Kicking the can down the road

20 03 2013

Today is the Equinox.  Our house begins its seasonal Autumn mode with the first tiny shafts of sunlight due to start penetrating into the house and slowly warm it up in preparation for the Autumn cooling.  Except it’s cloudy and there’s no sun, and I will have to wait a little more to get my kicks about how well I designed this place…….  sigh……  at least the rewiring of the  US64 solar panels is doing wonders for the life of my batteries, they are remaining fully charged now no matter how cloudy it gets.

I’m spending those hours I’m not feeling exhausted trying to finish all those little jobs around the place, like fitting architraves and pelmets in those last couple of rooms that don’t have them, and painting them, in preparation for selling Mon Abri…..  it’s wearing me down, and sometimes I wish I could just re energise by connecting my fingers to the solar panels on the roof……. or something.

The credibility of banking took a real hit this week.  The confiscation of depositors’ money in Cyprus has been [at least temporarily] averted when the Cypriot government voted unanimously (well, there were a lot of abstentions) to reject the ridiculous idea.  But the banks are staying closed, at least until Friday, unless that too changes.  EDIT:  Ooops.. it has!  Now the banks will be closed until Tuesday…. what next?

I’d still be surprised if there wasn’t a run on the banks in Cyprus on Friday.  And then it will be interesting to see what happens in Spain, Greece, and Italy next week…..

As if that wasn’t bad enough, customers of JPMorgan Chase (in the US) reported two days ago seeing zero balances in their accounts both online and on mobile, and speculated that the bank’s systems had been hacked into.  The bank, however, clarified later that it was having a “technology problem” regarding customers’ balance information that it was working to resolve.  I bet there were some very nervous customers out there……

But wait……  it gets worse…

The New Zealand Reserve Bank has released a consultation paper on “the pre-positioning”
requirements that banks will be expected to comply with to fully implement the “Open Bank Resolution” (OBR) policy, as mentioned by the Minister of Finance in his statement on 11 March 2011…..  OBR is a long-standing policy option aimed at “resolving a bank failure quickly”, in such a way that the bank can be kept open for business, thus minimising stresses on the overall banking and payments system.

NZ Reserve Bank Deputy Governor Grant Spencer said: “The OBR policy provides for continuity of core banking services to retail customers and businesses, while placing the cost of a bank failure primarily on the bank’s shareholders and creditors rather than the taxpayer.”

Kiwis had better hope nothing goes wrong with their banking sector…  more nervous customers, no doubt.  I’m just glad I don’t have to worry about having money in the bank.  There are upsides to being poor after all…!

The news on the whole Peak debt crisis, inevitably got worse this week too.

Max Keiser, the host of RT’s ‘Keiser Report’, has just reported that “The debt bomb just got bigger”.  No, really…….

The amount of debt worldwide is more than all of the bank accounts in the world, and the current financial situation in Cyprus is the inevitable next phase: Confiscation.

All pretence is now gone that central or global bankers can ‘securitize’ growth by packaging and repackaging debt; by hypothicating and rehypothicating debt; by regulating and re-regulating debt. Since the bond market rally began in the early 1980s (yes, it’s that old) each crisis has been met by central and global bankers – the IMF, EU and ECB, to name a few – and their Wall St. and City of London brethren with an increase in debt, and an extension of the debt’s maturity. 

The result has been – as of 2007 – the biggest mountain of on-balance sheet and off-balance sheet debt in history: A staggering $220 trillion in debt in America’s $14-trillion economy alone (when you include all public, private and contingent liabilities of unfunded entitlement programs). Deals in the global debt derivatives market now stand in excess of $1 quadrillion, riding above a global GDP of approximately $60 trillion.

But starting in 2007, and then becoming spectacularly apparent in 2008 with the Lehman collapse, the ability of the world’s taxpayers to pay either the interest or principal on this debt has hit a brick wall. And for several years now, governments around the world have tried the same old tricks of ‘extend and pretend.’ Repackage and extend the maturity, and pray that tax receipts start picking up enough to pay some of the debt off. It didn’t work. The debt bomb just got bigger. Now in Cyprus we see the inevitable next phase: Confiscation.

To pay off the debts that were incurred to finance the biggest wealth grab in history, we see in Cyprus, as well as central and global banking institutions around the world, a trend to just reach in and grab people’s money from their ‘insured’ bank accounts. We should have figured out this was coming when JP Morgan (read: Jamie Dimon) reached in and illegally stepped ahead of customers at MF Global and grabbed over $1 billion, with the help of his crony pal Jon Corzine.

Have we learned our lesson yet? They have more debts to pay than there is money in all the bank accounts in the world. This means that chances are, you – whoever you are, and whatever country you live in – will have a sizable percent of your savings stolen by banksters.

It now worries me that when/if we sell our place, I will have little choice other than put the money in a bank until I get a chance to spend it…….  Boy, do we live in interesting times.

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3 responses

20 03 2013
Don

Hi Mike,

As one would expect the equinox has arrived at our place to, with the crystal hung in our north window sending chips of rainbows over the ceiling. Time to plant the winter feed for the stock. At least we have a glorious autumn day to do this and ample soil moisture.

As you can see I am not contemplating the stupidities of the financial system. It will collapse without my wasting thinking time on it. I sympathise with your problem of transferring assets (farm) from Queensland to assets (farm) in Tassie. However if you are lucky you may be purchasing in a falling market and that without much delay. One can hope.

21 03 2013
mikestasse

Hi Don……. I don’t really dwell on this, I find the whole circus rather bemusing. And it is a good thing the weather is cooling down now, I might even spend sometime in the garden….. seedlings to plant, and more garlic.

18 04 2013
Sherry

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