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STAFF NEWS & ANALYSIS
BoE Set to Save the Day, But the World’s Banking System Is Set to Fail
By Daily Bell Staff - July 11, 2016

Britain’s central bank is on the cusp of pulling an unprecedented move to stop Brexit destroying the economy … The Bank of England is on the cusp of cutting interest rates to a new historic low again on Thursday in a bid to mitigate an impending economic slowdown caused by a Brexit. -Business Insider

This Business Insider article points out how the Bank of England is getting ready to save the British economy from the upcoming Brexit recession.

Many in the investment industry are positive about the Bank of England’s move to reduce rates from 0.5% to 0.25%. According to a survey in the Financial Times, markets “have already priced in a 75% chance of interest rates being cut from 0.5% to 0.25% this week.“

One analyst, for example, Jonathan Loynes of Capital Economics told the FT: “We think the [Monetary Policy] Committee will recognise the dangers of disappointing market expectations and cut the Bank rate by 0.25%.”

Britain’s interest rates have been at a historic low of 0.5% since March 2009 and before Britain voted to leave the European Union on June 23, the BOE was priming itself to eventually start raising rates again.

Lower rates, as the article points out, are great for people with debts, not for people with savings. Additionally, Carney already stated that the total capital the BoE is ready to inject is an astonishing  $324 billion into the financial system.

And it’s not just in Britain. “The Bank of England is also able to provide substantial foreign currency liquidity if needed,” he said.

Carney said at this is all part of the BoE’s determination to “ensure stability. According to the BI article, he said he has “a clear plan” and “we are rapidly putting its main elements in place, and it is working.”

Even though Carney has a “clear plan,” the amount of liquidity in the system climbs ever higher and is continuing to create significant distortions, as Jared Dillian points out in a recent Forbes article.

 After Friday’s market close, people remarked that both the bond market and the stock market were at all time highs.  It’s not supposed to work that way.

Now, it is a common misconception that bonds always are negatively correlated with stocks.  Actually, over the long term, they have a correlation of zero with stocks.

But they spend most of their time in one of two regimes, either strongly positively correlated or strongly negatively correlated.  Over time it works out to be zero.

Yet here we are, with stocks and bonds on the highs.  David Zervos, market strategist at Jefferies, commented that “Central banks may finally be taking this too far.”

Dillian’s point – as he asserts – is that there has been too much monetary easing:  “I am not the first to say that central banks are addicted to higher asset prices.  It’s hard to imagine a scenario where they willingly let the markets deflate.”

He wants to know how to invest when every asset class is in a bubble. But then he answers his own question, pointing out that “Hard assets, like commodities, are not” in bubbles.

Dillian’s article provides us with a good analysis, but neither article says what really ought to be said at this point: The system is not merely bad, it is probably purposefully so.

After more than a century of furious central bank expansion, it is surely impossible to argue about the effects of central banks. They create massive surges of capital and resultant booms and terrible busts.

The people at the very top of these enterprises must know this very well. Maybe others don’t know or fool themselves.

Central banks fix the volume and price of “money.” As central banks are consolidated, massive surges of money have negative impacts around the world.

Anyone simply looking at the history of central banks can determine that they are responsible for much of the world’s deep economic instability.

Since central banks are money monopolies, any facilities attached to them have monopoly like qualities.

That means there is no free market. That’s why Deutsche Bank can assume $30 trillion in derivative bets. That’s why Italy’s entire banking system is about to go bust.

From top to bottom, the system is set up to fail. Around the world, money is issued at a fixed price that has little or nothing to do with its actual value.

The lack of competition between banks and the relationships and the relationships between banks and governments means that the world’s financial system increasingly operates as one organic whole.

When monetary stimulation expands economies, many countries gain newfound “wealth.” And when the stimulation inevitably collapses, these countries suffer together.

The depression builds and expands. This happened in the 1930s. It almost happened in the 1970s. It did happen in 2008 – and the worldwide depression remains with us today.

Monetary expansion, once it has run its course, cannot turn economies around. What must happen is that the system must purge itself. But central banks and crony capitalism stand firmly in the way of any purges.

Eventually, the system simply collapses. And it is difficult to believe at this point that this is not the plan. After all, order out of chaos. When the system does collapse, the survivors will witness a far more globalized system.

Conclusion: It has been eight years since central banks started stimulating in concert around the world and nothing has changed. The world is teetering on a precipice. Carney is wrong about his plan. The era of central banking is probably done. If you are waiting for central bankers to save the day, you will be waiting a long time indeed. And probably you will grow a great deal more impoverished in the meantime. And maybe worse. Take care of yourself please, and your family and other loved ones. The system has not been set up to succeed but to fail.

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  • Bruce C.

    Maybe the “middle road” explanation is that central banks, politicians, etc. think short term and always do whatever they think will work for a while and will ameliorate whatever current problem exists. Longer term problems are literally not their concern.

    That’s why I think CB’s et al will continue to do whatever they can to keep the ball rolling. However, at the same time, I think they have the uncanny ability to almost always do the wrong things. That’s why the theory that they are nefarious on purpose keeps cropping up, because it doesn’t seem possible that an institution (central banking) can be so wrong so often. That’s understandable, in a way, but there is far more evidence that mass stupidity is to blame than evil intent.

    Look at it this way. When Janet Yellen speaks does she really seem like an evil genius, or an academic dolt? When Mario Draghi talks is he a brilliant tactician or just an a-hole? When Haruhiko Kuroda effuses does he seem inspired or robotic? When Mark Carney speaks does he seem diabolical or just dull? Et cetera.

    Personally, I very surprised that the Fed hasn’t raised interest rates this year. Asset prices are “too high” and they’re starting to climb higher. Raising rates would tame that tiger and signal confidence in the US economy and strengthen the dollar. Not doing that will create more problems but I really think it’s due more to stupidity than opportunism.

    • AmericaWILLbestopped

      Fair points there…..
      For me, here is “what it is down to”…….
      Humanity’s constant failure to understand itself.
      If two people are drowning at sea, two cannot survive by one standing atop the other……one must drown.
      “Buying low and selling high” is exactly this……
      We need to not only banish Central Banks, but banish money and the ability to even lend it out.

      • I believe this points to a most fundamental framing of our sense of self and survival – and that a sense of lack or fear of lack arises from a sense of inner disconnection – which must then compulsively seek but never find through external seeking – grabbing and competing for ascendency, dominion or not losing or missing out.
        Gaining control of any believed or actual need-supply can manipulate via the boom of abundant cheap and free followed by the bust of artificially induced scarcity – in order to capture and control ‘mindshare’.
        Whatever such corporations or institutions do – we each have the capacity to restore inner communication and connection – and the perspective opening there is different to ‘mind-control’.
        I don’t know who we are or how we do – excepting an awakening shift from the fear-driven manipulatory mindset, to an active willingness to live from a more connected foundation in pausing from reactive conditioned habits and discerning win-win outcomes or modalities that embody a sense of shared worth – rather than using another’s lack of worth to falsely inflate one’s own.

    • natural human

      I really don’t know why you frequent the DB, Mr. Bruce. You hardly ever fully agree with the premises or assertions and seem to regularly come up with a kind of “soft troll” commentary. Maybe that’s it. Are you a controlled ops “soft troll”? lol…I mean you don’t think it matters if the earth is really flat, or if all the mass shootings are false flags, and you don’t believe the monetary system is doing exactly what it was designed to do. No, the controllers of the monetary system are just stupid according to you. Can you be serious?

      • rahrog

        I think it is healthy to expose yourself to opinions that you might not agree with. If we were all in lock step on DB, it would be boring as hell, and a sign that we are not thinking for ourselves. It’s OK to disagree with folks.

      • Once a term is used pejoratively, it loses its original meaning – and usefulness.
        Was there a real question in anything apparently addressed to Bruce – or is it all a statement in the form of an appearance of dialogue?
        I’m not interested in giving energy to anything that doesn’t resonate some relevance to what moves me – but I don’t lay my trip on you and I don’t seek or even want agreement – but cherish synchronicity of communication or recognition stirring that may well then move in divergent ways yet still share purpose.
        There is a difference in being willing to question everything and simply calling everything into doubt and uncertainty. A cynic can hide within appearance of scepticism – as can the gullible – but the cannot actually listen and engage – but only gather ammunition.
        One of the things that makes DB a good focal point is the quality of the commenting – and I don’t mean the content – but the willingness to take issue or disagree or challenge but not ad hominem trashing of or dumping onto other posters.

      • Bruce C.

        I don’t understand what the “flat earth” concept means so no further comment on that.

        My point about whether mass shootings are staged or not doesn’t matter in terms of accepting or not accepting the narrative about why guns should be illegal to own by ordinary citizens. Are you more willing to surrender your Second Amendment rights if the shootings are NOT staged, but not so willing if they ARE staged? What difference does that make? If you surrender your right for whatever reason then you place yourself at the mercy of “government” and historically that doesn’t work out so well. That’s what people should be focused on, not extraneous reasons.

        Besides that, IF people know the shootings are NOT staged then people should WANT to have the right to own a gun for self defense against the nut jobs. However, IF people know the shootings ARE staged then they should also want the right to own a gun for self defense against the government. To me the net result is the same.

        As far as controllers of the monetary system – yes – they can be stupid or political or believe in economic and financial models that are simply wrong, OR they can be nearly infallible in their omniscience and clairvoyance. We just don’t know so to say that whatever happens is always part of some grand plan is begging the question.

    • The hidden agenda is largely operating via various levels of denial or ‘unconsciousness. The so called ‘conscious’ level is not at all the narrative reality played out by any compartment or facet of fragmented Consciousness. But the narrative itself will have different levels – of public, private, top secret and forbidden etc.
      Different levels of ‘need to know’ operate different roles within their scripts and I feel that the USA – I haven’t forgot the original ‘American’ basis of the US – is a good example of almost total fragmented dissociation – of broad spectrum cognitive dissonance.
      You cant expect a breakdown of communication to say – “I am a covering over a communication breakdown and by this I include the communication of raw emotional expression – but you can expect the mutual self interest in maintaining the cover story to operate divide and rule in place of bringing a truly receptive willingness and an honesty of witnessing that is not merely the public, but the private, and the top secret and even giving witness to the forbidden or denied reality that none the less is active but blind-sided.
      In the so called conscious level we attempt to use rational thought to ‘see’ with – when the rational mind is primarily founded in justifying and maintaining the mask or persona called forth to cover over the raw emotional splitting off into fragmentation that is both a cause and effect of mind-control.
      Lies must hide in truth and so from the point of view of the ‘secret power mafia cartel’ under any or no name – inner circles within circles operate that have a front in legitimate endeavour of at least plausible deniability in the event of confrontation.
      Most human beings are unable to maintain a lie unless they believe it is truly justifiable.

      Addressing the persona rather than discerning the validity of the foundation upon which the currency of a masked hate agenda operates – is the diversionary tactic that diverts awareness from true/false recognitions, into good/evil reactions. The chief method to justify an evil, a hate or lie is to be in righteous defence against a WORSE evil.
      Until the self righteous hate and the reaction to scaremongering thinking is paused for a truer perspective – there can be no freedom of choice. Only the winding up of a system to its breaking point. For no matter how much control is operating in any number of complex ways to maintain a narrative presentation of relative ‘worth’ or temporary ‘security’ – the cracks in the model open exponentially. There is no broad spectrum dominance – unless Planetary destruction can be seen to have solved the ‘problem’ – and for a pre rational sub personality urge “I hate myself and want to die!” is an active agenda that breaks out more and more through the loveless lack of acceptance for true worth that operates a lie of coercive and deceptive substitution. Such a life – SUCKS! And powerlessness and voice-lessness gives power to hate.
      So the personality level of each and every one is either aligning with the reintegration and acceptance of a wholeness of being – or playing out the struggle of power that runs all the way back to our core separation trauma – which is another way of saying we have not really moved past it – but covered over with level upon level of fragmenting dissociative plausible deniability – and the last point of change we look to is our self. But here am I and this is my experience. Once I recognize deceit in myself I cannot engage it as if it were true currency again. I cannot un-know – though yes I can ‘try’. But there is a self-betrayal that drains the motivating joy and capacity to share life. Fear of consequence can drive the ‘trying’ into a deeply sacrificial attempt to regain a sense of life by whatever pattern of self-validation drives the sense of needing it.

      The naivete of the social mask is the belief that people are basically trying to work to a common goal and keep making (the same) mistakes – but they are not mistakes – but are by design – and that design is implicit to the power struggle of the survival mentality – regardless how it masks in moral apology or justifies itself from grievance. However, when I use the term Humanity with an H – I don’t mean human insanity. An I don’t see insanity as organic disease requiring state control through pharma – but relational conflicts that manifest communication breakdown; a call for healing.

      Earth has been likened to a prison planet and I link that to an asylum planet.
      https://s-media-cache-ak0.pinimg.com/736x/93/5f/ab/935fab8162884626ca41e4c52467078e.jpg

      But are we in fact ‘here’ in the sense our identity defines or are we here in terms of a current focusing of idea and intention, of purpose and desire?

      • Bruce C.

        Hi binra. You mention a lot of good stuff that I want to chew on, but right off I like your observation that “the narrative” has different levels of not only communication but actually boundaries of thought. Dissociation and cognitive dissonance, as you say.

        That’s a more sophisticated way of saying “stupid” which I know is not the best term because it’s so “subjective”, which means it could range from meaning literally limited cognitive function/ability to cognitive dissonance which is almost the opposite in terms of potential.

        …More later, but I want to make sure I understand your reference to “America”. I think you’re saying that its founding principles are sound and consonant but the way the government/”Deep State” has evolved it is anything but. If so, I agree, and ironically that “intelligent dissonance” can effectively be as incompetent and indistinguishable as sheer “stupidity.”

        BTW, how did “Brexit” work out for you? Not to probe but I’d be interested to read your POV about what went down.

        Thanks for commenting.

        • Hi Bruce – opening inner reflection is where I invite – and not to argue ‘what is right’ – so gratitude for your synchronicity in a shared appreciation.

          Not knowing or openly owning and expressing what you know because terror defines the believed consequence is not stupid within its own framework – but playing ‘stupid’ can be a strategy of survival – and of setting off chaotic or destructive outcome by design – as part of hidden agenda. But playing anything that seems to work and playing it for real is the survival mode of psychological ‘defences’ that operate beneath the radar of what might be called our consensual reality – which as noted – has different levels and compartments according to the defining and triggering conditionality. Indeed it is the shadow power or denials that actually operate – while the narrative paints a censoring illusion of control via the same tricks that operate somewhat subconsciously.

          So the above construct in consciousness – taken without the living perspective that embraces and transcends the psychological conditioning – is only a getting mechanism operating blindly as a sense of struggle upon a sense of Life that thus seems polarized in mutually exclusive opposites.

          Of course the blindness here is cognitive – as a filtered and distorted version of the ‘movement of being’ by which existence has awareness-experience of being. There is a range of perspective available – perhaps an infinite range – but … one step at a time – at least while time serves the recognition and balancing of the expansive/contractive polarities of perspective. I may be getting too abstarct here for most – but suffice to say that a ‘dalek’s eye view’ is fearfully defended, mechanically limited, yet destructively directed – and any of us can experience this when we feel threatened and cornered. However, the fear imprint is much more deeply embedded than the conditions that trigger defence and should not be underestimated in its capacity to subvert and sabotage even the best laid plans…

          Perhaps my presumption of the USA as a representative model on the Big Screen of a fragmented and dissociated conglomeration of parts – asserting narrative controls at different levels in various compartmented agenda – was misplaced. I’m not accusing – but feel that extreme examples serve to illuminate what lies hidden in our own less obvious presentation.

          ‘America’ is used as a subliminal religion by a narrative identity of exceptionalism – that can be expressed – and does express in many ways. Was it stupidity or wisdom to NOT stand up as a US citizen after 9/11
          and challenge the asserted terror and war narrative – not just of what
          exactly happened – but what the happening was timed and used to
          implement upon both its own citizenry and the world? Or was it shock of a
          more complex order than the outer scenario seemed to justify or
          represent? For there is a terror of mind-breaking and therefore
          mind-controlling extent – that diverts and displaces into destroying ‘enemy’ almost regardless who serves as scapegoat. A coup-d’etat of the mind. But also a revealing of the way it works.

          Brexit is an ongoing ‘project’. The pre referendum campaign operated a narrative that hardly allowed any coverage or witness to what the EU is and does, what its origins are, how power operates through it, who effectively set it up and has undue influence over it – and the globalist agenda it is subverted to. Nor in the so called debate was there any real expansion on what sovereignty or freedom of self determination means – or can be redeemed to reveal as Meaning.

          I voted for a pause from conditioned reaction in which to open a process of communication in place of a complex technocratic scam by which to further sacrifice a truly Human willingness to a loveless mechanism in the guise of power and protection.

          Others voted for whatever reasons or from whatever intuitive sense they then rationalized. The inescapable sense of the whole thing being managed tends to ascribe evil agenda to the hidden hand. But I also see just how people’s fear demands a managed outcome – and although opportunism preys on such blind ‘trust’ – I also remain open to the guidance to use the event and the experience for the purpose, I, freely accept and recognize myself in – which is not defined over and against an evil – so much as uncovering or redeeming a sense of Life lived and shared – which is an intimacy or presence – not mere concept in rehearsal presented for mutual reinforcement.

          Change is generally anticipated, managed and controlled – and inner circle insider knowledge can be one step ahead of any outer rings – so that differing narratives arise as to what is in fact going on and who knows or did what as part of reaction, response or strategic presentation – for there are a number of threads running through this – any of which can be an overriding priority of focus to those involved – and thus a filter of exclusion and distortion relative to other threads and perspectives.

          Insofar as I am aware of the founding of the USA I see the attempt to define and codify something of the true – that becomes the trojan form in which error and the machinations of a mind un-recognized, operate against the true while keeping and using the form. Power interests do whatever is in their power, to survive and prevail – in the terms their identity sets. Relational interests communicate whatever is true of them – to honour and retain the recognition and meaning that reveals and renews an identification within Life. A confusion of both has power predating upon relationship as a means of getting power – as if meaningful in and of itself, and a sense of broken-hearted, denied and oppressed isolation amidst struggle to survive.

          No matter what the power-relationship embodies – it has honest feedback to a willingness for communication – which is as I said above – infinite in range – but one step at a time in acceptance and understanding – which is not so much a personal possession or accomplishment, as a point of balance and alignment within a ‘movement of being.

          Regardless of impossibility in the face of all prior human experience, I feel for awakened self-responsibility as a true ‘founding’ – and that is the willingness to find the balance point by living the discernment of it within relationship – rather than fixing it in externalized rules that then become coercive upon rather than guiding within. Not anti-rules nor anti-authority – so much as uncovering true authorship. Do I need to hide my true desire in forms of a defended coercive persuasion or appeal?

  • Praetor

    Its kind of like a movie I saw once! The theme of the story was, (There can be Only One). It seems we are in the final stages or closing act of finding out who the ‘one’ is, and that ones true intentions!!!

  • There is most definitely a raging problem, DB, which inevitably in a smarter internetwork connected world will be host to a global contagion which will not be a party to fools in positions of perverse and corrupted power. Such as a status quo foundational platform is just not a normal proposition to be in a way thought of as being acceptable.

    And here be a little something relating to the matter, which may be lost in the ether and lying in the cuttings on a Guardian newspaper editor’s floor. Getting good investigative news staff nowadays is just so difficult in the mainstream, I imagine, as be clearly evidenced by the lack of good investigative news in the mainstream.

    Thank goodness for the likes of the Daily Bell and its ringers.:-)

    HonourableMember [1607121309] ….. having a say on risky matters on
    https://www.theguardian.com/business/2016/jul/12/bank-of-england-brexit-commercial-property-fund-problems

    Hi, Jill,

    There is a lot more to worried and warning the masses about whenever you are into reporting news which is true rather than studiously ignoring certain truths and thus being both complicit and instrumental in creating an even bigger collapsing problem and exploitable vulnerability to deal with.

    Apparently the banking system is fundamentally a global criminal organisation which doesn’t listen and act upon sound and safe advice, and that has one wondering about bigger pictures and the real status of the likes of Chancellors of Exchequers and Central and even local bank managers, who cannot be totally unaware of that perverse situation and whenever the following tale is perfectly true and most inconvenient ….. http://www.zerohedge.com/news/2016-07-12/us-refused-prosecute-hsbc-over-fears-global-financial-disaster

    That makes for an altogether quite different sort of terrorist organisation, given the wholesale damage and destruction their actions have on billions of innocent people.

    Your comments are currently being pre-moderated

  • rahrog

    Kool-Aid liquidity.

  • Angelico Turino

    Get yourself the book, “The New Case For Gold ” by James Rickards and if you have time get his first two as well. He know’s his stuff and has the connections. (Death of Money & The Coming Collapse of the Int. Monetary System). Best of Luck.
    Angelico Turino

  • esqualido

    “Lower rates, as the article points out, are great for people with debts, not for people with savings. Additionally, Carney already stated that the total capital the BoE is ready to inject is an astonishing $324 billion into the financial system.”
    As if Joe Sixpack could walk into the bank and refinance his 20% APR credit card debt at 0.25%. When Ben Bernanke declared that in a pinch money could be tossed out of helicopters, he never mentioned he planned to drop it directly over the banks that owned the Fed.

  • Arationofreason

    Central banks are the device by which governments allowed themselves to bankrupt and destroy their own nations. Just a game of chicken while they compete to see who will be destroyed first and in what order. None can escape.

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