Posts Tagged ‘fiduciary duty’

I can only see deflation

March 20, 2011

Graph lifted from Zero Hedge: – courtesy of John Lohman.

I will grant you that even though we may have entered a deflationary cycle, the path is not yet clear due to the fact that various government interventions are generating conflicting signals in various sectors. So, yes, it is not a straight path down for assets or up for the Dollar or gold. Nonetheless, the trend is clear.

The key is the efficiency of the currency (i.e. the efficiency of debt).


The real state of “safe” investments and purchasing power parity

March 16, 2011

This is going to be boring for regular readers of this blog. But if I post it often enough maybe someone will be able to share it with someone that can make a difference.

via 135 – The 30yr US Treasury Bond valued in terms of gold bullion.

The Long Bond is what most pension and insurance funds, not to mention sovereign wealth funds and sovereign foreign reserves, are stuffed with.

As a corollary, I am not convinced Japan can sell their holdings of US paper in order to raise funds for reconstruction. If they did, they would likely further worsen the value of the ocean of US paper held globally.

In my opinion, Japan can only float even more sovereign debt…. thus going into head-to-head competition with all other Sovereigns requiring financing… $10Trillion may be a conservative estimate for Western funding needs this year.

Voter betrayal (Ireland)

March 7, 2011

If this is the case, I expect the Irish will, rightly, pull a Tunisia

The Fine Gael/Labour coalition Government is to implement in detail the outgoing Government’s four-year austerity plan as approved by the EU-IMF, the Sunday Independent can reveal.

The evil of inflation (Birthday ruminations II)

March 6, 2011

Debt based fiat money (DBFM) is predicated on inflation or, if you prefer, it is predicated on the devaluation of the currency. In other words, it is predicated on the liberal creation of currency and debt and, crucially, on the currency being spent rather than being saved. This is an important point to keep in mind as we go forward.

Of course, a currency can only be devalued so far. There is an absolute mathematical limit to debasing a currency. If that were not the case, then sovereigns could freely create any amount of debt and give every man, woman and child a state salary and we’d all be rich beyond our wildest dreams. But this is clearly impossible.

As the authorities opt for DBFM and impose the system upon society, the state has an obvious vested interest in keeping the system going as long as possible. Thus as the currency is gradually debased, the authorities must attempt to at least partially compensate for the mathematical certainty that DBFM loses efficiency over time. If the viability of DBFM rests on economic actors spending money as fast as possible, it follows that the state has a vested interest in enacting any legislation or instituting regulatory bodies or mandating the creation of entities whose sole purpose is to create new layers of expenditure. All in the name of keeping the currency circulating. This is because the viability of DBFM is predicated on economic actors spending the currency as fast as possible rather than saving it. This is, inter allia, also the reason why DBFM cannot contemplate gold as a viable financial instrument. Buying gold is the equivalent of saving which lowers the velocity of circulation of the currency spelling doom for DBFM, doom for the banks that sponsor the system hence doom for the state.

– Above, graphic representation of the efficiency of debt, ergo, the efficiency of the currency.

Graph: M1 Money Multiplier

– Above, graphic representation of the diminishing marginal utility of the currency in a DBFM system.

In the previous essay I pointed out how by promising to manage a pool of savings on behalf of the individual, the state not only has access to a source of cheap funding (it is in fact free funding) but by assuring the individual that their future financial requirements are taken care of, the state also ensures that the individual’s need to save for a rainy day is diminished thus inducing more spending in an attempt at keeping the velocity of circulation of the currency positive. Of course, the inherent dynamic of electoral politics greatly facilitates this process because politicians will promise great benefits to the electorate just to get elected. Anyway, even the longest serving politicians will not preside over an entire economic cycle so that it is no skin off their nose whatever they promise and whatever they may enact as policy because they won’t be around long enough to see what the long terms effect of their promises may result in.  But this is a subject for another time.

So the state has a vested interest in forcing economic actors to spend all money at all times and to make use of debt to make up the difference between what they want and what they can afford with their salaries. In this regard, the state mandates a constant and progressive reduction of interest rates. This seemingly innocuous policy in fact plays havoc with a myriad systems far and wide and, eventually, is the root cause of flaring prices in basic commodities of which more later.

Graph: 30-Year Treasury Constant Maturity Rate

– Above, graphic representation of long term interest rates. The trend clearly slopes from the top left to the bottom right. This is most certainly not a natural trend in a presumably capitalistic society free from government intervention. Draw your own conclusions.

So, now you are the de-facto industrial power but you are still reeling from the debt hang-over induced by your first attempt at using DBFM. It is 1939ish or thereabout and your administration seems powerless to lift society out of poverty and the masses are getting restless. What do you do? Why, you spoil for a fight of course.

So, you get your war, you put millions of people to work on infrastructure projects, on armaments and on secret weapons. At the same time you start creating gargantuan amounts of money and credit all with the excuse that a war is raging and “freedom must be protected”. As the single largest custodian of sovereign gold globally and having engaged in the greatest build out in the history of man till that point, you emerge from the war the single and only industrial power that has capacity left standing. This is the perfect set up. Now, after the war has devastated countries, lands and people you can release the flood of currency and debt you have piled up from 1913 under the guise of helping countries emerge from the devastation of war. But that is not all.

Here’s the stroke of genius.

You’ve opened the monetary flood gates upon the world but you know that the diminishing marginal utility of the currency will inevitably come back to bite you in the ass. You need to postpone that moment as far off in the future as possible. What do you do?

Well, for one you create the United Nations.

The United Nations a tool of inflation

I’m not going to spend much time on this subject. But here are some issues to ponder.

How many UN employees do you know that actually have any respect for the organization? How many of these same disgusted employees have willingly tendered their resignation? Ever wondered why the UN never refuses to disburse any sums for projects even in cases where fraud has been clearly and objectively established? Have you ever taken a look at the quality and quantity of perks UN employees enjoy during and after employment? Ever taken a look at the UN pension fund and UN pension entitlements? Ever wondered why when the UN moves into a situation the local black market immediately perks up? Finally, ever looked at the ratio of employees that have been fired from the UN in relation to total UN employee numbers?

The long and the short of it is that the UN is a tool of inflation. The role of the UN is to churn currency globally, churn it fast, churn it far and churn it wide. Ask no questions; just churn dosh. And, granted, the UN does too employ a number of idealists who actually believe they can change the world. I don’t mean to detract from their efforts. But the truth is that the UN is a behemoth that consumes staggering amounts of resources for which they have very little to show other than apparently being chronically underfunded (thought the pension fund and salary perks never run short).

Climate change former global warming (more convenient and all encompassing)

Here are Western governments ostensibly preoccupied by what is for all intents and purposes a theory that is more akin to the geo-centrism prevalent during the dark ages hell bent on saving the planet by, wait for it, instituting a trans-global entity to monitor carbon credits to be conveniently traded on an exchange sponsored by none other than Mr. H. B. Obama and Mr. A. Gore…. yes, he of An Inconvenient Truth… But that’s actually only a by the by.

The absurdity in the position of Western governments is that despite their stated intent to save the planet, they are also hell bent on maintaining inflation on a positive trajectory or, at the very least, making sure deflation does not happen (B. Bernanke speech to the National Economists Club, November 2002). The problem is that these are mutually exclusive positions.

Inflation conforms to the law of diminishing marginal utility so that you always need more inflation in order to obtain the same degree of GDP expansion. Accelerating inflation induces accelerating spending thus it pulls forward in time the demand and production cycles. This means that economic actors will consume today what they would otherwise consume over a longer period of time. Thus, accelerating spending puts stress on, for example, agricultural land and agricultural commodities. Accelerated spending puts pressure on renewable resources because by accelerating the consumption cycle the growth cycle may not be able to keep up. Finally, inflation puts undue pressure on energy resources for exactly the same reasons. So that oil wells that should reasonably be exploited at lower rates in order to ensure a more thorough extraction over a longer period of time must instead be exploited at higher rates thus leading to the abandonment of wells sooner than otherwise necessary which leads to an increase in prices. Rinse repeat.

So, now it’s the year 2000. You realize that the efficiency of this monetary system is once again hitting the buffers and you desperately need to find a way to keep the gig going either because you think you can actually find infinite ways to bail out the system or because you believe that buying time will actually achieve something. Or maybe you just know that now that DBFM has been forced down the throat of every single sovereign globally, there is no easy way to keep the system going short of some dramatic scorched earth solution … like a global currency for example…So what do you do? For one you just hammer interest rates to the lowest point in the history of mankind.  You then proceed to legally ring fence the sponsors of the monetary system (the banks) in an attempt to prevent their mathematical demise. You then pump the sponsors of the system full of cash that you either appropriate from the public or you down right create out of thin air. Then you go on a rampage creating untold trillions of Dollars that you use to buy your own sovereign debt either directly from the treasury or from your own primary dealers to the point where you become the single largest holder of your own country’s sovereign debt in blatant contradiction of the presumed floating exchange rate mechanism. All the while the real economy is starved of cash, unemployment rises, tax revenue collapses thus bringing about the failure of those social safety nets that were supposed to provide for the individual in his/her old age or when sick whilst, simultaneously, the banks you are so intent on saving are recycling their monetary gifts you so generously offered them into basic commodities just to protect their gift from the loss of purchasing power you are intentionally causing.

You do this aggressively, progressively and pervasively and soon enough you have on your hands a Greece, a Hungary, an Ireland and then a Tunisia, an Egypt and a Libya… and other to follow….

So, now you have a population that is well on its way to become destitute, unemployment is rising, debt levels are high and savings are low and the presumed social safety nets are failing. So now the people are angry, hungry and progressively homeless. The people are looking for somebody’s head. So what do you do? Are you going to give them the head of a Western politician or, gulp, that of a Western banker? What to do, what to do. Why, you spoil for a fight of course.

So this is the time to rev-up the blame machine the West is so good at operating. This is the point in time when the various fingers of blame that to date have been pointed in the general direction of countries and people you don’t like must be pointed more directly and more persistently at some country and people you don’t like.

That, in short, is the reason inflation is evil.

Birthday ruminations

March 5, 2011

For those of you that keep asking, I write this blog primarily because I love the “I told you so” moment. But just as satisfying is to point out the unwitting hypocrisy in people’s lives.

I say unwitting because most people are just too busy in their daily routines to be able to zoom out of their lives to notice how everything is interconnected and how people’s choices very often are not free but are in fact directed and how when these choices are made the ramifications extend to aspects of life that are otherwise apparently unrelated.

Just for a change, lets take the monetary system 🙂

Here is a system that pretty much sits behind every single aspect of human development and that is THE ultimate enabler of all human action and yet even amongst the few that may know what a monetary system is, even fewer know what the ramifications of the choice of a system over another may be.

Barter is a form of monetary system. Barter has been used throughout the ages and, though not an officially recognized system of exchange,  it is still in use today. Everyone resorts to barter at some point in their lives. The interesting thing about barter is that since it relies on an agreement between two parties, the exchange is not subject to taxation by the government (unless the items being exchanged are somehow registered with the government like a car or a house).

But just because barter requires an agreement between two parties AND because most barter would escape government taxation, organized societies cannot and will not adopt it as a viable system of exchange. It is just too cumbersome to allow the development of society at a viable rate.

If society is to organize and develop, exchange we must, so that a form of monetary system is inevitable and necessary. Nay, it is vital.

Other than barter, the choices of monetary system are spectacularly limited. So limited in fact that it boils down to two systems.

One system will be based on some sort of intrinsic value. Throughout the ages, salt, stones and shells have been used as basis of exchange thus the monetary system derived its strength from the desirability and/or scarcity of the medium of exchange.

One system will be based on political fiduciary duty. Call it honesty, rectitude or plain old decency. But that’s all that props up this system and nothing else.

The former system is a “value based” monetary system whilst the latter is a “fiat” monetary system.

Let me hasten to say here that fiduciary duty is an integral part of a value based monetary system too. But at least in a value based monetary system there is an objective measure of value against which aberrant policies or corruption can be flagged beyond all reasonable doubt. As an example of deteriorating fiduciary duty perpetrated behind the screen of the soundness of a value based monetary system take the USA from 1931 to 1971. During this period of time, the US government claimed to operate the monetary system within the confines of the value of its gold reserves (the US gov had confiscated all gold instruments by 1931). In other words, the US government claimed that it was not engaging in inflationary policies. At this time, the USA was already the de facto world industrial powerhouse and on its way to become the de facto global military hegemon so that they had already attracted significant gold deposits from numerous sovereigns. As we all know today, in 1971 the charade came to an end when France attempted to exchange their US Dollar reserves for the gold they thought they were entitled to but, of course, the gold wasn’t there.

All that to say that a value based monetary system by itself is no guarantee of fiduciary duty on the part of government. What does however guarantee a higher degree of fiduciary duty, is transparency. There is no substitute for transparency. So that a government, any government, cannot be expected to provide fiduciary duty unless transparency is ensured first.

So, a monetary system is vital to human development. But why does it matter whether we choose one system over another and, most importantly, why is inflation a problem? After all, there are scores of Noble laureate economists that claim that inflation is not only a desirable dynamic but it is necessary in order to develop society.

If you are a regular of this blog, you will know that inflation is a monetary dynamic that devalues the purchasing power of the currency thus causing a nominal rise in the trading value of goods and services thus causing a rise in the nominal value of GDP. The devaluation of the currency is also purported to have another beneficial effect in that economic actors always need more money in order to secure the same quantity and quality of goods and services so that inflation is perceived to cause a rise in employment (whereas in low inflationary environments one family can live on one salary, as inflation progresses, more salaries are required in order to maintain a constant level of quality of life if not increasing it). A rise in employment, it is thought, will occasion a rise in demand thus fostering industrial expansion, thus fostering a rise in employement… rinse, repeat… thus inflation is desirable.

But of course, from the arithmetical point of view, inflation is not and cannot be infinite. If that were not the case, Bretton Woods would never have been abrogated in 1971 when France asked for its gold back. If printing money was a viable solution, then in 1971 the USA could have just printed a bunch of dollars and gone out to buy some gold to give back to France. But they didn’t because they couldn’t. And the couldn’t because the purchasing power of the US$ had been depleted. They couldn’t because they had reached the limit of the presumed beneficial effects of inflation.

It is an arithmetical truth that inflation is limited mathematically. But can inflation be evil?

If you listen to the Noble laureates making their case, inflation is a necessary dynamic but it most certainly is not evil. Bear with me a while longer.

Social Security a tool of inflation

As outlined above, inflation is a dynamic that conforms to the law of diminishing marginal utility because as it erodes the purchasing power of the currency, it is a self reinforcing dynamic. As Argentina found out in 1997 and the USA found out in 1971 and in 1929 and as John Law found out in XVII century France and as the Romans found out when the gold content of their currency was being scraped off and as the Chinese found out even before the Romans, devaluation will eventually bring about the demise of empires. Not only that but on the way to demise, collateral devastation lays waste to countries and people well outside the borders of the stumbling hegemon.

That has always been so and there is no reason on God’s green earth why it should be different this time. The arithmetic behind the dynamic is a universal truth.

That being the case, how can inflation be evil? This answer touches on different aspects of society and life in general.

Like all dynamics, inflation goes through several stages. Each stage requires a set of government policies aimed at extending the effects of inflation on the economy. Take social security. Social security has been hailed as one of the greatest social achievements ever. But in fact, SS is nothing but a tool of state to extend the effects of inflation. SS requires payments into a fund. This does two things for the monetary authorities. First, regular rounds of payments help maintain positive the velocity of the currency. But, more interestingly, for as long as more people pay into the fund than people take out, government can make use of the excess funds free of charge thus lowering its need to issue sovereign bonds. Ergo, the government can spend money without paying interest and increasing the velocity of the currency. But the real beauty of SS is that it make the citizen dependent on the state. Other than eroding the purchasing power of the currency thus discouraging savings, the fact that citizens think they can rely on the state for retirement induces them to save even less thus spend more.

To be continued later…

More from the horse’s mouth (albeit another horse)

March 2, 2011

Initially I just quoted an excerpt that I thought would give the jist of the entire article. But as I read through the piece by I realized it is stuffed full of half truths and false remorse. I am now posting the entire article and interspersing my comments throughout.

Article and comments:

In some of his strongest language yet, Mervyn King today claimed the fall in households’ living standards was the fault of the financial services sector and he expressed sympathy that innocent families paying the price.

“The people whose jobs were destroyed were in no way responsible for the excesses of the financial sector and the crisis that followed,” he told MPs on the Treasury Select Committee.

GUIDO COMMENT: So, what’s going on here. Genuine heartfelt remorse? A moment of candor?

In most aspects, he said, the economy had been on a sound footing before the crisis. Previous downturns were often caused by inefficiencies or weak management and were useful opportunities to improve systems. “None of that applied in this crisis,” he said. “We had quite a successfully operating economy.”

GUIDO COMMENT: And there you go. It didn’t take long for Mr. King to come clean. His is not remorse nor is it candor. What Mr. King is doing is staging contrition. But it is not genuine. It is meant to placate the masses. By any measure anyone measuring the health of the economy prior to the crisis, would have found little to nothing healthy about it. What there was, was the ability of the banks to expand credit markets. If that’s Mr. King’s only measure to gauge the health of an economy then, yes, the economy would have been healthy at that point. But as anyone that has ever managed a budget can tell you, if your debts are increasing at a faster rate than your revenue and your intrinsic wealth you will soon be taken to jail.

The people who are now suffering “did not get bonuses of the scale people in the financial sector got”. The financial crisis may have occurred two years ago but, as austerity measures kick in, “the cost is now being felt”, he said.

It remains “a big political problem”, he added: “I’m surprised the real anger hasn’t been greater than it has.”

GUIDO COMMENT: Crocodile tears folks. Mr. King is seeking forgiveness.

The Governor also warned that living standards may be permanently lower than where they would have been under the economy’s trend growth rate before the crisis. “The evidence of the past is that the impact of a [financial] crisis like that persists for many years,” he said.

GUIDO COMMENT: Funny how Mr. King is aware of the historical background of financial crisis but, like all central bankers and official economist world wide, was unable to see this one brewing.

“You may not get it back for very many years if ever. It’s a very real hit on living standards. That’s why it is important to take the issue of financial stability very seriously.”

GUIDO COMMENT: He truly sounds sorry does he not? Let’s see what he proposes.

Making a personal commitment, he said he hoped to ensure the banks would never again be allowed to cause a recession of the scale just witnessed. “I joined the Bank of England 20 years ago today,” he said. “I don’t want to leave until we have a framework in place to ensure we don’t have to go through this again.”

GUIDO ROMERO: Number 1 rule of getting away with murder: show contrition, make puppy eyes and ask for forgiveness and then ask to stay in place to put things right.

The Governor also expressed concern about the legislation being enacted to give regulators greater powers on bank supervision. He said the Bank would have preferred a new Act rather than amendments to the existing law, but that he was satisfied with the current plans.

GUIDO COMMENT: Isn’t that precious. Mr. King is satisfied with current plans. Not one sentence ago, he pledged to stay on till he sorted this whole bloody mess out. But, you know, though he would have preferred a new act current plans are ok too… Which of course begs the question… why should he stay in place then if legislation being enacted is satisfactory?

Andrew Tyrie, chairman of the TSC, suggested the current plans are a “pig’s ear of a legislative process”.

The biggest change to banking supervision, Mr King said, would be to “move to a regime that does countenance failure but does not cause havoc with the financial system”. Regulators will pay closer attention to whether a bank can fail safely rather than continue with “excessively detailed scrutiny of the big banks”.

GUIDO COMMENT: The price of eggs in china shoves numerous pallistairs under the legislation of corporate mandated social fung shui. That’s a long worringstall for research in the quantum strands rabble.

His position appeared to contradict that of his future deputy governor Hector Sants, currently chief executive of the Financial Services Authority, who has said the new regime would have a “low tolerance for failure”. Mr King said: “I don’t think that’s where we are now.”

End article.

Mr. King basically wants to stay on and change little or nothing. That’s the jist of his speech. No mention of the monetary system, no mention of fiat money, no mention of fractional reserve banking no mention of anything that in fact is a prime mover in our boom-bust economic cycle. Nothing. Just crocodile tears.

Unless of course Mr. King is not aware of what debt based fiat money is and what are the laws that govern this type of monetary system. Though unlikely I suppose it is possible. Possible in the same manner that it is possible that the sun will not rise tomorrow.

Let the banks fail. Withdraw all your funds from the major banks. Close all your lines of credit with the major banks. Make use of small community banks or just keep the cash in a safe at home. Buy one coin and one ingot of silver each. Just stash them away till this whole unGodly mess washes over.

Good luck

And for the most recent “WTF!” moment…

February 12, 2011

This is right up there with the strange goings on in Sweden.

The single most popular internet search that leads to my blog is “most civilized country in the world”. This is due to a post I put online some two years ago chiding Sweden for betraying its status as most civilized country in the world when it decided to offer negative interest rates on saving accounts.

For a country of till then high moral standing, that was a decision I found to be out of character. Sweden eventually went on to do other peculiar things as, indeed, did Denmark when it was implicated in a carbon trading credit scandal of rather large proportions and whose instigator eventually went on to become EU Climate Commissioner. Nice work if you can get it.

One wonders what is happening with those beacons of morality and fairness that northern countries are usually known for.

And so it is that today it is Holland’s turn to act out of character. To be sure, Holland has already been acting strange in the recent past as attested by the attempt by two politicians to pass legislation that would criminalize the expression of comments that are deemed to lead to withdrawal of funds from a bank (which is exactly what I am suggesting in order to get out of this crisis and bring about a modicum of democracy again).

So now, for the most recent WTF moment,  Holland is at it again as the Dutch central bank orders a tiny pension fund to sell its gold holdings.

NB: On May 10th, 2011 I have updated the link to the press article. The original link I provided is no longer active. This is the new link:

Excerpt emphasis added:

The Vereenigde Glasfabrieken pension fund said Thursday it wants to keep the gold but a Rotterdam court sided with the bank in a ruling Tuesday.”

If you understand the implications of any of the above, you have to wonder what is going on with these countries that till recently were unmatched examples of tolerance, social justice, personal freedom and morality.

More specifically, in a presumed open and capitalist economy, economic actors are ostensibly free to operate as they see fit provided they operate within the bounds of the law. Moreover, in a debt based fiat monetary system where the authorities are hell bent on conveying the idea that gold is a barbarous relic, buying, holding or selling gold is not an activity that should be subject to state approval and, certainly, is not an activity that represents a particular threat to anyone thus should not be subjected to legislation.

If the central bank or the Rotterdam court feel that gold represents a particular investment risk I can only conclude that the head of the central bank and the judge of the court have taken a look at the performance of their own pension funds over the past ten years and threw an issy fit when they realized that this little pension fund did rather well for itself as compared to the average pension fund that has shunned gold.

But, seriously, at a time when the performance of traditional investment vehicles that are stocks or bonds has been disastrous for the past ten years, why condemn a little fund that has done well by blazing a trail in alternative investments? Indeed, innovation is the essence of capitalism. So, what’s going on? Why beat-up a small pension fund? And why is all this happening in these economically marginal countries? And why now? And, anyway; this pension fund’s investment in the precious metal is equivalent to only 10% of total money under management so that even if the price of gold went to zero, the fund would still survive and eventual losses do not even approximate what the fund has lost in bonds and stocks since the year 2000.

Here are some charts that tell the real story of what has happened to various investments during the past ten years.

The only thing I can think of is that small economies are being used as test ground by the monetary authorities like the ECB and the Fed to see what would happen if they were to push such aberrant legislation on larger countries.

These are likely tests for last ditch attempts to keep the current monetary system alive short of opting for the nuclear option of converting to a global currency.

In line with the spirit of this blog and as I have done so far, I am inclined to act in a manner that is contrary to what the authorities suggest and dictate.

A bon entendeur…

Banking sector remains unchanged

February 1, 2011

Hat tip to Barry Ritholtz of The Big Picture

Jordan notes that the folks who run the major banks today — the senior executives, directors, managers, etc. — are essentially the same exact folks who ran them (into the ground) 5 and 10 years ago:

“The prospects for a robust prudently guided financial sector have been substantially clouded by the fact that the both the corporate governance structure and the executive leadership of the financial sector remain largely unchanged—92% of the management and directors of the top 17 recipients of TARP funds are still in office.”

Can you see the concentration of profits?

January 29, 2011

This is the direct and inevitable result of a debt based fiat monetary system. When the inflationary tide withdraws, profit concentrates in the financial industry till it concentrates in the entities one step removed from the creator of the currency (Goldman Sachs is also in the enviable position of being both: a member of the entity that creates the money as well as a Primary Dealer which is the entity one step removed from the creator of the currency).

… and Bob’s your uncle…


Alabama town failed pension is a warning

December 23, 2010

If you followed my “tic, toc…” posts, this press article is the first shot across the bow of state finances in the Western world.

As I mentioned before on this blog and on comment pages of some news papers like The Telegraph, at this stage of the crisis, options are few and very well defined. Whatever we may do going forward, pension promises across the West cannot and will not be kept in their original form and, in some cases, will be terminated outright.

Our options today are:

Save the banks and let society alone shoulder the costs of this developing crisis that, incidentally, is about to get worse.

Let the banks sink and ensure that all share the burden of the crisis