The coronavirus crisis is a harsh and unavoidable reality for economies and governments around the world. Measures taken to tackle the health crisis such as quarantine and business closures have not only sunk economic activity, but also tax revenues.
At the same time, governments are implementing all sorts of stimulus plans to try to get through the crisis. Less revenue and much more spending are stimulating the public accounts of many countries, including the United States.
But how do politicians hope to be able to finance the immense public spending plans they are approving to offset the problems brought with the coronavirus? How is it possible that so many countries are issuing debt at negative interest rates? Why are investors willing to pay money to finance states?
And what if we were to tell you that these two questions are closely related to the increase in the wealth gap that has been recorded in recent decades in developed countries.
Are you ready to get into the ins and outs of the global economic system?
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Corona Bailouts: The Greatest MONETARY EXPERIMENT in History?
The global coronavirus pandemic has brought about unprecedented challenges for economies around the world. With businesses shutting down, unemployment rates soaring, and financial markets in turmoil, governments have been forced to take drastic measures to stabilize their economies. One of the most significant measures taken by governments has been the implementation of massive bailout packages to support businesses and individuals impacted by the pandemic.
The scale of these bailouts is truly historic, with trillions of dollars being injected into economies worldwide. The United States, the European Union, and many other countries have rolled out massive stimulus packages to prevent economic collapse. These bailout measures include direct cash payments to individuals, loans and grants for small businesses, and financial support for industries hit hardest by the pandemic, such as airlines and tourism.
The rationale behind these bailouts is clear: governments aim to prevent a total economic collapse and ensure that businesses and individuals can weather the storm until the pandemic subsides. However, the sheer scale of these bailouts raises questions about their long-term implications and the risks they pose to the global economy.
One of the biggest concerns is the potential for inflation and currency devaluation. With trillions of dollars being pumped into the economy, there is a risk that this influx of money could lead to a devaluation of currencies and a surge in inflation. This could erode the purchasing power of consumers and businesses, leading to a decline in living standards and economic instability.
Moreover, the massive bailouts raise questions about the sustainability of government debt. In many cases, governments are taking on huge amounts of debt to finance these stimulus packages, leading to concerns about their ability to pay back these debts in the future. This could potentially lead to a sovereign debt crisis and further economic turmoil.
The reliance on bailouts also raises questions about the long-term viability of certain industries. Some critics argue that these bailouts are propping up industries that were already struggling before the pandemic, and that the long-term sustainability of these businesses is in doubt. This could lead to a misallocation of resources and a drag on economic growth in the years to come.
The corona bailouts represent a monumental monetary experiment on a scale never before seen in history. The implications of these measures are far-reaching and pose significant risks to the global economy. It remains to be seen whether these bailouts will be successful in preventing an economic collapse and whether the long-term consequences will outweigh the short-term benefits. As governments continue to navigate the challenges of the pandemic, the corona bailouts will undoubtedly be a topic of debate and scrutiny for years to come.
And what do you have to say about the 3.3 trillion dollars that Congress just passed for the green deal? The biggest transfer of wealth to the 1% IN HISTORY.
Fiat Central banks are Ponzi schemes.
The spending is paid for with a new and increasing form of tax called INFLATION. If your money declines in value by 5% per year, you are, basically, paying a 5% tax imposed on all your cash, or cash equivalent, income and assets. It is both an income tax and a property tax as it applies to your savings every year, not just your annual income.
Federal Reserve Gave $60 TRILLION to AIG in Bailout.
The Federal Reserve and US Treasury reported that the AIG bailout required $180 billion and yielded a profit of $20 billion. The AIG bailout actually resulted in a loss of $59,980 billion and the massive losses were intentionally withheld from disclosure by the Federal Reserve.
Extraordinary assertions require extraordinary proof so we start with the evidence.
Magnitude of Undisclosed AIG Losses
The massive undisclosed losses are detailed in AIG Bailout Oversight Hearing, Panel 1, Oct. 8, 2008. The nature of "naked" (no collateral) credit default swaps and staggering amounts are clearly set forth. https://www.youtube.com/watch?v=T_RJ44ap400
Eric Dinalo participated in AIG negotiations as NY State Insurance Superintendent and estimated the “secret” AIG bailout (naked credit default swaps) at $60 TRILLION. Six other participants state similar amounts: Maloney (57), Yarmuth (62), Turner (63), Braley (63), Welch (62), Sarbanes (62 trillion).
The troubling nature of the “naked” credit default swaps is also set forth (“essentially gambling”, no collateral, no ownership of asset, no cap relative to asset). These "naked" derivitves clearly provided no return value for the $60 trillion… all .. gone. In the hearing, the total ($60 trillion) is compared to the “entire value of the NYSE” and “world economic output for a year”.
At that time (2008/2009) AIG was worth $5 billion yet received a $60,000 billion in a “bailout.”
Federal Reserve Intentionally Withheld the $60T Bailout from Disclosure in SEC Filings
The “extraordinary” withholding of disclosure is detailed in US House of Representatives, Committee on Oversight and Government Reform, Public Disclosure as a Last Resort: How the Federal Reserve Fought to Cover Up the Details of the AIG Counterparties Bailout from the American People, Special Report, US House, January 25, 2010. https://republicans-oversight.house.gov/wp-content/uploads/2012/01/20100125aigstaffreportwithcover.pdf
When the SEC sought full disclosure of the secret bailout and receiving parties ("counterparties") the FRBNY responded that this “requirement is giving us some pause, since we haven’t otherwise disclosed this information to Congress.” The “FRBNY clearly hoped to prevent Congress from fully understanding the payments to AIG’s counterparties” (pg 13).
The Committee concluded that the “fact that a quasi-government agency, unaccountable to the American people, likely wasted billions of taxpayer dollars and went to great lengths to prevent Congress and the American people from learning about these actions demonstrates the threat that the Federal Reserve poses to basic principles of American democracy."
see also https://youtu.be/Bxm0AzA_OJM
Further facts are found in the AIG shareholder vs. US lawsuits brought for unfair bailout treatment which concluded at the US Supreme Court in 2017.
AIG shareholders asserted that, at FRBNY's insistence, the actual SEC filings did not include Schedule A which would have set forth the undisclosed losses.
The SEC noted the omission and told AIG that it had to disclose or request confidential treatment. AIG in consultation with FRBNY, filed a confidential treatment request to conceal the $60 trillion from disclosure which the SEC granted.
Audit of Federal Reserve
The massive losses are also confirmed in the (virtually unreported) first-ever audit of the Federal Reserve. The audit suggests 16 trillion had already been doled out by 2011. GAO, Opportunities Exist to Strengthen Policies and Processes for Managing Emergency Assistance, GAO-11-696. Table 8 (page 131), 2011.
In assessing the GAO audit, the Levy Institute estimated the bailout cost to be $29 trillion (Levy Institute, Working Paper No. 698, December 2011, $29,000,000,000,000: A Detailed Look at the Fed’s Bailout by Funding Facility and Recipient). Where did the first $29 trillion go? Citigroup: $2.5 trillion, Morgan Stanley: $2.04 trillion, Merrill Lynch: $1.949 trillion, Bank of America: $1.344 trillion, Bear Sterns: $853 billion, Goldman Sachs: $814 billion, Lehman $183 billion.
While US homeowners were losing their homes, jobs and businesses … the Federal Reserve gave foreign banks: Barclays PLC (United Kingdom): $868 billion Royal Bank of Scotland (UK): $541 billion, JP Morgan Chase: $391 billion, Deutsche Bank (Germany): $354 billion, UBS (Switzerland): $287 billion, Credit Suisse (Switzerland): $262 billion, Lehman Brothers: $183 billion, Bank of Scotland (United Kingdom): $181 billion, BNP Paribas (France): $175 billion.
These amounts account for half of the AIG bailout (about $30 of $60 trillion) .. so double that.
The AIG bailout likely resulted in a loss of $59,980 billion rather than the reported profit of $20 billion.
Thx for reading.
03:40 – …with a huge public deCIFIT…
Please do : how to grow your own food?
Where's the nice bald man?
Frederick hayeck revolving in his grave.
This is all "Funny Money" The former Greek finance minister (YanisVaroufakis) will explain
Well richest 1percent pay 37percent of all federal tax
Ladies and gentlemen. We might be screwed
this is a good a topic
Oil
Beatiful
I completely hate the tired old argument that conservatives use in the states and elsewhere, namely: "our current public debt is not sustainable, and as such we need to cut government spending on welfare programs!" To be frank, this is an utter lie. It doesn't matter whether you're in debt, but as to why you're in debt. For instance, Japan has run a large public deficit for the past 30 years. However, there is no evidence that this debt has harmed the economy or employment. As a matter of fact, Japan has managed to outstrip the US when it comes to growth in G.D.P. Another example of debt sabre rattling comes to us from Australia. During the course of the Global financial crisis, the Labor party under the leadership of Kevin Rudd managed to avoid recession with small additions of Public debt. And yet, the liberals ran on the deficit being skyhigh (it wasn't, it was the third lowest in the OECD) and managed to win on that. Look at Australia today though, their public debt has skyrocketed since Tony Abbott took office. Now under Morrison this has topped out at over 1 trillion AUS$, and their economy is considered to be one of the worst managed in the OECD. They only barely beat out Turkey and Mexico, and are currently growing slower that places like Chile and The Domenican Republic. All of this just goes to show that those whom claim to care about the economy are often the very same masked thieves robbing you right under your nose
The host has really grown on me.. I trust him but if he shaved bald I'd trust him more
Hahah id trust him if he was balder :-p
Oi and btw check this finance news letter its legit good . https://www.morningbrew.com/daily/r/?kid=b98fb00c
Most people today do not know that Marx wrote "Das Kapital" because of the 19-hour workday.
Yet another one ready to blame Trump for the debt in America, would his opposition have handled the coronavirus pandemic any better?
IT IS LIKE MAGIC..IT VANISHES,AS FAST AS IT IS CREATED.
Get gold, silver and bitcoin. Weimar Republik is coming.
Defitit
It took a lot of money, not least for bribes to powerful people, to finance this scamdemic and to pay for cover up of paedophiles. To find out where the money came from go to rogermanners@yahoo.com It took a lot of money, not least for bribes to powerful people, to finance this scamdemic. To find out where the money came from go to rogermanners@yahoo.com It took a lot of money, not least for bribes to powerful people, to finance this scamdemic. To find out where the money came from go to rogermanners@yahoo.com
Since we made up the concept of money and accounting, technically we could all just make up an imaginary payer of the debt. If everyone agreed we could just write it off, it just needs somewhere to be posted against so all the books balance. I work in finance so I know it's possible if everyone did it. I say we make the Bank of Imagination and pass on all the world's debt there and restart debt free, it's just moving digits after all and the only one who can stop us is us so, really, it's completely doable. The only people who would argue are the ones who profit off the debt being the way it is, but stuff those greedy swines anyway 🙂
Question, when the interest from the bonds is paid to the fed, what do they do with it? Little help here
I realise they are being bought on secondary market, not directly from govt-
That would work, just titrate the money supply to the interest rate/ yield curve
Even NZ is doing 100b of QE, almost a half of gdp
True,only baldies please.
No productivity,no increase in economic activity.
No confusion,Covid is a 3year job.
No one is going to start anything new,China owns directly or indirectly.
Politicians want to win elections!!
You know what would have been nice for reference, is if you should that interest rate chart going
back to the 80's when interest rates were 18%. Contrast would be more of the word than reference.
Can anyone here today imagine paying 18% interest and still surviving?…Cuz my father did, and I paid 12%
on loans. That is where we have come from and to. The next phase is all unknown…..!!!
Why can't governments just NOT spend any more money when they don't have it?
It works for me and I never go into debt… Strange.
Answer ? you want an answer > I don;t even understand the question ,if there was one or two or ten….
Who is paying? The Irish "in spades"!
Zimbabwe easily beat the inflation record from 2006 to 2010. It was millions of percentage points annually. Argentina is well managed . . .
Monkey money having a ball… Phoney!!
WAY TOO MANY ADS! You demean your brand.