Revealed: The Run on Banks in Catalonia after the Independence Vote was Fomented by Madrid

The clandestine role of the Spanish government in a run on deposits that drained €29 billion from Catalan banks.

Just over a year has passed since over two million people in Catalonia voted in a banned referendum to leave Spain. On that day, the separatists were given a brutal lesson in the raw power of state violence. Days later, they were given another harsh lesson, this time in the fickleness of money. Within days of holding the vote, which was brutally suppressed but not prevented by Spanish police, Spain’s north eastern region was forced to watch as one after another of its brand names moved their headquarters, at least on paper, to other parts of Spain.

Among the first companies to up sticks were Catalonia’s two largest banks, Caixabank and Banco Sabadell, which feared being cut off from European Central Bank funding in the event, albeit unlikely, of Catalonian secession. That would have meant no more virtually interest-free loans from the ECB or access to Europe’s repo markets. In other words, a death sentence, as Caixabank’s then president Isidro Faine recently admitted.

The banks were also suffering a gathering run on deposits as customers shifted their money to other Spanish banks, either because they were afraid of what could happen to their funds in the event of independence or as punishment for the banks’ Catalan roots. In little more than a week, the two banks lost tens of billions of euros in deposits.

But what is only now becoming clear is just how central a role the Spanish government in Madrid was playing in fomenting this massive exodus of funds…

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I Was Asked: Why Did All this Money-Printing Not Trigger Massive Inflation?

by Wolf Richter • Oct 9, 2018 • 168 Comments

Asset-price inflation feels good to asset holders – until it doesn’t

I was asked two important questions in this mind-boggling era of QE: The Bank of Japan has monetized 50% of its national debt; so why has there not been a surge of inflation? And why can’t the Fed restart QE and do the same without triggering inflation?

“Inflation” can be a lot of things. Here we’re not talking about “monetary inflation.” We’re talking about price inflation – when the currency loses its purchasing power. There are several types of price inflation that are accounted for separately, including:

• Consumer price inflation
• Wholesale price inflation
• Wage inflation.
• Asset price inflation.

The questions were about consumer price inflation; but the answer lies in asset price inflation.

It’s true that despite QE globally – not just in Japan – there has been relatively little consumer price inflation in the countries whose central banks perpetrated it. But it has caused enormous asset-price inflation. We call it the “Everything Bubble” where practically all asset classes globally have become ludicrously inflated.

Asset price inflation means that the currency loses purchasing power with regards to assets, such as real estate. The house is the same, only a little more run-down, but now it takes twice as many dollars to buy than five years ago.

When asset-price inflation reverses, which it invariably does, it can be deadly for the banks and the financial system overall. There are plenty of examples, including the US housing and mortgage crisis that was part of the Financial Crisis.

Assets are used as collateral by banks and other lenders. When asset prices get inflated, they support larger loans. But inflated asset prices invariably deflate at some point, and suddenly, when the borrower defaults, the collateral is no longer enough to cover the loan. Asset price inflation feels good because it translates into free and easy wealth for asset holders, but when it deflates, it tends to bring down the banks – even or especially the biggest ones – and causes all kinds of other mayhem.

Asset price inflation means risks are building up in the financial system.

So central banks, while they try to stimulate some asset price inflation, are worried when it goes too far. The Fed has expressed this worry in various forms for two years. The ECB is now murmuring about it. And even the Bank of Japan is suddenly fretting about the “sustainability” of its QE program, and its impact on the financial markets.

This is why QE cannot be maintained without setting the stage for another, and much bigger and even more magnificent collapse of the financial system, the Big One if you will, and all the real-economy mayhem it would entail.

Consumer price inflation – defined here as loss of purchasing power of the currency with regards to consumer goods and services, as measured by a consumer price index – is in part a confidence game.

Consumer price inflation results from a mix of market forces, psychology, and other factors. What exactly causes consumer price inflation is still not fully understood, as evidenced by the surprise that economists experienced when QE failed to cause it.

One factor in consumer price inflation is confidence in the currency – often measured as “inflation expectations.” Like so many other factors in economics, it’s psychological!

When the people have confidence that the purchasing power of their currency remains stable, and when businesses therefore cannot raise prices because people and other businesses would refuse to pay these higher prices, then inflation is “well anchored,” as central bankers say. This is expressed in various “inflation expectation” indices. But confidence can vanish, and once gone, it’s devilishly hard to rebuilt.

Over the past two decades, the Japanese have learned that there is very little or no inflation in their system:

All economic players have adjusted to it — consumers, government entities, businesses, pension funds, etc. This confidence has made it effectively impossible to raise prices on many goods and services (with some exceptions). When companies tried to raise prices, consumers simply switched to alternatives or cut back, and the price increases didn’t stick.

The Japanese are hoarding cash (via yen deposits and other low-risk yen instruments) because they know it will retain its purchasing power. They trust the yen! This attitude – “inflation expectations” – has helped keep inflation to near zero. It’s a self-reinforcing mechanism.

On the other hand, there’s Argentina: Successive governments have for decades trashed any kind of confidence or trust people might have had in the peso. Argentines get rid of pesos as soon as they can (convert them into dollars or assets). In other words, they constantly sell pesos. The entire economy has adjusted to dealing with a currency that rapidly loses purchasing power. It too is a self-reinforcing mechanism.

During the 1970s, there was a lot of inflation in the US, reaching nearly 15% in 1980. It had to be stopped before it would spiral completely out of control. Fed Chairman Paul Volcker, with the gutsy public backing of President Reagan, went to work with rate increases of a full percentage point per meeting that shocked. This was accompanied by a publicity campaign.

It was radical surgery to rebuild confidence in the dollar, and it caused a nasty “double-dip” recession that threw millions of people out of work. But inflation began dropping. And over many years, it gradually rebuilt confidence that prices might rise by about 2% to 3% a year, not more. In the Fed’s terms, “inflation expectations are well anchored.” As long as that confidence persists, inflation will have a hard time spiraling out of control.

But in the US, this confidence is still fragile. Inflation expectations already ticked up to 3%. Once inflation expectations rise, all bets are off.

This can also crop up in Japan, and when it does, nothing and no one will be prepared for it – after two decades of price stability. If consumer price inflation gets out of hand, the loss of purchasing power of the yen will destroy much of the wealth of the Japanese and the purchasing power of their labor.

That is a risk. And it comes on top of the more immediate risk associated with asset price inflation – what it does to the financial system when the prices of leveraged assets deflate. That’s the mechanism by which QE becomes destructive. That’s why the price of free money can be very costly.

Despite repeated speeches to the contrary, the Bank of Japan is sharply tapering its QE. Read…  QE Party Is Drying Up, Even at the Bank of Japan

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New Study Shows Vast Majority of Non-White Americans Reject Political Correctness

They reject it even more than white people

A huge new study by a left-wing organization has slayed a sacred cow of the left by proving that the vast majority of non-white Americans reject political correctness.

The study was undertaken by scholars Stephen Hawkins, Daniel Yudkin, Miriam Juan-Torres, and Tim Dixon on behalf of leftist group More in Common.

As the Atlantic explains, “It is based on a nationally representative poll with 8,000 respondents, 30 one-hour interviews, and six focus groups conducted from December 2017 to September 2018.”

The survey found that a full 80% of Americans across the nation believe “political correctness is a problem in our country,” including 74 percent of young people aged 24 to 29, and 79 percent under age 24.

However, it’s when the responses are broken down by race when the results become even more intriguing.

“Whites are ever so slightly less likely than average to believe that political correctness is a problem in the country: 79 percent of them share this sentiment. Instead, it is Asians (82 percent), Hispanics (87 percent), and American Indians (88 percent) who are most likely to oppose political correctness,” writes Yascha Mounk.

Three quarters of African Americans also oppose political correctness.

In other words, some of the very people who white leftists claim to be representing when they push politically correct narratives reject political correctness even more vehemently than white people.

Among “traditional liberals,” 61 percent see political correctness as a problem, while almost a third (30 percent) of self-proclaimed “progressives” see it as a problem.

When asked to define exactly what it was about “political correctness” that concerned them, a significant number of respondents said they were worried “about their day-to-day ability to express themselves.”

At the end of his article, Yascha Mounk, a leftist lecturer on government at Harvard University, admits that the results indicative progressives are completely out of touch with the mood of the American people.

“The fact that we are so widely off the mark in our perception of how most people feel about political correctness should probably also make us rethink some of our other basic assumptions about the country,” he writes.

“The gap between the progressive perception and the reality of public views on this issue could do damage to the institutions that the woke elite collectively run. A publication whose editors think they represent the views of a majority of Americans when they actually speak to a small minority of the country may eventually see its influence wane and its readership decline. And a political candidate who believes she is speaking for half of the population when she is actually voicing the opinions of one-fifth is likely to lose the next election,” concludes Mounk.

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Paul Joseph Watson is the editor at large of Infowars.com and Prison Planet.com.

Anti-Military Dem Senate Candidate: Deaths of Illegals ‘Are Same as’ Deaths in Iraq

The Democratic nominee in the Arizona Senate race, Rep. Kyrsten Sinema, once appeared to compare the deaths of illegal immigrants crossing into the United States to the deaths of civilians massacred by a brutal dictator abroad — and possibly even U.S. troops killed fighting that same dictator.

Sinema’s ridiculous claims were reported Wednesday by The Washington Free Beacon.

The Democratic nominee’s most alarming claims were made when she discussed deaths of illegal immigrants to deaths in Iraq.

“To state that immigration is not a war or is not equal in magnitude to war, I believe, dishonors those who have died in this country and others as migrants,” Sinema wrote in an email.

“I volunteer with a group called No Mas Muertes—No More Deaths—and I cannot explain to you the pain that I suffered one hot day last July as I scoured the desert along with scores of others for the bodies of those who have died tortuous and painful deaths in our desert … Death is death, and to rank one form of death as being somehow more important than other death [sic] does us no good as humans. The deaths that people suffer in the Mexico-Arizona desert are the same as the deaths that people suffer in the Iraq desert — they are needless, senseless deaths.”

TRENDING: GOP Cut Backroom Deal with Obama Administration During 2016 Election

It was unclear exactly what comparison Sinema was drawing, but the Free Beacon pointed out that her email was written on April 4, 2006, the same day that an Iraqi court charged former Iraqi dictator Saddam Hussein with attempted genocide for using chemical weapons against Kurds in Iraq in a 1988 massacre. So she might have been referring to that barbarity.

However, Sinema has a radically anti-military past. In 2003 she participated in producing flyers depicting American soldiers as skeletons spreading “U.S. terror in Iraq and the Middle East.” It’s entirely possible she was actually equating the deaths of illegal immigrants to those of Americans in uniform, dying to protect a country they have sworn to serve.

Either comparison is morally bankrupt.

“Death is death, and to rank one form of death as being somehow more important than other death (sic) does us no good as humans,” Sinema explained pompously in the email.

I’m going to have to strongly disagree with Sinema here.

For example, wouldn’t most people agree that it’s objectively bad for the U.S. if our soldiers suffer more deaths than our opponents?

Fortunately for Arizona voters, they have a far different alternative to vote for. Sinema’s opponent, Rep. Martha McSally, knows a thing or two about the United States military.

As a former A-10 “Warthog” pilot, she has more than 100 hours of combat patrol flying over the old Iraq “no-fly” zone, according to a Washington Post profile from 2002.

She retired from the Air Force as a full colonel in 2010, according to her congressional biography.

RELATED: GOP Rep Gets the Last Laugh After Siblings Bash Him in Opponent’s Campaign Ad

In an earlier campaign advertisement, McSally pointed out that while she was in the service of her country, Salima was safe at home, mocking the military that was fighting for her.

McSally said “while we were in harm’s way in uniform, Kyrsten Sinema was protesting us in a pink tutu and denigrating our service.”

And Sinema’s history has been noted by conservatives everywhere. In September, Missouri Republicans used it to attack the Show Me state’s incumbent Democrat Sen. Claire McCaskill.

It’s clear where Sinema stands on the military.

The Democratic Party can’t help but attract people who don’t support our troops.

Every American voter needs to remember that in November’s midterms.

We are committed to truth and accuracy in all of our journalism. Read our editorial standards.

Source: Global Warming – Court Orders – Pathetic Analysis | Armstrong Economics

Although many people have forgotten all about the story, there is still an ongoing investigation into the still unproven claim that Donald Trump ‘colluded’ with Russian agents to win the 2016 election. A new report sheds light on an interesting possible link in that particular investigation, tying Michael Flynn to an operative.

According to a report by the Wall Street Journal, a veteran republican activist was looking to find out what happened to Hillary Clinton’s hacked emails shortly before he died. The Journal also suggested that this political operative’s links to General Michael Flynn may have played a role in his decision to search for those emails.

This operative was tied to Flynn via a friend’s emails, though the timing of his death, which came after he informed the WSJ about his investigation, is more than a little strange.

Unidentified sources told reporters at the WSJ that Peter Smith had, at very least, a professional relationship with General Flynn as far back as 2015.

In fact, the two had a meeting just after the good General left his position as the top man in the Defense Intelligence Agency.

In an email that the news organization somehow got hold of and reviewed, Joe Szobocsan, a former associate of Peter Smith’s, wrote to a friend to reveal that deceased political operative had a business relationship with the General, which started sometime in November 2015, at very least.

According to the paper, the political activist had used his connections with Flynn in order to further his project to track down Hillary Clinton’s missing and stolen emails.

The Journal had previously stated that Smith at very least ‘implied’ that he had connections to Mike Flynn. Although it sounds like nothing ever came of their ‘business relationship,’ the email concerning the 2015 meeting does seem to suggest that they had some ties to each other.

The paper said that in his quest to track down the emails from former Secretary of State Clinton’s hacked email server, he came into contact with a number of hackers, including at least two groups of hackers who appeared to be Russian.

Interestingly, as with others who looked into the Clinton family and their dealings a bit too intently, Smith died of what has been called a suicide.

Shortly after he spoke with the Wall Street Journal about his research, in fact, and weeks after he told friends that he thought he had finally found the elusive emails from the former Secretary of State’s server, he was found dead.

At this point, it is still unclear whether or not anyone knew about the investigation Smith had operated, or what it uncovered.

The Robert Mueller probe, however, would likely be extremely interested in the answer to that question.

Last week, the same newspaper agency that reported this most recent development in the Smith tale also reported that he raised at least $100,000 from four different backers in order to finance his work.

If it was found that Flynn had either backed the investigative work, or had helped the political activist to meet up with people who would be interested in paying for him to attempt to track down the Clinton emails, that could be problematic.

It would be even worse if it was somehow proved that the former General’s interest in Peter Smith’s work was not just on his own behalf, or because he thought it might harm the Hillary Clinton campaign and its chances, but as a representative of President Trump’s campaign and its interest in such matters.

It’s also strange that, once again, someone who was looking into the Clinton family and their secrets, including emails on their poorly-secured email server (which just happened to also contain classified documents), died suddenly.

The death and disappearance of people who publicly take positions contrary to the particular politically powerful line is so unusually common that it has become a meme, humorously used by many throughout the country, with lists counting down the number of such people who existed, usually suggesting that there are 40 or more.

It is likely to be difficult to figure out where, exactly, the money and connections came from that paid Smith to look into Mrs. Clinton’s missing emails.

If it is discovered that it came from Flynn, or from powerful and wealthy republicans that the former Donald J. Trump cabinet member and campaign ally helped connect to Mr. Smith, that could cause further legal troubles for him.

As it stands, Flynn will be sentenced in December, on one charge of “willfully and knowingly” making “false, fictitious, and fraudulent” statements to the Federal Bureau of Investigation.

Exclusive! Hillary Clinton To Run For President In 2020

Two-time failed presidential contender will not go away

Infowars has confirmed from multiple inside sources that Hillary Clinton is already the presumptive Democrat nominee and no matter who really wins the nomination she will be handed the delegates.

Also, be sure to tune in to Infowars.com/show tonight, and every weeknight until November 6, for special Midterm election coverage you won’t see anywhere else.