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Jim Willie: Saudis are going to abandon the US dollar in payment for oil
Material posted: Publication date: 01-10-2014

Speaking simply and clearly, monetary policy by the fed is killing the system. They call it stimulus, whereas the extreme degree of accommodation is a actually just a secret financial aid to wall street in combination with the refusal of the U.S. government debt discipline. There is no more binding on the debt ceiling – it's a circus!

Every month the U.S., with large-scale fraud, the collapse of the economy, war and sanctions, and lack of leadership are beginning to resemble a third world country. The U.S. Federal reserve has embarked on a very dangerous track, raising the hyperinflation in the official policy that frees up money for the machine of interest rate swaps, derivatives serving to maintain the policy of cheap money. Therefore, in the absence of major actors willing to Finance growing trillion-dollar debt, foreign lenders mostly have vacated the premises. Therefore, to maintain in the absence of buyers on the benchmark 10-year US Treasury on an absurd level of 2.6 percent, the emphasis is on mechanism of derivatives. Accordingly, these asset markets as the US stock market every month take new heights, despite the fact that the us economy is mired in the worst recession since the great depression. The visible part is shopping malls, one third of the stores which closed and the unemployment rate exceeding 22 percent, in the real world when viewed not through rose-colored glasses. The said situation continues for long can, especially against the background of complete seizure of the credit mechanism. The big us banks are insolvent structures dedicated exclusively to the carry trade, in which the same cheap money is used for investment (often with leverage) in long-term Treasury bonds of the United States. The banks serve the casino, not the business sector.

The impasse of monetary policy

The current policy of cheap money in no way can be deployed in the opposite direction and reduced to normal condition. All the talk about tapering is a lie, and always was. Website Golden Jackass loudly called by the fed in June and July, and in September his innocence was confirmed. Since then the fed lied creatively and decisively. "Belgian bulge" has revealed himself to $400 billion abscess visible to the world, and it is unlikely that this savings account of a small country. It was either a stash of U.S. Treasury bonds, or loading point for the sources of supply of Gold bullion BRICS meant for their future of the Central Bank. Large-scale trade carry-trade cannot be stopped. This is the only source of real revenue for large U.S. banks. Another source – money laundering from drug trafficking. Such actions will change the course of the engines carry trade return, initiating an unwanted episode of convexity of a cash flow with increased leverage by selling bonds U.S. Treasury the same big corrupt banks that are so clearly implicated in the game of derivatives. The fed can not raise rates, as in this case, her own large bond portfolio will record a huge loss just to get the ugly publicity. In the end, she bought the top in bonds and continues to buy the top in bonds every month that QE continue. This fools buying the asset bubble at its peak. Look for Parallels in Japan.

Everywhere red warning lights. The brightest, according to Jackass, is the default. We are told that the number of bonds US Treasury players on the market. Their number can be moderate, but not huge, as savings is not enough. When Interest rate swaps are applied using zero percent of money in pipe mechanism, the result is an artificial demand created to buy those bonds from the U.S. Treasury. Big banks have to pursue the case, or to expose the entire fraudulent game, this financial pyramid. Dissatisfaction with banks increases. However, bonds from the U.S. Treasury to your bond market exists is insufficient to meet such large-scale artificial demand as a result of the operation of the mechanism. The result is a default warning fake rigged market. In Third world countries really bogus mechanism.

Schedules in the act suggests otherwise

The answer to the riddle of American bonds lies in the destructive corrosive effect of monetary policy, now in its fourth year. They said that the policy of zero percent will be for a few months, but they lied. Jackass said in 2009 that it will be permanent. They said that the QE bond monetization would be just for a few months, but they lied. in 2011, Jackass said that it will be permanent. The heralds of the Central Bank over the years has taught us that a little inflation is good and big is bad. In Economics classes we were taught that hyperinflation eventually destroys the whole system, as in Third world countries. Although QE (monetary hyperinflation) and zero policy rates accordingly cause destruction of fixed assets and obsolescence of the equipment, as well as the distortion of asset prices without any benefit to depositors.

Two plots clearly indicate that QE is not stimulus, and zero policy rates – a bucket of cold water. Together they are causing economic collapse as a result of a system error. Words of a Jackass for years sounded like an exaggeration and fantasy, since the collapse of Lehman cowardly assassinations carried out the criminal banks of wall street to save Goldman Sachs from drowning. Two show nearly 4-fold reduction in the velocity of money while increasing the money supply by 3.5 times. Equivalent whether it is a system error, you decide. Jackass says a resounding "Yes". It's the broken US financial system, and hence broken the US economy, a consequence eroticheski malicious monetary policies. Another great tragedy is that he cannot be removed. Closing the monetary spigot suggests the resolution of the collapse of the financial markets, improving bond yields, falling stock markets, reversal of carry trade in the opposite direction and the cessation of consumer lending. So the QE spigot continues in a slow death to distribute the acid and not to cause sudden death.

The story, which are treated regarding extremely detrimental and destructive monetary policy undoubtedly, this is a story about incentives. The only proposed incentive relates to large U.S. banks and is aimed at the continuation of projects carry-trade instead of lending to create fixed assets in the business sector. Large banks can support the game in derivatives with the help of free money to keep the platform of vaporous mass a whirling dervish. The result was a systematic attack on the capital. The American economy went into a loop with feedback, involving the destruction of capital, loss of jobs and decreased activity. There was no stopping him. The results of the much lower velocity of money are screaming evidence of failure in monetary policy. Dying activity means that capital is destroyed, does not function, does not produce the desired product. Slower turnover in the US economy is not caused by adherence of money. The participants suffer from lack of money, often struggling for survival. Put money in the mattress is a stupid idea, when barely enough to pay for housing, food and utilities. The beneficiaries of the policy of cheap money is a large us banks. They also suffer from lack of money since the derivative holes are acting as sinks, draining their capital. Indicators of capital is not very good, and the introduction of the stricter rules of Basel III is delayed. No signs of holding back money is not observed.

The logical conclusion

The logical end is a system error, the default of the American government debt, the war to protect the us dollar and US Treasury bills. The US dollar became the ticket, which in the case of rejection, brings war. Bond U.S. Treasury has become the toxic element of the banking system. In the Western wards in the USA, Britain, EU refuse to liquidate the big banks and work toward the return of the Gold standard. So Eastern offices in Russia, China and BRICS will be to secure the return of the Gold trade standard, with an expanding Union. They are in large quantities stored in gold.

A heart-wrenching explanation left the fed as the last word. They ran out of answers ran out of solutions and out of reputation. Franchise system of Central banks has failed. The bankers are cornered, and someone and killed. Others may be put under investigation. They – the main cause system errors, another reason is that large scale production overseas in the past three decades and the hypertrophied social state of the American government. A more important reason for system errors is the American military machine that exists longer than the fascist business model, made its first release in 2002. Half of the 17 trillion dollars of American debt stems from military spending. They protect not only the insolvent US dollar, but also drug trafficking. As a side note: Russian President Vladimir Putin made a two act that angered supranational leaders of the Western banking cabal. Putin kicked out of the country bankers the Rothschilds. Putin interrupted the supply routes the U.S. government heroin from Afghanistan. Like Abraham Lincoln 150 years ago, the house of the elite bankers want to remove Putin and to suppress Russia, but far-flung country has become inseparable with China. Therefore, Russia can isolate not more than you can bear hug. The country is spread over 12 time zones and is the main supplier of numerous important commodities. Relations between Russia and China are developing and will end the marriage, which will result in the child named Gold trade standard. Attempts by the U.S. government to impose sanctions would isolate the United States.

The Federal reserve released a report. He's funny. They blame society, citizens, victims themselves. They talk about the sluggish recovery like fools and charlatans. What appears below is unconvincing nonsense. Federal reserve Bank of St. Louis said:

"The issue is related to the velocity of money, which has never been constant, as can be seen from the chart below. If for some reason the velocity of money during a period of inflationary monetary policy is sharply reduced, then this may compensate for the increase in the money supply and even lead to deflation instead of inflation. In the 1st and 2nd quarters of 2014 the rate of circulation of the monetary base was at 4.4, the lowest rate at the time of registration. This means that last year every dollar in the monetary base was spent in the economy only 4.4 times lower to 17.2 before the recession. This implies that the unprecedented monetary base increase, which contributed to a large cash infusion by the fed through its large-scale programmes of buying assets, are unable to trigger an increase in nominal GDP, at least in the ratio of one to one. Thus, it is the sharp decline in velocity of circulation was compensated by a sharp increase in the money supply, which resulted in the almost complete absence of changes in nominal GDP. So why did the monetary base increase not cause a proportionate increase or the General price level or GDP? The answer lies in a significant increase in the willingness of the private sector to save money and not spend it. Such an unprecedented increase in money demand has slowed the velocity of money". Nonsense! The inflow of money killed capital!!!

The return of the gold standard

He is approaching. In his return he will be excruciatingly slow. It's the only answer, avoided the decision. While QE and zero rate policy is not canceled, will continue action in the highest degree destructive forces that destroy the capital within economic structures that distort the value of assets in the financial markets, leading to an overall irrational use of resources and under constant increased pressure drives the system to the point of failure. Destructive and disruptive monetary policy cannot be pursued indefinitely. Time is not on the side of the banking cabal. The Eastern Alliance will continue to work towards the establishment of the Gold trade standard. This requires the growth of the boycott and rejection of the US dollar in trade settlements, (than successfully maintained). The Chinese yuan has made serious forays institutions swap exchanges that avoid the use of the US dollar, with the construction of new centres of the yuan as a long-term fire giant structures of the Global monetary war.

King-dollar offset, deposed from his throne. Its squire the Petro-dollar is dying. The war in Ukraine is a defeat of the US dollar. The leaders of the fascist regime in Kiev began to retreat, the funds of $3.2 billion loan now missing. Major energy deals in the East are already in rubles and yuan, not in US dollars – another correct Jackass forecast. Rumble in the result of the refusal of the Saudis from the US dollar as the exclusive means of payment at calculations for oil will be heard around the world. Relations between the Saudis and the Chinese are developing successfully, each month accompanied by another high level conference. In the coming weeks or months, the Saudis will make the announcement as kneeling down before the Chinese and Russian curtsey. Soon the oil price will be established Russian-Chinese team in CNY. When the Gold trade standard will take root, diversification in the global banking system by US Treasury will turn into a torrent. The procedure of activities of the banking system will follow the order of trade settlements. Upon establishment, the standard will lead to prosperity in the East and havoc in the West.

The reaction of the American government and the fed will be full of intrigue and despair. The fed will be overwhelmed with his current derivative mechanism of interest rates to prevent the U.S. default on debt or some notable incident in derivatives, with another whale, beached on the shore in plain view. The American government will have to introduce a new domestic currency, a Scheiss dollar. The us economy will react differently, inflation of prices and lack of supply and rising violent-chaos. A rough idea about what will happen, gives a horrifying situation in Venezuela, the tragedy which has received little attention. It exports its vital products (beans, rice, oil) to raise the exchange rate of its currency and to prevent the domestic money collapse. The same will be done in the United States. An early example of exported Essentials is sinoway livestock feed, growing on the basis of sent to China from us farms.

Source: http://mixednews.ru/archives/65530


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