In my last article ‘Remember Nuremberg’ we examined the propensity of Humanity to look outside and ‘up’ the hierarchy for answers; and the devastation brought about by the abuse of this propensity by psychopathic power seekers.
We saw how, by looking to the ‘elites’ (better called leeches) for answers, we are misled again and again. We saw how the propensity to look to ‘authority’ leads to betrayal and disaster. The upshot is that we look outside for direction; “tell me what to do, Boss, and I will do it. Tell me what to think, Guru, and I will think it. Tell me who to shoot, Sergeant, and I will shoot him. Tell me what money is, Bankster, and I will sweat and grovel for it.”
Those who have follow Gold Standard writing will understand that Fiat currency, that is the banksters’ counterfeit money, is fundamental to the depredation of human society. The enormous, unpayable debts, the destruction of productive enterprise, the insane unbalances of payment, the constant wars and terrorism and bloodshed are all funded by Fiat.
None of this is possible under a Gold Standard. But this is just the economics of Fiat; the harm it causes goes much deeper than just economics, no matter how important economics is. Honest money underlies honest political and societal systems.
My father, may he rest in peace, was a practical man. He hated priests and religion, in the belief that most priests were simply parasites; and that religions were designed to control people, mainly for the benefit of the parasites. He had and often used what he called ‘shoemaker logic’; that is, (un) common sense. He did not respect ‘book learning’... and again, I see that he was right. Most ‘book learning’ today is simply indoctrination.
One of his astute observations was ‘the fish starts to spoil from the head’... now just wrap your mind around this. What he was saying was ‘society starts to spoil from the top’... and by golly, this is ever so true. When the leadership is corrupt, mendacious, selfish, criminal... then that is the direction of society as a whole.
Most governments in the Western world are out of touch with reality, and out of touch with the needs and desires of the great majority. Rules and laws are written for the benefit of the 0.01%... and damn the rest. Surveys show that Western leaders and parliaments are at historic lows as far as popular support. Most Western leaders, presidents and prime ministers have historically low approval ratings, many in single digits.
Coups and putsches, rebellion, terrorism and civil war are on the rise. Trust is rapidly fading. Once trust in leadership dissipates, the ramifications start; do we trust the mainstream media to tell us the truth? Haw. The same leeches that own governments own the media... no trust there. Do we trust the corporate world? Haw. The big ‘money’ that owns government and media come from big corporations... how could we possible trust them?
Do we trust what we see and hear on the Internet? Haw. The thousands of trolls spreading lies and half-truths are paid by the same ‘big money’... so even here, we have no choice but to look inside ourselves for the truth. But surely, the leeches must trust each other... after all, they are after the same thing; our wealth... and yet even this ‘trust between thieves’ is fading.
The talking heads of mainstream media are constantly blathering about the Fed’s latest moves... specifically raising/lowering/ holding interest rates. Zirp and Nirp are fodder for all the pundits, with even the ‘alternative’ media constantly examining, commenting, predicting... and all this is but ‘sand in the eyes’. The really significant interest rate is hardly ever even mentioned.
Have you even heard the mainstream talk about LIBOR? Yet Libor is a key indicator of what is actually happening in the financial system. Libor stands for London Interbank Borrowing Rate; the interest rate charged by one bank to another, for short term loans, one or three month, mostly.
Other things being equal, this rate is set by the overall Fed rates, and Libor is really just a mechanism to net out short term noise in cash flows, as one bank may have a bit of cash surplus, while another a deficit. The noise or ripples tend to even out in the longer term...
Well, Libor has been soaring. In the last few months, it has risen by over 40%; and this in the face of no raises in interest rates by the Fed in a year, by more and more negative rates from ECB and BOJ and BOE et all. So, why this soaring Libor? The last time Libor soared with no apparent cause was... hold your breath... the 2008 GFC.
Clearly, the thing changing is trust... between banks. As the trust of one bank for another declines, the premium charged for borrowing goes up. This is called risk premium. And surely, with the stress being felt by Banca Monte dei Paschi, Italy’s oldest bank, by Deutche Bank, by Wells Fargo... the list is endless... this is only to be expected. Banks making loans to each other are pricing in perceived risk.
Now keep in mind that G’men all over the world have been and are bending over backwards to prop up the banking system; zero percent loans, TARP funds, bail outs, bail ins... and yet the banks, who know best what is going on, are still seeing increased risk, regardless.
The problem is that the derivatives exposure of banks is in the quadrillion dollar range; a quadrillion is a thousand Trillion! There is by far not enough ‘money’ in the world to cover this risk. No amount of bail in, bail out, wealth tax, or money creation (except for totally over the top hyper inflationary Zimbabwe style printing) can cover the ‘notional risk’.
Libor is in reality the ‘canary in the Gold mine’. The poor canary has tumbled from its perch, and is choking and flopping around in the poop at the bottom of the cage. It will soon die. Just as, with ever increasing risk, no amount of interest surcharge will do; once risk is over a tipping point, no promise of interest can cover the risk; only cash will be accepted. The world financial system is devolving to COD; that is a credit freeze and consequent financial collapse.
Once again we cut to the chase; to protect ourselves from the inevitable collapse, we must do several things; hold some cash out of the banking system. Hold assets off shore, out of reach of our grasping greedy desperate G’man... and mostly, own real money; Gold and Silver.
Rudy J. Fritsch
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