Fox News , Napolitano suggested social distancing measures implemented by Democratic governors in states such as Michigan and New @ @ @ @ @ @ @ liberties .
“ This is a blatant violation of the Bill of Rights , a blatant violation of freedom of assembly , of your right to purchase a product that you decide is essential , ” Napolitano said , referring to Michigan Democratic Gov .
Gretchen Whitmer ’ s new executive order .
“ These are not decisions for the government to make .
These are decisions for individuals to make .
And the sooner we take our freedoms back , the less likely the government will be able to continue doing this @ @ @ @ @ @ @ : “ If we don ’ t take our freedoms back , they might not come back.
” Slap the leadership and enforcers with a federal lawsuit 42 U.S. Code 1983 .
Civil action for deprivation of rights Every person who , under color of any statute , ordinance , regulation , custom , or usage , of any State or Territory or the District of Columbia , subjects , or causes to be subjected , any citizen of the United States or other person within the jurisdiction thereof to the deprivation of @ @ @ @ @ @ @ secured by the Constitution and laws , shall be liable to the party injured in an action at law…

‘Impeachable Offense’: Fox’s Judge Nap Says NJ, MI Govs Violating The Law With CV Lockdowns
Fox News legal analyst Judge Andrew Napolitano angered a lot of people earlier this year when he said President Donald Trump committed impeachable offenses regarding his July 25 phone call with the Ukrainian president.
Now, Napolitano is saying another “impeachable offense” has been committed — but not by the president.
During an interview Thursday on Fox News, Napolitano suggested social distancing measures implemented by Democratic governors in states such as Michigan and New Jersey violate the law and trample civil liberties.
“This is a blatant violation of the Bill of Rights, a blatant violation of freedom of assembly, of your right to purchase a product that you decide is essential,” Napolitano said, referring to Michigan Democratic Gov. Gretchen Whitmer’s new executive order.
“These are not decisions for the government to make. These are decisions for individuals to make. And the sooner we take our freedoms back, the less likely the government will be able to continue doing this,” Napolitano added.
Napolitano continued: “If we don’t take our freedoms back, they might not come back.”
We are primarily funded by readers. Please subscribe and donate to support us!
trendingpolitics.com/impeachable-offense-fox-s-judge-nap-says-nj-mi-govs-violating-the-law-with-cv-lockdowns/?utm_source=economics
Slap the leadership and enforcers with a federal lawsuit
42 U.S. Code 1983. Civil action for deprivation of rights
Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law…
Source –
www.law.cornell.edu/uscode/text/42/1983
h/t CrsCrpr


investmentwatchblog--2020-04-21--The Next Giant Industry In Need Of A Bailout

Well this is starting to become a trend .
Over the past few weeks , state governments across the Land of the Free have been feverishly proposing new legislation that will virtually guarantee the entire insurance industry is wiped out .
The root of the issue has to do with something called business interruption insurance .
Business interruption is a pretty common type of insurance that ’ s designed to protect business owners against a number of risks .
For example , let ’ s say you own a restaurant and you have a bad kitchen fire that forces you @ @ @ @ @ @ @ You ’ d most like have a fire insurance policy to cover the direct damage of the fire .
And a lot of companies would also have a business interruption policy to help them stay afloat during that one-month period while the business is closed for repairs .
But business interruption insurance has certain exclusions .
It ’ s just like any other policy , and the insurers are very clear about what risks they do/do not cover .
A typical homeowner ’ s insurance policy , for example , covers your home @ @ @ @ @ @ @ and vandalism .
But most homeowner ’ s policies specifically exclude flooding .
So any homeowner who wants to protect their homes from the risk flood damage can purchase a separate flood insurance policy .
Many insurance plans , including business interruption policies , also tend to exclude things like damage caused by war , government action , and “ acts of God ” .
But again , any business that wants to insure against those risks is free to seek additional coverage .
That ’ s the whole idea of insurance : @ @ @ @ @ @ @ which risks they want to insure against , and which risks they ’ re willing to take .
It ’ s fair to say that most business interruption policies don ’ t cover a worldwide pandemic that shuttered the entire global economy .
But there ’ s a growing trend now where state governments are proposing new legislation that would RETROACTIVELY force insurance companies to protect their policyholders against Covid .
This is totally nuts .
The state governments are the ones that forced businesses to shut down .
Now they expect the @ @ @ @ @ @ @ , even though the policies specifically state that they don ’ t cover this type of risk .
They might as well demand pay for every other uninsured hazard .
Did your house flood and you didn ’ t have flood insurance ?
Well let ’ s retroactively force the insurance companies to pay for that too .
Pennsylvania , New York , Illinois , New Jersey , and several other states have proposed similar legislation , or threatened regulatory action .
And given that just about EVERY business would qualify for this @ @ @ @ @ @ @ simply no way that the insurance industry would be able to afford such an indemnity .
Think about it– the federal government made $ 350 billion worth of loans available to small businesses earlier this month , and that money was 100 % used up in about 2 weeks .
And they just agreed on another $ 300 billion this morning .
So most insurance companies would be wiped out if this legislation passes… i.e .
CUE THE GOVERNMENT BAILOUT of the insurance industry .
Just like airlines , hotels , hospitals , @ @ @ @ @ @ @ standing in line to suckle on that sweet taxpayer bailout teet , probably to the tune of another half-trillion dollars .
Of course , it goes without saying that the government doesn ’ t have the money for any this .
We ’ ve explored the government balance sheet many times in the past : Uncle Sam is already in the hole by MINUS $ 23 trillion according to the Treasury Department ’ s most recent financial statements .
And , over the last few years , even when the economy was incredibly @ @ @ @ @ @ @ to lose more than a trillion dollars a year .
Now that they have a real crisis to contend with , the deficit is going to swell to an unimaginable figure .
Frankly it doesn ’ t matter whether or not the insurance companies end up footing the bill .
If the insurance companies re forced to pay up , the government will likely bail them out .
Otherwise the government will bail out businesses directly .
Either way , it ’ s pretty obvious the government is going to spend an unbelievable @ @ @ @ @ @ @ have… which means the central bank ( Federal Reserve ) will keep printing more money .
That ’ s how the system works : whenever the government wants to bail someone out , the Federal Reserve first conjures the bailout money out of thin air , and then ‘ loans ’ it to the Treasury Department .
The Federal Reserve has already printed trillions of dollars since this crisis started , and that may only be the warm-up round .
The longer this lasts , the more money they ’ re going to @ @ @ @ @ @ @ end up debasing the currency .
We are obviously living in extraordinary times , and it ’ s perfectly reasonable to hope for the best .
But it would be irresponsible to willfully ignore what the government and central bank are doing here .
Conjuring infinite amounts of money out of thin air could have incredibly destructive consequences on the currency .
And that ’ s why , as I ’ ve written before , it ’ s definitely time to consider owning some real assets .
And to continue learning how to @ @ @ @ @ @ @ next in the world , I encourage you to download our free Perfect Plan B Guide .
Because… If you live , work , bank , invest , own a business , and hold your assets all in just one country , you are putting all of your eggs in one basket .

by Simon Black of Sovereign Man
Well this is starting to become a trend.
Over the past few weeks, state governments across the Land of the Free have been feverishly proposing new legislation that will virtually guarantee the entire insurance industry is wiped out.
The root of the issue has to do with something called business interruption insurance.
Business interruption is a pretty common type of insurance that’s designed to protect business owners against a number of risks.
For example, let’s say you own a restaurant and you have a bad kitchen fire that forces you to shut down for a month.
You’d most like have a fire insurance policy to cover the direct damage of the fire. And a lot of companies would also have a business interruption policy to help them stay afloat during that one-month period while the business is closed for repairs.
But business interruption insurance has certain exclusions. It’s just like any other policy, and the insurers are very clear about what risks they do/do not cover.
A typical homeowner’s insurance policy, for example, covers your home against risks like theft, fire, and vandalism.
But most homeowner’s policies specifically exclude flooding. So any homeowner who wants to protect their homes from the risk flood damage can purchase a separate flood insurance policy.
Many insurance plans, including business interruption policies, also tend to exclude things like damage caused by war, government action, and “acts of God”.
But again, any business that wants to insure against those risks is free to seek additional coverage.
That’s the whole idea of insurance: customers are able to pick and choose which risks they want to insure against, and which risks they’re willing to take.
It’s fair to say that most business interruption policies don’t cover a worldwide pandemic that shuttered the entire global economy.
But there’s a growing trend now where state governments are proposing new legislation that would RETROACTIVELY force insurance companies to protect their policyholders against Covid.
This is totally nuts. The state governments are the ones that forced businesses to shut down.
Now they expect the insurance companies to pay for the consequences, even though the policies specifically state that they don’t cover this type of risk.
They might as well demand pay for every other uninsured hazard. Did your house flood and you didn’t have flood insurance? Well let’s retroactively force the insurance companies to pay for that too.
Pennsylvania, New York, Illinois, New Jersey, and several other states have proposed similar legislation, or threatened regulatory action.
(This trend is also picking up steam overseas; in the UK, for example, lawsuits are already pending against insurance companies for not paying out Covid-related claims.)
And given that just about EVERY business would qualify for this retroactive Covid coverage, there’s simply no way that the insurance industry would be able to afford such an indemnity.
We are primarily funded by readers. Please subscribe and donate to support us!
Think about it– the federal government made $350 billion worth of loans available to small businesses earlier this month, and that money was 100% used up in about 2 weeks. And they just agreed on another $300 billion this morning.
So most insurance companies would be wiped out if this legislation passes… i.e. CUE THE GOVERNMENT BAILOUT of the insurance industry.
Just like airlines, hotels, hospitals, etc., the insurance company would be standing in line to suckle on that sweet taxpayer bailout teet, probably to the tune of another half-trillion dollars.
Of course, it goes without saying that the government doesn’t have the money for any this.
We’ve explored the government balance sheet many times in the past: Uncle Sam is already in the hole by MINUS $23 trillion according to the Treasury Department’s most recent financial statements.
And, over the last few years, even when the economy was incredibly strong, the federal government still managed to lose more than a trillion dollars a year.
Now that they have a real crisis to contend with, the deficit is going to swell to an unimaginable figure.
Frankly it doesn’t matter whether or not the insurance companies end up footing the bill.
If the insurance companies re forced to pay up, the government will likely bail them out. Otherwise the government will bail out businesses directly.
Either way, it’s pretty obvious the government is going to spend an unbelievable amount of money they don’t have… which means the central bank (Federal Reserve) will keep printing more money.
That’s how the system works: whenever the government wants to bail someone out, the Federal Reserve first conjures the bailout money out of thin air, and then ‘loans’ it to the Treasury Department.
Crazy, right?
The Federal Reserve has already printed trillions of dollars since this crisis started, and that may only be the warm-up round.
The longer this lasts, the more money they’re going to print… and the more they’ll end up debasing the currency.
We are obviously living in extraordinary times, and it’s perfectly reasonable to hope for the best.
But it would be irresponsible to willfully ignore what the government and central bank are doing here.
Conjuring infinite amounts of money out of thin air could have incredibly destructive consequences on the currency.
And that’s why, as I’ve written before, it’s definitely time to consider owning some real assets.
And to continue learning how to ensure you thrive no matter what happens next in the world, I encourage you to download our free Perfect Plan B Guide.
Because… If you live, work, bank, invest, own a business, and hold your assets all in just one country, you are putting all of your eggs in one basket.


investmentwatchblog--2020-04-21--Is it the ECB which is the Euro area bad bank?

A feature of the credit crunch era is that some subjects have never gone away in spite of all the official denials .
Another is that establishment ’ s use crises to try to introduce policies which they would not be able to get away with in ordinary times .
As today we are looking at a central bank this is of course about the subject closest to their hearts which is “ The Precious !
The Precious !
” which for newer readers is the banking sector .
So let us get straight to the issue in the Financial @ @ @ @ @ @ @ from its role as the house journal of the Bank of England to bid for the same role for the ECB or European Central Bank .
After my reply I somehow doubt I will be getting the role .
Indeed this is quite a different message from the one given to the European Parliament by Mario Draghi in February 2016 .
I have emphasised the use of central banking language as I have picked out that word for some time .
He emphasised the point later .
Indeed the non performing loans we @ @ @ @ @ @ @ were apparently fixed .
Er , well we have had a few years since so…..
The article gives us a good idea of one of the countries pressing for this .
I have no idea how you could form a Greek bad bank but anyway that would have even less of a life than a May Fly so let ’ s not worry too much .
If we switch to the state of play it does not seem to have progressed as Mario Draghi told us four years ago .
Yes the numbers @ @ @ @ @ @ @ 2010 so we are a decade on now .
When will it ever go away ?
We could have a quiz as we wonder how much would be paid for that and whether it would help much ?
Regular readers will recall that we were told it was a triumph when some of the NPLs of the Italian banks were sold .
Would you want them now ?
I rather suspect the problem has been kicked like a can elsewhere .
I note the Bank of Italy reporting this in its latest Economic @ @ @ @ @ @ @ was somewhat upbeat on the subject .
Although even by then ( November ) the Bank of Italy was troubled by the slow down in the Italian economy and of course now we know that essentially 2019 saw no economic growth at all .
So we can see why Italy would be keen especially as we note this development .
They got into trouble with this last time around .
Returning to the FT there is also a mention of a couple of places which the official and FT lines had been ones @ @ @ @ @ @ @ a better economic run but those who followed the debacle at Novo Banco will be aware of the banking system problems .
There are quite a few issues for us to pick our way through .
For example with the expansion of its role is the ECB already a bad bank itself ?
Let me hand you over the the present ECB President Christine Lagarde .
It is also lending but with wider ( aka weaker ) collateral requirements .
I raise this issue because back at the height of the credit crunch @ @ @ @ @ @ @ of its schemes early because of “ Phantom Securities ” .
I am sure you get the drift .
A reply to the FT from Italicus raises another issue .
As Pink Floyd so aptly put it .
Next comes the issue that rules for banks are only applied when the seas are calm which is the reverse of what should happen .
Next comes the issue of what are Special Purpose Vehicles .
The Italian versions for bad loans called variously Atlas and Atlante have rather faded from view .
Not before @ @ @ @ @ @ @ weakened the banking sector they were supposed to support .
Also there is Deutsche Bank with its share price of 5.88 Euros .

by Shaun Richards
A feature of the credit crunch era is that some subjects have never gone away in spite of all the official denials. Another is that establishment’s use crises to try to introduce policies which they would not be able to get away with in ordinary times. As today we are looking at a central bank this is of course about the subject closest to their hearts which is “The Precious! The Precious!” which for newer readers is the banking sector. So let us get straight to the issue in the Financial Times which has taken a brief holiday from its role as the house journal of the Bank of England to bid for the same role for the ECB or European Central Bank.
European Central Bank officials have held high-level talks with counterparts in Brussels about creating a eurozone bad bank to remove billions of euros in toxic debts from lenders’ balance sheets.
After my reply I somehow doubt I will be getting the role.
But they already have Deutsche Bank?
Indeed this is quite a different message from the one given to the European Parliament by Mario Draghi in February 2016.
However, we have to acknowledge that the regulatory overhaul since the start of the crisis has laid the foundations for durably increasing the resilience not only of individual institutions but also of the financial system as a whole. Banks have built higher and better quality capital
buffers, have reduced leverage and improved their funding profiles.
I have emphasised the use of central banking language as I have picked out that word for some time. He emphasised the point later.
In the euro area, the situation in the banking sector now is very different from what it was in 2012……….making them more resilient to adverse shocks.
Indeed the non performing loans we are now supposed to be worried about were apparently fixed.
There is a subset of banks with elevated levels of non-performing loans (NPLs). However, these NPLs were identified during the Comprehensive Assessment, using for the first time a common definition, and have since been adequately provisioned for. Therefore, we are in a
good position to bring down NPLs in an orderly manner over the next few years.
Er, well we have had a few years since so…..
Geography
The article gives us a good idea of one of the countries pressing for this.
“The lesson from the crisis is that only with a bad bank can you quickly get rid of the NPLs,” Yannis Stournaras, governor of the Bank of Greece and member of the ECB governing council, told the Financial Times. “It could be a European one or a national one. But it needs to happen quickly.”
I have no idea how you could form a Greek bad bank but anyway that would have even less of a life than a May Fly so let’s not worry too much. If we switch to the state of play it does not seem to have progressed as Mario Draghi told us four years ago.
Greek banks have by far the highest level of soured loans on their balance sheets of any eurozone country, making up 35 per cent of their total loan books — a legacy of the 2010-15 debt crisis that pushed the country to the brink of exiting the eurozone.
Yes the numbers are down but the crisis started in 2010 so we are a decade on now. When will it ever go away?
But plans by Greece’s big four lenders to sell more than €32bn of NPLs — almost half the total in the country — are likely to be disrupted by the coronavirus crisis,
We could have a quiz as we wonder how much would be paid for that and whether it would help much? Regular readers will recall that we were told it was a triumph when some of the NPLs of the Italian banks were sold. Would you want them now? I rather suspect the problem has been kicked like a can elsewhere. I note the Bank of Italy reporting this in its latest Economic Bulletin.
approving a debt moratorium on outstanding bank loans, and increasing public guarantees on new loans to firms.
The latest Financial Stability Report was somewhat upbeat on the subject.
At the end of June, the stock of NPLs net of
provisions fell to €84 billion (€177 billion gross
of provisions), 7 per cent less than at the end
of 2018.
Although even by then ( November) the Bank of Italy was troubled by the slow down in the Italian economy and of course now we know that essentially 2019 saw no economic growth at all.
We are primarily funded by readers. Please subscribe and donate to support us!
In the fourth quarter of 2019 the seasonally and calendar adjusted, chained volume measure of Gross Domestic Product (GDP) decreased by 0.3 per cent over the previous quarter and increased by 0.1 per cent in comparison with the fourth quarter of 2018. ( Istat)
So we can see why Italy would be keen especially as we note this development.
In June, Italian banks’ exposure to emerging economies was €165 billion (about 5 per cent of assets),
6.4 per cent higher than at the end of 2018.
They got into trouble with this last time around.
Returning to the FT there is also a mention of a couple of places which the official and FT lines had been ones of recovery.
Total NPLs in the biggest 121 eurozone banks almost halved in four years to €506bn, or 3.2 per cent of their loan books, by the end of last year. But Greek, Cypriot, Portuguese and Italian banks still have NPL ratios above 6 per cent.
Portugal had been in a better economic run but those who followed the debacle at Novo Banco will be aware of the banking system problems.
Comment
There are quite a few issues for us to pick our way through. For example with the expansion of its role is the ECB already a bad bank itself? Let me hand you over the the present ECB President Christine Lagarde.
Second, we are buying public and private sector bonds in large volume to ensure that all sectors of the economy can benefit from easy financing conditions…….We have also extended our asset purchases to commercial paper, which is an important source of liquidity for firms.
It is also lending but with wider ( aka weaker) collateral requirements. I raise this issue because back at the height of the credit crunch issue the Bank of England ended one of its schemes early because of “Phantom Securities”. I am sure you get the drift.
A reply to the FT from Italicus raises another issue.
So the idea is to remove NPL from the balance sheets of banks so that they can keep on lending to people and businesses who can keep on not repaying their debts?
As Pink Floyd so aptly put it.
Tired of lying in the sunshine staying home to watch the rain.
You are young and life is long and there is time to kill today.
And then one day you find ten years have got behind you.
No one told you when to run, you missed the starting gun.
Next comes the issue that rules for banks are only applied when the seas are calm which is the reverse of what should happen.
The European Central Bank (ECB) today announced a temporary reduction in capital requirements for market risk, by allowing banks to adjust the supervisory component of these requirements.
Next comes the issue of what are Special Purpose Vehicles. The Italian versions for bad loans called variously Atlas and Atlante have rather faded from view. Not before some rather spectacular write downs though which weakened the banking sector they were supposed to support.
Also there is Deutsche Bank with its share price of 5.88 Euros.
Podcast


investmentwatchblog--2020-04-21--Bix Weir: Hang On To Your Hats! COUNTER-PARTY RISK Has Just GONE NUCLEAR!

by Bix Weir of Road to Roota The largest commodity market in the world is OIL derivatives and it will @ @ @ @ @ Losses !
!
Hang on to your hats as Counterparty Risk has just gone NUCLEAR @

by Bix Weir of Road to Roota
We are primarily funded by readers. Please subscribe and donate to support us!
The largest commodity market in the world is OIL derivatives and it will IMPLODE tomorrow with Trillions in Losses!! Hang on to your hats as Counterparty Risk has just gone NUCLEAR!


investmentwatchblog--2020-04-21--Revolutionary Times and Systemic Collapse – “The System Cannot Handle It”

Some have queried how it could be that President Putin would co-operate with President Trump to have OPEC+ push oil prices higher – when those higher prices precisely would only help sustain U.S. oil production .
In effect , President Putin was being asked to underwrite a subsidy to the U.S. economy – at the expense of Russia ’ s own oil and gas sales – since U.S. shale production simply is not economic at these prices .
In other words , Russia seemed to be shooting itself in the foot .
Well , the calculus for Moscow on whether @ @ @ @ @ @ @ ) was never simple .
There were geo-political and domestic economic considerations – as well as the industry ones – to weigh .
But , perhaps one issue trumped all others ?
Since 2007 , President Putin has been pointing to one overarching threat to global trade : And that problem was simply , the U.S. dollar .
And now , that dollar is in crisis .
We are referring , here , not so much to America ’ s domestic financial crisis ( although the monetisation of U.S. debt is connected to @ @ @ @ @ @ @ but rather , how the international trading system is poised to blow apart , with grave consequences for everyone .
In other words , Covid-19 may be the trigger , but it is the U.S. dollar – as President Putin has long warned – that is the root problem : “ We ’ re looking at a commodity-price collapse and a collapse in global trade unlike anything we ’ ve seen since the 1930s ” , said Ken Rogoff , the former chief economist of the IMF , now at Harvard University .
@ @ @ @ @ @ @ to follow , he said , and “ the system just can ’ t handle this many defaults and restructurings at the same time ” .
“ It ’ s a little bit like going to the hospitals and they can handle a certain number of Covid-19 patients but they can ’ t handle them – all at once ” , he added .
More than 90 countries have inquired about bailouts from the IMF—nearly half the world ’ s nations—while at least 60 have sought to avail themselves of World Bank programs @ @ @ @ @ @ @ ] have resources of up to $ 1.2 trillion ” .
Just to be clear , this amount is not nearly sufficient .
Rogoff is saying that $ 1.2 trillion is a drop in the ocean – for what lies ahead .
The health of the global economy thus has attenuated down to a race between dollars flooding out of this ‘ complex self-organising ’ system amidst the coronavirus pandemic , versus the very limited resources of the IMF and World Bank to pump dollars in .
Simple ?
Just ramp up the @ @ @ @ @ @ @ there !
This would mean the U.S. providing a flow of dollars sufficient to meet ‘ rest of world ’ needs – ‘ during the biggest collapse since the 1930s ’ ?
There is $ 11.9 trillion of U.S. denominated debt out there alone , plus the dollar float required to finance day-to-day international trade ( usually held as national , foreign exchange reserves ) .
That however , is only a fraction of the dollar-denominated debt ‘ problem ’ , since a part of that debt takes the characteristics of a distinct @ @ @ @ @ @ @ , called Eurodollars .
Mostly ( but not exclusively ) , they present themselves as if ordinary dollars , but what distinguishes them is that they are overseas dollar deposits that exist outside of U.S. regulation , in one sense .
But which – in the other sense – they become the tools extending U.S. jurisdiction ( think Treasury sanctions ) , across the globe , through the use of U.S. dollars , as its medium of trade .
That is to say , this huge Eurodollar market serves Washington ’ s geo-political @ @ @ @ @ @ @ world .
Hence , the Eurodollar market is a main tool to the U.S. ’ covert ‘ war ’ against China and Russia .
Eurodollars just ‘ emerged ’ , ( initially ) in Europe after WW2 ( no-one is sure quite how ) , and they grew organically to huge size , by the European banking system simply electronically creating more of them .
The Achilles ’ Heel is that it lacks any Central Bank to supply it with liquid dollars , as and when , payments into the U.S. sphere are @ @ @ @ @ @ @ especially in times of crisis , when there is flight to the onshore dollar .
Oh , no .
Oh yes : It ’ s another self-organising dynamic system that can only ‘ grow ’ under the right conditions , but will be prone to dynamic de-construction if too many dollars are withdrawn from it .
And now , with the Covid-19 pandemic , the Eurodollar market is in a near panic for dollars : liquid dollars .
The U.S. Fed does ‘ help out ’ , at its own discretion , but @ @ @ @ @ @ @ for dollars , and by extending short term dollar loans .
But this ‘ swap bandage ’ can not of course staunch full-blown global trade blowout – in the same way that the Fed is ‘ supporting ’ U.S. domestic financial system – by throwing trillions of dollars at it .
President Putin saw this eventuality long ago , and predicted the dollar ’ s ultimate collapse , as a result of the world ’ s trade becoming too large and too diverse to be sustained on the slender back of the U.S. @ @ @ @ @ @ @ no longer ready for the U.S. to be able to sanction it , willy-nilly , and at will .
And here ‘ is ’ that moment – very possibly .
So , the collapse in the oil price is a piece to this much bigger story .
Putin – not so surprisingly – thus cooperated with Trump ’ s OPEC initiative , no doubt guessing that the attempt to ramp prices higher would never ‘ fly ’ .
Putin may not want to see the dollar hegemony renewed , but nor would he @ @ @ @ @ @ @ main contributor to a global blow-out .
The blame being heaped on China over coronavirus serves as a potent alert in this context .
This – emphatically – is not an essay about barely-understood Eurodollars .
It is about real global risk .
Take the Middle East , as one example .
Oil is trading currently at $ 17 ( Friday ’ s WTI ) .
No producer state ’ s Middle East business-model is viable at this price level .
National budget ‘ break-evens ’ require a price of oil to be @ @ @ @ @ @ @ more .
And this , comes on top of the collapse of the Gulf air-travel hub business and tourism .
The northern tier of states additionally , is being pressed hard by U.S. sanctions , with the latter tightening the sanctions tourniquet , as Covid-19 strikes , rather than relaxing it .
Lebanon , Jordan , Syria – and Iraq .
All have national business-models that are bust .
They all require bail-outs .
And into this bleak picture , coronavirus has gripped precisely that class of expatriates and migrant workers that sustain @ @ @ @ @ @ @ and its business model .
NGOs presently are scouring the UAE for empty buildings , and Bahrain is re-purposing closed schools in order to re-house migrant-labourers from cramped accommodation where one room with bunk-beds would sleep a dozen workers .
The virus has also spread to densely populated commercial districts of cities , where many expatriates share housing to save on rent .
Many have lost jobs and are struggling .
The authorities are trying to deport the migrants home ; but Pakistan and India both are refusing them immediate entry .
These @ @ @ @ @ @ @ any chance to escape their misery .
Just to be clear : Gulf élites are not exempt from Covid-19 .
The al-Saud have been particularly hit by what they sometimes call the “ Shi ’ i virus ” .
The situation is turning explosive .
Gulf economies are held aloft by expatriates , migrant workers and domestic help , and coronavirus has upended the pillars of their economies .
The state looms large over the financial sector in the Gulf , and this makes financial institutions especially vulnerable , because the proportion of @ @ @ @ @ @ @ government or to government-related entities , has been rising since 2009 .
As the authorities draw further on these institutions , so the Gulf economies will prove more vulnerable to Eurodollar stress – absent huge Fed bail-outs .
The global impact of Covid-19 is only beginning , but one thing is abundantly clear : Middle Eastern states will be needing a great deal of spending money , just to fend off social disorder .
An economic breakdown is more than just economic .
It leads quickly to a social breakdown that involves looting @ @ @ @ @ @ @ anger directed at authorities .
Global trade is going to be hit hard , and U.S. imports are going to tumble , which threatens one of the main USD liquidity channels into the Eurodollar system .
This fear of a systemic dynamic destruction of the trading system has led the BIS ( Bank for International Settlements : the Central Bankers ’ own Central Bank ) to insist that : “ … today ’ s crisis differs from the 2008 GFC , and requires policies that reach beyond the banking sector to final users @ @ @ @ @ @ @ in global supply chains , are in constant need of working capital , much of it in dollars .
Preserving the flow of payments along these chains is essential if we are to avoid further economic meltdown ” .
This is a truly revolutionary warning .
The BIS is saying that unless the Fed makes bail-outs and working capital available on a massive scale – all the way down , and through , the supply-pyramid to nitty-gritty individual enterprises – trade collapse can not be avoided .
What is hinted at here is @ @ @ @ @ @ @ systems begin to degrade , they can , and often do , enter into a spiralling feedback-loop .
There may be agreement in the G7 on the principle of a limited debt moratorium to be offered to struggling economies , but an approach à outrance – on the BIS lines – apparently is being blocked by U.S. Treasury Secretary Mnuchin ( the U.S. enjoys a veto at the IMF by virtue of its quota ) : No more U.S. cash is being offered to the IMF by Mnuchin , who prefers to keep @ @ @ @ @ @ @ the USD liquidity roll-out process .
In other words , Trump wishes to keep intact the scaffolding of the ‘ hidden ’ dollar-based , sanctions and tariff ‘ war ’ against China and Russia .
He wants the Fed to be able to determine who does , and who does not , get help in any ‘ liquidity roll-out ’ .
He wants to continue to be able to sanction those he wants .
And he wants to maintain as large an external footprint of the dollar as possible .
Here then , @ @ @ @ @ @ @ complaint : “ At root , the Eurodollar system is based on using the national currency of just one country , the U.S. , as the global reserve currency .
This means the world is beholden to a currency that it can not create as needed ” .
When a crisis hits , as at present , everyone in the Eurodollar system suddenly realizes they have no ability to create fiat dollars , and can rely only on that which exists in national foreign exchange reserves , or in ‘ swap lines ’ @ @ @ @ @ @ @ power and privilege .
But more than subjecting the world to the geo-political hegemony of Washington , the crucial point is made by Professor Rogoff : “ We ’ re looking at a commodity-price collapse – and a collapse in global trade unlike anything we ’ ve seen since the 1930s .
An avalanche of government-debt crises is sure to follow , he said , and “ the system just can ’ t handle this many defaults and restructurings – at the same time ” .
This simply is beyond the U.S. Fed @ @ @ @ @ @ @ capacities , by a long shot .
The Fed is already set to monetize double the total U.S. Treasury debt issuance .
The global task would overwhelm it – in an avalanche of money-printing .
Does Mnuchin then , believe his and Trump ’ s narrative , that the virus will soon pass , and the economy will rapidly bounce-back ?
If so , and it turns out that the virus does not rapidly disappear , then Mnuchin ’ s stance portends a coming , tragic débacle .
And with further massive money @ @ @ @ @ @ @ the dollar .
( President Putin would have been proved right , but he will not welcome , assuredly , being proved right in such a destructive manner ) .
In a parallel sphere , the global trade plight is being mirrored in the microcosm by that of EU states , such as Italy , whose economies similarly have been racked by Covid-19 .
They too , are beholden to a currency – the Euro – that Italy and others can not create as needed .
With this crisis hitting Europe , everyone @ @ @ @ @ @ @ it means to have no ability to create fiat currency , and be entirely subject to a non-statutory body , the Eurogroup , which – like Mnuchin – simply says ‘ no ’ to any BIS-like approach .
Again , it is about scale : this is not business as usual , as in some neo- ‘ Greek ’ eruption , to be countered with EU ‘ discipline ’ .
This crisis is much , much greater than that .
The absence of monetary instruments – in crisis – can become existential .
@ @ @ @ @ @ @ the Eurogroup , Alexander del Mar ’ s 1899 Monetary History , in which he observes how the manoeuvres of the British Crown , in constricting the export of gold and silver ( i.e .
money ) to its American colonies , led to the Crown ’ s ‘ war ’ on the paper monetary instruments – Bills of Credit – issued by the Revolutionary Assemblies of Massachusetts and Philadelphia , to compensate for this British monetary starvation .
Finally , it left the desperate colonists with but one resort : “ to @ @ @ @ @ @ @ the Bills of Credit of this era … were really the standards of The [ American ] Revolution .
They were more than this : They were the Revolution itself !
”

by Alastair Crooke via Strategic Culture Foundation
Some have queried how it could be that President Putin would co-operate with President Trump to have OPEC+ push oil prices higher – when those higher prices precisely would only help sustain U.S. oil production. In effect, President Putin was being asked to underwrite a subsidy to the U.S. economy – at the expense of Russia’s own oil and gas sales – since U.S. shale production simply is not economic at these prices. In other words, Russia seemed to be shooting itself in the foot.
Well, the calculus for Moscow on whether to cut production (to help Trump) was never simple. There were geo-political and domestic economic considerations – as well as the industry ones – to weigh. But, perhaps one issue trumped all others?
Since 2007, President Putin has been pointing to one overarching threat to global trade: And that problem was simply, the U.S. dollar.
And now, that dollar is in crisis. We are referring, here, not so much to America’s domestic financial crisis (although the monetisation of U.S. debt is connected to threat to the global system), but rather, how the international trading system is poised to blow apart, with grave consequences for everyone.
In other words, Covid-19 may be the trigger, but it is the U.S. dollar – as President Putin has long warned – that is the root problem:
“We’re looking at a commodity-price collapse and a collapse in global trade unlike anything we’ve seen since the 1930s”, said Ken Rogoff, the former chief economist of the IMF, now at Harvard University. An avalanche of government-debt crises is sure to follow, he said, and “the system just can’t handle this many defaults and restructurings at the same time”.
“It’s a little bit like going to the hospitals and they can handle a certain number of Covid-19 patients but they can’t handle them – all at once”, he added.
More than 90 countries have inquired about bailouts from the IMF—nearly half the world’s nations—while at least 60 have sought to avail themselves of World Bank programs. The two institutions together [only] have resources of up to $1.2 trillion”.
Just to be clear, this amount is not nearly sufficient. Rogoff is saying that $1.2 trillion is a drop in the ocean – for what lies ahead. The health of the global economy thus has attenuated down to a race between dollars flooding out of this ‘complex self-organising’ system amidst the coronavirus pandemic, versus the very limited resources of the IMF and World Bank to pump dollars in.
Simple? Just ramp up the dollar flow into system. But whoa there! This would mean the U.S. providing a flow of dollars sufficient to meet ‘rest of world’ needs – ‘during the biggest collapse since the 1930s’? There is $11.9 trillion of U.S. denominated debt out there alone, plus the dollar float required to finance day-to-day international trade (usually held as national, foreign exchange reserves).
That however, is only a fraction of the dollar-denominated debt ‘problem’, since a part of that debt takes the characteristics of a distinct ‘currency’ used in international trade, called Eurodollars. Mostly (but not exclusively), they present themselves as if ordinary dollars, but what distinguishes them is that they are overseas dollar deposits that exist outside of U.S. regulation, in one sense.
But which – in the other sense – they become the tools extending U.S. jurisdiction (think Treasury sanctions), across the globe, through the use of U.S. dollars, as its medium of trade. That is to say, this huge Eurodollar market serves Washington’s geo-political interests by enabling it to sanction the world. Hence, the Eurodollar market is a main tool to the U.S.’ covert ‘war’ against China and Russia.
Eurodollars just ‘emerged’, (initially) in Europe after WW2 (no-one is sure quite how), and they grew organically to huge size, by the European banking system simply electronically creating more of them. The Achilles’ Heel is that it lacks any Central Bank to supply it with liquid dollars, as and when, payments into the U.S. sphere are sucked out of it.
This happens especially in times of crisis, when there is flight to the onshore dollar. Oh, no. Oh yes: It’s another self-organising dynamic system that can only ‘grow’ under the right conditions, but will be prone to dynamic de-construction if too many dollars are withdrawn from it. And now, with the Covid-19 pandemic, the Eurodollar market is in a near panic for dollars: liquid dollars.
The U.S. Fed does ‘help out’, at its own discretion, but mainly through offering to swap other currencies for dollars, and by extending short term dollar loans. But this ‘swap bandage’ cannot of course staunch full-blown global trade blowout – in the same way that the Fed is ‘supporting’ U.S. domestic financial system – by throwing trillions of dollars at it.
President Putin saw this eventuality long ago, and predicted the dollar’s ultimate collapse, as a result of the world’s trade becoming too large and too diverse to be sustained on the slender back of the U.S. Fed. And because the world is no longer ready for the U.S. to be able to sanction it, willy-nilly, and at will.
And here ‘is’ that moment – very possibly. So, the collapse in the oil price is a piece to this much bigger story. Putin – not so surprisingly – thus cooperated with Trump’s OPEC initiative, no doubt guessing that the attempt to ramp prices higher would never ‘fly’. Putin may not want to see the dollar hegemony renewed, but nor would he want Russia to be viewed as a main contributor to a global blow-out. The blame being heaped on China over coronavirus serves as a potent alert in this context.
This – emphatically – is not an essay about barely-understood Eurodollars. It is about real global risk. Take the Middle East, as one example. Oil is trading currently at $17 (Friday’s WTI). No producer state’s Middle East business-model is viable at this price level. National budget ‘break-evens’ require a price of oil to be at least three times higher – maybe more. And this, comes on top of the collapse of the Gulf air-travel hub business and tourism. The northern tier of states additionally, is being pressed hard by U.S. sanctions, with the latter tightening the sanctions tourniquet, as Covid-19 strikes, rather than relaxing it. Lebanon, Jordan, Syria – and Iraq. All have national business-models that are bust. They all require bail-outs.
We are primarily funded by readers. Please subscribe and donate to support us!
And into this bleak picture, coronavirus has gripped precisely that class of expatriates and migrant workers that sustain the Gulf ‘way of life’ and its business model. NGOs presently are scouring the UAE for empty buildings, and Bahrain is re-purposing closed schools in order to re-house migrant-labourers from cramped accommodation where one room with bunk-beds would sleep a dozen workers.
The virus has also spread to densely populated commercial districts of cities, where many expatriates share housing to save on rent. Many have lost jobs and are struggling. The authorities are trying to deport the migrants home; but Pakistan and India both are refusing them immediate entry. These victims have lost their livelihood, and any chance to escape their misery.
Just to be clear: Gulf élites are not exempt from Covid-19. The al-Saud have been particularly hit by what they sometimes call the “Shi’i virus”. The situation is turning explosive. Gulf economies are held aloft by expatriates, migrant workers and domestic help, and coronavirus has upended the pillars of their economies.
The state looms large over the financial sector in the Gulf, and this makes financial institutions especially vulnerable, because the proportion of loans that local banks extend to the government or to government-related entities, has been rising since 2009. As the authorities draw further on these institutions, so the Gulf economies will prove more vulnerable to Eurodollar stress – absent huge Fed bail-outs.
The global impact of Covid-19 is only beginning, but one thing is abundantly clear: Middle Eastern states will be needing a great deal of spending money, just to fend off social disorder. An economic breakdown is more than just economic. It leads quickly to a social breakdown that involves looting, random violence, fraud and popular anger directed at authorities. Global trade is going to be hit hard, and U.S. imports are going to tumble, which threatens one of the main USD liquidity channels into the Eurodollar system.
This fear of a systemic dynamic destruction of the trading system has led the BIS (Bank for International Settlements: the Central Bankers’ own Central Bank) to insist that: “… today’s crisis differs from the 2008 GFC, and requires policies that reach beyond the banking sector to final users. These businesses, particularly those enmeshed in global supply chains, are in constant need of working capital, much of it in dollars. Preserving the flow of payments along these chains is essential if we are to avoid further economic meltdown”.
This is a truly revolutionary warning. The BIS is saying that unless the Fed makes bail-outs and working capital available on a massive scale – all the way down, and through, the supply-pyramid to nitty-gritty individual enterprises – trade collapse cannot be avoided. What is hinted at here is the concern that when multiple dynamic complex systems begin to degrade, they can, and often do, enter into a spiralling feedback-loop.
There may be agreement in the G7 on the principle of a limited debt moratorium to be offered to struggling economies, but an approach à outrance – on the BIS lines – apparently is being blocked by U.S. Treasury Secretary Mnuchin (the U.S. enjoys a veto at the IMF by virtue of its quota): No more U.S. cash is being offered to the IMF by Mnuchin, who prefers to keep the U.S. Fed front and centre of the USD liquidity roll-out process.
In other words, Trump wishes to keep intact the scaffolding of the ‘hidden’ dollar-based, sanctions and tariff ‘war’ against China and Russia. He wants the Fed to be able to determine who does, and who does not, get help in any ‘liquidity roll-out’. He wants to continue to be able to sanction those he wants. And he wants to maintain as large an external footprint of the dollar as possible.
Here then, is the crux to Putin’s complaint: “At root, the Eurodollar system is based on using the national currency of just one country, the U.S., as the global reserve currency. This means the world is beholden to a currency that it cannot create as needed”.
When a crisis hits, as at present, everyone in the Eurodollar system suddenly realizes they have no ability to create fiat dollars, and can rely only on that which exists in national foreign exchange reserves, or in ‘swap lines’. This obviously grants the U.S. enormous power and privilege.
But more than subjecting the world to the geo-political hegemony of Washington, the crucial point is made by Professor Rogoff: “We’re looking at a commodity-price collapse – and a collapse in global trade unlike anything we’ve seen since the 1930s. An avalanche of government-debt crises is sure to follow, he said, and “the system just can’t handle this many defaults and restructurings – at the same time”.
This simply is beyond the U.S. Fed, or the U.S. Treasury’s capacities, by a long shot. The Fed is already set to monetize double the total U.S. Treasury debt issuance. The global task would overwhelm it – in an avalanche of money-printing.
Does Mnuchin then, believe his and Trump’s narrative, that the virus will soon pass, and the economy will rapidly bounce-back? If so, and it turns out that the virus does not rapidly disappear, then Mnuchin’s stance portends a coming, tragic débacle. And with further massive money issuance, a collapse in confidence in the dollar. (President Putin would have been proved right, but he will not welcome, assuredly, being proved right in such a destructive manner).
In a parallel sphere, the global trade plight is being mirrored in the microcosm by that of EU states, such as Italy, whose economies similarly have been racked by Covid-19. They too, are beholden to a currency – the Euro – that Italy and others cannot create as needed.
With this crisis hitting Europe, everyone in the Euro system is experiencing what it means to have no ability to create fiat currency, and be entirely subject to a non-statutory body, the Eurogroup, which – like Mnuchin – simply says ‘no’ to any BIS-like approach.
Again, it is about scale: this is not business as usual, as in some neo-‘Greek’ eruption, to be countered with EU ‘discipline’. This crisis is much, much greater than that. The absence of monetary instruments – in crisis – can become existential.
Some muse might recall to Mnuchin and the Eurogroup, Alexander del Mar’s 1899 Monetary History, in which he observes how the manoeuvres of the British Crown, in constricting the export of gold and silver (i.e. money) to its American colonies, led to the Crown’s ‘war’ on the paper monetary instruments – Bills of Credit – issued by the Revolutionary Assemblies of Massachusetts and Philadelphia, to compensate for this British monetary starvation.
Finally, it left the desperate colonists with but one resort: “to stand by their monetary system. Thus the Bills of Credit of this era … were really the standards of The [American] Revolution. They were more than this: They were the Revolution itself!”