Russian Roulette: Taxpayers could be on the hook for Trillions in Oil Derivatives
The sudden dramatic collapse in the price of oil appears to be an act of geopolitical warfare against Russia.
The result could be trillions of dollars in oil derivative losses; and depositors and taxpayers could be liable, following repeal of key portions of the Dodd-Frank Act signed into law on December 16th.
On December 11th, Senator Elizabeth Warren charged Citigroup with “holding government funding hostage to ram through its government bailout provision.” At issue was a section in the omnibus budget bill repealing the Lincoln Amendment to the Dodd-Frank Act, which protected depositor funds by requiring the largest banks to push out a portion of their derivatives business into non-FDIC-insured subsidiaries.
Continue reading report here: Russian Roulette with Taxpayers Money
Watch the following interview explaining the details about The Confiscation of Bank Deposits & the Derivatives Debt
On December 11, 2014, the US House passed a bill repealing the Dodd-Frank requirement that risky derivatives be pushed into big-bank subsidiaries, leaving our deposits and pensions exposed to massive derivatives losses.
The bill was vigorously challenged by Senator Elizabeth Warren; but the tide turned when Jamie Dimon, CEO of JPMorganChase, stepped into the ring. Perhaps what prompted his intervention was the unanticipated $40 drop in the price of oil. As financial blogger Michael Snyder points out, that drop could trigger a derivatives payout that could bankrupt the biggest banks. And if the G20’s new “bail-in” rules are formalized, depositors and pensioners could be on the hook.
The new bail-in rules were discussed in my last post. They are edicts of the Financial Stability Board (FSB), an unelected body of central bankers and finance ministers headquartered in the Bank for International Settlements in Basel, Switzerland. Where did the FSB get these sweeping powers, and is its mandate legally enforceable?
Those questions were addressed in an article I wrote in June 2009, two months after the FSB was formed, titled “Big Brother in Basel: BIS Financial Stability Board Undermines National Sovereignty.” It linked the strange boot shape of the BIS to a line from Orwell’s 1984: “a boot stamping on a human face—forever.” The concerns raised there seem to be materializing, so I’m republishing the bulk of that article. We need to be paying attention, lest the bail-in juggernaut steamroll over us unchallenged…
Continue reading from original source here: The Global Bankers Coup: Bail-In and the FSB
SEC Approves Tighter Money-Fund Rules
Plan Allows Funds to Temporarily Block Withdrawals in Times of Stress
Money market funds can impose a liquidity fee on redemptions if the fund’s weekly liquidity falls below the level required by regulations.
Redemptions may also be suspended temporarily. The SEC calls them redemption “gates.”
Institutional prime money market funds are required to float the net asset value, or NAV, rather than keeping share prices fixed at $1.
Note: An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although a money market fund seeks to preserve the value of your investment at $1 per share, it is possible to lose money by investing in such a fund.
Remember, nuclear energy is safe, like GMOs, like the NSA/Homeland Security Police State, like whatever government, corporate interests and presstitute media tell you.
Just keep believing.
Even the soothsayers and Abenomics spin doctors expected a downdraft after Japan’s consumption tax was jacked up to 8% from 5%, effective April 1st. But not this.
The tax hike had been pushed through parliament by Prime Minister Shinzo Abe’s predecessor. It was supposed to save Japan. But no one wants to pay for government spending.
Japan is in terrible fiscal trouble. Half of every yen the government spends is borrowed, now printed by the Bank of Japan. Expenditures can’t be cut, apparently, and government handouts to Japan Inc. had to be increased. Yet something had to be done to keep the gargantuan deficit from blowing up the machinery altogether, and it was done to those who spend money.
But here is the thing: money that people and companies keep in the bank earns nearly nothing, and even a crappy 10-year Japanese Government Bond yields less than 0.6% per year.
But if buyers frontloaded major purchases by a few months or even a year to beat the consumption-tax increase – buying that refrigerator or heavy-duty truck a year earlier than they normally would, for example – they’d save 3% of the purchase amount. That’s pure income. And tax-free for individuals. The biggest no-brainer in Japanese financial history.
Every company and individual frontloaded whatever was sufficiently practical and substantive, and whatever they could afford. It started late last year and culminated in the January-March quarter. As a result, GDP soared at an annual rate of 5.9%, a phenomenal accomplishment for Japan.
The Japanese have been through this before. Ahead of the prior consumption-tax hike from 3% to 5% effective April 1, 1997, consumers and businesses went on a buying binge of big-ticket items. The economy boomed for a couple of quarters, then woke up with a terrific hangover as spending on durables by businesses and consumers ground to a halt, and the economy skittered into a nasty recession that lasted a year and a half!
The Ministry of Economics, Trade, and Industry just released a dose of reality. Total retail sales in April plunged 19.8% from March and were down 4.4% year over year. But this includes sales of perishable and small items not suited for frontloading, and convenience-store sales (which rose a smidgen). In stores where people buy durable goods, such as appliances, watches, or cars, sales were awful.
At “large retailers,” sales swooned 25.0% from March and 5.4% year over year. At supermarkets, where people also buy some durable goods, sales fell 3.9% year over year – people even stocked up on non-perishable food and beverages. At department stores, where people buy jewelry, designer clothing, or French purses, sales fell 10.6% year over year. It wasn’t just retail. Sales between businesses – nearly 2.5 times the value of retail sales – plunged 20.4% from March and 3.7% year over year. In short, it was the largest decline in sales since March 2011, when the Great East Japan Earthquake and tsunami that killed over 19,000 people, brought commerce to a near-standstill.
Those sales were in prices that had been inflated by 3%. That tax-hike money doesn’t stay with the seller but is turned over to the government. In actual merchandise sales, the scenario is 3 percentage points worse. So sales at, for example, large retailers on a comparable basis dropped 28%, not 25%.
At the end of January, the Japan Automobile Manufacturers Association (JAMA) forecast that passenger and commercial vehicle sales would dive 9.8% in fiscal 2014, to 4.85 million units, the lowest since earthquake year 2011. JAMA’s prediction was pooh-poohed as catastrophist.
Turns out, the good people at JAMA are optimists; vehicle sales got demolished in April. As measured by registrations, all categories plunged: new cars, including minis (cars with tiny 500cc engines) -56.0% from March; trucks of all sizes, including minis -54.0%; and total vehicles sales, retail and commercial, cars, trucks, and buses -55.9%, from 783,384 units in March to 345,226 units in April.
It was the worst performance since December 2012 (December being historically the weakest month of the year in Japan) when the economy was still suffering from the aftershocks of the earthquake nine months earlier.
Here is the chart of that epic collapse in total vehicle sales:
Most of the vehicles sold in Japan are made in Japan – despite decades of screaming by US automakers, which have yet to get their foot in the door. This means production schedules are going to get cut, hours will be reduced, component purchases will be whittled down…. It has already happened.
In April, production was cut by 18% to 770k units, including export units, which are doing well. And the whole chain reaction of a large complex manufacturing sector slowing down will worm its way into the statistics over the coming months. Same as in 1997.
The slowdown will add to the slowdown already underway in business and consumer spending on durable goods. And all the hype about the phenomenal January-March quarter and how Abenomics was performing miracles, and how consumers were finally starting to spend is already turning into furious spin-doctoring as economists are fanning out to explain that this time, it’ll be different, that April was just a blip, that all this frontloading won’t lead to a long recession, as it did last time.
And on May 30, the hapless Japanese consumers woke up to find out officially what they’d already figured out on their own: inflation in April had soared 3.4% for all items from a year earlier, with goods prices up a dizzying 5.2%. But their incomes have been stagnating.
The wrath of Abenomics is slamming them: inflation without compensation. Inflation mongers will be ecstatic, but this can’t possibly be good for the Japanese people, or the economy.
Have you reviewed your financial strategy lately?
If you have not contacted me yet for an independent financial consultation, what’s taking you so long?
Video: Antonopoulos on Bitcoin
Watch the 401K Scheme video below – Government to Confiscate ?
In these times, it is critical not to rely on government schemes as your main strategy to financial freedom! Trusting the wrong team can be expensive, hope is a week strategy, now is the time to create financial independence for the future. Planning with the right team will enhance the odds of reaching your goals.
A short video highlighting the importance of being financially aware, with the importance of working with an independent professional financial consultant whom can educate, inform & provide access to the advantaged opportunities normally out of reach as an individual investor.
The confiscation of depositor funds
The real story for taxpayers and depositors is the heightened threat to their pocketbooks of a deal that now authorizes both bailouts and “bail-ins”
The Unsettled Question of Deposit Insurance;
But at least, you may say, it’s only the uninsured deposits that are at risk (those over €100,000—about $137,000). Right?
According to ABC News, “Thursday’s result is a compromise that differs from the original banking union idea put forward in 2012. The original proposals had a third pillar, Europe-wide deposit insurance. But that idea has stalled.”
Two pillars are now in place” – two but not the third.
And two are not enough to protect the public.
As observed in The Economist in June 2013, without Europe-wide deposit insurance, the banking union is a failure…
“As things stand, the banks are the permanent government of the country, whichever party is in power.”
– Lord Skidelsky, House of Lords, UK Parliament, 31 March 2011)
On March 20, 2014, European Union officials reached an historic agreement to create a single agency to handle failing banks. Media attention has focused on the agreement involving the single resolution mechanism (SRM), a uniform system for closing failed banks. But the real story for taxpayers and depositors is the heightened threat to their pocketbooks of a deal that now authorizes both bailouts and “bail-ins” – the confiscation of depositor funds. The deal involves multiple concessions to different countries and may be illegal under the rules of the EU Parliament; but it is being rushed through to lock taxpayer and depositor liability into place before the dire state of Eurozone banks is exposed.
View original post 1,601 more words