Are We Looking at an Economic Collapse? - Aug 15

Are we looking at an economic collapse?

The economies of the world are on a knife edge. The solutions experimented with in the past economic crisis by Reserve Banks around the world have not cured the problem but simply deferred it. Worse than just deferring the problem, it has been allowed to grow bigger.  We are moving from a sub-prime global financial crisis (GFC) towards a sovereign debt crisis – one which has no solution in current economics.

We have all seen boom and bust cycles in financial terms. Stock market bubbles, bond market bubbles, real estate bubbles, and debt bubbles. We have never before experienced a global sovereign debt bubble.

First things first, how did we get to where we are now, and what was the GFC?

The Global Financial Crisis 2007/08

The GFC was caused by a number of factors. Underlying it was political motivation, market manipulation, lack of regulation, and our old friend - greed. The political motivation came from the need for George W Bush to stimulate the US economy. He embarked on a campaign for every American to own their own home. With the backing of Alan Greenspan (the then chair of the Federal Reserve) the Bush administration pushed for every American to be able to get into their own home. To do this a number of normal banking practices needed to be tweaked. First the financial markets needed to be incentivised to lend to those who would not otherwise qualify for a home loan. The Government solution to this was for two Government Sponsored Enterprises to be instructed to make this lending happen. The two organisations were called Federal National Mortgage Association and Federal Home Loan Mortgage Corporation. They were affectionately called Freddie Mac and Fannie Mae. These institutions followed the brief perfectly and further stimulated borrowing by introducing non-recourse loans. The policy worked incredibly well. A housing boom was created as demand for housing surged. Those in modest houses could borrow and move into the bigger homes they so very much deserved. The houses they moved out of were available for first home buyers to purchase. House prices went only one way…UP UP UP. The policy that anyone with the desire to own a home could do so, led to the creation of NINO loans (No Income No Assets= No Problem). Thus the sub-prime lending market was born.

The banks were climbing over themselves to lend into this market. There is a great deal of money to be made when there is strong demand for borrowing. There was no down side. After all, property prices have only ever gone one way in the past.  Even the ratings agencies who were supposed to protect the humble investor and independently assess risk were sucked into this mind-set. They gave A ratings to these lending institutions - but then again, what choice did they have? The ratings agencies rely on these institutions for their survival. More ratings demand = more revenue for them. It would have been business suicide for them to declare that the Emperor has no clothes = so the lie continued.

The housing bubble peaked in 2004 in the US but then went world-wide. Cheap credit, ever increasing real estate prices saw a surge of greed embrace the world.

Then in late 2007 the unthinkable happened. House prices started to fall! The Government policy had achieved its goal of getting everyone who wanted a home into one. The supply shortage had been met… and then some. Now there was an oversupply. Demand had slowed and thus developers were now faced with cutting prices to get rid of their housing stocks.

Now for the first time financial institutions were having a closer look at the security they held on these sub-prime mortgages. Banks who had originally lent to the home borrowers had cleverly bundled these up into packages containing 1000's of individual loans. The credit-worthiness of the individual borrowers had never been tested and yet the banks unloaded these sub-prime mortgages onto financial institutions based on the A rating from Standard and Poors. These financial institutions were about to face the reality that what they were holding was worthless.

Prices continued to fall and once people realised their house was now worth far less than their mortgage a panic set in among the people. Non-recourse finance meant the owner could simply post the keys to the house back to the bank. It became the bank’s problem. The banks were unable to cope with the losses and threatened the Government that if these major financial institutions were allowed to fail it would take down the entire financial system.

Enter the white knight.

Who better to solve this crisis that the Federal Reserve.

The Chairman of Fed at this time was Ben Bernanke. Ben had a strong knowledge of the cause and effects of the Great Depression having written about it many times. His most notable work was entitled “The Gold Standard, Deflation, and Financial Crisis in the Great Depression” which he wrote in 1990. Ben believed he was on the cusp of the US economy plunging into a deflationary death spiral that would lead to an even Greater Depression than that of the 1930’s.

In a decisive action (behind closed doors) Fed Chair Ben Bernanke met with the Government and the major banks to negotiate a bail-out package. As part of this deal Freddie Mac and Fannie Mae were nationalised and following this, the Government set about paying the banks large sums of money to see them through the crisis.

The terms of the bailout were hurriedly passed through congress and thus a new bubble was about to come forth.

In this move, the  banks debt burden was essentially moved to the Government books and the banks were free to continue. Surprisingly the terms of bailout did not state how the funds were to be spent. Banks simply put their hand out and were able to have their deposits secured by the Government. 

The Sovereign Debt Bubble

The Federal Reserve also had to play its part to inject money into the banking sector. It did this by issuing encouraging the US Treasury to issue more Treasury Bonds (the equivalent of Government Stock in NZ) to the banks and financial institutions. These banks in turn sold these Treasury Bonds (at a profit) to the Federal Reserve.

The moment the Federal Reserve paid for these bonds (essentially drawing a cheque for these on a bank account that hold no actual money) new currency was born into existence.   

The issuing of Treasury Bonds is essentially an IOU guaranteed by the Government which pay a fixed rate of interest and have a maturity date for repayment (much like a term deposit). This debt is how a Government borrows money = sovereign debt.

Ben Bernanke was terrified of the deflationary spiral that made the Great Depression last so long. When people lose confidence in the economy they slow down their spending. When spending slows down, goods and services margins get tightened as businesses have to lower prices in order to generate sales and keep staff employed. The public see the panic in businesses’ eyes  as prices continue to be discounted, so they defer their spending in the knowledge goods and services will be cheaper tomorrow than they are today. This downward spiral continues until the businesses lay off staff, go broke etc. Less people willing to spend in the economy leads to tighter margins….and so the deflationary death cycle continues.

Ben promised he would never allow deflation to take hold of the economy. He vows to drop cash from helicopters if necessary to entice the public to spend cash. It never happened like that, instead he undertook the biggest economic experiment of all time…

He told the Government to start spending. John Maynard Keynes (a renowned economist upon whose theories most western economies are based) theorised that an economy could not distinguish Government spending from that of the public. So if you want to maintain growth or avert deflation the Government should step in to spend at times when the public were unwilling to do so.

The Government did just that. Roading money, infrastructure money etc was thrown around the country. Runways on disused airports were resurfaced, beautification of ghost towns was undertaken, money was thrown at places that had no need or beneficial use of the spending. Even Rodeo Drive in Beverley Hills got an upgrade!

So who purchased these Treasury Bonds?

China was eager to get a piece of the action and furiously purchased these bonds up until 2010. Thereafter it was the institutions that eagerly sought risk free rates of return on their portfolios as their investors did not want to suffer losses like they did in the GFC.

The US Government also undertook an experiment was called Quantitative Easing (QE). Three tranches of QE have been actioned to date. All this newly created money gets channelled through the banking system and as such the banks get to clip the ticket on the way through.

The other strategy employed by Ben was to slash interest rates to near zero levels. And here they have remained ever since. 

As a final plunder of the Government resources the Treasury borrowed money from the jars of cash set aside to meet future commitments to social security etc.

The New Zealand Government and Reserve Bank reacted in a similar fashion. We bailed out the finance companies, put in place Government guarantees, went on an infrastructure spend-up on roading, new cycle ways etc etc. We slashed interest rates, issued Government Stock at attractive interest rates but unlike the USA we stopped short of Quantitative Easing. We also stopped short of borrowing funds from our Cullen fund and ACC funds (however we did stop adding any further contributions to the Cullen fund).

Central Banks/Reserve Banks and the Money Multiplier

The central banking systems of the world’s largest economies are essentially privatised. The US Federal Reserve for example is owned and controlled by a select few of the Wall Street banks. It has been this way since the Fed was conceived in the 1913. The Fed was introduced to ‘bring stability to the banking system’ after runs on various banks saw deposit holders lose their money. The problem was due to Fractional Reserve Banking and while the symptoms could be resolved by introducing central banks to come in and support a bank in trouble it created a far more sinister problem.

Central banks control the supply of money in the system. To understand this you need to understand that all money in existence today is essentially debt. It is an IOU issued by the Central Bank as a form of legal tender currency. How did the money come into existence?

1 Treasury issues Government Bonds and sells them to the banks
2 The banks in turn sell the bonds (some of which are purchased by the central bank).
3 The central bank pays for them via a book entry in terms of reserves and thus
4 the banks receive a book entry payment for the bonds sold in the form of money credited to their bank account and thus money is born into existence.
5 The Government (Treasury) now has a bank balance that can be used to pay its workers and suppliers. 

This money is then grown via the magic of the money multiplier effect of Fractional Reserve Banking Rules

Here’s a step by step guide to fractional reserve banking and growth on the money supply:

Step 1 Government uses some of this created money to pay one of its staff Say $1000

Step 2 The staff member banks the money into Westpac $1000

Step 3 Westpac keep $100 in deposit and lend out $900

Step 4 lender from Westpac buys a laptop from Noel Leeming $900

Step 5 Noel Leeming bank the $900 into their ANZ account

Step 6 ANZ keep $90 in deposit and lend out $810

Step 7 Lender from ANZ buys a Mountain bike for $810

Step 8 Bike shop deposits this $810 with BNZ

And so it continues…

At this stage (up to step 7 the original money supply created by the Government of $1000 has grown to $ ($1000+$900+$810) $2,710.  In reality this money multiplier system continues until the sums get very small. For example by the time the money going round is down to $1 the total money in circulation has grown to $9,990. ($1,000 of it was printed by the Government and the $8,990 was created out of thin air by the banks).

It works because the banking system is a closed loop (like a wagon wheel with the central bank as the hub). The banks all borrow from one another to meet any daily shortfalls and pay interest at a a rate set by the reserve bank called the official cash rate. 

This is the ‘magic’ of monetary supply and is often referred to as the money multiplier. Each Central bank determines how much its member banks must hold in reserve. In the USA it is a 1/10 ratio or 10% for most major banks (as in the above example). In NZ we governed by capital requirements which operate in a similar manner at around 12-13%. The Central Banks attempt to control the speed of increase in the money supply (which is measured by inflation) via control of short term interest rates (the OCR). If they want to slow down the velocity of money through this cycle they raise interest rates and if they want to increase the velocity of money to stimulate the economy they lower them.

What’s the Problem with Sovereign Debt?

In the US this is where the majority of public debt has been growing from. The Government sells these to the banks who on sell them to financial institutions, mum and dad investors and to retirement superannuation schemes as well as to other off-shore institutions or Governments. These instruments have been known in the past as a risk free investment and the returns they pay as being the risk free rate of return.

The issue with Sovereign debt is that one day it has to be repaid. It has an expiry date. In the past this was met by either re-issuing Govt Stock or in some cases printing more money to repay it. A common method employed by countries where the debt is owed to foreign countries is to devalue  their currency which cheapens the burden of repaying this money. In the USA and Euro zone countries this devaluation strategy poses a real problem.

China were the main purchasers of Treasury bonds until 2010. They have a sword hanging over the US in terms of holding such a huge amount of debt. Since 2010 the main buyer has been superannuation funds (KiwiSaver type schemes), Cullen Fund type schemes and the biggest of these are the baby-boomers of the USA through their IRA’s and 401K’s. As the baby boomers get closer to retirement they want less risk and move their investments from the volatility of the share market and more towards the risk free fixed rate of return offered by the Treasury Bonds.

Here is the problem: How will the US repay these bonds as they mature in the years to come? Answer: They have no clue! The retiree’s will see this very shortly and cause a run on selling these Govt Stocks. Unlike a run on one bank, a run on Govt Stocks is a one-way downward spiral.

The retiree’s may not be the trigger for this run. China hold a tremendous amount of these Treasury Bonds, such that a sudden sell-off of a sizeable parcel of these bonds be enough to trigger a massive run on them. The USA know this and so does China.

On 23 July 2015 China started to apply pressure to the US by publically announcing they would like to swap some of these debt instruments for equity (ownership of US public assets). They did not go as far to say what they will do if the US do not comply with their request. More on China later.

Saudi Arabia also hold a large number of these Treasury bonds. Most of their foreign reserves are in fact held in US dollars in this form.

The velocity of money creation in the USA is much faster than NZ as banks there only need give $100 to the Federal Reserve in return for the ability to lend out $900. In other words they can generate loans without waiting for a depositer to bank money with them. As such they have a far greater degree of leverage than NZ.

NZ banks were stress tested by the IMF in 2012. While they came through much better than most international banks there were still some serious shortcomings. Namely it only took a 30% reduction in house prices, a decrease in output of 4% and an increase in unemployment to 11.4% to see our NZ banks capitalisation fall from 12.6% to 3.3%. The IMF sited this as a very real threat to our stability and the RBNZ responded by introducing LVR restrictions (to slow down the Auckland property bubble) and the Open Bank Resolution (OBR) legislation which authorises the RBNZ to give deposit holders a haircut on their money held in any bank to avert its failure.

Just on the OBR legislation. There is a myth that NZ banks are Government guaranteed. They are not. The OBR legislation has been implemented in nearly every OECD country since 2007/08. Why is that?

Since 2012 we have seen the property bubble expand massively while at the same time seen a reduction in economic output (look at dairy and forestry for evidence of this). Milk powder prices have gone down by more than 40% since 2012 and volume of supply has diminished greatly as farmers consolidate to less risky production methods. Log prices are falling quickly. Some strong operators are down by 20% in volumes harvested. This is all despite the NZ dollar depreciating by 20% against the USD over this time.

The reality is NZ is much better off than most other countries. Our national debt is lower in relation to our GDP and at least our Reserve Bank is owned by the NZ Govt (not privatised). The US Federal Reserve which effectively has the power to print money is separate from Govt and is in fact privately owned. Who in their right mind would allow private banks control over the printing of money? The largest economy in the world – that’s who!

We are not insulated from the corruption however as our NZ banks are actually owned by the same corporate banks that own the Federal Reserve. These are the likes of JP Morgan, Chase Manhattan, HSBC, etc. Look through all these and you come back to the corporate family dynasties of the Rockefellers, Carnegies, Vanderbilts, Morgans, Rothschilds etc. – This is the web of power which runs the world.

“Permit me to issue and control a nation’s money and I care not who makes its laws.” – Mayer Amschel Rothschild

Fractional Reserve Banking arose from the need to grow an economy quickly and was usually used during times of major economic growth or more commonly to fund a war effort. The problem with getting onto a treadmill of this kind is that it can never slow down or the system will crash. Keynesian economics is based on this premise too. An economy that fails to grow at a certain rate will inevitably fall over like every other pyramid scheme or ponzie scheme you have heard of. Sooner or later you will either run out of suckers or resources.

In our case the globe will run out of investors. Unfortunately those who miss the early opportunities to get their debts repaid may find themselves like the child at the party with no seats left when the music stops.  China are clearly angling towards swapping their debt instruments for one of equity signalling that the music may stop at any time.

Are the Baby Boomers, Inflation or Keynesian Economics to Blame?

Have you ever considered how the baby boomer generation have been the most wealthy of any generation before it? The answer is inflation. Inflation is a tax that will one day have to be repaid. Those in the 70’s-80’s will acknowledge that even though interest rates were eye-wateringly high, so long as you had a job you were able to meet the repayments on your house. All the while watching your house more than double in value. This was the wind fall of an unprecedented magnitude for those who held assets with a mortgage, but disastrous to the poor.

This century has also seen the advent of “having your money work for you”. Previous generations had no such thing. You lived, worked hard and lived off your capital in retirement. In fact charging interest on loans was illegal in many countries as it was thought to be usury.

In the 1980’s and 1990’s we got used to high levels of interest and receiving a healthy return on our money. Interest rates now are much lower than we have been used to but what happens when you get negative interest rates – Since January 2015 in Switzerland, Denmark and Sweden for example a depositer can expect a bill from their bank for holding large sums of money in their account. Put another way the Central Bank pays people to borrow money to keep the wheels of inflation turning.

A large number of international pension funds have a guaranteed inflation adjusted annuity payable upon the retirement of their contributors. The problem is when these funds were created in the 1970’s – 1990’s they were working on a conservative 8% return pa going forward. The actuaries also worked on much shorter life expectancies than are currently achieved. Long story short - these pension funds do not have the funds available to meet the ongoing retirement commitments made to those who contributed. This is a real problem for an entire generation of retirees in coming years.

Never mind, there’s always the Social Security backstop to fall back on if your own private superannuation falls over, right? Well, no unfortunately. The Government of the US raided this piggy bank to help bail out the banks…remember? All that's left is an IOU in jar. Oops, now what?

Keynesian economics requires a continual level of growth year on year to ensure prosperity and keep the system from crashing. Any mathematician will explain such a phenomenon as an exponential curve. Eventually it goes to infinity in terms of needing more people, more resources etc to function. The sovereign debt in the world is on this same exponential curve and it is not maintainable. Nor can it even pause without crashing the system.

If we all decided to pay down our debts at the same time the monetary supply would shrink at such a fast rate the economy would collapse. Like all ponzie schemes our monetary system relies on more and more debt every year to maintain our standard of living. When interest rates hit 0% an interesting problem arises. The reserve banks lose their power to influence monetary supply, unless the Govt can devalue their currency and try to import inflation into the economy. Our Reserve Bank has more room to move on interest rates than other countries but how low can we devalue our currency at the cost of other countries?

China devalued its currency against the USD in a shock move earlier this week. This is to be expected of course. They want their exports to be sold at strong prices to maintain growth in China. China have a population approaching 1.4billion. That’s a lot of people to maintain  control of - even for a controlling Government such as China. To maintain control they need to maintain stability. Stability at any cost. This in turn requires a steady level of inflation. China is attempting to do what NZ is doing – that is devalue our currency and increase the return we get from our exports.  We are all in a race to the bottom.  The problem is not all countries can devalue their currencies at the same time – it becomes ineffective! Moreover if some currencies are unable to devalue (like the Eurozone participants and the USD) – they end up bearing the cost of us devaluing. It amounts to a currency war.

The USD is bearing this pain at present and will continue to do so until a breaking point occurs.

Let’s look at Europe.

The Euro was introduced in 1999 to unify Europe’s trading position. It was doomed from the start however as it would never be a political unification nor a social unification (i.e. people were never going to identify themselves as European instead of Italian, French or German etc). The biggest flaw from an economic point of view is that while the currencies were consolidated the national debt of each country was left as individual sovereign debt. 

Countries who previously found it hard to borrow offshore now had the backing of a strong currency and went on a spending spree. They had access to seemingly unlimited credit at exceptionally low interest rates and countries like Germany (with the backing of the ECB) continued to lend to these countries until 2007/08. In the wake of the GFC cross-border credit was hard to find which together with increased demands for repayment drove the debtor countries like Greece, Italy, Spain, Portugal and even France deeper and deeper into debt.

The austerity measures being imposed on countries like Greece will never work long term and in reality these countries face either being forced from the Euro or bankruptcy in the long term. Switzerland exited its artificial pegging against the Euro in January 2015 having seen the Euro marriage as a bad one.

The IMF & The World Bank are controlled by the voting power of the USA currently. The IMF act as the banker of last resort for countries in trouble. They already have their own world-wide currency created in 1969 which member countries must hold in their possession called Special Drawing Rights (SDR’s). When originally issued 1 SDR = 0.888671 grams of gold = $1 USD. Since the abandonment of the gold standard in 1971 the SDR  world reserve currency currently comprises of a basket of international currencies namely:

USD 47.0%

Euro 33.6%

GBP  12.4%

YEN 7.0%

A rebalancing of this basket of currencies is undertaken every five years. The last review was undertaken in 2010 and the next is due this year.

China have been working hard over the past 5 years to have their currency included as a major player in this basket, thus paving the way for them to trade internationally in a currency that is not USD. They started reporting their gold holdings to the IMF in July (first time since 2009) and then announced their new holdings yesterday as having increased by 19 tonnes in the past month. This is part of their plan to show greater transparency to the IMF. The IMF require all member countries to report their gold reserves every month. It is widely speculated that China are understating their actual holdings by a huge margin.

The ramifications economically for the USA are not good. A move away from the USD as the major trading reserve currency would see panic selling of he US dollar. This would also see the US lose its status as the world’s largest economy.

Unsurprisingly the US are reluctant to allow China voting power at the IMF, but the IMF are pressuring the US for a decision by 15^th September 2015. The IMF have not advised what they will do if the USA refuses – nor has China. Remember, China is not a country the US would be wise to mess with.

War! What is it Good For?

Not all wars are fought on the battle ground.

We have seen wars recently fought with drones etc remotely from the safety of the US, we have seen terrorism used as a weapon, we have not really seen a war fought with nuclear weapons on both sides yet but neither have we seen a war declared on a particular currency. Or have we?

As stated earlier the USA relies heavily on the strength of its dollar to keep demand for its treasury bonds going and keep the hamster running on the wheel. When the US dollar broke away from the gold standard in 1971, President Nixon negotiated a deal with Saudi Arabia (and later all the other OPEC nations) that would see them supplied with arms and come under the protection of the USA if these countries undertook to only ever sell oil internationally in US dollars. Hence the Petrodollar was born!

Sadam Hussein threatened that Iraq would break away from the Petrodollar and refused to budge despite economic sanctions etc. The rest is history.

The fact that the USA is taking a far more relaxed attitude to Iran is worrying Saudi Arabia. There is no love lost between Iran and Saudi Arabia. The Saudi’s are fearful that Iran will gain an advantage in terms of access to nuclear technology that may threaten the Saudi dominance of OPEC and even the defence of their borders. This represents a potential threat to the USA in terms of loss of the Petrodollar status.

China has another card to play in breaking the reliance of the US dollar. BRICS.

BRICS  is an acronym for Brazil, Russia, India, China and South Africa. These BRICS countries have threatened to form a rival institution to the IMF/World Bank. China are in fact hedging their bets by threatening to put their weight behind the BRICS coalition if they fail to get acknowledged by the IMF. There are some dangerous players in this alliance from an economic viewpoint.

Russia too are very keen to avoid having to buy/sell US dollars as it is crippling their economy and gives the economic sanctions imposed on them more weight.

That said China had made it very clear they favour joining the IMF rather than having to take the long way through the BRICS  alliance.

Currency wars can be fought a number of ways.

All banking transactions internationally are run through a system called SWIFT. It is essentially a portal based in Brussels which allows transactions between banks in all countries to be made. If you restrict a countries ability to use SWIFT you essentially cripple their banking system and economy overnight.

Such a threat was made to Russia in January 2015 as part of the proposed economic sanctions to which Russia responded such action would be regarded as an act of war.

Specifically the Russian Prime Minister stated:

"We’ll watch developments and if such decisions [to restrict access to SWIFT] are made, I want to note that our economic reaction and generally any other reaction will be without limits."

There is speculation that China may be amassing large quantities of gold in anticipation of pegging their currency to a gold standard. Such a move by an economy as large as China would see a flee from fiat currency world-wide to this new reserve currency that actually has real value. Real value in that you cannot print more of it than is currently backed by Gold thus eliminating inflation – and collapsing any economy that did not hold gold reserves.

Cyber warfare is also a real tool in bringing down an economy. Russia, China and even North Korea have proven their abilities in this area. An attack on the NY stock exchange, the banking system, in fact “any system” could see a run on the markets. 

How might the sovereign debt problem be resolved?

The USA is already gearing itself up for methods of repaying its loans in the future. When their attempts at using monetary policy fail they will have to resort to fiscal policy. i.e. cutting spending and increasing taxation. In the US you are taxed on your world-wide income if you a citizen of the USA or have residency there. The new Foreign Account Taxation Compliance Act (FATCA) rules which every country in the world has signed up for (including NZ, China, Russia and all the tax haven countries) enforce every bank in the world to collect tax from these US citizens if so requested. 

FATCA is a mechanism by which the USA can give offshore bank accounts of their citizens a haircut if they ever need to. Taxation  in various forms is the only way that a sovereign debt bubble can be resolved. The people must be taxed heavily in order to reduce the debt. Capital controls and world-wide reach mean that the USA can continue to tax its citizens despite a resident deciding to flee to a lower tax jurisdiction. The Eurozone are contemplating the introduction of rules similar to FATCA for their citizens also.

Incidentally, USA was able to enforce FATCA compliance on foreign banks by threatening to cut them off from SWIFT if they refused to comply. 

This is only scratching the surface of what is happening at an economic level... and only what we are allowed to see. The bottom line is all these events are brewing into something very large and would change society instantly if any one of these wobbly dominos start to fall.

Socially we have seen what happens in panic situations in the US with hurricane Katrina, etc. We have become so accustomed to consumption on demand are we prepared for even one week of not having access to fuel, food, electricity, water and the necessities for survival?

Our reliance on ‘just in time’ inventory, transport, instant communication,  international trade, specialisation in employment, economies of scale and fiat currency give us a very false sense of security but no ability to survive if we had to rely on ourselves for survival.

We hold our wealth in bank accounts that if we needed it would not be there. We have seen in Cyprus and Greece how easy it is to stop runs on the markets. Simply close the banks, the stock markets and restrict access to cash through ATM limits.

We are slaves to the dollar right now. Take it away and what do we become?

Perhaps we will not have much time. Perhaps they will find a way to kick the can further down the road. Who knows? Events in economic warfare happen instantly and often in back room secret deals. One theme remains constant however - it is always occurs without warning. 

© 2015