Dear reader, decorum and etiquette demand that I give you fair warning. This commentary regarding central bankers may contain content and images not suitable for all ages. This should not surprise anyone, as the current state of our global economy and the behavior of central bankers can only be discussed by those who have a strong constitution and an appetite for the surreal.
His rather elastic moral fiber allowed him not only do the job well, it allowed him to excel
Today I will be sharing with you, my most recent interview with Gustavo Laframboise-Pierre, the Director of Statistical Creation at the European Central Bank [ECB]. For those of you who have not yet become familiar with Gustavo I should explain that my relationship with Gustavo began in New York City, in his former life, when he was my principal bookie. His fortunes changed dramatically when a senior member of the ECB, while on a junket to the 'City that Never Sleeps' [New York, for my less traveled readers] made a fantastically large and incorrect bet on the outcome of the 2010 World Cup. The only way the debt could be settled was for the senior member of the ECB to offer Gustavo an extremely high paying sinecure at the ECB. Gustavo found himself, almost overnight, living the good life in Europe as the Director of Statistical Creation at the ECB. His notional job was to make up statistics that would support whatever policies the ECB and other central bankers around the world were instituting at that moment in time. Gustavo's experience as a bookie made him eminently qualified for this job. His rather elastic moral fiber allowed him not only do the job well, it allowed him to excel at his new profession.
Unsavory aspects of his life that would merit Gustavo doing the "perp walk" in most G-20 countries
His remarkable ascension to the pinnacle of global financial power had the benefit of providing a much needed boost to my sagging journalistic career. My friendship with Gustavo, coupled with my knowledge of some rather unsavory aspects of his life that would merit Gustavo doing the "perp walk" in most G-20 countries allowed me unparalleled access to the workings of Central Bankers all over the world. I have previously chronicled some of the startling revelations Mr. Laframboise-Pierre had shared with me, but today's meeting at the legendary Jules Verne restaurant atop the Eiffel Tower promised to be the most newsworthy. Gustavo had called me earlier in the day from a very chic Bordello in a swank Parisian neighborhood where the ECB was holding its weekly 'Global Update' meeting.
"David", Gustavo said as he shouted over the confused commotion at the Bordello, "We have to talk. I can't take it anymore. We have to meet. I need to plan an exit strategy from my job at the ECB before I lose my mind and my dignity." This sounded intriguing. I suggested we meet at a modest and discreet café on the outskirts of Paris that appealed to my journalist's budget. 'What are you nuts David, I still have my dignity and my ECB expense account. Buy yourself a tie and meet me at the Jules Verne restaurant at noon."
He had already been joined by a bottle of Cristal Brut 1990 "Methuselah", [$17,000/bottle]
As I walked into the Jules Verne restaurant after admiring the panoramic view of Paris that only the Eiffel Tower can provide I quickly noticed Gustavo sitting in the corner. He was not alone. He had already been joined by a bottle of Cristal Brut 1990 "Methuselah , [$17,000/bottle], the preferred refreshment of Central Bankers around the world. The presence of this champagne gave me great relief as it indicated that today's meal would be covered by Gustavo's ECB expense account. He was all smiles as I sat down. However his eyes were red, his bespoke suit, produced by Loro Piana looked like it had just popped out of a crackerjack box, his custom made white Egyptian cotton shirt was stained with remnants of every meal he had had in the last week. His gold Hermes tie was covered in what appeared to be lipstick and spaghetti sauce. Clearly Gustavo's work as a central banker was taking a toll on his emotional stability.
The twisted, rusted, defective device that is Gustavo's 'moral compass'
"Gustavo", I exclaimed "What has happened to you. You are a mess." "David," he replied, as he spilled caviar on to his cracker, his voice trembling, "As you know in my lifetime, in addition to being a bookie, I have also been a prostitute, a pimp, a con artist, a drug warlord, a mercenary, a loan shark, an arms dealer and a politician. While each of these occupations had its rather unseemly aspects I have always been able to justify my chosen profession of the moment by seeing the positive contributions that each profession made to society and to my bank account. I never had any difficulty reconciling my career of the moment with my moral and religious beliefs. I was always able to maintain my dignity." Dear reader like you, I would like to explore the twisted, rusted, defective device that is Gustavo's 'moral compass' but that will have to wait for another day.
He had found an activity that offended even his less than delicate sensibilities.
"David", Gustavo continued, "the things that we central bankers are doing now make the crimes of my past seem like seem so petty and childish". While I was no fan of central bankers, I smiled at Gustavo and indicated that he was exaggerating. "Am I David? Am I really?" he responded. Gustavo was on a roll, "We bankers are not stealing a few pennies here and there or selling a few tons of cocaine. We are stealing democracy from Nations. Ask the Greek people who runs their country? We are robbing people of their retirement. We are engineering wholesale changes in the fabric of society. We are protecting our own while throwing the rest of the society 'under the bus'. Do you know how hard it was to keep all the HSBC bank executives from being prosecuted when HSBC was caught laundering billions of dollars of drug money? Do you know how tirelessly central bankers had to struggle to ensure that no banker ever be held accountable for the financial crisis ? Can you imagine the complexity of ensuring that all wealthy depositors were able to get their money out of Cyprus before we brought the hammer down on smaller depositors?" Can your journalists mind even contemplate the challenge we central bankers face in convincing the world on a regular basis that Japan, despite having a debt that is 240% of GDP should still be considered a viable country rather than a failed nation state? Can you imagine the guilt we central bankers should be feeling because we have robbed the next generations of any possible hope for a better future because we have burdened them with unimaginable debt?
At a central bank it is easy to blend in when one is drunk at work
He carried on, "The list of our high crimes and misdemeanors is endless. Our behavior is so reprehensible I cannot sleep at night. I cannot function at work unless I am drunk. Fortunately as you can imagine at a central bank it is easy to blend in when one is drunk at work. My nerves are shot. I cannot look myself in the mirror in the morning". Given the career path that had led Gustavo to his current job I found it rather astonishing that he had found an activity that so offended even his less than delicate sensibilities."
War on Democracy
"You think I am crazy? David, you think I exaggerate? You think I am paranoid?" I thought to myself, Crazy, exaggerating paranoid, yes to all. His eyes were getting misty eyed as he opined, "Listen to me my friend, his voice dropped to a whisper to avoid being overheard by the NSA or any of the other state security services that had planted listening devices in the restaurant. In the US, Greece, Cyprus, and Spain and shortly in Italy, the Central Banks are in charge. We still allow the politicians and the people to pretend that they are involved in the decisions of the state, but we the central bankers make all the important decisions. Through our agents, the large commercial banks, Central Bankers began their 'War on Democracy' fifteen years ago by allowing governments around the world to achieve a level of indebtedness that ensured their collapse and paved the way for us to take over. If you doubt the naked power and control of central bankers ask yourself of the two following scenarios, which would merit greater news coverage and have greater impact around the world. Scenario One, President Obama announces that he had achieved world peace, discovered a cure for cancer and had replaced Joe Biden with John Boehner to ensure bipartisan cooperation in the US government, or Scenario Two, Federal reserve Chairman Ben Bernanke announcing that he intended to allow interest rates to rise immediately by 2.5%.
Yes dear reader, it was time for me to pull out my flask of Jack Daniels
Clearly Mr. Obama's minor announcement would be ignored as the Global Market participants heeded Mr. Bernanke's proclamation and rushed for the exits in anticipation of the next Great Depression. Yes dear reader, it was time for me to pull out my flask of Jack Daniels and allow myself a generous sip. "What are you saying Gustavo? Are you implying that the central banks are trying to take over the world?". "I am not implying it David I am stating it as fact."
The plot by the central banks might even make it to the front page
As I sipped my 'Jack Daniels", my professional training kicked in and I considered getting out my notepad and taking a few notes. My instincts told me there might be a story here. A global conspiracy by central bankers to overthrow democracy and take over the world was definitely newsworthy. As long as Kim Kardashian didn't have a press conference to announce she intended to change her hair style, or there was not a controversy on the latest episode of Duck Dynasty the plot by the central banks might actually capture the public's attention. The story might even push Duck Dynasty and Kim Kardashian to page 2 of newspapers around the world.
Only an interest rate announcement away from collapse
Think about it David, by printing so much money and keeping interest rates so low every Mom and Pop prudent saver who expected a pleasant retirement by earning 5 or 6 % by investing in safe investments, has been guided and encouraged by the commission oriented, useful idiots of the financial services industry to take on significantly more risk in their investments to maintain a reasonable income. If they only realized that their new higher risk portfolio was only an interest rate announcement away from collapse they would be terrified. Their entire way of life is now completely dependent not on politicians, or their own behavior, or the free markets. They are completely at the mercy global central bankers.
Perhaps one would call it 'Bankocracy'
While I wanted to dismiss Gustavo's rant as the observations of a drug and alcohol induced psychotic break from reality, I was finding it uncomfortably difficult to ignore. Global governments are no longer to able to make any policies or enact any legislation, declare war, build an aircraft carrier without considering how the central bankers and the commercial banks will react. It is logical to assume that governments now get all their policies approved by the bankers before making any public announcements. This clearly avoids any embarrassment should the bankers disapprove of their actions. In simple terms before a government can spend a penny, farthing or sou, it must ensure that the central banks are willing to print or lend them that penny, farthing or sou. Dear reader, I do not know what you would call this system of government where unelected central bankers are responsible for both fiscal and monetary policy as well as judicial oversight. Perhaps one would call it 'Bankocracy'. In any event it is not democracy.
With apologies to Charles Ponzi, One could call our current form of marketplace a 'Bernanke scheme'
Mom and Pop's worldwide acquiescence to the siren call of their respective advisors to chase higher yields by taking on larger and more incomprehensible risk, that at the end of day, is controlled solely by central bankers is not capitalism or a free market, not even close. Once again I do not know what one would call this form of market place. Perhaps in deference to the tradition of naming great scams and frauds after their original practitioners, such as Charles Ponzi and his famous Ponzi scheme, one could call our current form of capital market structure a 'Bernanke scheme'. This would definitely be more accurate than the much used phrase, the 'Bernanke Put'
One last attempt at pointing out the flaw in his rather 'tall tale'
The soothing effect of the Jack Daniels allowed me to remain calm. In fact, as I watched Gustavo refill his water glass with the remains of his third bottle of Cristal Brut 1990 "Methuselah", I could not help but think that despite his obvious diminished capacity there was merit to his observations. However, I made one last attempt at pointing out the flaw in his rather 'tall tale'. '"Gustavo" I lectured, "over the last 50 years global stock markets have always outperformed fixed income investments over the long run. Thanks to wise leadership by our elected leaders, coupled with socially responsible behavior by our captains of industry the global stock markets, despite some ups and downs have continued to rise reflecting the promise of the world's economic future.
David you and your journalist friends are the most useful idiots of all
Gustavo quickly snorted a line of cocaine off his plate and responded. "David, you and your journalist friends are the most useful idiots of all. There is no rising tide of prosperity. There is only one fact. Over the last 50 years global governments have borrowed $50 trillion , most of which was borrowed in the last 25 years. That is your economic miracle. However, the world is about to 'max out' their line of credit. The world will experience the same discomfort and reduced standard of living that households all over the world are familiar with when their credit is reaches its maximum. The good times are over and the piper must be paid.
There is a 'New World Order' coming
"David", he slurred, "There is a 'New World Order' coming and the Central Bankers will be in charge. In order to achieve this new form of 'Benevolent Dictatorship' we sold countries the rope with which to hang themselves . The rope, of course, took the form of credit and free money."
Statistics, C'est moi!
Dear reader, I do not know about you but I was thinking to myself that this might not be a bad thing. Democracy was finding it difficult to cope with the complexities of a global society and its curious and conflicting aspirations. Perhaps a strong hand at the tiller in the form of our unelected and therefore unfettered central bankers would prove to be a refreshing and stable alternative to democracy. I shared this thought with Gustavo. In fact I mentioned that the statistics relating to unemployment, consumer confidence, inflation, GDP growth, manufacturing activity all seemed to point to a slow gradual recovery. He laughed. "David I do not know who is dumber you, or all the central bankers. Those statistics you refer to, how can I best explain it to you? Statistics, C'est moi"! Only a central banker could appropriate the Sun King's famous quote in such a plausible fashion. His eyes brightened as he proudly explained his job at the ECB, "That is my job. Each week after a conference call with other Central Banks I make up a bunch of suitably benign numbers and statistics. I then email them to all the appropriate parties worldwide for gradual release over the upcoming week. If you want I can tell you what the US or Eurozone employment number will be in 6 months from now. I can do that because all government statistics are a figment of a Central Banker's imagination. Anyone who buys groceries knows that inflation is not running at 1%."
However, David here is the problem
"However, David here is the problem", Gustavo continued, "When this plan for global domination was put together, the Central Bankers hired a student to create the excel spreadsheets on which all the Central Bankers based their projections and plans. Sadly the student we retained for this work made an error in the spreadsheet , well, truthfully, several errors. Apparently the student was distracted by the excitement of his upcoming high school Prom. In any event, the errors related to future dated algorithms connected to modification of M-1 money supply and its coefficient of wages and inflation." Gustavo noticed that my eyes had glazed over at this rather complicated explanation. He simplified it for me.
The only thing we can do now is sit back and watch this unholy creation of ours play itself out
"The exit strategy! David, for goodness sake, Pay attention, Stay with me!" I am talking about the exit strategy or should I say the lack of an exit strategy. The student's error means that everything we have done is flawed and there is no way out. We are no longer in control. There is no possible exit strategy. The only thing we can do now is sit back and watch this unholy creation of ours play itself out. Our actions are having less and less impact on the global economy, our ability to provide unlimited money printing and credit is running out. At the same time, social unrest in Spain, Greece, Russia, China, Egypt and the US, well in fact social unrest everywhere is exploding. The first signs of starvation are appearing in Greece . Democracy is failing as we planned, but we central bankers, due to the error in the excel spreadsheet, have no exit strategy. We are in no position to move in as benevolent dictators. The world is going to have to make the transition from its current form of democracy and capitalism to its next iteration of democracy and capitalism without or guidance". "Yikes Gustavo, this sounds quite scary. Will the ECB be holding a press conference to update the world on this matter"?
You truly are an idiot David
"You truly are an idiot David" Gustavo exclaimed, "of course not. The ECB intends to take the following actions. First we have hired a private detective to track down the student who made the error in the excel spreadsheet. Once this individual is found we intend to launch a civil lawsuit against this person and recover the full amount of the $250 fee that was paid to them for their work. Furthermore we intend to launch a civil suit against this individual in which we will claim damages of 30 trillion dollars.
When one can print money one does not waste time haggling
It is our intention to seize their assets and income of this individual until the full amount of the damages is repaid. We have been assured by an expensive New York law firm that our case has merit. As soon as we wire them our $30 million retainer they will begin legal proceedings." "Gustavo, I offered, "$30 million dollars for a retainer sounds a little pricey even for a New York law firm. Did you shop around?" David, he grinned, "When one can print money one does not waste time haggling". He continued, "Second we intend to shut down all media outlets that are disclosing the names of individuals holding assets in tax havens before we and all our friends are tied up in legal wrangling and embarrassing publicity. Third we intend to insist politicians grant a complete and total amnesty to ourselves and all our agent bankers around the world so that we never be charged for their crimes such as money laundering, aiding and abetting a fugitive, fraud, hosting Bunga-Bunga parties and "wanton greed and selfishness".
Gangster Bankers are too big to jail'
I wasn't sure that that wanton greed and selfishness was actually a crime but I could see that the Central Bankers fear of a 'Truth and Reconciliation' investigation that inevitably follows great social and political upheaval was palpable. Their fear of prosecution was, I thought unfounded. Given that no banker had been brought to trial in the last 6 years for casing a global financial collapse it seemed unlikely that things would change. Everyone knows, thanks to Matt Taibbi, that Gangster Bankers are too big to jail'
We feel it would be safer for us to be at sea when the @#&$ hits the fan.
Dear reader, I smiled at Gustavo and said. "it is interesting that the world can ignore all the financial wrongdoing of powerful bankers but will bring the full weight of the law down on an individual such as the 'Clown of Italy', Silvio Berlusconi, for his well-attended 'Bunga-Bunga' parties. Gustavo, who had been either a guest or an organizer for most of these parties ignored my smirk and continued, "Fourthly we are commandeering all private yachts over 50 meters in length because we feel it would be safer for us to be at sea when the @#&$ hits the fan. Next we will",,,
David, we central bankers feel that George Orwell was an optimist.
"Stop Gustavo, enough, what are you doing to help the people"? I asked angrily. "What you describe sounds like a very terrible thing is about to happen How will you help the people"? Gustavo grimaced and said "Well David, here is our thinking on that subject. We feel that we can best serve the people by remaining at sea in our yachts during the inevitable conflagration. Once the dust settles and the fires are out we can return and give the new society the benefit of our education, our knowledge of economics and government. We can help the people to restructure their society". Gustavo I responded, "This sounds to me like a twisted mix of Aldous Huxley, Dr. Strangelove and George Orwell". Gustavo sneered as he said, "That's a joke David. We central bankers feel that George Orwell was an optimist."
Hope for the best and plan for the worst
"David the social and political change that Central Bankers have unleashed will, in all likelihood, change the world in a manner that we cannot even conceive. In advance of this change one would be well advised to hope for the best and plan for the worst. In fact for the right price I am willing to offer you a place on my yacht so that you are one of the first to chronicle our successful return from the sea and our anticipated triumphant, creative construction of a new society, after the impending social upheaval has played itself out.
This was the only 'exit strategy' bankers have ever mastered
At that point Gustavo's eyes rolled skyward and his head fell forward as he collapsed, his face resting in the remains of his Lobster bisque and his cocaine. Dear reader, you can imagine my consternation and my panic. If Gustavo was unconscious and rushed to the hospital I was going to get stuck with bill, again. These bankers were amazing. Once again Gustavo was going to avoid paying the bill. This was the only 'exit strategy' bankers have ever mastered. As luck would have it, the staff at the Jules Verne was well accustomed to having central bankers pass out at the end of dinner. Using a cart, whose proper purpose was to clear the dirty dishes from the tables, they made the rounds and picked up Gustavo and several other bankers who were similarly comatose after overindulging themselves at lunch. The overloaded cart was pushed into the elevator and the bankers, including my good friend Gustavo, were whisked down to their waiting limousines.
An enterprising lad
Fortunately for me, my waiter Francois, an enterprising lad, who deduced from my polyester tie that I would not be able to pay for lunch, reached into Gustavo's pocket removed his ECB ID. He copied the employee number, charged up the bill, gave himself a 25% tip, signed a reasonable facsimile of Gustavo's signature, and ensured that the bill would be placed on the running tab maintained by the ECB at the Jules Verne restaurant. He put the ID card back in Gustavo's pocket, before helping lift Gustavo's snoring body onto the cart.]