March 10, 2014

Russian roulette in an unstable world

Posted in Banks · 45 comments ·

I am here at Abu Dhabi Airport. My flight was supposed to depart at 2.15am. It’s now 9am and we’ve been told the flight may take off at 11am. So you can imagine the state of the place and the state of me! There’s no point in getting angry at staff, who are trying their best to deal with a mega systems failure. There has been a collapse of the Etihad infrastructure: poor visibility due to fog, lights on the runways have gone out, crews are not able to make their connection and now there is a massive backlog of planes queuing up on the runways with no one to fly them.

Obviously, now that the backlog is into many, many hours, lots of the crew who could work are prevented from doing so as they would be over the acceptable working hours per week or month. Here in the business lounge after 12 hours, it’s like a refugee camp for people with lots of air miles, and the levels of middle-aged male indignation is rising ever higher. The Filipino stewards are doing their best, but they have about as much idea about what is going on as the rest of us. However, their Etihad uniforms makes them legitimate targets for customer ire.

This collapse this morning got me thinking about systems’ failures in general.

Running an airline and an airport that prides itself on being a transit hub is an extremely tricky business and – as everything is profoundly interconnected – when something small goes wrong, like fog in the early morning, everything can collapse. You’d hope that this would not be the case, indeed you convince yourself that this can’t be the case, but it is.

Systems can be very fragile and the difference between smooth organisation and total chaos is, in reality, very small. The possibility of contagion – in this case with flights, connections and crews – is everywhere. Like the ecosystem of a rain forest, each small change can have an amplified effect on activity somewhere further down the food chain.

Deeply unstable set-up

These changes, which on their own don’t seem to add up to much, can profoundly affect the health of some creature or plant. Similarly, the airline network with its web of connecting flights, each one depending on each other, is a deeply unstable set-up.

Financial markets are similarly integrated ecosystems and the question is whether they are becoming more – or less – stable.

It seems fair to suggest that they are becoming much less stable and much more fragile. Each year there are more and more financial crises which have enormous impacts on people’s lives, can overwhelm economies and reduce many millions of people’s ability to make a living. These are real costs, real human costs, and yet the trigger for these crises can be remote and appear inconsequential at first.

In financial markets, confidence can evaporate almost as quickly as it arrived. The reason is leverage. If the entire system is a series of bank-financed IOUs, where borrowed money is speculated on an asset which may yield a bit more cash, then the fortunes of everyone are linked. If a trader in a hedge fund in one part of the world is losing money on his Russian portfolio, and the positions in that portfolio are financed by debt, then he will have to sell something else to pay down that debt.

The difference between the value of a stock and the debt you took out to buy that stock is called the margin. If the value of the stock falls, then the trader is forced to come up with cash to plug the difference between the value of the stock today and the original value of the stock on the day he bought it.

How does he get this cash? Well he has to sell something doesn’t he?

This need for cash is very dangerous because the trader has to sell good assets (which are worth something) to pay for bad assets (which are falling in value). You can see very easily how when there is too much borrowing around, good assets can turn bad very quickly. And more significantly, good assets in one country which may be doing ok, have to be sold to finance bad assets in another country which may be doing badly. There doesn’t need to be any real connection in terms of investment or trade between these countries. The only common denominator needs to be that the same sort of people own the assets in each country. Indeed, it is often the same person.

Debt dynamics

So, for example, as The Sunday Business Post reported, the guy who owns the most Irish government debt, Michael Hasenstab, also owns a big position in Ukrainian government debt.

He is betting that Ukraine – like AIG in 2008- will be deemed ”too big to fail and that ultimately, Russia will extract money from the West to prop up a weakened Ukraine achieving its two geopolitical aims of (1) having a Ukraine firmly in the Russian orbit and (2) getting the West to pay for the pleasure. This is the bond guy’s bet. He bets that the West – the IMF – will use Western taxpayers’ money to pay him what the Ukrainian government owes him. Yet again, we see more and more of other people’s money being passed on to people who had nothing to do with the debts in the first place. What if that doesn’t happen? Then this investor has to sell some of his good stuff to pay for his losses in the Ukraine.

This means he would have to sell some of his peripheral European or other emerging markets debt to pay for his Ukrainian gamble. This means that the debts of emerging markets would fall in value. Where are a significant amount of emerging markets debt held? Why it’s on the balance sheets of European banks, which filled up with this stuff from 2010 to 2012. But this fall in emerging markets debt prices would put a hole in their balance sheets. And what happens then when the ECB stress tests come? The banks with exposure to emerging markets need more capital than previously thought. And thus we can see how bank leverage can lead us into a fresh European banking crisis sparked by an incident over Crimea?

This is how systems break down. As I look out at the rows and rows of grounded Boeings and Airbuses rendered useless because of one small glitch earlier this morning, the nature of system failure comes home to roost.

David McWilliams writes daily on international economics and finance at

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  1. Tull McAdoo


  2. Wonder if I’ll beat Adam….

    Like Scotland, Ukraine isn’t about economics but about ‘identity’ so the number-crunchers may be in for the mother of all WTFs!

    This article could usefully be linked to Morgan Kelly’s re-emergence and discussion of a potential debt/stress test tsunami engulfing Ireland once the Draghi Put is debunked by the Bundesbank.

    Also brings to mind Naseem Tablib’s book “Antifragile” about building resilience into structures/systems to withstand white/grey/black swans. I guess ‘fog’ at an airport is a White Swan: everyone knows it happens so why do folk act like it’s incompetence?

    Following the leaked EU phone call: if Putin has the evidence on who the Maidan Snipers were, he may well be able to name his price for peace.

    I guess this system instability stuff makes doing the globalmacro360 stuff more ‘interesting’. LOL!

    • JapanZone

      Andrew, Morgan Kelly’s recent video is my distraction of choice this morning:

      • Hello “JapanZone”. I watched it yesterday. There’s also a revealing follow-up Q&A:

        Some have got very rich betting on Irish Sovereign Debt & may do so on Ukrainian Bonds: but who’s going to *bet the house* (sic) on Irish SME/Household Debt being bailed with the same terms that the top of the food-chain got? They might have to sell their Ukrainian stuff to pay back the Irish bets…or sell the Abu Dhabi airport shares when it melts down repeatedly due to global warming causing fog such that no globe-trotting investigative economist will ever use it’s VIP lounges ever again.

  3. JapanZone

    Systems and their efficiency are reflective of the culture in which they are developed. While dealing with the “efficiency” of Japan’s banking system may be one of the most frustrating experiences known to man, the efficiency of the country’s train system is truly a wonder of the modern world. Here’s just a small insight:

  4. Reality Check

    Fascinating article from Isreal Shamir on the Ukraine Pendulum:

    “The oligarchs who financed the Maidan operation divided the spoils: the most generous supporter, multi-billionaire Igor “Benya” Kolomoysky, received the great Russian-speaking city of Dnepropetrovsk in fief. He was not required to give up his Israeli passport. His brethren oligarchs took other Russian-speaking industrial cities, including Kharkov and Donetsk, the Ukrainian Chicago or Liverpool. Kolomoysky is not just an ‘oligarch of Jewish origin’: he is an active member of the Jewish community, a supporter of Israel and a donor of many synagogues, one of them the biggest in Europe. He had no problem supporting the neo-Nazis, even those whose entry to the US had been banned because of their declared antisemitism. That is why the appeals to Jewish consciousness against the Brown putsch demonstrably failed.

    Now came the nationalists’ crusade against Russian-speakers (ethnic Russians and Russian-speaking Ukrainians – the distinction is moot), chiefly industrial workers of East and South of the country. The Kiev regime banned the Communist Party and the Regions’ Party (the biggest party of the country, mainly supported by the Russian-speaking workers). The regime’s first decree banned the Russian language from schools, radio and TV, and forbade all official use of Russian. The Minister of Culture called Russian-speakers “imbeciles” and proposed to jail them for using the banned tongue in public places. Another decree threatened every holder of dual Russian/Ukrainian nationality with a ten-years jail sentence, unless he gives up the Russian one right away”.

  5. pauloriain

    The conclusion should be that’s it’s long past time to pull the plug on this system and the gangsters who are exploiting it. It’ll of course be painful, but if this is truly the way the financial system & world works, then it isn’t actually delivering value for the community and is not worth propping up.

  6. michaelcoughlan

    Hi David,

    Very good article. Chaos theory is what you are referring to I’d say;

    It will indeed be interesting to see how things pan out. But chaos theory works both ways. If the deleveraging event brings down the derivatives bubbles commodity prices will initially collapse and then sky rocket in a classic cup with handle chart pattern No?

    The reason I put the last bit in is to convey to all of you that whether you and your family is on the right or wrong side of a black swan event can in many though not all cases be determined by you yourself. The thing to remember is that if you have had a bad experience in life like losing a job or business you tend to look for the dark. With awareness and refocusing the mind you can force you’re though process to look for the light.

    best regards,


  7. douglaskastle

    Some of this reminds me of the move in business to Just In Time manufacturing.

    It is a great concept, the small widgets you need to make your fancy big widget arrive almost when you need to build it. So you don’t need to maintain a backlog of small widgets, which obviously need to be stored, and paid for in advance, which is just too expensive.

    The reality is that you have removed some if not all the slack from your system, any delay up the chain can ripple wildly.

    JIT is a valid technique, but it does need to be managed well. In this case the money saved needs to exceed the potential money lost when there is a cockup. At the end of the day, while it might be a bad day for Eithad (and it sucks been laid up in a airport, even in business class), it could still be a type of thing they are willing to tolerate, balance sheet wise, they just won’t say it out loud. It’s not like fog is unusual.

  8. baffled

    “Like the ecosystem of a rain forest, each small change can have an amplified effect on activity somewhere further down the food chain.”

    not just ‘down’ the food chain tho..thats a bit too Darwinian for me. The Darwinian bottom up model but rather a top down ..we,humanity,and the Biosphere are not governed by such a bottom up process and neither
    of course is the Universe.The character of the Biosphere is determined by the process of exchange of matter within the environment (“biogenic migration of atoms”)and the subsequent impacts they have on the nature of the “interconnected” Biosphere as a whole, as it strives to make the necessary CHANGES to organise itself to higher and higher states of both energy flux density and organisation, in order to sustain FUTURE life at these higher states. Growth! e.g “the oxygen crisis’ or the oxygen revolution where c.2Bbillion years ago where single celled organisms CREATING an oxygen rich environment and atmosphere which served many benefits ,but to name one :to block harmful sunrays which would have killed future chance of life coming into being and hadnt existed PRIOR to life ‘placing it there’,creating it.

    The process of Photosynthesis in plants can uniquely take non living matter and integrate and convert into a new living biological matter- Organising higher levels to support its furthering its survival now and future survival.

    The process of the development of life in our entire system of the Universe ,the evolution of life itself,is governed by this process of anti-entropy.

    “LIFE , Nature will find a way”

    Down with the 2nd law !!! We are not grassland for the 1 %

    We can “find a way” and intervene,we MUST intervene, and close down Wall Street,then we give ourselves a fighting chance to pursue NAWAPA type MEGA projects with a focus on Nuclear energy and launch ourselves from the now collapsed PHYSICAL economy and collapsing financial system of oligarchy.

    We can be Free

    • michaelcoughlan


    • Thanks for that Baffled, I am no expert in this field, so I defer to you better knowledge.



      • baffled

        Oh im no expert and its not my “better knowledge” … Vladimir Ivanovich Vernadsky is the genius to thank forsuch powerful insights (and with your dexterity in the Russian language David,you wont have to read ‘crappy’ translations like the rest of us!)

        Theres a minimal condition in systems where there MUST be a rate of expansion of development ,or you get a collapse.fact.The limit to growth (‘drag effect)’ that we,humanity, have, is being suffocated by the evils of usury and monetarism and all associated debt, so we must purge this obsolete part of the system in order to survive and grow

        Life has found ways of increasing energy flux density as its the very principle of life – to grow. For millions of years ,leaps in orders of magnitude of CHANGE in efd were needed,and crucially so, or run the risk of species going extinct

        In the history of life on earth we’ve had such periods – the Kt boundary and End Permian ,and others, and while the poor yawning Dinos didn’t know any better and didnt have any control over an asteroid wiping them off the face of earth ( if that’s what indeed hastened their demise? ) we humans DO have ‘some’ control,quite alot actually, of determining future occurrences and we have the noetic will to shape our future with our species’ unique imagination and creativity and using Science as our guide,we can prosper…as we are not baboons and we can and will wilfully act and intervene with creativity,change the axioms and create a plan for a future,sans empire. We can and will with the use our scientific capability – the synthesis of Fusion – provide humanity that necessary leap in orders of magnitude ( non linear ) of efd to meet the challenges of the now and challenges into the future its long but well worth it, if Truth is what one seeks

        we’re already living on borrowed time with our economic systemic systems in rapid collapse (and fraught with dangers of financial and political black swans that could detonate us) which is now observable fact …the guillotine blade is in free fall everyone and the seconds are separated by days, weeks, months.I dont want to face the 4 horsemen of the Apocalypse! Oligarchical brainwashing and killing culture makes us scared of change,victims of fear..thats empire!

        So what do we do to survive ?? Answer :Impeach the lawless Obama who has no commitment to humanity’s progress! That clears our path to a future!

        [I wonder how many submarines with nuclear weapons were on a state of alert ,or state of ‘readiness’ in recent days with the neocons dirty tricks in Ukraine? hmmm... to be brought this close to a thermonuclear conflict is stomach turning and an absolute outrage!]

        So its Glass Steagall 2014 or more Schactian policies leading to DECADES moreof misey,entropy,despair and death

        • michaelcoughlan


          I’m responding respectfully because I have read about Vladimir Ivanovich Vernadsky and boy did one light bulb after another go off once I read about the noosphere.

          Can I beg you to consider the following; Please please DON’T bore everyone to death about GS. I’d say most people agree. If you keep referencing it you will be banned and that would be a crying shame such is the quality of your post.

          Obama is a nobody and the US will implode as YOU pointed out due to entropy in its economic system due to too much debt.

          Once two people of like mind want to trade debt free it matters not whether banks are split or not. The observation on gold is accurate in that wealth doesn’t come from metal but from human creativity but gold is very useful as a tool to protect against entropy in fiat based currency.

          If you keep (mantra like) diverting the treads to GS you will be dismissed as nuts so don’t fall into the same trap as other posters who didn’t care about other peoples opinions.

          Vladimir Ivanovich Vernadsky and his noosphere is proof of God’s existence in my view.

          If you are to take vladimir’s opinions to their logical conclusion all physical matter in the universe will eventually be reconstituted to it’s purest electrical concentrated self without any physical matter present at which point god’s will (the supreme creator) will be omnipotent with a merging of the consciousness of all living things since all matter will have been converted from inanimate to animate (Living)organisms. The final process will be the the shedding of the physical support (the body) to pure electrical composition at which point all that will exist is god’s consciousness unconstrained by time or space which are only constructs of a finite observing human brain in the first instance.

          Glad I logged on today.

          • baffled

            Hi Michael

            Vladimir was non religious and if he was alive today he would undoubtedly see the wisdom and clear crystal necessity in humanity’s intervention with Glass Steagall. He was all about Truth and Science

            GS is not an “opinion”, its a fundamental and urgent step in extraditing ourselves from debt slavery and choosing an alternate path to thermonuclear war. All this Debt can never and will nnnever be repaid,so end the monetarist delusion and choose a new path before the system collapses.perhaps you find that all a bit of a “bore” but people’s lives (in the millions and arguably billions) are in the balance of what we do now,right now to stop the hemorrhaging!

            you wrote : “gold is very useful as a tool to protect against entropy in fiat based currency”
            We cant of course be sure how useful it is as a protection against fiat but yes some hope it will be and i hope so too,but gold fascination/obsession is just self serving, self indulgent, and a greedy monetarist mindset and all the while ,our people ( in all countries) are being targeted by the debt overlords – IMF for example,so its distasteful to harp on about gold when there are REAL refugee camps in the world ( and a far cry from airport lounges !!)

            you wrote “..due to entropy in its economic system due to too much debt”

            entropy is due to the current system’s closed structure and so its inherently flawed design.An open system is negentropic ,as is the development /Growth of life itself and of the Universe

            i wont comment on your last paragraph as your god is not part of my system of beliefs

          • Colin

            Then convince the goldbugs of the error of their ways, you lot haven’t done a very good job of it so far? If anything, more and more people will see gold as the solution to the failed money system.

          • michaelcoughlan

            Hi Baffled,

            Sop referencing GS or you will be banned. This is not the place for it. If you believe in it don’t waste your time on the blog go out and organize a march or protest etc and get people to support you by leading by personal example instead of ramming it down everyone’s throats and not being productive.

            Gold has thousands of years of pedigree protecting against fiat. As for the refugees if you turned up handing out gold coins would they turn you down do you think?

            Regarding the flawed design; I presume you mean the Universe and Life? Guess what? it hasn’t been designed it’s in a constant state of evolution and to suggest that the problems you see can be solved by changing the design as you see it is a fallacy.


          • baffled

            i’m baffled ? GS has no place in an economics forum? That’s just an insane statement!We are facing a crisis like never before, where an international conglomerate of finance is controlling our energy /our food /our economies / our freedom and our future and its a damning indictment of the state of mainstream economics where the Real story is not being told and the real dangers are not highlighted,certainly not in MSM. And then to add insult to injury we have light weight opinions of yourself and Colin colluding with the enemy?What a disgrace!Youve been given ample opportunity to pull your head out of your ass….cant wait for you mate(s)!

            I’m reminded of Franklin Delano Roosevelt’s speech of 1936 in Madison sq Garden (after the 1929 stock market crash and the subsequent Depression)

            “For twelve years our Nation was afflicted with a hear nothing, see nothing, do nothing Government. The Nation looked to that Government ,but that Government looked away. Nine mocking years with the golden calf and three long years of the scourge!…..They [Zeusians] had begun to consider the Government of the United States as a mere appendage to their own affairs and we know now that Government by organized money is just as dangerous as Government by organized mob”

            …..”They are unanimous in their hate for me and I welcome their hatred !!!!”


            facing being “banned” or living with myself knowing i could have helped to save lives,there is no choice!not for “us lot” who care for The Common Good in the face of Evil.

            We need a modern day Pecora Commission ( “A Select Committee on Financial Bailouts.”) for the banking criminals,swindling us out of a prosperous future.We need to urgently bankrupt the current monetary system of finance ,trillions of worthless paper and introduce FDR’s Credit Principle, to remove the predators of oligarchy and their choke hold of death preventing us from realising our True destiny

          • baffled

            And not that you watched the video of course(that’d take effort)but photosynthetic single celled phytoplankton ,pumping out free oxygen,’a boom of bloom’, delivered in a prolific manner the necessary conditions (building blocks) for exponential FUTURE growth and the revolution and evolution of life itself as we now know it.Yes single celled organisms did all that and they didnt have any noetic quality.

            We need change,”a New Deal Programme” and all its intentions and a mission orientation of economic policy re Reconstruction of the Physical economy delivering REAL value,for humanity.Value ,not in monetary terms!, but rather all those ‘contributors’ to the process of development of mankind….no more downsizing, debasement, entropy,.We need Change, a non linear transformation,a new platform economy,a new paradigm for mankind,a Golden Renaissance.

            Anyone reading this KNOWS this need to be True

            A Renaissance thro the introducing of new fundamental scientific (and cultural) principles of discovery into our economies (human creativity as the supreme example as it contributes to enhancing and controlling our environment with a yield in Productivity necessary to support a growing population which is what Alexander Hamilton was all about) …

            an evolution and revolutionary change in the state of existence of our economy and then all internal relationships change ,as a function of the introduction of this new idea(s) and as a result we grow (minus debt slavery) coz we direct the flow of all human activity – the process of combining our technologies and resources – towards the creation of ‘up shiftin’g to higher efd of the physical economy(not monetarism) and we simply have no other choice ….

            grow or die !

            telling me to stop mentioning a solution to our woes…the cheek of you!

          • michaelcoughlan

            Hi baffled,

            I can’t believe my luck in your response to my post above that it was so easy to get you to show how insane and indeed sociopathic your personality is. So what I’m going to do is to explain it to you and I know at the end it will make no difference but just like your mates I’ll get you to rant on and on until McWilliams tires of your brain washing techniques and bans you too.

            Of all of the posts that have been put up on the blog none more demonstrates the complete and utter madness as this part of you post above “You’ve been given ample opportunity to pull your head out of your ass” Really? I’ve been given ample opportunity by who you nutcase? You and your buddies is it? Totally deluded into believing that you have a far greater place in the great scheme of things than you do I’d say. Keep posting the more you post the more you damage yourself.

            Next bit nut job;

            “I’m baffled? GS has no place in an economics forum? That’s just an insane statement!”

            I didn’t make the statement that GS has no place on an economics forum YOU DID. Then you go off on a rant implying it was me who made the statement. Keep posting nut job the more you post the more you damage yourself.

            Next bit nut job;

            Like all psychopaths you don’t understand that this forum belongs to another person whose rights you have no regard for because GS will belong on this forum when McWilliams decides it will not you nutcase! Keep posting the more you post the more you damage yourself.

            Next bit nut job;

            Like your buddies you are too much of a coward to post in your own name or indeed do anything proactive instead you butt into everyone else’s conversations and try and divert them to suit your own agenda.

            “Telling me to stop mentioning a solution to our woes…the cheek of you!”

            I told you to stop diverting the board because I don’t want you to get banned. It’s your madness to believe i’m trying to stop anyone talking about a solution to our woes.

            As for your understanding of evil. What would you know about evil since you don’t believe in god?

            When you post stuff as mad as your rantings and ravings the whole nation has access to it you know.

            Keep posting the more you post the more you damage yourself.

      • John Allen will have no issues appreciating this viewpoint, methinks.
        I am involved with a systems driven transport industry which is working to capacity, and has been for a number of decades now.
        Once a systems failure occurs, the root cause analysis is vital to eliminating that element of risk occurring again. Public opinion and indignation demands it.

        It is curious that the same global level of indignation did not eventually take root in the past 5 years to kickstart some real regulation. It must be some form of subliminal mass hallucinogenic master and servant effect where we were bred to respect the “Bank Manager”.As it stands we only seem to have moved from Reaganomics 1 to Reaganomics – End of days.

        And why does RTE keep crediting Prof M Kelly with forecasting the crash when our host, the real “Mr Doom & Gloom”, was ahead of the game by at least 2 years?

        Oh well, back to the matrices.

        • Colin

          To answer your last question there Furrylugs, RTE prefer the ‘Prof Morgan Kelly, the greatest discoverer since Columbus’ angle for many reasons including;

          1. They are simply perverted.
          2. They do not like to admit they were wrong, remember all those programmes like ‘I’m an adult, get me outta here’, ‘Holiday homes in the sun’ etc…?
          3. Morgan is a Professor, don’t you know, he’s an expert, OMG….you DO need a PhD to be an expert y’know!
          4. Morgan hasn’t made a living out of calling the economy – and prefers correcting exam scripts, our host has, and it sticks in the throat of RTE as they like to control success in the Meeja in dear old Ireland.

          • Hi Colin,

            Ardscoil have produced the fifty anniversary book last week .Its worth buying .

          • Colin

            Hi John,

            Yes, I’m aware of the book. I’ll ‘look into it’ next time I’m home.

            Most of the teachers there were nutjobs. I can count the good ones on one hand. luckily, I came across the best one in 2nd Year who steered me towards science. The commerce teacher resented the class for asking questions, and his response to someone putting his hand up to ask a question was ‘what’s wrong now?’ – such a dreadful approach to teaching, which led me to conclude a career in commerce was bullshit.

            Go ahead and eulogise the teachers there if you want, I won’t be, some were psychotic, others were bullies, some weren’t even properly qualified, one got a criminal conviction for indecent assault on a 20 year old girl in galway – the same pervert who dropped me from the school soccer team for no good reason – and I watched from the sidelines as we got thrashed 8 – 0 one day against a good CBS Sexton Street, but it would have been different if I had been playing.

        • Minister Noonan has referred Morgan Kelly to contact Central Bank so as ‘to doodle him’ just like Alan Aherne was ‘doodled’ when he was vociferous in his earlier years as a dissenter .

          ‘If you cannot beat them join them ‘, seems to pay off .

          It Pays to honour the virtue of water ie it pays to bend over.

  9. Adelaide

    Predictably the mainstream media have poo-pooed Morgan Kelly aka “Doctor Doom!”. Time will tell. I love his turn in his Q&A. “The tyranny of the Weak by the Incompetent. A perfect succinct description of Ireland.” You can tell he obviously has an extremely low opinion of the pixie-heads and seemed to biting his tongue itching to shout “you’re heading for a complete economic and social collapse, you f%*!?#£/ dimwits!!”

    My own prediction, the stress-test will be a whitewash, nothing of substance will change, and Crimea will cede to Russia without a whimper from the West.

    • Reality Check

      I agree 100% Adelaide. Morgan Kelly seems to think the extend and pretend stuff is going to come an end. My answer is why would it end?

      The banks are addicted to the LTRO and the Eurozone is deflating so much keeping the spigots going with “that sweet, sweet credit” is the least they can do to keep the party going.

      Banks will never willfully start a deflationary crisis – there’s no money in it

  10. CorkPlasticPaddy


    As you mentioned in your reply about Just In Time needing to be managed properly or else it would come back and quite literally ‘bite you on the bum’. Well, it’s true. I worked in a company that got into the Just In Time system and what happened was that in quite a few instances the results of doing so did come back to ‘bite them on the bum’. Most of it was just down to inept management at the time, but it happened and in the end management had to change the way they went about operating the system in order to get it working properly, but it did take a bit of time for them to realise that most of the problems had been their own fault right from the beginning, but as you well know management can sometimes think that they’re ‘the bees knees and the goats ankles’, but it doesn’t always work out that way.

  11. Bamboo

    Thanks for your article David. Everything in a life is fragile I guess. I hope at this stage you’re on board of a plane to bring you to your next destination.

  12. Reality Check

    LOL indeed Georg get a load of this;

    Anonymous Ukraine releases Klitschko e-mails showing treason

    Anonymous Ukraine releases Klitschko e-mails showing treason – News – World – The Voice of Russia: News, Breaking news, Politics, Economics, Business, Russia, International current events, Expert opinion, podcasts, Video

    “Anonymous Ukraine has released the e-mails of one of the leaders of the so called opposition and will continue to expose the moves by the west to subvert the sovereign country of Ukraine. The e mails released by Anonymous prove that Vitaly Klichko is a puppet of the West and is being financed through intermediaries in Lithuania. The e mails also prove that Klitchko has bank accounts in Germany and is receiving funding for his coup d’état from the West. We will continue fighting these puppets”

    • No doubt there is Anglosphere subversion in order for the banking interests to control the Ukraine economy and money system.
      See syria, Libya, Iraq etc, etc.
      all efforts are to pry away from Renegade Russia. gold shipped to US? Where else as it will become as unavailable as Germany’s.

      The only way to freedom is to break the banking (central banking fiat money system) cartel. The cartel will resist with murder mayhem and war. That will be the price of freedom unless we the people get educated and act in unison.

  13. Adelaide

    “ECB details criteria for upcoming bank tests”

    Results to be published in October.

    Is the following excerpt a long-winded euphemism for a Bail-In?

    “”Banks may be expected to correct specific provisions for collectively impaired credit facilities, where the bank’s collective provisioning model is considered as missing crucial aspects required in accounting rules,” the ECB document said.”

    • michaelcoughlan

      40 tons of gold is what the Ukraine had Tony according to the link and then at the bottom;

      “Finally, putting this into perspective, 40 tons of gold is roughly what China imports every ten days”

      Says it all really.

      • no it does not say it all Michael.
        What it does show is the US and the FED RES desperation to get any gold that they can get their hands on. Without gold to manipulate the price down the US dollar will be seen around the world as useless.

        See Craig Paul Roberts Below. We are in the final days of the collapse of the US and the US dollar as reserve currency.

        David will not go there!!???

  14. Church Board Notice

    The 7th Day before the full moon was last week end :

    Plane went missing

    Earthquake in California

    Just keep listening until monday for more revelations



    U.S. Definitely Wants War in Ukraine-Paul Craig Roberts
    “US is a busted state”


    The Federal Reserve’s Latest Maneuvers
    The Assault on Gold

  17. Highlighted and pictured beside Klitschko is Svoboda Leader Oleh Tyahnybok.


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