THE LAST POST by Dr Geert Van Den Bossche — Unprecedented Global Financial Crisis — IMF Boosts Money supply — All About FLOW

GARDENS BY THE BAY

GEERT VAN DEN BOSSCHE — THE LAST POST

He is a super expert in vaccine development. Some QUOTES: —

“… mass vaccination campaigns may have a beneficial short-time effect ….. but will eventually drive the propagation of more infectious variants.”

“A vaccine that only prevents hospitalizations and severe Covid-19 disease is not good enough to be used to combat a pandemic.”

“There should be no doubt that non-transmission-blocking vaccines (i.e., so-called ‘leaky’ or ‘imperfect’ vaccines) CAN NEVER EVER CONTROL A PANDEMIC, even though they may temporarily protect against disease.”

“The mass vaccination hype will undoubtedly enter history as the most reckless experiment in the history of medicine.”

” … mass vaccination campaigns during a pandemic of highly infectious variants fail to control viral transmission.”

“This IRRATIONAL EXPERIMENT will unambiguously highlight the clear-cut limitations of conventional vaccine approaches.”

” … the mass vaccination program is nothing else but a big experiment. For how much longer is the public going to believe the treacherous narrative?”

“Only a mind that has lost its grasp on reality can fail to see how pathetic all this has become …..”

Link: https://www.geertvandenbossche.org/post/the-last-post

His Detailed CV in Vaccinology:

THE IMF BOOSTS SUPPLY of SPECIAL DRAWING RIGHTS

The International Monetary Fund (IMF) is an international financial institution, headquartered in Washington, D.C., consisting of 190 countries working to “foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world”. It was formed in 1944 well before the end of World War Two at the Bretton Woods Conference attended by the alliance of Nations (the “Allies”) opposed to the Axis nations (lead by Nazi Germany, Italy and Japan).

It plays a central role in the management of balance of payments difficulties (trade and capital settlements) and international financial crises. Member countries contribute funds to a pool through a quota system from which countries experiencing balance of payments problems can borrow money. As of 2016, the fund had a total of SDR 477 billion (about US$667 billion).

IMF funds come from two major sources: quotas and loans. Quotas, which are pooled funds of member nations, generate most of the IMF’s funds. The size of a member nation’s quota (contribution) depends on its economic and financial importance. Nations with greater economic significance have larger quotas — they provide funds to help nations with smaller economies — in essence and ominously, becoming their bankers. The fund quotas are increased periodically as a means of boosting the IMF’s resources in the form of Special Drawing Rights (SDRs).

On 24th August, Ceyla Pazarbasioglu, Director of the Strategy, Policy and Review Department of the IMF made a Podcast to explain the recent release (or “allocation”) of US$ 650 Billion worth of SDR’s from the IMF to its client nations. She explained that there is a current “unprecedented crisis” in the global financial system requiring the allocation of these new SDR’s.

Special Drawing Rights (SDR), established in 1969, are international reserve assets, used as the accounting unit for IMF transactions with its member countries. They can be transferred for use by individual nations into one of five component national currencies.

There are two things to understand here —

1. what is a Reserve Asset?

2. what (exactly) is an SDR?

What is a “reserve asset”?  Answer – in banking terminology, it is a loan from one bank to another. It can be a loan of currencies, commodities (such as gold), or any other financial capital. The loans are made by the IMF to national client central banks. The subsequent funds can then be used to help finance trade settlements, “smooth” foreign exchange fluctuations or can be used to purchase assets. In other words, the IMF will make such loans if there is some international liquidity problem.

The recent issue of US $ 650 Billion worth of SDR’s was done in order to stimulate more global liquidity to assist in global central bank transactions — presumably because of increased demand or because of a (relative) reduced supply of SDR’s. That may be a good thing in response to an increased demand for trade settlements or a bad thing if reflective of central bank hoarding of SDR’s or an inadequacy of SDR’s in some nations. Take your pick.

It is important to remember, however, that $ 650 Billion is a relatively small amount in terms of global trade settlements which amount to about $ 20 Trillion per year (just for goods). To help with the perspective, $ 20 Trillion is 20,000 Billion.

However, $ 650 Billion is a large amount when compared to the previous balance of SDR’s held by the IMF as it represents almost a doubling of that number. Take your pick. In the Global Financial crisis of 2008/2009, an allocation of just US $ 250 Billion was made to help stabilize the global financial system on that occasion.

Ceyla Pazarbasioglu described this recent “allocation” of SDR’s as “unprecedented” and “the largest allocation ever” in response to the “unprecedented ” global crisis caused by the Covid 19 pandemic. She used the word unprecedented twice in her Podcast. To BOOM that seems significant and possibly unprecedented. She also said that “$ 21 Billion will go to low income countries”. Thus, you can assume that the rest will not.

What is an SDR? — Special drawing rights (SDRs) are foreign exchange reserve assets defined and maintained by the IMF. SDRs are units of account for the IMF, and not a currency per se. They represent a claim to currency held by IMF member countries (and for which they may be exchanged).

Thus, an SDR is a unit of account for the IMF and the world’s central banks. It is made up of five currencies — The value of an SDR is calculated from a weighted basket of major currencies, including the U.S. Dollar 41.73%, the Euro 30.93%, Chinese Yuan 10.92%, Japanese Yen 8.33% and British Pound 8.09%. You can clearly see the dominance of the US Dollar and the Euro (arguably a proxy for the US Dollar).

Interestingly, these relative amounts of currencies that make up an SDR do not reflect the foreign currency holdings of global central banks — US Dollar 58 %, Euro 18.8%, Yen 5.3%, Pound 4.14%, Chinese Yuan 1.89 %.

Clearly, there needs to be much more Chinese Yuan held by central banks to allow more trade settlement in Yuan. That will happen eventually as China progressively settles more trade purchases with Yuan and its currency is correspondingly accepted by other nations. Russia and China are now moving down that pathway more and more as the years go by but other nations will soon be asked to do so as well.

China must move more Yuan offshore slowly but surely to better balance central banks’ foreign exchange reserves. Or find a way to create such funds externally via bank loans created externally and denominated in Yuan. This is the next big monetary trend that must take place progressively over the next 50 – 100 years as the US Dollar loses its dominance and becomes more balanced by Yuan.

THE FINANCIAL CRISIS — ALL ABOUT FLOW

What about the “unprecedented” financial “liquidity” crisis? BOOM has often referred to money as water for a garden. The garden is the real economy of goods and services being transacted daily. If the water flow reduces or stops, then the garden will suffer and may even die.

Paradoxically, the current crisis is not caused by lack of money — there is plenty of money — but it is progressively being trapped and cannot flow. It is trapped in the asset exchange economy where money changes hands infrequently but only from one owner to another when a large pre-existent asset is bought and sold. That money is not in daily circulation. It is not liquid in the real economy. This is all made worse by Asset Price Inflation and the fact that almost all of the money supply in western, “advanced” economies is created as a bank loan collateralized against a pre-existent asset. We need much more money created in a different way. That means more CASH created by the sovereign nations. Yes — despite it being unfashionable, more CASH is the answer to the world’s economic woes.

Currently central banks clearly know this and they are creating more money in Quantitative Easing Programs and injecting it into the real economy but via the asset markets (in purchasing bonds and other financial assets). Stupid. Dumb. The new money needs to find its way into the real economy directly. Physical cash would work but is unwieldy and slow. This is where BOOM’s Quantitative Boosting (QB) solution comes to the rescue — a form of electronic money free of interest costs, in national currency and injected straight into the real economy.

QB Explained

and BOOM’s Perfect Economy

In economics, things work until they don’t. Until next week …………  Make your own conclusions, do your own research.  BOOM does not offer investment advice.

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HOW MOST MONEY IS CREATED

BANKS CREATE FRESH NEW MONEY OUT OF THIN AIR (but they always need a Borrower to do so)

THERE IS NO SUCH THING AS A DEPOSIT
BANKS PURCHASE SECURITIES, THEY DON’T MAKE LOANS
BANKS DON’T TAKE DEPOSITS, THEY BORROW YOUR MONEY

Watch this short 15 minutes video and learn as Professor Richard Werner brilliantly explains how the banking system and financial sector really work. 

https://www.youtube.com/watch?v=EC0G7pY4wRE
How is Most New Money Created ?

LOANS CREATE DEPOSITS — that is how almost all new money is created in the economy (by commercial banks making loans).

From the Bank of England Quarterly Bulletin Q1 2014    —
“Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money.

“Most money in the modern economy is in the form of bank deposits, which are created by commercial banks themselves”.

Youtube Video —  https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-in-the-modern-economy-an-introduction

and

https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creation-in-the-modern-economy

Paper:  Money in the Modern Economy  PDF —  CLICK HERE

Quarterly Bulletins Index

http://www.bankofengland.co.uk/publications/Pages/quarterlybulletin/2014/qb14q1.aspx

Most economists are unaware of this and even ignore the banking & finance sectors in their econometric models.

On 25th April 2017, the central bank of Germany, the Bundesbank, released a statement on this matter —

“In terms of volume, the majority of the money supply is made up of book money, which is created through transactions between banks and domestic customers. Sight deposits are an example of book money: sight deposits are created when a bank settles transactions with a customer, ie it grants a credit, say, or purchases an asset and credits the corresponding amount to the customer’s bank account in return. This means that banks can create book money just by making an accounting entry: according to the Bundesbank’s economists, “this refutes a popular misconception that banks act simply as intermediaries at the time of lending – i.e. that banks can only grant credit using funds placed with them previously as deposits by other customers”. By the same token, excess central bank reserves are not a necessary precondition for a bank to grant credit (and thus create money).”

Reference: https://www.bundesbank.de/Redaktion/EN/Topics/2017/2017_04_25_how_money_is_created.html
The Reserve Bank of Australia (Australia’s central bank) has also contributed to the issue in a speech by Christopher Kent, the Assistant Governor on September 19th 2018.
“…… the vast bulk of broad money consists of bank deposits”
“Money can be created …….. when financial intermediaries make loans
“In the first instance, the process of money creation requires a willing borrower.” 
“It’s also worth emphasizing that the process of money creation is not the result of the actions of any single bank – rather, the banking system as a whole acts to create money.”
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MOLS Denmark

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