Since 2012, ECB president Mario Draghi has famously dubbed the euro “irreversible”; he would do whatever was necessary to preserve it. But whatever Draghi sees as necessary will eventually be seen as intolerable in creditor countries like Germany, The Netherlands, and Finland, which view the euro’s costs as greater than its benefits.
In an era of one financial scam after another, central bank money printing to buy sovereign debt is perhaps the ultimate scam. They’re printing money to support the value of government paper. In one word, it is criminal. 90 of the largest European banks must refinance €5.4 trillion of their own debt over the coming months, which equals 45% of GDP, while they have not even accounted for the €1,5 – €2 trillion in sovereign debt that must be simultaneously refinanced over the same period.
An ex central bankster Sir Josiah Stamp formulates the scam from his own experience:
Banking was conceived in iniquity and was born in sin. The bankers own the earth. Take it away from them, but leave them the power to create money, and with the flick of the pen they will create enough deposits to buy it back again. However, take away from them the power to create money and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of bankers and pay the cost of your own slavery, let them continue to create money.
The ECB is of the opinion that it can follow the easy way out of the crisis by printing money out of nothing, although the rules do prohibit this! Never mind the fact that emergencies allow for the breaking of rules. As a Reminder; the ECB has already bought hundreds of billions of Euros in sovereign debt from Italy, Spain, Portugal, Ireland and Greece for which the Federal Reserve opened the dollar swap lines with the ECB.
The banking predicament in Europe is no different from the banks elsewhere in the world – EU banks are equally highly leveraged, but their situation is further complicated by the fact that what was once the most liquid and secure loan ever to have been on European bank balance sheets – sovereign debt – is no longer liquid and secure. This makes EU banks extremely vulnerable to deposit withdrawals as it forces them to approach the ECB for help to maintain liquidity, as is the case in the USA. There is only so much the ECB can do – if a true ‘liquidity event’ takes place, rest assured that there will be no buyers of distressed assets in the capacity that European banks hold today.
Regarding the changing of the guard, Christine Lagarde would be the perfect person to take over from Mario Draghi to run one of the most important Rothschild-owned banks in the world. She is fundamentally an insider, a crony, a political puppet with a criminal history who can be easily manipulated by the insider cabal, well-trained and well-suited to operate a criminal bank in a criminally run world.
Even better, this position could be held by an anonymous technocrat whose job it would simply be, to make sure nothing funny happens on his watch. A central banker doesn’t have to be a hero, and shouldn’t even get his name in the paper. He should not concern himself with the level of stock prices, as it should be none of his business, nor with the economy, as there is nothing he could do about it, not even with consumer price changes unless he’s the cause of them, through the printing of money which is injected into the fiscal channel. He should be passive, invisible, and unobtrusive, like a rock and most of all loyal to his masters.
But, the ECB chief is a celebrity, a mover, a shaker and a grafter of global prominence. And, he is like Federal Reserve chief Jay Powell, who on the other side of the Atlantic is following the orders by cutting down interest rates too. The ECB is an active, aggressive central planner and manipulator, spreading the fame of Mario Draghi, far and wide, reaching even President Trump in the USA. Trump said last June in an interview:
What Draghi is doing by forcing money into the economy, we’re doing the opposite. We’re taking money out – of the economy – and we’re raising interest rates — it’s insane.
Since then, the Fed has made a U-turn, and is now “forcing money into the economy,” just like the ECB. At the present rate, it will add about €1 trillion over the next 12 months.
€3 trillion of ECB money printed
Mr. Draghi, who had previously made such a great success of the Italian economy as head of the Bank of Italy, was the Pelé of can-kickers, in postponing the day of reckoning. From the day Draghi began his eight years in office at the ECB – November 2011 till early November 2019, he printed €3 trillion of ECB money. That was more money created and added to the ECB balance sheet than the total increase of European GDP during his eight years of tenure. In other words, every euro of GDP increase was matched by a euro created by Mario Draghi. He was not only allowing strange things to happen, he was making them happen.
Fiscal and monetary loosening is not an appropriate response to a permanent supply shock, explains Roubini: By “fiscal and monetary loosening,” he refers to the Modern Monetary Theory (MMT), which is quickly gaining popularity among progressives in government.
MMT is basically the theory that a government that borrows in its own currency can never go bankrupt because, it can just print more money, or buy more bonds, as is happening now with the Central Banks’ QE 4.
Despite differences in terminology, all of these proposals are variants of the same idea: large fiscal deficits monetised by central banks to be used to stimulate aggregate demand in the event of the next slump. Roubini wrote for Project Syndicate. “To understand what this future might look like, we need only look to Japan, where the central bank is effectively financing the country’s large fiscal deficits and monetising its high debt-to-GDP ratio by maintaining a negative policy rate, conducing large-scale QE, and pursuing a ten-year government bond yield target of 0%.”
No real prosperity is produced
Draghi’s policies and their aftermath haven’t produced real prosperity. That can be seen by looking at the growth rate. In the eight years before Draghi took the helm, European GDP growth averaged a limp 1.2%. Over the Draghi years, the growth rate was exactly the same, 1.2%. In other words, the $3 trillion he added to the euro economy bought nothing. Moreover, the money didn’t stop the downward business cycle either. As the EU’s biggest economy by GDP, namely Germany’s manufacturing sector, just registered its 10th straight month of decline.
And there are more German problems emerging on the horizon for Angela Merkel. Her coalition is faltering. The SPD is becoming irrelevant regionally and is on the path to extinction nationally. The Greens have peaked post-EU elections and with Germany in recession, the centre of the political spectrum simply can’t hold. If Germany descends into political chaos, it may be thrust back in prosperity to levels of those before WW II. Such a decline has not been experienced since the end of World War II. The markets will take a huge hit, and are only just beginning to wake up to the reality that Merkel is losing control in Germany.
2% per year inflation is the norm
Finally, Mr. Draghi has made it his mission to raise consumer prices by 2% per year. Because two percent is the symbol of almost all modern economists; less than 2% is a threat to prosperity, they believe, as they can’t steal enough from the public. This parameter is another piece of utter nonsense, as Mario Draghi has unwittingly proved. Not only did he fail to reach his inflation target — the Consumer Price Index (CPI) fell from around 2% when Draghi took over to around 1% today — but GDP remained the same. In other words, falling inflation levels did not cut into growth.
And, just before leaving the ECB headquarters, Mr. Draghi took aim at the can again. He cut the ECB’s deposit rate to minus 0.5%, and kick-started another $20 billion-a-month quantitative easing program. Before handing it over to Christine Lagarde.
The result from this negative interest rate policy is, for banks it’s been much harder to make a profit on loans and mortgages. And, as they don’t make enough money they start next month charging up to 0,75% fee on large cash-deposits, which in the end is nothing else as another tax, adding-up to several thousands per deposit. Nonetheless, most concerning is the reason why these banks have turned to charging people simply to hold their money in the bank, just to passing on some of the costs to their clients!
And it doesn’t stop here: When one thinks of pensions crisis, the state of Illinois – with its woefully underfunded retirement system, issues bonds just to fund its existing pension benefits, is the first that comes to mind. Which is why it is surprising that The Netherlands may suffer substantial pension cuts, while actually has one of the world’s best-funded, and most generous, pension systems. – Or, is another agenda item behind it? The Netherlands is the try-out kitchen of the Deep State under the control of Mark Rutte. The ‘useless eaters’ have to suffer more again, income tax on their pensions is not enough, the next step is cutting payment, under the name of necessary austerity measure.
According to the FT, millions of Dutch pensioners are facing material cuts to their retirement income for the first time next year as the Dutch government scrambles to avert a crisis to the country’s €1.6 trillion pension system. And while a last minute intervention by the parliament may avoid significant cuts to pensions next year – and a revolt by trade unions – if only temporarily, the world finds itself transfixed by the problems facing the Dutch retirement system as it provides an early indication of a wider global pensions funding shortfall, not to mention potential mass unrest once retirees across some of the world’s wealthiest nations suddenly finds themselves with facing haircuts to what they previously believed were unalterable retirement incomes.
At the core of the Dutch cash crunch is the ECB’s negative interest rate policy, which has sent bond yields to record negative territory across the EU, and crippled returns deficits while pushing up the funding requirements of Dutch pension funds.
Propping up an insolvent financial system
To be more precise: Most of the printed money since 2006 was intended to prop up an insolvent financial system. Thus, the money stayed within the banks and could be used by banks and bigger investors to leverage their investments and thus their wealth. This is why especially the Western world has seen a totally unprecedented wealth-gap developing between ordinary people and the elites.
Despite the supposed stimulus of low and even negative interest rates, it is expected that these are at their maximum in the credit cycle, and simultaneously a whopping €17 trillion in bonds are negative yielding, which is an unnatural distortion of markets. Assuming that McKinsey in their annual banking survey of 2019 is correct in which it effectively writes that 60% of the world’s banks consume their capital before a credit crisis.
This has been confirmed in Germany where Deutsche Bank and Commerzbank must be rescued; by whom? And on an additional note; the IMF recently warned that $19 trillion in corporate debt is a systemic time bomb, with collateralised loan obligations and direct exposure to junk held by the US commercial banks for an amount that is approximately equal to the sum of their own equity.
With some confidence, it can be stated that a major credit crisis is developing, and that it will almost certainly be far greater than the crisis of 2007/8. This is due to the fact that the money-printing by central banks to rescue both the banking system and government finances will be on a far greater scale, which will likely destabilise the purchasing power of currencies. And, if that happens, interest rates will be forced higher, as prices for everything begin to rise uncontrollably, irrespective of central bank interest rate policies.
Globalist Lagarde will grab more political EU-power
The new head of the ECB, Christine Lagarde, will probably be the strongest person in the EU. She is a globalist and a member of the elite. As the banks and the financial system in Europe crumble, Lagarde will probably grab more power than the leaders of Germany, France and the other major European nations. After all, the ECB has the history of intervening in domestic politics of many of its member states.
Draghi was not yet President of the ECB when the EU toppled the Greek prime minister in 2010. But he was directly involved with the interference of several political issues in Eurozone countries, like pushing Italy’s Berlusconi out in 2011 and installing the EU’s own man. He was also behind the demanding of constitutional changes in Spain.
A former ECB governor described the methods as follows:
“They threaten governments that misbehave with financial destruction. They cut off refinancing and threaten to kill the banking system. They create a roll-over crisis in the bond market. This is what happened to Italy in 2011.”
This explains how the ECB, by controlling the money, has total financial and therefore political power over its member countries. Draghi used these methods on the Greek Syriza government in 2015 by turning off the ECB refinancing window, thus choking the Greek economy. This was enough to bring the Greek government to heel.
This confirms our earlier thesis that the ECB is owned by the Rothschilds, as Mayer Amschel Rothschild ‘s dictum was clearly demonstrated once again:
“Give me control of a nation’s money and I care not who makes its laws.”
The Eurozone countries are totally in the stranglehold of the ECB. Their only chance of independence is to leave the EU and the Euro. They can only do this by reneging on their debt and creating their own currency. This major step should have been taken many years ago when countries like Greece, Portugal and Italy went bankrupt. These countries cannot survive in the long run with a Euro which is too high, while at the same time, their debt can never be repaid. At some point in the coming years, this process will be the start of the inevitable dissolution of the EU.
Fiat currencies always die eventually
The collapse of stock and debt markets, as well as most currencies will exacerbate this downturn, as it develops into the worst global crash in history. As Vladimir Putin recently expressed:
“The Dollar Enjoyed Great Trust Around the World. But for Some Reason. It Is Being Used as A Political Weapon, Imposing Restrictions. Many Countries Are Now Turning Away from The Dollar as A Reserve Currency. The US Dollar Will Collapse Soon.”
There is no real bottom for the dollar, euro or the yen. Their intrinsic value is zero. The global financial system and the central banks of the world are out of ammo, and nothing can be done to fix the problems. Eventually hell breaks loose, as everything falls apart all at once, without any fix for what went wrong. This is happening largely because of financial mismanagement. The corrupt elite have been siphoning off all the wealth in our society.
Fiat currencies always die eventually, as history has proven time and time again. Today’s currencies have yet to fail, but fail they surely will. The death of a currency is painful for all those involved. It is a national bankruptcy, but even though it is difficult to predict how, nations and their peoples do tend to survive the destruction of their currencies. This too has been proven time and time again throughout history and it demonstrates the resilience of people, even in the face of utter desperation.
Finally, the most important lesson from this article is: Central Banks are bad for the economy and the people. The solution is a free market-people’s economy with the issuance of money in the hands of the people themselves.
Note: There has probably never been a more favourable climate for holding precious metals, primarily gold, but also silver. The reason for holding gold is clearly for wealth preservation or insurance purposes against a bankrupt financial system. But physical gold and silver today also represent the most unique investment opportunity ever.
Be helpful to bring this article to the attention of all fellow citizens.