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NEWSLETTER NO 162

Monday 04 September 2017

This week:

The Mother and Grandmother of All Crashes

Chronicle of the Times.
A New National Print Newspaper

ECONOMICS


Peter Kellow, Sovereign Republic Leader

The Mother and Grandmother of All Crashes

Dear Reader

Whatever you think is the most important thing happening in the world at this moment, whether Brexit, North Korea and its nuclear tests or the crises in social services.

Whatever you think it is, forget it.

I have written before about the next big economic crash and how it will make 2008 look like a vicar’s tea party, but still few people understand what is about to hit them.

The reason for this is that the coming crash will happen for completely different reasons. Reasons that are starring us in the face but which we choose to ignore.

We survived, more or less, the last crisis because the heavy indebtedness that banks had accrued was bailed out by governments, that is, it was bailed out by the tax payer. But it was indirect.

No one came looking for your money immediately, the country simply slipped into more borrowing and the demand from citizens was kicked down the road. We will pay later – or our children will.

But this can’t happen next time.

 

This is because the private banks have been propped up directly by the central banks.

To do this they have artificially propped up share prices through QE [money creation] and this has sustained values. But what this FT graph shows that in spite of massive injections of new money into the economy share prices are are not responding as they did in the past

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Central banks are not supposed to do this. They are not supposed to be proactive players in the economy – only reactive one, servicing and supply liquidity to iron out problems.

It is ironic that we are living in an era governed by the principles of neoliberalism and so in theory the government is not needed to participate in the economy except in a caretaking role.

And yet to give the semblance of the neoliberal system working, governments everywhere have engaged in the most massive interventions every known. Strange that none of the orthodox economists ever hold up their hand to say the system they imposed on us is failing on a scale that is off the Richter.

 

The central banks in all advanced countries have reversed this role. Central banks now have injected trillions into the economy and bought trillions of bonds and shares owned by banks. But they have bought the rubbish – the junk assets.

They have done this to keep bankrupt private banks afloat and keep the semblance of stability going. They, in theory, have to charge interest on these junk assets and they do. They pay interest at zero or near zero which they themselves have set.

So everything is OK – until they have no choice by to raise interest rates. That will happen sooner or later. To get out of the situation created they will want to sell the junk. But there will be no buyers, obviously. So the central bank itself risks going bankrupt.

That is unthinkable and this is where you, whoever or whatever you are, come in. The central bank will have only one source to bail itself out – you, i.e. the citizens of the country of the central bank. This is a “bail in” and so far it has only happened once - in Cyprus, a few years ago.

 

Although that glosses over the fact that you have already bailed in by low interest rates which makes your savings and your pension decline in value – reducing your prospects for the future or for your retirement.

This is what makes the next crisis so very different from the last one. In the last one the government could afford to bail out criminal banks.

This time it won’t be able to afford it. The sums are too massive and it is not a question of bailing out the private banks but BAILING OUT THE CENTRAL BANKS.

As a practical response, as I said before, you must get your savings, if you have any, out of the government's reach. Keep it in cash in a bank deposit safe is one solution.

You won’t ever get any interest on it so there is no reason to leave it in a bank. Central banks crashing out is something we have never seen before – at least not on any great scale.

The MSM won’t tell what I have told you. When the crash comes it will be another “black swan” event that no one could have predicted.

 

But the world will shake and never be the same again.

 

Chronicle of the Times.
A New National Print Newspaper

I want to bring to your attention, a further project that I have been engaged on.

This is the creation of a new national print newspaper. That might sound crazy but I have adopted a simple but original business model that makes this possible. It is called Chronicle of the Times or CTT for short

This initiative is a response to the fact that mainstream newspapers of any country are untrustworthy, their political and economic predictions hopelessly wrong and their opinion shallow and biased. The BBC and other media have long ago given up on providing unbiased factual reporting

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While this is quite separate from the party I will promote party events through CTT. You may find this difficult to believe but it is almost impossible to advertise political events. No newspaper or journal will accept political adverts and I have not found any events website that is suitable as they all concentrate on leisure activities.

So I view taking CTT forward as a way also of publicising Sovereign Republic and setting up real time meetings. There is nothing like have a bunch of people in a room to establish a common purpose and meaningful debate

To find out how this works watch this video or visit the Chronicle of the Times website


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CTT will be financed through donations mainly by those who pick it up free on the streets. But we need some money for the startup. I have lauched a crowdfunding campaign

This campaign states a goal of £5000 but that is far more than I need . With £1500 I can get 10,000 copies onto the streets of London. After that a 2.5% response of readers to donate £10 will pay for 20,000 for the next issue

As you can see I have a very streamlined business model that cuts out any middlemen

All I am asking of you is to donate £10 to the startup. You can do the math. We don't need many of those £10's to create the launch

Everyone knows that we have major problems with current newspapers. They are all owned by just a few billionaires. That is not democracy. This is a way to fight back.

Check out the full mockup here

Do watch the 9 min video or visit the crowdfunding campaign to learn more

....And contribute £10!


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