Nomi Prins: Why the Financial and Political Systems Failed

Nomi Prins calls out the policy error deluxe that has been the topic of so much commentary at Le Café over the past few years.

What is perhaps most striking is that this failure is so bipartisan in a time of contentiousness.   It crosses not only parties but professions, from academics to politicians.

As you know I have featured several articles and videos of hers as she introduces her latest book, All the President's Bankers which is insightful, well-founded and researched, and essential to any understand of what is happening today.

 

As you know I have ascribed this to the credibility trap.   Insiders never speak ill of insiders, if they which to remain a part of the power elite. This is reinforced in the Ivy League and the halls of power.   And so leaders and potential leaders are hopelessly compromised and entangled in a self-serving system of abuse of power and corruption.

It is part of a general failure of moral conscience and leadership in the country.   It has been or is being repeated in England and other countries in Europe.  It is the reason for the long stagnation of the Japanese economy.

 

This is a very brief excerpt.  You may read this insightful commentary in its entirety here.

 

"The recent spike in global political-financial volatility that was temporarily soothed by ECB covered bond buying reveals another crack in the six-year-old throw-money-at-the-banks strategies of politicians and central bankers.

The premise of using banks as credit portals to transport public funds from the government to citizens is as inefficient as it is not happening. The power elite may exude belabored moans about slow growth and rising inequality in speeches and press releases, but they continue to find ways to provide liquidity, sustenance and comfort to financial institutions, not to populations.

The very fact - that without excessive artificial stimulation or the promise of it - more hell breaks loose - is one that government heads neither admit, nor appear to discuss. But the truth is that the global financial system has already failed. Big banks have been propped up, and their capital bases rejuvenated, by various means of external intervention, not their own business models..."

Nomi Prins, Why the Financial and Political Systems Failed, and Why Stability Matters

Related: All The President's Bankers

Gold Daily and Silver Weekly Charts - Quiet Option Expiration, Markets In Lockdown

One of the savvier traders and commentators I know told me this morning that 'the markets are in lockdown,' and I think he had it exactly right.

The Fed is very sensitive to provoking a market sell off in anything except precious metals perhaps when they formally announce the end to QE III tomorrow.

I would expect an extra effort to placate stocks and bonds. Moderate growth, low inflation, all is well, but we'll act quickly in case anything upsets our clientele on Wall Street. As for Main Street, we'll send a 'get well card.'

If there are any fireworks coming in the metals it would be an FOMC related 'gut check' over the next couple of days.

You would have to be almost blind, deaf, and dumb, or maybe just a willfully whole lot of the last of these, to not yet realize that something very big is going on in the world of global economics.

Have you noticed that the US and a few of its client states seem to be at odds with just about everyone else in the world? That is the currency war. It is the struggle to maintain and increase political dominance through the use of the dollar and financial institutions, essentially to control the world's money supply and extend the Pax Anglo-Americana forever.

It is good to remember that just are there are military neo-cons pursuing the New American Century, so there are financial counterparts, who while a minority have enormous financial power and thereby political influence.

Change is coming. It will take longer than we expect, but when it starts to show, it will come much faster than expected.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - FOMC Tomorrow and the End of QE III

The Street hit the stock market with tranquilizers and vitamins ahead of the end of QE III which will most likely come tomorrow with the Fed's afternoon FOMC announcement.

I expect the market to be supported, and perhaps find support as well.

This is a technically traded, highly dangerous market beneath the surface calm.

Have a pleasant evening.

Gold Daily and Silver Weekly Charts - Spooky Janet and the Zombies of the American MIddle Class

Unlike the fiends of folklore fright;

No coffin holds them safe for night.

Our Vampires live amongst our ranks;

And haunt us from their central banks.

A. S.

As a reminder tomorrow is a precious metal options expiration on the Comex.

Wednesday is an FOMC announcement.

Let's see if the hinted extension of QE transpires.   As if.

The Tories are trying to offset the subsidies for their wealthy by declaring their disabled 'fit to work' and slashing their benefits.  And here I thought they could sink no lower.  Oh, well done. 

This afternoon Dennis Gartman forecast that crude oil would literally drop to 'ten dollars' and would, over the next twenty or so years, go the way of whale oil as it is completely replaced by fusion energy (supplied by Lockheed for example).  He also urged the US government to start selling oil from the Strategic Petroleum Reserve.   Looks like it might be time for Russia to throw in the towel, right?

I wonder what Dennis' book might look like?  Or whose it might be? 

A technology is only as good and effective as its implementation and 'roll out' into general availability.   And effectively eliminating the need for oil in about twenty years would be an ambitious infrastructure project for even the best organized of societies.

 

This from a country that cannot even repair its bridges now, or provide high quality rail transportation, or find the will to modernize its power grid, or a real estate title system that is not based on massive neglect and fraud, or a truly high speed internet system, or a capital allocation equity market with a level of integrity than would not be deemed criminal in a Las Vegas casino, or manage a single high level prosecution in one of the greatest financial frauds in history, or hold an election where people are not purposefully denied the right to vote by artificially complicated last minute ID rules and ridiculously long waiting lines.

 

Or manage a healthcare system that doesn't look as though it is price managed by Scrooge & Marley, or perhaps Sweeney Todd.

Have a pleasant evening.