Category Archives: Fiat Currency

Bank Lobbyists Help in Drafting Financial Bills | What Could Possibly Go Wrong?

House Committe Advances bill weakiening financial regulations written word for word by citgroup lobbyists

Citibank lobbyists write the rules for Citibank to follow. What could possibly go wrong in that scenario?

Do you think that maybe huge banks might have an incentive to write regulations that benefit the banks to the detriment of everyone else?

I dunno… let’s think back to 2008 for a second… to the economic collapse that was created by bad mortgages that were doomed to fail. This memory brought to you by the vultures at mega-banks who love legislation that allows them to write their own law.

Bank Lobbyists Help in Drafting Financial Bills

MAY 23, 2013, 9:44 PM

By ERIC LIPTON and BEN PROTESS

WASHINGTON — Bank lobbyists are not leaving it to lawmakers to draft legislation that softens financial regulations. Instead, the lobbyists are helping to write it themselves.

One bill that sailed through the House Financial Services Committee this month — over the objections of the Treasury Department — was essentiallyCitigroup’s, according to e-mails reviewed by The New York Times. The bill would exempt broad swathes of trades from new regulation.

In a sign of Wall Street’s resurgent influence in Washington, Citigroup’s recommendations were reflected in more than 70 lines of the House committee’s 85-line bill. Two crucial paragraphs, prepared by Citigroup in conjunction with other Wall Street banks, were copied nearly word for word. (Lawmakers changed two words to make them plural.)

The lobbying campaign shows how, three years after Congress passed the most comprehensive overhaul of regulation since the Depression, Wall Street is finding Washington a friendlier place.

The cordial relations now include a growing number of Democrats in both the House and the Senate, whose support the banks need if they want to roll back parts of the 2010 financial overhaul, known as Dodd-Frank.

This legislative push is a second front, with Wall Street’s other battle being waged against regulators who are drafting detailed rules allowing them to enforce the law.

And as its lobbying campaign steps up, the financial industry has doubled its already considerable giving to political causes. The lawmakers who this month supported the bills championed by Wall Street received twice as much in contributions from financial institutions compared with those who opposed them, according to an analysis of campaign finance records performed by MapLight, a nonprofit group.

In recent weeks, Wall Street groups also held fund-raisers for lawmakers who co-sponsored the bills. At one dinner Wednesday night, corporate executives and lobbyists paid up to $2,500 to dine in a private room of a Greek restaurant just blocks from the Capitol with Representative Sean Patrick Maloney, Democrat of New York, a co-sponsor of the bill championed by Citigroup.

Industry officials acknowledged that they played a role in drafting the legislation, but argued that the practice was common in Washington. Some of the changes, they say, have gained wide support, including from Ben S. Bernanke, the Federal Reserve chairman. The changes, they added, were in an effort to reach a compromise over the bills, not to undermine Dodd-Frank.

“We will provide input if we see a bill and it is something we have interest in,” said Kenneth E. Bentsen Jr., a former lawmaker turned Wall Street lobbyist, who now serves as president of the Securities Industry and Financial Markets Association, or Sifma.

The close ties hardly surprise Wall Street critics, who have long warned that the banks — whose small armies of lobbyists include dozens of former Capitol Hill aides — possess outsize influence in Washington.

“The huge machinery of Wall Street information and analysis skews the thinking of Congress,” said Jeff Connaughton, who has been both a lobbyist and Congressional staff member.

Lawmakers who supported the industry-backed bills said they did so because the effort was in the public interest. Yet some agreed that the relationship with corporate groups was at times uncomfortable.

“I won’t dispute for one second the problems of a system that demands immense amount of fund-raisers by its legislators,” said Representative Jim Himes, a third-term Democrat of Connecticut, who supported the recent industry-backed bills and leads the party’s fund-raising effort in the House. A member of the Financial Services Committee and a former banker at Goldman Sachs, he is one of the top recipients of Wall Street donations. “It’s appalling, it’s disgusting, it’s wasteful and it opens the possibility of conflicts of interest and corruption. It’s unfortunately the world we live in.”

The passage of the Dodd-Frank Act, which took aim at culprits of the financial crisis like lax mortgage lending and the $700 trillion derivatives market, ushered in a new phase of Wall Street lobbying. Over the last three years, bank lobbyists have blitzed the regulatory agencies writing rules under Dodd-Frank, chipping away at some regulations.

But the industry lobbyists also realized that Congress can play a critical role in the campaign to mute Dodd-Frank.

The House Financial Services Committee has been a natural target. Not only is it controlled by Republicans, who had opposed Dodd-Frank, but freshmen lawmakers are often appointed to the unusually large committee because it is seen as a helpful base from which they can raise campaign funds.

For Wall Street, the committee is a place to push back against Dodd-Frank. When banks and other corporations, for example, feared that regulators would demand new scrutiny of derivatives trades, they appealed to the committee. At the time, regulators were completing Dodd-Frank’s overhaul of derivatives, contracts that allow companies to either speculate in the markets or protect against risk. Derivatives had pushed the insurance giantAmerican International Group to the brink of collapse in 2008. The question was whether regulators would exempt certain in-house derivatives trades between affiliates of big banks.

House Committe Advances bill weakiening financial regulations written word for word by citgroup lobbyists

As the House committee was drafting a bill that would force regulators to exempt many such trades, corporate lawyers like Michael Bopp weighed in with their suggested changes, according to e-mails reviewed by The Times. At one point, when a House aide sent a potential compromise to Mr. Bopp, he replied with additional tweaks.

In an interview, Mr. Bopp explained that he drafted the proposal at the request of Congressional aides, who expressed broad support for the change. The proposal, he explained, was a “compromise” that was actually designed to “limit the scope” of the exemption.

“Everyone on the Hill wanted this bill, but they wanted to make sure it wasn’t subject to abuse,” said Mr. Bopp, a partner at the law firm Gibson, Dunn who was representing a coalition of nonfinancial corporations that use derivatives to hedge their risk.

Ultimately, the committee inserted every word of Mr. Bopp’s suggestion into a 2012 version of the bill that passed the House, save for a slight change in phrasing. A later iteration of the bill, passed by the House committee earlier this month, also included some of the same wording.

And when federal regulators in April released a rule governing such trades, it was significantly less demanding than the industry had feared, a decision that the industry partly attributed to pressure stemming from Capitol Hill.

Citigroup and other major banks used a similar approach on another derivatives bill. Under Dodd-Frank, banks must push some derivatives trading into separate units that are not backed by the government’s insurance fund. The goal was to isolate this risky trading.

The provision exempted many derivatives from the requirement, but some Republicans proposed striking the so-called push out provision altogether. After objections were raised about the Republican plan, Citigroup lobbyists sent around the bank’s own compromise proposal that simply exempted a wider array of derivatives. That recommendation, put forth in late 2011, was largely part of the bill approved by the House committee on May 7 and is now pending before both the Senate and the House.

Citigroup executives said the change they advocated was good for the financial system, not just the bank.

“This view is shared not just by the industry but from leaders such as Federal Reserve Chairman Ben Bernanke,” said Molly Millerwise Meiners, a Citigroup spokeswoman.

Industry executives said that the changes — which were drafted in consultation with other major industry banks — will make the financial system more secure, as the derivatives trading that takes place inside the bank is subject to much greater scrutiny.

Representative Maxine Waters, the ranking Democrat on the Financial Services Committee, was among the few Democrats opposing the change, echoing the concerns of consumer groups.

“The bill restores the public subsidy to exotic Wall Street activities,” said Marcus Stanley, the policy director of Americans for Financial Reform, a nonprofit group.

But most of the Democrats on the committee, along with 31 Republicans, came to the industry’s defense, including the seven freshmen Democrats — most of whom have started to receive donations this year from political action committees of Goldman Sachs, Wells Fargo and other financial institutions, records show.

Six days after the vote, several freshmen Democrats were in New York to meet with bank executives, a tour organized by Representative Joe Crowley, who helps lead the House Democrats’ fund-raising committee. The trip was planned before the votes, and was not a fund-raiser, but it gave the lawmakers a chance to meet with Wall Street’s elite.

In addition to a tour of Goldman’s Lower Manhattan headquarters, and a meeting with Lloyd C. Blankfein, the bank’s chief executive, the lawmakers went to JPMorgan’s Park Avenue office. There, they chatted with Jamie Dimon, the bank’s chief, about Dodd-Frank and immigration reform.

The bank chief also delivered something of a pep talk.

“America has the widest, deepest and most transparent capital markets in the world,” he said. “Washington has been dealt a good hand.”

Eric Lipton reported from Washington, and Ben Protess from New York.

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Cancer Care Rationing Begins in America as Cancer Clinics Turn Away Thousands of Medicare Patients

feds fund study benefits of snail sex

 As reported by NaturalNews.com, Cancer care clinics have started turning cancer patients away on a large scale. Even when you know that things are headed in a predictable direction, you are never quite prepared when you hear the news. Now, after admittedly contributing to hundreds of thousands, perhaps millions of cancer cases, the US government decides to quite paying for treatment. Of course, like any dictatorial government, they want the weakest and most infirmed out of the way so that they are left with only worker bees…

“With an aging global population and an endless conveyor belt of expensive new drugs and technologies and increasing financial pressures, the cost of cancer care in high-income countries is becoming unsustainable,” said the journal The Lancet Oncology…

I wonder if it would be more sustainable if we didn’t have constant war and hundreds of military bases all over the world? Perhaps if we weren’t sending the Muslim Brotherhood in Egypt 10billion dollars a year in aid? Perhaps we don’t need to research the length of duck penises or effects of snail sex or buy talking urinal cakes for the White House… Maybe then we could afford to treat cancer patients?… All food for thought.

Cancer care rationing begins in America as cancer clinics turn away thousands of Medicare patients

Thursday, April 11, 2013 by: Ethan A. Huff, staff writer

federal funding study of duck penis length(NaturalNews) Federal sequestration measures that came into effect on April 1 are making it impossible for many cancer clinics across the country to administer conventional care to patients, and particularly to those on Medicare. Consequently, thousands of cancer patients with taxpayer-funded insurance coverage are being turned away, according to reports, as clinics simply do not have the capacity nor the funding to administer expensive pharmaceutical-based treatments such as chemotherapy.

According to the Washington Post, many cancer clinics are having to turn away patients without adequate coverage, or else face potential closure of their practices. Since many of the latest cancer drugs now cost upwards of $35,000 or more per year, it is grossly unsustainable to deliver such treatments to patients without adequate insurance coverage — doing so would spell financial suicide for even the most successful and well-funded cancer clinics.

“If we treated the patients receiving the most expensive drugs, we’d be out of business in six months to a year,” said Jeff Vacirca, chief executive of North Shore Hematology Oncology Associates in New York, to the Washington Post. “The drugs we’re going to lose money on we’re not going to administer right now.”

Back in October, the Memorial Sloan-Kettering Cancer Center, another New York-based cancer center, announced that it would not be administering an expensive new cancer drug known as Zaltrap (ziv-afilbercept), a Sanofi-Aventis creation designed to treat metastatic colorectal cancer. According to an op-ed piece published by The New York Times (NYT), an average month’s worth of treatment with Zaltrap costs more than $11,000, or more than $132,000 per year.

“We don’t sugar-coat things, we’re cancer doctors,” explained Charles Holladay, an oncologist at the Charleston Cancer Center in South Carolina, to the Washington Post. Holladay’s facility began informing many of its government-covered patients several weeks ago that they would have to seek out alternative treatment options.

“We tell them that if we don’t go this course, it’s just a matter of time before we go out of business,” he added.

Prevention, natural treatments are the keys to beating cancer and avoiding a total healthcare meltdown

 feds fund study benefits of snail sex Even if sequestration was not a factor in the current cancer treatment crisis, the ever-escalating costs of conventional cancer treatments would still be bankrupting an already-overburdened American healthcare system. The public at large is still not being informed about effective cancer prevention strategies, for instance, nor is there any effort whatsoever being made by public health authorities to teach people about effective natural cancer treatment options like the Gerson Therapy protocol, Indian black salve, and all-natural cannabis oil.

This, of course, is due to the fact that the conventional healthcare system is owned and operated by the pharmaceutical cartel, which has no interest in actually healing people. Instead, a sadistic combination of greed and eugenics is what drives healthcare, and especially the cancer industry, today — and this death-care model is directly responsible for pushing the healthcare system to the precipice of complete destruction.

“With an aging global population and an endless conveyor belt of expensive new drugs and technologies and increasing financial pressures, the cost of cancer care in high-income countries is becoming unsustainable,” said the journal The Lancet Oncology in a statement back in 2011 about the failure of the conventional cancer industry.

http://www.naturalnews.com/039879_sequester_cancer_care_health_rationing.html

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Hyperinflation in America: When a Loaf of Bread is $3 Billion

Too few understand just how disruptive hyperinflation in America would be.

Truth is, it would be a nightmare.

In an episode of hyperinflation, money loses value so rapidly that people spend it as quickly as possible, which only feeds the cycle of pushing prices higher and higher at a faster and faster rate.

Imagine prices at the food store and gas pump not just going up a few cents at a time, but doubling in a matter of months, weeks, or even days.

This is exactly the scenario that played out in Germany and many other countries with fiat currency.

In 1922, a loaf of bread cost 163 marks. 

By September 1923, this figure had reached 1,500,000 marks and at the peak of hyperinflation, November 1923, a loaf of bread cost 200,000,000,000 marks.

The impact of hyperinflation was huge :

People were paid by the hour and rushed to pass money to loved ones so that it could be spent before its value meant it was worthless. People had to shop with wheel barrows full of money. 

And now some economists and market experts think many of the ingredients for hyperinflation are brewing in America.

That’s because years of profligate U.S. government borrowing and spending have created trillions of dollars that lurk in the reserves of foreign countries and major financial institutions. The situation escalated after the 2008 financial crisis, with the U.S. Federal Reserve‘s policies of “quantitative easing” creating even more money.

“The U.S. government and the Federal Reserve have committed the system to its ultimate insolvency, through the easy politics of a bottomless pocketbook, the servicing of big-moneyed special interests, gross mismanagement, and a deliberate and ongoing effort to debase the U.S. currency,” said John Williams of Shadow Government Statistics in his annual report on hyperinflation.

Historically, governments that have suffered bouts of hyperinflation – most notoriously Weimar Germany from 1922-1923 – have set the table by printing too much money during a time of economic contraction.

The trouble is, once it starts it’s impossible to stop. Hyperinflation in America isn’t here yet, but we’re edging dangerously close to the point of no return.

“We’re certainly at a flashing yellow alert,” Art Cashin, Director of Floor Operations at UBS Financial Services, told King World News last week. “You have in place a variety of things that could begin to react somewhat domino-like.”

Cashin drew attention last week when he sent out a report detailing the Weimar hyperinflationary disaster, concluding that the episode was why “many express concern about unintended consequences of each new wave of quantitative easing.”

Hyperinflation in America: Where Is It?

fiat currency and hyperinflation Some may point to the moderate inflation in the U.S. now – between 2% and 3% — and reason that hyperinflation in America is a distant possibility, if it could happen at all.

But the seeds of hyperinflation tend to be sown long before the signs of hyperinflation become apparent.

So it could be a while before any evidence of hyperinflation shows up, despite QE1, QE2 andQE3.

“Even when they [Weimar Germany] were actually printing money, literally printing, the inflationary spiral didn’t happen instantly,” Cashin told King World News. “It was delayed a couple of years. But once it started, it could not be taken back.”

The key is that no matter how much of a currency exists, if large amounts of it remain out of circulation, inflation – and hyperinflation in particular – can’t happen.

“The analogy I use is if the Fed flew over your house and dropped a million dollars in brand new bills, and you were so worried you put them in your garage, that’s not inflationary,” Cashin said. “It’s only inflationary when you lend it or spend it.”

For the U.S., the “garage full of money” is the trillions in U.S. Treasurys squirreled away in places like Japan and China, as well as hedge funds and major U.S. and European banks.

Should some sort of financial crisis cause a run on the dollar – a sudden meltdown of the long-simmering Eurozone debt crisis, or if no one blinks in Washington’s game of chicken over budget and debt issues – the situation could unravel quickly.

“The Fed’s initial moves to debase the U.S. dollar worked, impairing the U.S. currency’s exchange rate value and triggering commodity inflation fueled by the weak-dollar policy,” said Williams in his report.

“This also has helped to set the stage for a global dumping of the dollar and dollar-denominated paper assets, a rapid influx of unwanted dollars from abroad that either would collapse the financial markets or would force the Fed to flood the system with the incoming liquidity, monetizing dumped U.S. Treasury securities among other assets.”

RELATED: Four ways to survive the coming market collapse

Warning Signs of Hyperinflation

Cashin noted that hyperinflation can sneak up in that it often appears at first to be only higher-than-normal conventional inflation.

Going back to his Weimar example, Cashin used the price of a loaf of bread to illustrate this.

 

In 1914, before World War I, a loaf of bread in Germany cost the equivalent of 13 cents. Two years later it was 19 cents, and by 1919, after the war, that same loaf was 26 cents – doubling the prewar price in five years. 

Bad, yes — but not alarming. But one year later a German loaf of bread cost $1.20. By mid-1922, it was $3.50. Just six months later, a loaf cost $700, and by the spring of 1923 it was $1,200. As of September, it cost $2 million to buy a loaf of bread. One month later, it cost $670 million, and the month after that $3 billion.

Within weeks it was $100 billion, at which point the German mark completely collapsed.The whole time the German government kept printing more money, so much so that people burned it in their fireplaces because it was cheaper than wood.Why didn’t they just stop and try to stabilize the currency?

“When things began to disintegrate, no one dared to take away the punchbowl,” Cashin wrote in his report. “They feared shutting off the monetary heroin would lead to riots, civil war, and, worst of all, communism. So, realizing that what they were doing was destructive, they kept doing it out of fear that stopping would be even more destructive.”

Cashin advises Americans to keep an eye on M2, a measure of the nation’s money supply, particularly how much money is in circulation. The government reports this number every week. A sudden spike could signal the start of hyperinflation in America.

And once people decide they’d rather spend their money as fast as possible, the so-called “velocity of money” – how quickly money changes hands – takes off. The faster it goes, the higher the rate of inflation.

Preparing for Hyperinflation in America

hyperinflation and fiat dollarNo one can predict precisely when, or even if, an episode of hyperinflation might strike. But because the consequences would be so devastating, it bears watching no matter how slim the possibility.

Hyperinflation in America would create havoc in the markets. Bonds would become toxic and stocks would plummet. But precious metals like gold and silver would soar, as would commodities like oil, copper and corn. Foreign currencies would also skyrocket against the dollar.

“If you begin to see not just the first signs of inflation, but acceleration – it will come very fast – then you have to think about how you are protected,” Cashin said, advising people to make sure they’re invested in hard assets like commodities or real estate.

But most of all, Cashin urges that Americans stay vigilant.

“If [M2] begins to grow rapidly, then the money that the Fed has created will be seen as moving through the system and that will create the high risk of accelerated inflation and, God forbid, runaway inflation,” Cashin told King World News. And if that happens, he said, “get very cautious.”

http://moneymorning.com/2012/10/16/hyperinflation-in-america-when-a-loaf-of-bread-is-3-billion/

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