Could the Yellow Vests collapse the world’s debt-based economy and deal a death blow to globalism?

The National Sentinel ^ | 1/17/19 | J. D. Heyes

[SleeperCatcher]

After U.S. markets peaked in September nearly two years after Donald Trump’s victory came with the promise (and delivery) of pro-growth policies, investors got a scare in December when several factors combined with interest rate hikes by the Federal Reserve to drive down indexes.

The Dow Jones, Nasdaq, and the S&P 500 all finished the year lower than they were in September. Worse, there are predictions that 2019 could hit markets harder.

Bank of America just polled 234 panelists who manage more than $645 billion in investments where they think global growth is heading over the next 12 months, and 60 percent said it will be negative.

On top of this potential nightmare scenario is the fact that governments around the world comprising the largest economies have nearly all become debtor nations that are one economic calamity away from global collapse.

As noted by Robert Gore at The Burning Platform blog, France’s Yellow Vest protesters may have inadvertently hit upon a way to bring about the collapse of the fiat money and debt system that is sustaining the very governments which increasingly suppress the people they are supposed to serve.

[Toddsterpatriot]

So, how does a run on a single bank in France “turn into a loose yarn that once pulled, unravels the whole sweater?” Gore wrote.

“The bank tries to increase its liquid funds, drawing on whatever lines of emergency credit it may have, and to convert it’s illiquid assets into liquid assets, calling in loans. This pressures other banks and financial institutions, who draw on their lines of credit and call their loans and so on until the system collapses,” he writes.

Wow! So much silliness in such a small passage.

[eyeamok]

have advocated a run on the country’s banks. Such a run, if it occurs, could actually start a chain reaction that would spread to other ostensibly wealthy countries including the United States.

Signs of encouragement!

[null and void]

Only if Soros helps...

[cuban leaf]

Sounds like a black snail event to me.

Not to be confused with a black swan.

[Liz]

......234 in-the-know types who manage more than $645 billion in investments were asked where they think
"global growth" is heading over the next 12 months.....a whopping 60 percent said it will be negative..........

Heck, this is very good news for Clinton haters.

The two con artists separated a lot of globalists from a lot of money....predicated on the fact that Hillary was a shoo-in for president.

Heaven only knows what the two greedsters promised in return for donations to the "do-good" Clinton Foundation money laundry.

Do the globalists now where Billy put their money? Remember Billy had a pass-through account....in by AM out by PM.....and no paper trail.

Could have gone to a numbered account in an offshore bank, to a hedge fund, to another do-good foundation.....anywhere.

[Phlyer]

So much silliness in such a small passage.

Well, yes and no. If your comment is that it is silly we got into such a mess in the first place, then you're right.

But if you think the 'unravel' explanation is silly, then you're wrong. It's very real. Except that ultimately the main debtors are the sovereign governments, who can always just print more money (which they do nowadays by pushing a button on a computer - no actual treasury notes needs to be printed). However, 'cash' with no real, material wealth underlying it just causes inflation - eventually hyperinflation.

The good news from that is that the debt becomes meaningless. As measured in something real, like loaves of bread, a US national debt that would equate to 15 trillion loaves of bread becomes the equivalent of 1 million loaves of bread. The bad news is that it costs us (the private citizens) $15 million to buy a loaf of bread. That's pretty close to collapse as far as I'm concerned.

[Liz]

No place on the globe is untouched by the Clintons' monstrous grered.

[momincombatboots]

The French may bbe on to something here. No wall =bankrun.
Sex and dollars are the bottom line for our leadership. They are drunk with the power of those two things. It is bloodless and brilliant.
No wall.. we withdraw.

[Toddsterpatriot]

But if you think the 'unravel' explanation is silly, then you're wrong.

If the "yellow vests" pull all their money out of the bank, is your bank going to "call your mortgage"?

However, 'cash' with no real, material wealth underlying it just causes inflation - eventually hyperinflation.

The Fed created over $3.5 trillion after the crisis, where was the hyperinflation?

[robowombat]

Amazing the size of the shakedown and payoff operation.

[Liz]

A vast network for donors / Published: March 18, 2015
The Bill, Hillary and Chelsea Clinton foundation publishes a list of its donors, updated annually.

How much each has given cumulatively over time and whether that donation includes a gift in the most recent year.

https://www.washingtonpost.com/graphics/politics/clinton-foundation-donor-list/

[Phlyer]

If the "yellow vests" pull all their money out of the bank, is your bank going to "call your mortgage"?

I don't have a mortgage, because I spend//borrow responsibly.

The situation is like this: If you deposit $100 in the bank, they immediately lend out $95 in loans to others. With a thousand depositors, they retain $5000 in cash reserves, and if you want your $100 back, they can give it to you.

But if all thousand depositors want their money back at the same time, the bank has to call in the outstanding loans to pay them. And if sovereign governments are the biggest debtors (as they are) then the bank calls in the loans on the government. Who have no choice but to 'create' more money to pay the money back.

Along the way, the bank (or the other lending institutions which are all linked together) will call in mortgages. But, as was shown in the so-called Savings and Loan crisis of 2008 (actually due to the Community Reinvestment Act), the mortgage money itself is ultimately guaranteed by - and therefore in essence borrowed from (in the form of FNMA, etc.) - the federal government. So again, the only way to repay the loan is if the federal government does it.

$3.5 trillion is a huge amount by my standards, but when it only amounts to less than 10% of GDP (spread over a few years) it's not enough to trigger hyperinflation. But if you think prices are not going up, then you must not do your own shopping. If they had to print (or create electronically) $25 trillion in one year, do you really think prices wouldn't go crazy?

The only reason we're not seeing large inflation right now (meaning, 10% per year) is because the Feds are cooking the books by changing what is counted in the consumer price index to make it seem low. If inflation were recognized as 10% plus, then loan rates would be at least 10%, and the loan payments on the national debt would be unsustainable. As it is, people still believe that - someday, somehow - the federal government will pay off their debts so treasury notes are still worth something. But that is not guaranteed forever.

[Toddsterpatriot]

But if all thousand depositors want their money back at the same time, the bank has to call in the outstanding loans to pay them.

Cool story. How do they "call in a mortgage"?

And if sovereign governments are the biggest debtors (as they are) then the bank calls in the loans on the government.

You think banks have made loans to the government that are "callable"? Or did the banks buy US Treasuries and you feel those are callable?

[Phlyer]

How do they "call in a mortgage"?

Depends on the mortgage, but it's not uncommon to have a balloon clause that makes the balance due on demand, perhaps with a small (30 day) response period. Theoretically, that allows the homeowner to arrange another loan, and there are reasons (monitored by the government - how convenient) why the lending agencies can't do it arbitrarily. But impending failure of the bank is a reason.

Similar clauses are addressed in things like loans to the Treasury (which are actually administered by the Federal Reserve system). They usually have an interest penalty if you 'cash' them in (call the loan) early, just as a certificate of deposit does, but you can get your money early . . . as long as everyone else doesn't want theirs at the same time.

I believe that the US federal debt is the true existential threat to the US. If we don't get it under control, it is entirely possible that there will not *be* as United States. If it weren't for the confidence in the future strength of the economy giving people hope that someday, somehow the US will pay off its debt, then the US would not be able to borrow any more money - and with a trillion dollars of deficit each year, that would truly result in a government shutdown, not this posturing that is going on now. China and non-governmental actors like George Soros are actively trying to get the world's trading currency to be something other than the US dollar. When that happens, we won't be able to borrow/print unlimited amounts of money without everyone (including US citizens) ceasing to believe the Federal Reserve Notes are worth anything. And then there will be runaway inflation.

You don't have to believe in that doomsday scenario. My original point was that it was silly to have gotten into this situation in the first place, but not silly to worry now that we're here. Think 2008 home mortgage crisis times 50.

[Toddsterpatriot]

but it's not uncommon to have a balloon clause that makes the balance due on demand, perhaps with a small (30 day) response period.

How not uncommon?

Similar clauses are addressed in things like loans to the Treasury (which are actually administered by the Federal Reserve system).

I don't believe I've ever heard of a loan to the Treasury, they're more commonly called T-bills, T-notes and T-bonds, that allows the holder of the security to get their money early.

Do you have a source that backs your claim?

Think 2008 home mortgage crisis times 50.

A couple of Yellow Vests emptying their bank accounts isn't going to even cause a detectable ripple.