CaitlinJohnstone.com
Empire News Roundup: Latin American Sovereignty, Anatoly Shariy And More
https://caitlinjohnstone.com/2022/05/05/empire-news-roundup-latin-american-sovereignty-anatoliy-shariy-and-more/
On Psychopathy, Power, Empire And Ego
Empire News Roundup: Latin American Sovereignty, Anatoly Shariy And More
https://caitlinjohnstone.com/2022/05/05/empire-news-roundup-latin-american-sovereignty-anatoliy-shariy-and-more/
On Psychopathy, Power, Empire And Ego
https://caitlinjohnstone.com/2022/05/06/on-psychopathy-power-empire-and-ego/
Caitlin Johnstone
US Intel Assisted In Sinking Russian Flagship Vessel: Officials Claim Bombshell Escalation
Tyler Durden
https://www.zerohedge.com/geopolitical/us-intel-assisted-sinking-russian-flagship-vessel-officials-say-bombshell-revelation
TASS (Russian state media)
Belarus shifts to Russian rubles in trade with Russia - President [Lukashenko]
Reminiscence of the Future
A Short Note.
Andrei Martyanov, former USSR naval officer and expert on Russian military and naval issues
TASS (Russian state media)
Belarus shifts to Russian rubles in trade with Russia - President [Lukashenko]
https://tass.com/world/1447585
A Short Note.
Andrei Martyanov, former USSR naval officer and expert on Russian military and naval issues
http://smoothiex12.blogspot.com/2022/05/a-short-note.html
15 comments:
If there is a humanity on the other side of the existential hurdles we now face, it is a humanity that has let go of its impulse to control and has instead learned to move in harmony with what is. It’s hard to imagine from where we’re at right now, but that’s only because we’ve never seen it before. We’ve also never seen anything like our current situation, though. There’s a first time for everything. We’ll either pass this test or we won’t.
Caitlin doesn't understand the imperative of biological life.
To exist in balance with the ecosystem, a species cannot have more power and control than other species. Cutting off our access to abundant energy should restore the balance.
if lavrov felt like scoring a rhetorical "gotcha" he could've just asked why israel supports a country that names streets after people who participated in the holocaust against a country that names streets after people who liberated concentration camps.
Zbigniew Brzezinski, adviser to the President of the United States.
“The world order will not survive without Ukraine. We must bring Russia to its knees by any means necessary to send a clear and unambiguous signal to our enemies.”
“Ukraine is a necessary thing that we cannot afford to lose on the geopolitical chessboard. In essence, our current path of no hostilities means that our global project is dead.”
“I demand from you to send more forces against Russia and its satellites, step up the “information war” to correct public opinion and send weapons to our friends in Ukraine.” This is how America operates. To bring Russia to its knees is US goal. "
I get the feeling from what we have seen so far. That this is the actual real world view and in fact they are very willing to go all in in Ukraine.
That Ukraine has become so important for so many different reasons the West view it as a war they will not lose. Will do whatever it takes to win.
Which is extremely dangerous for all of us. Currently I would say there is an 80% chance this is going to escalate.
The British recommends that Ukraine use the experience of Mariupol in other cities. Choose a factory there, place more civilian hostages on it.
The British Ministry of Defense recommended Zelensky to use the experience of Mariupol to defend other cities, including Kharkov and Nikolaev, Odessa. The task is to choose a suitable plant and strengthen a specific object as much as possible, turning it into a center of defense.
According to the TG-channel "Resident", Kyiv has begun to implement these instructions.
Pure Evil.
Paul Tucker on BoE independence
https://the-blindspot.com/paul-tucker-on-boe-independence/
My former colleagues Jonathan Ford and Neil Collins have bagged an absolute must-listen interview with Paul Tucker, formally of the BoE, now a fellow at the Harvard Kennedy School.
On Spotify
I very much doubt it will be an absolute must listen if it doesn't include the changes via the Maastricht treaty which was the driving force behind the changes.
Or explain why the changes were for geopolitical reasons to represent US interests.
Treasury select commitee submission from 1999 is from November 1999 and describes the accounting and function changes that occurred as a result of Maastrict and with Bank of England independence.
https://publications.parliament.uk/pa/cm199900/cmselect/cmtreasy/154/cor15402.htm
The thing that was illuminating was the explanation of how the Ways and Means account worked pre-1997.
If I follow it correctly (paragraph 37 onwards), the government simply spent according to direction from Parliament and this was expressed as money injected into the economy via the Bank of England. Then the Bank of England issued gilts (though always a liability of Treasury) solely with an eye on monetary conditions. In cases where not all of the government spending was drained - because the monetary objectives didn't require it - then Ways and Means account simply acted as a balancing item. The Ways and Means account was therefore basically analogous to an overdraft (as I know other folk in here have always understood it), an IOU of the Treasury. So even in this case, we have Treasury IOUs backing central bank money creation, but as explicit, overt, unequivocal money creation by government spending. And the only concern in this system is the monetary target, i.e. inflation. Everything else is subsumed into that. All completely consistent with the claims of MMT.
Post-1997 we have the system that we have now. The Treasury (DMO) is now responsible for cash management which means it has to clean up after itself by issuing gilts to neutralise its spending. This leaves the Bank to focus on regulating the economy only with respect to prevailing conditions rather than the additional complication of government cash flows. So now when the BoE needs to add more money to the economy it cannot use any of the government's direct spending (i.e. only drain part of it off) as before because the DMO has already drained it all. So now it has to buy back some of the gilts that the DMO sold. Again, we have net money added to the economy backed by a Treasury IOU, though this time it is a gilt rather than an entry in the Ways and Means account.
But apart from that, what else is really different? The only thing that stands out is that there are now two targets in the system: (1) the Treasury's balanced cash flow target; (2) the Bank's monetary target. In many cases the Bank will have to undo what the Treasury has done, instead of both simply acting together under one target as they did before.
The changes in 1997 really did just obfuscate the reality. It is much easier to reconcile the pre-1997 system with MMT, as it is clear to see
1. that the spending happens first following Parliamentary direction
2. that spending creates money via accounts being credited as the central bank
3. that the only concern ultimately is monetary conditions (inflation not budgets)
4. that gilts are a monetary instrument
It is the most clear description from the horse's mouth that shows the claims of MMT are pretty much bang on.
However, does the BoE buys lots of types of assets, not just gilts or bills.
What proportion of Treasury liabilities held as assets by the BoE over time and/or the proportion of Treasury liabilities used in OMO repos, etc... compared with other types of assets ?
For example,
* gilts and bills are defined as the highest quality of collateral - the category that is used in OMOs. Corporate debt is not, to my knowledge.
* Gilts are loaned by the BoE in the Discount Window facility and Funding for Lending, so presumably seen as an important instrument.
* Gilts represent 95%+ of QE. Some other private assets were purchased but only to bootstrap those markets, not as equivalents in the general QE objectives
* Quarterly Bulletin, 2008, Q4 states that the BoE would accept as collateral bank debt that qualifies for HM Gov guarantee scheme - implying a Treasury backstop adding value to otherwise overly risky assets (to me)
* Treasury Bills can be used for settlement purposes at The BoE RTGS system. I am not sure what else can be other than, obviously, reserves.
* The Ways and Means account can be used to back reserves. Other non government entities don't have this convenience. We can obviously debate whether or not the government has it at the moment.
Is there is a tendency to employ gilts and bills in operations over anything else?
The two main liabilities of the BofE are what we call central bank money, being banknotes and reserves. The main asset is a loan to the APF, which holds all the Gilts purchased under QE, as well as the corporate bonds purchased under QE and the loans to banks under TFS. You'll also see that due to the very high number of reserves created as a byproduct of QE, plus the reserves borrowed under TFS, there is no need for any short term OMOs. I don't believe the discount window has been used for some time for the same reason.
RTGS settlement can only be made using settlement accounts held at the BofE (settlement accounts for banks that are members of the SMF are counted as reserve accounts). However, intra day liquidity will be added to settlement members settlement accounts, as needed, provided sufficient collateral can be posted. The collateral acceptable is much wider than just T-Bills and can include government securities in GBP, EUR, USD and CAD issued by the governments or central banks of the UK, USA, Canada, Germany, France and the Netherlands - this is Level A collateral.
The BofE offers members of the SMF various other liquidity insurance schemes, under which those banks may post collateral against a loan of either reserves or higher quality securities. The list of eligible collateral covers just about anything on a bank's balance sheet, including Spanish covered bonds and US student loan ABS:
So what is the split and how eminent in the system are gilts ?
The government spends in gilts and the BoE simply adjusts the split between money and gilts as appropriate - a coherent system.
However, if the Treasury is simply equal to any other agent in the economy and the BoE buys private assets to back its operations in equal measure then how often do they do this ?
I do not doubt that the BoE uses other types of assets sometimes. But the question for is to what extent? Is it 5% or 50%? Is it infrequently or all the time? If there is a tendency to favour Treasury bills and gilts?
Maybe Paul could shed some light on it which would be really helpful to get a full understanding of the process ?
Neil might know.
"So what is the split and how eminent in the system are gilts ?"
The analysis we did is that the BoE is backed almost exclusively with Treasury Bills and Gilts. The Operational Standing Facility will only lend or repo reserves against Gilts and other Level A collateral.
Level B and Level C collateral has to be 'upgraded' via the Discount Window, which the Bank backs off onto the Debt Management Office (the Bank borrows the Gilts from the DMO).
Where the Bank is required by government to take risk onto its balance sheet, it requests either an indemnity from HM Treasury, or capital injection.
That's what the latest Capital MoU is about. https://www.gov.uk/government/publications/financial-relationship-between-the-treasury-and-the-bank-of-england
Once the war is lost in Ukraine, the next option is an insurgency. But if Russia partitions Ukraine, sets up a DMZ, and expels hostile civilians, insurgency within the east can be weeded out.
Since we have had interest on reserves, the cash management actions of the DMO are essentially redundant.
However since they do undertake them, it means the debt management auctions end up being short paper to long paper exchanges.
Or someone over there can whack Putin and all would quickly go back to normal..,
Or someone over there can whack Putin and all would quickly go back to normal..,
What scenario do you see following that? What evidence do you have for it?
The British recommends that Ukraine use the experience of Mariupol in other cities. Choose a factory there, place more civilian hostages on it.
From some reports, it was the US and UK that came up with the strategy employed by the Ukrainian armed forces to dig into the cities and town and not confront the Russians on the battlefield. This makes it most expensive for the Russian armed forces in terms of KIA and wounded and appearance of killing civilians — at the expense of killing a whole lot of civilians.
The plan involves putting troops on alternate floor with the other floors occupied by civilians. This is the plan the Ukrainians are already using.
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