Juggling Dynamite

A defining issue of the 2016 US election must be who pledges to break up the banking cartel and hold individual actors accountable for financial crimes within corporations.

Former regulator Bill Black and Public Banking Institute founder Ellen Brown say Hillary’s track record gives no indication that she will fulfill any promise in her 2016 campaign to implement regulations on Wall Street.

Here is a direct video link.

“Every day we roll the dice to see which big bank will blow up the global economy next.” –Bill Black

Critical to setting the world on a more stable and viable financial foundation is a break up of the existing finance cartel which has enriched itself at the expense of everything else over the last 30 years.  Some key reforms that will help to reverse course are now in process.  It is important for thinking people to understand the need and initiatives for a new finance model.  Fortunately many people already do.  See the following updates:

• Switzerland has announced that it will hold a referendum on a proposal to strip the commercial banks of the ability to create money.  This would be a huge step forward.  For historical context on the proposal see:  The banking system faces an existential threat.
• In Canada, a constitutional lawsuit requiring the Bank of Canada to return to its pre-1974 mandate and practice of making interest-free infrastructure loans directly to federal, provincial and municipal governments (rather than through private banks who have been collecting $30-$40 billion a year of unnecessary interest payments from taxpayers) is advancing towards trial despite repeated efforts by the banking lobby to stop it.  See the latest update here at Bank of Canada Lawsuit.

• Canada and Switzerland are not alone in envisioning a more efficient and democratic banking system that supports rather than bankrupts the real economy and public purse.   See:  Reinventing banking from Russia to Iceland to Ecuador: 

  Global developments in finance and geopolitics are prompting a rethinking of the structure of banking and of the nature of money itself. Among other interesting news items:

  • In Russia, vulnerability to Western sanctions has led to proposals for a banking system that is not only independent of the West but is based on different design principles.

  • In Iceland, the booms and busts culminating in the banking crisis of 2008-09 have prompted lawmakers to consider a plan to remove the power to create money from private banks.

  • In Ireland, Iceland and the UK, a recession-induced shortage of local credit has prompted proposals for a system of public interest banks on the model of the Sparkassen of Germany.

  • In Ecuador, the central bank is responding to a shortage of US dollars (the official Ecuadorian currency) by issuing digital dollars through accounts to which everyone has access, effectively making it a bank of the people.

• And lastly the IEX application (commenced by Micheal Lewis’s ‘Flash Boys ‘ heroes) to be approved as a public stock exchange is continuing to battle status quo HFT firms like Citadel who are making billions off rapid fire trading that abuses investor order flow. To combat the predatory practice of gaming trades at lightening speed, IEX proposes to send trades through a coiled fiber-optic cable that pauses incoming orders by 350 millionths of a second in order to stop traders (like Citadel and others) from using speed to exploit legitimate investors.  The industry-controlled SEC has so far not approved IEX’s application while continuing to hold ‘closed door’ meeting with HFT firms.  See:  IEX’s Exchange Quest spurs a ‘Flash Boys’ fight with Citadel. (recall that in a typical display of revolving door conflicts, former Fed Chair Ben Bernanke went to work as an advisor for Citadel when he left the Fed.)

The consensus that was supremely confident and risk-oblivious when valuations were outrageous, is starting to become concerned and gradually terrified as prices re-couple down to economic reality.  This is the usual emotional swing that transpires each market cycle but particularly where record levels of debt and leverage were used, as was this time. This clip reflects the sense of horror spreading through the oil sector and its related financiers. Panic in the host’s voice is getting palpable.

Macro Risk Advisors Chief Energy Strategist Chris Kettenmann explains why oil will head to $20.  Here is a direct video link.

But here’s a broader question: while the masses are now focused on when the oil glut will clear, few are even mentioning the plunge in other key economic indicators.  If the oil story is all about its supply-specific imbalances, what’s going on with Doctors copper and aluminum then?  They seem to be confirming a broad demand downturn.