North Cyprus Consumer | Turkish Interest Rate Rise Good News

North Cyprus Consumer – Turkish Interest Rate Rise is Good News

Some good news in Turkey, is that the raising of the interest rates, although it will slow down growth and moderate consumption, this will stabilize the country from the deeper trauma of a life of debt, that has crippled most of the western world. Applying the correct measures early is the only cure for a sick economy. It shows us that some politicians have the courage to take the right actions, even at the expense of their popularity, unlike those in Europe that have just pushed the can down the road for future generations to pay the very much larger bill. I do not think it will be work as the money markets are being controlled by the FED. However there are other factors in the potential for growth of Turkey that need to addressed.

Jean-Claude Juncker, prime minister of Luxembourg said recently, “We all know what to do, we just don’t know how to get re-elected after we have done it.”

The current world wide financial crisis is the biggest every in all history,  unless politicians get to grip with this now, rather than kick the problem down the road, it will only grow , be more difficult to stop, cost a huge amount more and wipe out more of people’s and corporate assets. The truth is that a sizable part of the debt and liabilities will never be paid off and will have to default.

To stop the crisis getting worse, all governments should stop all deficit spending, if you do not have the money you can not buy anything more!  The old way of pumping more money into the market only works if the depression is short lived and the capacity for growth is there, they have tried to pump money into the markets and  this has failed due to excessive leverage and hidden liabilities., so the only way is to cut  expenditure buy 30% and raise taxes .  Normally interest rates rise would, at present triggering high inflation, but this increases the interest governments will have to pay on their debt, and many governments can not service their debt interest and repayments, as the unemployment that this crisis has caused has reduced revenue and greatly increased welfare costs.

This would not be so bad had they done this sooner. Debt is a cancer of the financial system, when it gets to big, it does not respond to the methods used to treat short term depressions in the business cycle, as it takes over and the cure is not known.

They now should sell what ever assets they can, and when they have collected every spare bit of cash, then raise interest rates and and taxes, then pray.

Hidden liabilities , like Government pensions are already under funded. Due to the falling birth rate in Western countries, to make matters worse private pension funds in the USA have a negative liability of 500 billion dollars and in Europe over 300 billion, The situation is even worse with Government and local authority local budgets. The Government must reduce public employment and force workers into industries that produce wealth.  Civil servants and service industries just  revolve money they do not create it.

Hiding from debt and underfunding of liabilities as well as not renewing capital expenditure to industries, does not create growth. Politicians have miss managed finances and put off hard decisions as they have become weak and forgotten what their jobs are. They have spun , twisted and turned in every direction in order to keep power. They have become greedy and lack morality and the public should have voted them out of office sooner,  The fault is also the public’s as they have allowed themselves to become apathetic  and have been fooled into thinking that consumerism is healthy, but it is as much a drug as debt. The governments have relaxed drug laws to offer the public an opiate , and offer more entertainment as a panacea to divert the public’s sense of right and wrong. Unfortunately the public is now very upset and are demanding more rather than work for it. But they are ignorant of the real reasons.

Nothing brings them down from this opiate faster than unemployment that takes away all hope of a future. The rules and morality of life is that you have to work to enjoy growth of our standard of living, it is not handed out by politicians. We need a clean sweep of the out of date politicians and take responsibility for our own future by demanding better government and work longer and harder. We will pay for our sins for a very long time.

Globalization has changed the world, it is much smaller now and change happens faster. The actions of one country working independently for their own good now effects everyone. With the population getting smaller and older, we have to work harder in a world market, as the competition is greater. The disparity of wealth between the rich and the poor, is a direct result of more opportunity in a global market, education and innovation rewards the people who adapt to this change, bringing new industries and technologies to a larger market offers greater rewards, where as most people are working just to sit and watch TV and are not taking the opportunities as they lack the education and knowledge to play any part in the new rules that globalization now offer us.

In days gone by every village or town produced their own food and ran local businesses, a few ordinary leaders could  run the local economy or country as there was not much change and things went on the same as they always had been in the past. But now we need better leaders who understand globalization At present these people are getting rich and have no interest in leading a public that waiting for handouts.

The rich and successful are now running corporations and the power has been taken away from politicians, who are now ineffective civil servants and bureaucrats.

But now to a scandal of how the gold price has been manipulated. Since the world came off the Gold Standard, the price of gold has been held down by reserve banks, the Fed and the Bank of England . They sold gold or leased it to bullion dealers, who sold the gold to investors and countries wishing to build gold reserves , like China and India and now Iran and other Asian countries.

As the supply of gold was reducing all the time, the Fed and big banks started to deal in gold derivatives. They still owe Germany over 650 tons of gold, that has got lost!

There are more contacts open for gold, than has ever been mined since time began! A bubble of leveraged debt 6800% larger than the GDP of the whole world!!!!!!

The last time the FEB /Banks manipulated the price of gold was on the 30th January 2014. at 8.20am the gold price dropped $17 in 30 minutes.

Normal trading amounted to 202 gold contracts per minute, which in its self if too high, yet –

1766 contracts were sold at 8.21am

5172 contract were sold at 8.22 am

3242 contracts were sold at 8.31 am

3515 contracts were sold at 8.47 am

Traders and investors rushed to get out of gold and sold their options at a loss or to fix profits, and when the blood bath finished to Fed / banks bought back in. If you or I did this we would be put in prison for 20years for insider trading and wire fraud. This enabled the Fed to support the dollar, and stop people/banks taking delivery of gold instead of a cash settlement; which anyway is only fiat printed money. The total contracts due to be delivered on that date was 2.223000 ounces of gold. Comex only had 375.000 ounces of physical gold.

This scam was to protect the main players in cahoots with the Fed, JP Morgan, HSBC, and the Bank of Nova Scotia, who are responsible for the fixing of the daily price of gold in the USA. They hold most of the debt related gold derivatives on their balance sheets as ASSETS! They would go broke if they were forced to pay. The tapering of the Fed drew bank huge amounts of liquidity from the emerging markets, thus causing their currencies to fall in value.

Russia and China and other BRIC countries as well as the world bank are calling for the termination of the dollar as the reserve currency, as they get hit often by this fraud.  If they win the USA is in very deep trouble.

The other country that fixes the price of gold and also does not have clean hands, is the Bank of England, as you will remember George Brown, sold all of the UK’s gold reserves at $ 300 an ounce, and later the price of gold went up to over $ 2000 an ounce. On paper a huge loss.

But the real reason was that Rothschild Bank and other UK and European banks were  going to go broke as their derivative contracts had gone against them.  The UK  BOE did not lose as the private deal was that these banks would pay back to the BOE the loss and interest over the next few years. The UK government then did not have to bail out the banks, yet Parliament then voted to make the BOE independent, and they have not played that game again. Recently the Deutsche Bank was forced to leave the gold fixing European cartel; as their derivatives liabilities were so large that they are technically broke.

You can buy a few gold coins, if you need to flee the country and paper money becomes worthless, but as an investment it is not worth the risk; as is silver , platinum and other derivative trades.  The true use of derivatives is to allow gold produces to sell their future gold mining profits to finance the large cost of mining deeper and deeper. Also for manufactures of products using gold to fix their buying costs over a longer time frame.

Debt, derivative and fiat money are financial tools to raise money, that you do not have and can never pay back; they are the cause of stock market crashes about every four years and high inflation. No wonder bankers jump of high buildings when things go wrong.

Lastly an interesting bit of news is that Russia banks and HSBC are now requiring their customers to prove what large withdrawals in cash are for and refusing to allow their customers to have their money. Either they are trying to stop capital flight and money laundering or they are seriously short of money.

Russia is losing huge amounts of capital flight now to Latvia as Southern Cyprus has lost the money laundering business. HSBC has huge derivative positions and credit swap bonds that are nearly worthless, yet still on their books as assets. They also have cash flow problems and can not borrow more money. Watch it a hair cut is the next step.

JP Morgan bank paid over 20 billion in fines for the mortgage scam and their involvement in the Madoff Ponzi scam, as well as an undisclosed loss of multi billion dollars when one of their traders went rogue. As a result the board cut the boss’s pay to $11.5 million, previously over $ 23 million. Yet at the annual review he won against a minority of board members, who did not want to raise his pay.

Interestingly the minority board members walked the corridors at their Park lane HQ, while the rest of the board thrashed out a deal. None of them jumped from the 50th floor as their bonus for that year were agreed and they all went to lunch. The bank however made over $17.9 billion last year and averted several law suits in the USA. They still have a major law suit issued by the Libyan government , but will most likely fix that one as well.  Losing an oil rich country is the price they will pay for ripping Libya off.  Mr Dimon said at Davos last week that he thought a lot of it was unfair!

But that is what banking in the USA is all about.

Southern Cyprus’s financial problems are well reported yet they have huge legal problems with the EU, who are threatening to take them to the European Court for a multitude law breaking , the latest one is that they have so far refused to adopt the EU directives for PIG welfare!! as also Belgium, Greece and France . One wonders why people want to join or stay in the EU.

They are also in breach of EU law on child welfare, and refusing to allow free access to jobs for EU citizens.

Other things the EU does not like: British wine being called wine, Cornish pasties and bottled water Olive oil, children using party blowers and balloons are all now regulated as well a 600 new laws like these. The EU elections will see many new faces as the old idiots take their gold plated pensions are get out before they have to face the music.

Turkey is now free to buy more oil from Iran, as some of the sanctions have been lifted, but the Iranians still want payment in Gold, yet part of the deal is that Turkey will pay in Lira and Iran will buy the gold, holding it in the Halkbank. This should put an end to the black market trading and commissions paid to ministers sons.

We will see if the local elections in March will return Erdogan’s party to power and his ambitions to become President in August. He may hang on yet, recent purges of the police and laws to control the justice department, as well as many of the richest Turkish business men are no longer supporting him.

The need to reduce the budget deficit and reduce imports and raise exports remains the main problem, but this will not be attempted until after August. If they succeed there is no reason why Turkey should not grow at over 6% per year.

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