Central Banks Now Operating as One Global Monopoly?

Source: The Daily Bell

Central banks‘ joint efforts sustain global system … Never before have the world’s central banks sent so much money sloshing through the global financial system. From slashing interest rates and buying government debt to dangling cheap loans to banks and taking on their risky assets, central banks have taken extraordinary steps since the 2008 financial crisis to nurse the international banking system back to health. Over the past 3 1/2 years, the central banks of the United States, Britain, Japan and the 17 countries that use the euro have pumped out so much money that their balance sheets have reached a combined $8.76 trillion. That’s a record, by far. The infusion of money has eased borrowing costs and raised confidence in banks, governments and companies. – Boston.com

Dominant Social Theme: More is better. But each bank “does its own thing.”

Free-Market Analysis: It is a much denied fact that what may be called a New World Order is continually being developed at the highest reaches of power. But what is less well known is the amount of coordination already developed between the facilities that provide the engine for global governance.

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The Federal Reserve Is Secretly Bailing Out Europe

Source: Washington's Blog

Federal Reserve chair Ben Bernanke told Congress that the Fed would not bail out Europe.

But he might have been less than forthcoming.

Former Vice President of the Federal Reserve bank of Dallas, Gerald ODriscoll, says that the Fed is secretly bailing out Europe:

O’Driscoll wrote in a Wall Street Journal editorial:

America’s central bank, the Federal Reserve, is engaged in a bailout of European banks. Surprisingly, its operation is largely unnoticed here.

The Fed is using what is termed a “temporary U.S. dollar liquidity swap arrangement” with the European Central Bank (ECB). There are similar arrangements with the central banks of Canada, England, Switzerland and Japan.

Simply put, the Fed trades or “swaps” dollars for euros. The Fed is compensated by payment of an interest rate (currently 50 basis points, or one-half of 1%) above the overnight index swap rate. The ECB, which guarantees to return the dollars at an exchange rate fixed at the time the original swap is made, then lends the dollars to European banks of its choosing. 

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The two central banks are engaging in this roundabout procedure because each needs a fig leaf. The Fed was embarrassed by the revelations of its prior largess with foreign banks. It does not want the debt of foreign banks on its books. A currency swap with the ECB is not technically a loan.

Germany and France Push for Fiscal Union

Source: AFP

German Chancellor Angela Merkel kicked off a crunch week of talks on saving the euro by laying out a vision Friday for a “fiscal union” in Europe, ahead of a pivotal summit of EU leaders.

A day after French President Nicolas Sarkozy said that Europe needed to be “refounded” in response to a crisis that has threatened the very existence of the EU, Merkel insisted that progress had been made.

Speaking in a hotly awaited speech in the German parliament, Merkel said Europe was “on the verge” of creating what she called a “stability union” for the 17-nation eurozone, with greater budgetary discipline and control.

“Anyone who had said a few months ago that we, at the end of 2011, would be taking very serious and concrete steps toward a European stability union, a European fiscal union, toward introducing (budgetary) intervention in Europe would have been considered crazy,” she said.

She said she would be holding talks with “almost everyone” in the run-up to a summit in Brussels next Friday that many commentators have dubbed the last chance to save the single currency, introduced with such euphoria a decade ago.

And she confirmed she would be heading to Paris for talks with Sarkozy on Monday to thrash out a joint Franco-German position on changing the EU founding texts ahead of the summit.

Highlighting the challenges that face Europe’s leaders, around 17,000 people demonstrated in Athens on Thursday in a bid to force the new government to abandon austerity measures.

The sixth general strike this year in Greece shut down public services and crippled train and ferry services.

The European Central Bank Fiddles While Rome Burns

Source: Global Research
Ellen Brown

“To some people, the European Central Bank seems like a fire department that is letting the house burn down to teach the children not to play with matches.”               

So wrote Jack Ewing in the New York Times last week.  He went on:

“The E.C.B. has a fire hose — its ability to print money. But the bank is refusing to train it on the euro zone’s debt crisis.

“The flames climbed higher Friday after the Italian Treasury had to pay an interest rate of 6.5 percent on a new issue of six-month bills . . . the highest interest rate Italy has had to pay to sell such debt since August 1997 . . . .

“But there is no sign the E.C.B. plans a major response, like buying large quantities of the country’s bonds to bring down its borrowing costs.”  

Why not?  According to the November 28^th Wall Street Journal, “The ECB has long worried that buying government bonds in big enough amounts to bring down countries' borrowing costs would make it easier for national politicians to delay the budget austerity and economic overhauls that are needed.” 

As with the manufactured debt ceiling crisis in the United States, the E.C.B. is withholding relief in order to extort austerity measures from member governments—and the threat seems to be working.  The same authors write:     

“Euro-zone leaders are negotiating a potentially groundbreaking fiscal pact . . . [that] would make budget discipline legally binding and enforceable by European authorities. . . . European officials hope a new agreement, which would aim to shrink the excessive public debt that helped spark the crisis, would persuade the European Central Bank to undertake more drastic action to reverse the recent selloff in euro-zone debt markets.”

The Eurozone appears to be in the process of being “structurally readjusted” – the same process imposed earlier by the IMF on Third World countries.  Structural demands routinely include harsh austerity measures, government cutbacks, privatization, and the disempowerment of national central banks, so that there is no national entity capable of creating and controlling the money supply on behalf of the people.  The latter result has officially been achieved in the Eurozone, which is now dependent on the E.C.B. as the sole lender of last resort and printer of new euros.

Federal Reserve Bleeds The Dollar To Keep Europe on Life Support For Another Week

Source: Business Insider
Joe Weisenthal

MARKETS SURGE AS FED/ECB/BOJ/BOE/SNB/BOC ANNOUNCE COORDINATED INTERVENTION

All the world's central banks have just announced a big coordinated intervention to lower swap rates.

What does that mean?

Basically this: European banks have been parched for liquidity, and need access to dollars. The ECB can't supply them dollars unless it borrows them from the Fed.

Essentially today's action makes it easier for the ECB and thus European banks to borrow dollars.

It's not a solution to the euro crisis by any means; it just means that the most acute liquidity problems will be mitigated for now.

The market is loving the news.

US futures had been down by 0.5% at one point this morning, and now the Dow is up 400 points.

Note that there are some other bullish things going on today. China lowered its Reserve Requirement Ratio also this morning, and we got a strong ADP jobs report.

So, lots of bullish action going on.

Here's the full announcement from the ECB.

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Bankers have seized Europe: Goldman Sachs Has Taken Over

Source: Global Research
Paul Craig Roberts

On November 25, two days after a failed German government bond auction in which Germany was unable to sell 35% of its offerings of 10-year bonds, the German finance minister, Wolfgang Schaeuble said that Germany might retreat from its demands that the private banks that hold the troubled sovereign debt from Greece, Italy, and Spain must accept part of the cost of their bailout by writing off some of the debt. The private banks want to avoid any losses either by forcing the Greek, Italian, and Spanish governments to make good on the bonds by imposing extreme austerity on their citizens, or by having the European Central Bank print euros with which to buy the sovereign debt from the private banks. Printing money to make good on debt is contrary to the ECB’s charter and especially frightens Germans, because of the Weimar experience with hyperinflation. 

 

Obviously, the German government got the message from the orchestrated failed bond auction. As I wrote at the time, there is no reason for Germany, with its relatively low debt to GDP ratio compared to the troubled countries, not to be able to sell its bonds.

If Germany’s creditworthiness is in doubt, how can Germany be expected to bail out other countries?  Evidence that Germany’s failed bond auction was orchestrated is provided by troubled Italy’s successful bond auction two days later.

Strange, isn’t it. Italy, the largest EU country that requires a bailout of its debt, can still sell its bonds, but Germany, which requires no bailout and which is expected to bear a disproportionate cost of Italy’s, Greece’s and Spain’s bailout, could not sell its bonds.

In my opinion, the failed German bond auction was orchestrated by the US Treasury, by the European Central Bank and EU authorities, and by the private banks that own the troubled sovereign debt. 

My opinion is based on the following facts. Goldman Sachs and US banks have guaranteed perhaps one trillion dollars or more of European sovereign debt by selling swaps or insurance against which they have not reserved. The fees the US banks received for guaranteeing the values of European sovereign debt instruments simply went into profits and executive bonuses. This, of course, is what ruined the American insurance giant, AIG, leading to the TARP bailout at US taxpayer expense and Goldman Sachs’ enormous profits.

ECB Riots Begin in Italy as Globalist "Super Mario" Forces Austerity

Source: Infowars
Kurt Nimmo

On his first day in office, the bankster prime minister of Italy, Mario Monti, told Italians they can expect to be rolled by the ECB banksters.


“Super Mario” promises to impoverish average Italians.

As we noted last week, Monti is a super globalist. He is a Trilateralist, Bilderberger, and former bankster (Intesa Sanpaolo). His job is to bring IMF-style austerity to the people of Italy now that Silvio Berlusconi has made way. 

Super Mario managed to rally the Italian parliament and get a vote of confidence as he unveiled his “reform” program. He warned ordinary Italians they can expect more pain through “deficit-reduction measures” and other “correctives.” 

In other words, parliament under the rule of a seasoned globalist and bankster will force the Italian people to pay off a debt they did not want and do not owe. 

Specifically: Italy will introduce a raft of new taxes and introduce “incentives” for free traders looking to buy up Italy’s public infrastructure for pennies on the dollar. It will also cut Italy’s socialist public sector where shovel-leaning jobs are the norm. 

But forget the chortling approval for austerity you hear coming out of the corporate media. In fact, as blogger J. Brad Hicks notes, the whole thing is a scam, as usual:

Deutsche Bank and other German banks loaned huge sums of money to Greece and Italy, knowing for a fact that at least half of the loaned money was being stolen by wealthy personal friends and business partners of government officials, and not caring, because they knew that the ECB would enforce “austerity,” would demand that people who didn’t benefit from those loans, not the wealthy people who did, pay them back by the enforced looting of those countries of every asset. There will be riots; there may well even be civil war, but Deutsche Bank will be repaid and those countries’ infrastructure and archaeological treasures and other resources will end up in the hands of the banksters and their friends for pennies on the dollar, extracted at gunpoint by the Greek and Italian armies with whatever “stabilization” help they need from NATO – as a matter of sacred principle.

Meanwhile, in Europe, the IMF Riot has morphed into the ECB Riot.



“Milan police in riot gear wielded clubs as they scuffled with egg-throwing students who tried unsuccessfully to march to Bocconi University, which educates Italy’s business elite. Monti is Bocconi’s president,” reports Businessweek.

In the Sicilian capital of Palermo, demonstrators hurled eggs and smoke bombs at a bank, and protesters threw rocks at police who battled back with pepper spray, the Italian news agency ANSA reported. One protester was injured. Police charged demonstrators who were trying to occupy another bank. Jobless youths joined students in the protests.

In Rome, hundreds of students protested outside Sapienza University, while others assembled near the main train station. No clashes were reported, but some protesters hurled eggs and oranges just blocks from the Senate.

Towards Economic Collapse: Europe’s Debt Crisis has Spiraled out of Control

Source: The International Forecaster
Bob Chapman

As Chancellor Merkel and PM Sarkozy search for a solution that doesn’t exist they continue to lose credibility. Nothing of substance has been agreed upon that is legal and can be implemented. At the IMF Christina LeGarde is frantically waving her arms like a cheerleader telling anyone that will listen that if the six sovereigns in financial trouble are not aided the euro will fail and peace in Europe will disappear. The elitists are frantic because they cannot find a solution. LeGarde says without help there will be ten years of depression. She obviously hasn’t done her homework. Try 30 or more years. Sarkozy, Merkel and Jans Weidmann council member of the ECB has said the ECB cannot bail out governments by printing money. He is also head of the Bundesbank and said a key lesson of what is being proposed is the hyperinflation in Weimer Republic, which followed WWI. Over in Italy PM Berlusconi, who looks and acts like Benito Mussolini has been unseated and as a result the Italian bond market is on the edge of collapse. There is big pressure downward in stock and bond markets as a result and the US Treasury again attacks gold and silver hoping they can keep gold from breaking about $1,800. The PPT’s ability to achieve this is more than questionable.

At Cannes PM Sarkozy and President Obama discuss what a liar Israel’s PM Netanyahu is. Their candor was accidentally picked up by a supposedly muted speaker. What is now realized is that euro zone government bonds contain unexpected credit risks. All the European politicians and bureaucrats want to save the euro, but their promises and solutions are not worth the paper they are written on. They are so believable that China won’t lend them money. These characters have been kicking the can down the road since last spring with little or no long-term solutions, and no solutions to affect a recovery and create jobs. Austerity has replaced growth and that is expediting a failing economy, even in Germany. If economies don’t grow tax receipts fall and the ability to service debt is impaired. Big euro zone banks are broke just as their counterparts in NYC are. As this proceeds we ask how long can the ECB buy Italian and Spanish bonds?

In Greece a coalition has been made and Mr. Samaras has shown his true colors by backing Trilateral-Bilderberg Lucas Papademos, as interim PM. We hope Greek citizens realize that Papademos will sell them out. It is only a matter of when. The debt deal will probably be ratified, but at what price? Will it bring revolution or a coup? Who knows, but under the circumstances anything goes. 60% to 65% of Greeks oppose the bailout, but 71% want to stay in the euro, which is impossible.

Germany and France Begin Talks to Break Up Eurozone

Source: The Guardian
Larry Elliott, Heather Stewart and John Hooper

Fears that Europe's sovereign debt crisis was spiralling out of control have intensified as political chaos in Athens and Rome, and looming recession, created panic on world markets.

Reports emerging from Brussels said that Germany and France had begun preliminary talks on a break-up of the eurozone, amid fears that Italy would be too big to rescue.

Despite Silvio Berlusconi's announcement that he would step down as prime minister once austerity measures were pushed through parliament, a collapse of investor confidence in the eurozone's third-biggest economy sent interest rates in Italy to the levels that triggered bailouts in Portugal, Greece and Ireland.

Sovereign Debt is Everybody’s Problem

Source: USAWatchdog
Greg Hunter

The most pressing problem on the planet right now is the European sovereign debt crisis.  It is a gigantic highly leveraged mess caused by greedy reckless bankers.  It was nurtured with the help of regulators who turned a blind eye and allowed the problem to mushroom into an uncontrollable financial cancer.  The European Union is struggling to come up with a plan or bailout fund big enough to truly end the crisis, but there is none in sight.  Every time there is a plan, it is shot down or falls apart.  There was talk of Germany backing the EU bailout fund with its gold reserves, but that was rejected by the Germans.  (Germany is the world’s number two holder of gold with 3,412 tonnes.)  Can you blame them?  It is ironic this so-called bailout fund is looking for tangible backing and that world leaders would turn to the yellow metal.  Didn’t they all have a pact to sell gold not so many years back?  This tells me any country with toxic sovereign debt that wants a bailout better be considering putting up its gold reserves.

The first troubled country that comes to mind is Italy.  It has the fourth largest gold reserve in the world with 2,451 tonnes.  Spain is in just as much debt and trouble as Italy, but only has 281 tonnes of gold.  It ranks around 17th on the list.  These two countries have ten times the sour debt of Greece.  I predict Germany will not be the last country to be asked to put up its gold.  I suspect there is not a country on earth that will elect to give up control of its yellow reserves.  What else is there?  I don’t think Italy would put up the island of Sicily for collateral, no more than the U.S. would post the Hawaiian Islands as security for a loan.

They call this a sovereign debt crisis, but it is the banks that are really at the heart of the problem.  This leaves the EU with very limited options.  They can allow the banks holding this sovereign debt to default, or print money to bail them out.  Laws have been passed in Europe that allow the banks to count toxic sovereign debt as an asset.  It is a novel idea–overwhelming debt that doesn’t have a prayer of being fully repaid counted as a store of value.  (Oh wait, what was I thinking, this is the same thing the American government allows U.S. banks to do!)  That means you can also say the sovereign debt crisis is bank solvency crisis.  If you mark all sour debt for what banks can get for it today, many European financial institutions would be insolvent.  End of story.