Entries Tagged 'Banks' ↓

WORD of the DAY – Runaway Inflation

Economics Has “Long Been Called “The Dismal Science”.

However, In My Opinion It Should Be Called “The “Magical Thinking Science”

So many calculus formulas and jargon words are mis-used to promote economic policies that seem nuts.

This week I’m using an example of “Wolf Street’s Stories behind Business, Finance & Money” post  about Runaway Inflation for their chock-full-of-data about how Economics really works.

Wolf defines this phrase. Runaway Inflation is when “‘Temporary’ inflation” (or a “spike in inflation” is suddenly called “Runaway Inflation”).

Wolf shows in an easy-to-see Eurostat chart that “Runaway Inflation” in the Eurozone jumped to 9.1% in August 2022, a percentage that in Europe hadn’t been seen since 1997.

Ignoring reality, back in mid-2021 our Fed announced that inflation was just temporary, and the ECB followed suit.

For decades while printing money, both our Central Banks and the Eurozone Countries Central Banks had been getting away with using a policy called “Negative-Interest-Rates”

The Central Banks in Europe and U.S. told their big money-market customers that even though their clients’ accounts were losing money, their customers were safer with them than with other kinds of assets.

Those Central Banks were accually claiming that going and staying below zero was gaining their customers some kind value – the value of peace of mind. Continue reading →

Book Review – Deutsche Bank & Trump Family Debts

Dark Towers: Deutsche Bank, Donald Trump and an Epic Trail of Destruction by David Enrich (2020)

This Wall Street Journal Bestseller and New York Times Bestseller deserves being a bestseller. Its author, David Enrich, has been a reporter for both papers.

This book does not start out to be about the Trump Family. It covers the entire history of the bank from March 10, 1870 in Berlin. That’s why the book is over 400 pages long, (the last 100 pages being endnotes).

The lens David Enrich uses to tell a really compelling story from the 19th century to the present year is shown through the stories of several top executives of Deutsche Bank.

In this book it is clear that the type of banker portrayed in the the American classic movie “A Wonderful LIfe” has been buried deep in their graves for centuries.

For those conspiracy lovers who have decided banks, and Deutsche Bank in particular are a run by Jewish cabal, this book will be a disappointment.

Dark Towers skims over the Nazi period and follows the all-German Board that runs the Bank its branches with secret meetings in the top of one of its Berlin buildings’ towers.

According to Wikipedia, Deutsche Bank dumped three of its Board members in 1993 and confiscated Jew’s belongings, provided funds for the Gestapo, and loaned the funds for building  Auschwitz.

From the start Deutsche Bank was run by a group of all German Bankers who met in secret in the top of one of the banks’ two towers and plotted to open branches all over the globe.

Throughout its long lifetime, outsiders were not let into this cabal until very recently when an Indian fellow was named CEO and an American added to the Board.

Incidently, these German bankers had a sense of whimsey. the two towers, that rose above the main bank Frankfurt were named “Credit” and Debit”.

And These Bankers are Not Boring

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Word of the Day – Helicopter Money

Definition of Helicopter Money

“Helicopter money is a proposed unconventional monetary policy, sometimes suggested as an alternative to quantitative easing when the economy is in a liquidity trap”. Wikipedia

This term, invented by Milton Friedman, conservative Economist at the University of Chicago in 1969 to explain how economic stimulus works works, means just what this image brings up. A whole lot of minted money dropped out a helicopter which blows it around to those on the ground.

But where is that ground and who is getting that money?

When we got out of the Financial Crises in 2007, the Fed had $3 to $4 trillion in debt on its books. Get ready for what it has on its balance sheet now—6.37 trillion dollars!

“Since March 11, the Fed created $1.77 trillion and handed it to Wall Street either by purchasing financial instruments or as loans. The sole purpose of this was to inflate asset prices and bail out asset holders.” (Wolf Street, “QE 4 Cut in Half….Fed’s Helicopter Money for Wall Street & the Wealthy Hits $1.8 Trillion in 4 Weeks” 4-9-2020)

Continue reading →