Welcome to Finance and Fury, The Furious Friday Edition
Today – want to explain why to watch out for proposed solutions to economic or societal issues
Last ep – talked about the battleground between the Bankers and Governments back in the early 30s –
Was a wild political time - Communist parties, Nazi party – mass protests, rioting, damaging buildings and assaulting people Since then – nothing much has changed – except where civil unrest is occurring and the degree - Today Sub-Saharan Africa – South Africa, Zimbabwe protests – over fuel costs, power and water, food costs and shortages South America – Chilean, Ecuadorian, Bolivia, Venezuela – over costs of living, like healthcare, education, The Middle East/Northern Africa - Algeria, Egypt, Iran, Libya – Food costs and shortages In the UK and Australia and America - Climate activist demonstrations today are acting out their perceived disenfranchisement – in the 30s it was real (living through the great depression) – while one is manufactured (world ending in 12 years) - Climate activism – pushing for social unrest Hong Kong massive protests – Trying to separate from China – very similar to another event – The Hong Kong 1967 riots were large-scale riots between pro-Beijing/communists and with the HK government and HK Police Force – Britain took HK as part of 1st opium war in 1841, then 2nd took Kowloon in 1860 – then 1898 99y lease Instigated by pro-People's Republic of China (PRC) parties - massive strikes and organised demonstrations - police stormed many of the leftists' strongholds and placed their active leaders under arrest. The colonial government banned leftist publications and closed leftist schools - retaliated by planting decoy and real bombs in the city. Several pro-Beijing protesters were beaten to death by police, and leftists murdered some members of the press Now the protests are reversed to leave China rather than join it But With civil unrest came the atmosphere of change – not in a good direction – From unrest - Economic solutions are proposed that are also similar – Comes from two sides of Monetary and Fiscal - Fiscal - Increase in Government spending, lots of Large infrastructure spending with some additional services provided and Gov jobs along with the new positions – What are the remedies being proposed? Monetary – Central banking responses in lower rates, more money distributed Battle between central banks and governments - Price distributions and The government and banks' regulations Out to destroy Trump out of fear that a new FDR impulse is beginning to be revived in America which may align with the 21st Century international New Deal emerging from China’s Belt and Road Initiative and Eurasian alliance – Monetary – V Fiscal – Banks Destroyed FDR’s Post-War Vision - While FDR’s struggle did change the course of history FDR’s allies were ousted from power over his dead body, and they were recaptured by the same forces who attempted to steer the world towards a Central Banking Dictatorship in 1933 IMF, World Bank or UN used as instruments for the internationalisation of the New Deal principles to promote long term, low interest loans for the industrial development of former colonies – like HK Why does this cycle repeat itself? Well - As it can be controlled – How? the population has something happen to them – a traumatic event – like a massive loss in wealth from collapse, loss of job, protests and civil unrest, or thinking world will end In a traumatic state – you are more likely to be susceptible to ideas given to you by others – especially if that idea will help to alleviate that stress – even if it really won't help the cause – The behaviour or action becomes the only goal for these groups – doesn’t matter if everything else is destroyed in the process Creates an easy environment to seize more control - Trauma based control – doesn’t have to be to the level of MKUltra or Project Monarch – but trauma in the form of stress, anxiety or worry – makes people susceptible to suggestions Authority figures – either Create or use an event – provide the response = get the outcome you want The danger of authority figures – Milgram experiments - The Milgram experiment on obedience to authority figures Series of social psychology experiments conducted at Yale by Stanley Milgram Measured the willingness of study participants from a diverse range of occupations with varying levels of education, to obey an authority figure who instructed them to perform acts conflicting with their personal conscience - they were led to believe that they were assisting an unrelated experiment, in which they had to administer electric shocks to a "learner." These fake electric shocks gradually increased to levels that would have been fatal had they been real First set of experiments - 65% (26 of 40) of experiment participants administered the experiment's final massive 450-volt shock, and all administered shocks of at least 300 volts. Milgram summarised the experiment in his 1974 article, "The Perils of Obedience", writing: The legal and philosophic aspects of obedience are of enormous importance, but they say very little about how most people behave in concrete situations. I set up a simple experiment at Yale University to test how much pain an ordinary citizen would inflict on another person simply because he was ordered to by an experimental scientist. Stark authority was pitted against the subjects' [participants'] strongest moral imperatives against hurting others, and, with the subjects' [participants'] ears ringing with the screams of the victims, authority won more often than not. The extreme willingness of adults to go to almost any lengths on the command of an authority constitutes the chief finding of the study and the fact most urgently demanding explanation. From combining trauma to the experiment with a ‘scientist’ in the room telling the participants to shock more Ordinary people, simply doing their jobs, and without any particular hostility on their part, can become agents in a terrible destructive process Moreover, even when the destructive effects of their work become patently clear, and they are asked to carry out actions incompatible with fundamental standards of morality, relatively few people have the resources needed to resist authority – know that most people think they wouldn’t do this – but it is replicable Cycle: Event + response = outcome Event – even if real or manufactured, Response - is normally created by those with the end outcome in mind Outcome – what a small group wants Who holds authority – activist organisation formed and funded by the very institutions who will benefit from the proposed policy Major parties fight over control over the population – three main groups to watch out for National and Global Governments – UN, IPCC, G20, each nation-state Financial system – Central Banks, IMF, World Bank, BIS Think tanks/Activist groups – Multi-national Companies – Macarthur Institute, Google, FB, etc. all the same people But all of these same authorities are pushing for the same thing – control of resources – Race of company, financial or government control of resources With What? Beyond climate – new ground is Crypto issued by countries – at the expense of existing market The future of currency and economy will very likely be digital – crypto and blockchain – banks want to get in front of this There have been about 4 major currency resets/adjustments in the past 100 years – WW1 broke the gold standard – 1930s saw another shift in nationalised gold-backed currencies, 1944 saw the Brenton woods system pegging to USD – backed by gold, Aus stopped using Pounds in 1966 and AUD was created - then 1971 when Nixon declared the end to Brenton Woods we went to Fiat – Technically have been in the longest period of no monetary reset in the west in over 100 years Bank of International Settlements (BIS) – still plays a large role in today world – Shift towards digital finance – complete control – either by companies of by central banks – it is a race After issuing comments and reports heavily critical of cryptocurrencies over the last few years, Agustin Carstens, chief of the Bank for International Settlements (BIS), has acknowledged that central banks will likely soon need to issue their own digital currencies. BIS – which acts like a central bank for central banks – is supporting global central banks’ efforts to research and develop digital currencies based on national fiat currencies. Carstens: “It might be that it is sooner than we think that there is a market and we need to be able to provide central bank digital currencies.” Private companies – Like Facebook planned Libra cryptocurrency - shook regulators worldwide, as the prospect of a tech firm with users in the billions launching is own money potentially poses a threat to state currencies France’s finance minister has said that Libra must not be allowed to become a sovereign currency Maxine Waters (US) asked Facebook to halt development so hearings can be held – block through administration BIS itself name-checked Facebook - expressing fears that initiatives like this pose a long-term threat to central banks' control of money. Carstens: “Regulators need to ensure a level playing field between big techs and banks, taking into account big techs’ wide customer base, access to information and broad-ranging business models.”- “The issue is how will the currency be used? Will there be discovery of information, or data that can be used in credit provision and how will data privacy be protected?” he said, adding that a “simple way” to regulate such cryptocurrency networks is to start addressing “immediate and very obvious” money laundering concerns – which is all the justification needed to shut down competing currencies US done already something similar - Liberty Reserve was a Costa Rica-based centralised digital currency service - payment processor, serving millions all around a world - it was shut down by the United States government. Prosecutors argued that due to lax security, the criminal activity could go undetected, which ultimately led to them seizing the service - In May 2013, Liberty Reserve was shut down by United States federal prosecutors under the Patriot Act after an investigation by authorities across 17 countries Founders charged with money laundering and operating an unlicensed financial transaction company Patriot Act itself is an example of using an event by Gov to push through legislation that is unconstitutional – removed due process – but passed congress next month after 9/11 attacks – passed 98-1 Hence – BIS has argued there was a strong case for authorities to reign in cryptocurrencies like Bitcoin Central banks – Bank of England and Sweden’s are looking into digital currencies of their own - BIS’s new hub is designed to improve and develop the future of the financial system “There needs to be demand for central bank currencies and it is not clear that the demand is there yet,” Carstens told the FT. “Perhaps people can do what they want by using electronic wallets provided by banks or fintech companies. It depends on the development of private stable coins.” The BIS’s hub will be set up in Switzerland, Hong Kong and Singapore, in collaboration with their respective monetary policy officials, according to a statement.What it will take to get there - Possible step from here – QE is unwound and markets collapse – require monetary reset as without inflation the debt can’t be paid back – so need to have a new issued reserve currency – almost what Germany did post 30s – Reset financially – but to do so you have to kill the competition
We will go through why I think BTC is a trap on Monday – Then go through the battle with the BIS, company-issued crypto, like Libra and existing crypto markets next Friday.
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