Thursday, June 29, 2017


We have seen where the developed financial markets are under the control of massively leveraged derivative trading through the Federal Reserve system, most notably the NY Fed, coordinating with primary dealers, the US Treasury and the Exchange Stabilization Fund (ESF).

This "sub-system", with it's tremendous dollar advantage, has sustained the greatest wealth re-positioning "parent-system" ever contrived. It's "markets" defy all fundamentals, and defeat the true nature of marketplace competition - all in the name of "crisis recovery".

The whole affair is not much different than how a certain government operates under cover of foreign "crisis management" through the various crises it has discursively and deceptively produced, using "terrorist"  and ideological propaganda partnerships / proxies.

But that does not mean that competition, in a puff of smoke, has vanished completely from the face of the Earth. Indeed not. Like the specter of debt, it has merely found its way to a higher level.

We've seen the signs of what had been foretold in the 90's, and ever since. Isn't it interesting how changing conditions reshape the omens of today?

With the recent cautionary message from the BIS (especially the 4th "threat") it does appear that the first wager from that "big poker hand" is being played.

The dollar system has competition not only from the Euro, but the entire CB system of the West faces competition from its emerging counterpart(s) in the East. Perish the thought that our "open" global economic order might be under threat from "protectionism".

But I think it is not truly "protectionism" that is feared, rather, "competition" is the issue behind closed doors - such competition as would challenge the very credibility of debt transferred from financial to "sovereign" balance sheets in the bailout and easing adventures of recent decades.

Such fear may, in times of desperation, cause a parent to sacrifice even a favored child.

Lions and Tigers and Bears, Oh My! With the CBs in need of emotional rescue after the daring and heroic transfer of systemic risk to their balance sheets (in the name of "God's Work") who or what shall rise to the occasion to prevent THEIR disastrous demise?

Perhaps ... that singular general ledger item which promises "payment in full"?

We watch ...


  1. What frustrates and amazes me is that the ROW have continued to feed the monster. Allowing it to grow so fat and bold, it no longer fears any consequences. Indeed it is the ROW that suffers the consequences from it's fattening up of the hegemon by it's own gorging (on the monsters debt/currency) and being servile to it's demands.....pathetic !!

    1. Indeed, what an elegant system it is. Trapping a world shaped by the aftermath of World War into accepting debt as a reserve asset. And benefiting the feeders ever since.
      We can clearly see who has had enough, and the support being withdrawn ...