Collusion_How Central Bankers Rigged the World Read online

auction mechanism of, 20–21, 45, 48

  cheap money and, 43

  rate hikes of, 46–47, 49, 51–52

  rate predictions of, 31–32

  rates cut by, 41

  United States and, 15

  Bank for International Settlements (BIS), 8–10, 17, 212, 221

  Carstens as head, 37, 50–51

  developing nations and, 51

  on inflation, 231

  Ortiz as head, 32

  Bank of America, 2, 21, 58, 200

  Bank of Canada, 8, 56, 142, 150, 155, 186

  currency swaps, 212, 218

  Bank of England (BOE), 136, 155, 183, 201

  currency swaps, 140, 150, 212, 218

  rates cut by, 187, 240

  Bank of Japan (BOJ), 2, 102, 134

  asset purchase program, 145–147, 161, 165, 167

  Brexit and, 166, 169, 238

  cheap money of, 162

  currency swaps, 140, 175, 218

  on deflation, 141

  Haruhiko Kuroda as head, 151–152

  Masaaki Shirakawa as head, 135–136

  money injection by, 160

  money pumping by, 139

  money-conjuring by, 133, 139, 143, 149, 159, 175

  negative rates of, 164–175

  NIPR in, 13

  PBOC alliance, 175–176

  QE by, 138, 159–160

  QQE of, 12

  rates cut by, 119, 137, 210

  Shinzo Abe on, 149–150

  Tripartite Bank Governor’s Meeting, 97, 140

  yen and, 201

  Bank of Korea (BOK), 97, 140, 176

  bank spreads, 58–59, 64, 66

  Barbosa, Nelson, 77

  Barroso, Joao, 80–81

  Bartiromo, Maria, 17

  Batista, Joesley, 84

  BCB. See Central Bank of Brazil

  Bean, Charles, R., 154

  Bear Stearns, 18–19, 21, 55, 89, 90, 134, 183

  Berlusconi, Silvio, 185, 201, 202, 203

  Bernal, Alberto, 31

  Bernanke, Ben, 1, 7, 30, 32, 38, 55

  on bank purchases, 21

  on Carstens, 42

  as collusion master, 142

  criticism of, 146

  departure of, 110

  Draghi and, 219–220

  as the Fed head, 31, 141–142, 154, 194

  on FOMC, 134

  on foreign exchange intervention, 148

  global policy of, 195

  on gold standard, 104–105

  as Helicopter Ben, 37

  as illusionist, 22, 25

  monetary intervention of, 18

  money-conjuring by, 193

  Ortiz meeting, 23–25

  on policy tools, 188–189, 217

  on protecting financial system, 207

  QE and, 110, 147

  on systemic risk, 94

  Trichet on, 193, 197–199

  Big Six banks, 2, 56, 249, 253

  BIS. See Bank for International Settlements

  Bitcoin, 250–251

  BOJ. See Bank of Japan

  BOK. See Bank of Korea

  Borio, Claudio, 231, 241–242

  Bradesco Bank, 58, 64, 65, 71

  Brazil, 8, 11–12

  best of times in, 60–62

  capital controls in, 62–66

  central banks as battleships, 54

  China agreements, 79, 86

  China trade wars and, 73–77

  credit squeezes in, 76

  currency wars in, 59–60

  the Fed and, 86

  future of, 78–79

  GDP, 60–61, 74–76, 78

  IMF on, 74, 78

  inflation in, 66–69, 76

  Meirelles becomes dove, 85–86

  Mexico competition, 45

  money-conjuring in, 62–63

  in new year of 2016, 77–78

  Operation Car Wash, 79–80, 83

  outside financial crisis of 2007–2008, 54–57

  overview, 53–54

  Petrobras and, 72–73

  political discontent in, 71–72

  promises and results in 2014, 69–70

  real strength in, 58

  return of Meirelles, 82–85

  risk and, 57–59

  Temer’s coup in, 82

  United States speculators in, 79–82

  See also Central Bank of Brazil

  Bresser-Pereira, Luiz, 81–82

  Bretton Woods, 5, 24, 81, 214

  Brexit, 13, 249

  BOJ and, 166, 169, 238

  China and, 123, 125–127

  G7 banks on, 237

  Haruhiko Kuroda on, 168

  Lagarde on, 239

  Lew on, 239

  Merkel on, 229

  money-conjuring and, 238–242

  peso and, 49

  Yellen on, 238

  BRICS, 54, 57, 75, 97

  aid and benefits to, 12

  China and, 109–110

  developing nations and, 214

  See also Brazil; China; New Development Bank; Russia

  Brown, Sherrod, 108

  Bullard, James, 172, 234

  Bush, George W., 18, 19, 24, 220

  Calderón, Felipe, 18–20, 27, 51

  IMF and, 33

  on international financial institutions, 29

  spending plan announcement, 23–25

  stimulus package of, 31

  Cameron, David, 229, 241

  Carney, Mark, 154, 229–230, 240, 241, 243–245

  Carstens, Agustín, 11–12, 15, 31, 102, 154

  allegiance from, 43–44

  ascension of, 35–36

  awards to, 38, 39

  Bernanke on, 42

  as BIS head, 37, 50–51

  at Bloomberg Markets 50 Summit, 39

  on currency wars, 36

  the Fed and, 40, 42, 45, 47

  IMF and, 16, 38, 44

  Lagarde competition, 28–29, 38

  on monetary policy, 48

  money magic by, 46

  on Trump, 50–51

  Caruana, Jaime, 9

  CDB. See China Development Bank

  Cecchetti, Stephen, 212

  Central Bank of Brazil (BCB), 65, 157

  bank spreads in, 58–59

  inflation target, 58

  Meirelles and, 53

  rates raised by, 69, 75–76

  SELIC and, 59, 61, 85–86

  Tombini as head, 61–63, 68, 78

  central banks, 4, 6, 10, 14, 138

  as battleships in Brazil, 54

  cheap money of, 193

  collusion of, 248

  currency swaps, 154, 190

  goals in flux, 247

  holding power, 250

  intervention by, 178

  liquidity and, 146

  low rates and, 252

  money-conjuring by, 98, 212, 241

  power game of, 7–8

  price stability and, 147

  beyond public scrutiny, 249

  types of, 253

  Wall Street and, 249

  See also specific banks

  cheap money, 21, 36, 249

  bailouts and, 93

  Banco de México and, 43

  of BOJ, 162

  of central banks, 193

  collusion with, 118

  of the Fed, 2–3, 7, 10, 20, 63

  in Mexico, 28, 43

  policies of, 219–224

  Shinzo Abe and, 151

  in United States, 93

  Wall Street and, 3, 6

  Chiang Mai Initiative, 97

  China, 6, 8, 11

  Brazil, trade wars, and, 73–77

  Brazil agreements, 79, 86

  Brexit and, 123, 125–127

  BRICS and, 109–110

  currency wars and, 90, 118–119

  EU and, 110, 218

  G20 meeting in, 126–127

  GDP of, 129

  IMF and, 93

  inflation in, 89–90

  Lagarde visit, 102

  money technique
s in, 12

  money-conjuring in, 111

  NDB and, 120–126

  Obama on, 93

  overview, 87–88

  Paulson on, 90–91

  Russia and, 99, 103, 111–117, 174

  Treasury Bonds and, 94–95

  Trump and, 12

  in Year of Ox (2009), 92–98

  in Year of Tiger (2010), 98–100

  in Year of Rabbit (2011), 100–103

  in Year of Dragon (2012), 103–107

  in Year of Snake (2013), 107–108

  in Year of Horse (2014), 110–112

  in Year of Sheep (2015), 115–117

  in Year of Monkey (2016), 117–120

  in Year of Rooster (2017), 127–131

  Zhou Xiaochuan intuition and, 88–92

  See also People’s Bank of China

  China Development Bank (CDB), 73, 101

  China-Latin America Industrial Fund (CLAI-Fund), 79, 120

  Citi-Banamex, 26, 28, 35, 43

  Citigroup, 2, 28, 99

  CLAI-Fund. See China-Latin America Industrial Fund

  Clinton, Bill, 27, 28

  Clinton, Hillary, 94, 105, 126, 139

  collusion

  Bernanke as master of, 142

  of central banks, 248

  change on horizon, 250–252

  with cheap money, 118

  by ECB, 184

  by the Fed, 138, 139, 147, 184

  in Japan, 12–13

  with money-conjuring, 87

  start of, 18

  what should be done, 252–254

  See also specific topics

  Conable, Barber, 88

  conjured money. See money-conjuring

  Constâncio, Vítor, 215, 232

  Corbat, Michael, 43

  The Courage to Act (Bernanke), 23

  Credit, Exchange and Insurance Tax (IOF), 60, 67

  credit squeezes, 20–22, 47, 76

  crypto currencies, 250

  Cunha, Eduardo, 77, 82, 84

  currency swaps, 8–9

  Bank of Canada, 212, 218

  BOE, 140, 150, 212, 218

  BOJ, 140, 175, 218

  of central banks, 154, 190

  Chiang Mai Initiative, 97

  Dudley defending, 205

  ECB, 140, 212, 218

  the Fed, 140, 190, 212

  with Mexico, 26, 42

  PBOC, 110, 112, 154, 175–176, 218

  SNB, 212, 218

  currency wars, 75

  in Brazil, 59–60

  Carstens on, 36

  China and, 90, 118–119

  Lagarde on, 152

  Mantega coining, 60

  in Mexico, 36–37

  Dai Bingguo, 105

  DAX, 195, 230

  De Gaulle, Charles, 214, 235

  developing nations

  BIS and, 51

  BRICS and, 214

  capital inflows in, 69, 157

  financial crisis of 2007–2008 and, 4–7, 250

  IMF and, 29, 47, 137

  inflation in, 62

  monetary need of, 34

  NDB and, 115–116

  RCEP and, 50, 128, 177, 250

  shifts in policy, 214

  US dogma and, 30, 81–82

  wage growth in, 9

  World Bank and, 101

  Dickens, Charles, 127

  Dimon, Jamie, 18

  DJIA. See Dow Jones Industrial Average

  Dobrindt, Alexander, 211

  dollar, 12, 91

  appreciation of, 204, 230

  Dollar Index, 140, 145, 184

  drop in, 172, 173, 193, 219

  the Fed supplying, 8–11

  gains in, 156

  Geithner on, 140–141

  liquidity swap, 150

  Masaaki Shirakawa on, 137

  in Mexico, 30–31

  Ortiz announcement, 22–23

  World Bank on, 200

  Zhou Xiaochuan on, 234–235

  Dow Jones Industrial Average (DJIA), 91–92, 136, 139, 186, 254

  Draghi, Mario, 7, 13, 155, 160, 165

  on asset bubbles, 225

  on bankers, 207–208

  Bernanke and, 219–220

  as ECB head, 204–206, 209–211

  the Fed and, 182

  on Germany, 236–237, 242–244

  Italian Central Bank and, 192

  money-conjuring by, 245–246

  QE and, 225–226, 245

  Schäuble on, 235–236, 242

  showing strength, 203

  as Super Mario, 213

  See also Europe, Draghi and

  Dudley, William, 39, 172, 205, 240

  Duke, Elizabeth A., 40

  EAPP. See Expanded Asset Purchase Programme

  easy-money, 66, 141, 208, 213, 231, 245

  EC. See European Commission

  ECB. See European Central Bank

  EFSF. See European Financial Stability Facility

  Einstein, Albert, 225

  Emergency Economic Stabilization Act of 2008, 3

  emerging markets (EMs), 30

  EMs. See emerging markets

  ESM. See European Stability Mechanism

  ETFs. See exchange-traded funds

  EU. See European Union

  euro, 12, 91, 108–110, 155–156, 198

  crisis with, 103

  depreciation of, 142, 159, 166, 206

  in EU, 214

  Greece and, 225

  manipulation of, 223

  Merkel on, 145, 202–203

  strengthening of, 219, 221, 230

  as supercurrency, 181

  Trichet as guardian, 201

  Europe

  economic and monetary policies in, 13–14

  IMF and, 5

  political and economic turmoil in, 11

  See also specific countries

  Europe, Draghi and

  Brexit and money-conjuring, 238–242

  cheap money policies and, 219–224

  Germany and, 242–244

  Greece problem in, 216–219

  more QA in, 230–238

  overview, 213–216

  tensions in, 224–230

  Trump election and, 244–246

  Europe, Trichet and

  changing of ECB guard, 198–206

  the Fed and ECB warm-up, 183–188

  financial crisis of 2007–2008 involvement, 182–183

  no-limit QE and, 193–198

  overview, 181–182

  QE and ECB, 188–193

  recovery and, 206–212

  European Central Bank (ECB), 2, 102, 136, 141, 155, 156, 223

  APP, 222, 239, 244

  attack on Greece, 227–228

  auctions and, 186

  bond purchase program, 211, 224–225, 232, 238

  Bundesbank battle, 13

  changing of guard, 198–206

  collusion by, 184

  currency swaps, 140, 212, 218

  destruction caused by, 245

  Draghi as head, 204–206, 209–211

  the Fed warm-up, 183–188

  Germany on, 235

  inflation and, 217

  money pumping by, 155–156, 183, 241, 245

  money-conjuring by, 98, 175, 196, 205

  negative rates of, 169, 220–222

  QE and, 188–193, 208, 221

  rates cut by, 37, 187, 189, 210, 230, 233–234

  rates raised by, 198–199, 201

  Schäuble on, 237

  Trichet as head, 181, 185

  yuan and, 113–114

  European Commission (EC), 13

  European Financial Stability Facility (EFSF), 195, 202, 206

  European Monetary Union, 190, 197, 211, 213

  European Stability Mechanism (ESM), 198

  European Union (EU), 13, 181, 203, 229

  China and, 110, 218

  euro in, 214

  the Fed and, 169

  GDP, 129

  Greece and, 226

  Japan and, 179


  Schäuble on, 239

  state of banks in, 254

  unemployment in, 218

  See also Brexit

  Eurozone, 13, 102–103, 151, 239

  bailouts, 229

  debt crisis in, 200

  EFSF of, 195, 202, 206

  fiscal policy and, 209

  hitting wall, 187

  inflation in, 219, 243

  low growth in, 236–237

  reforms in, 214

  saving of, 194–195

  split economy of, 192

  unemployment in, 191, 219

  viability of, 189

  Evans, Charles, 153, 234

  exchange-traded funds (ETFs), 170

  Expanded Asset Purchase Programme (EAPP), 226

  Fang Xinghai, 119

  Federal Deposit Insurance Corporation (FDIC), 254

  Federal Open Market Committee (FOMC), 26, 46, 142, 158, 166, 223

  Bernanke on, 134

  on rates, 240

  Federal Reserve (the Fed), 1, 6, 145

  Bernanke as head, 31, 141–142, 154, 194

  Brazil and, 86

  Carstens and, 40, 42, 45, 47

  cheap money of, 2–3, 7, 10, 20, 63

  collusion by, 138, 139, 147, 184

  concern over Mexico, 26–27

  currency swaps, 140, 190, 212

  dodging criticism, 254

  Draghi and, 182

  ECB warm-up, 183–188

  EU and, 169

  financial crisis of 2007–2008 and, 3–4

  G7 banks and, 4

  IMF and, 10–11

  Japan and, 159–160

  Merkel on, 191

  money pumping by, 37, 47, 110

  money-conjuring by, 15, 31, 54, 88–89, 98, 114, 117, 139, 175, 254

  Operation Twist, 115

  private sector intervention of, 21

  QE by, 42, 46, 63, 67, 81, 95, 100, 106–107, 115, 143, 146, 159–160, 211–212, 224

  rate cuts by, 22, 37, 137, 138

  rates raised by, 46–48, 51, 117, 165, 176

  shaky monetary system of, 253

  stalling by, 232–233

  supplying dollars, 8–11

  Wall Street and, 25

  Yellen as head, 111, 156

  ZIRP, 56–57, 63, 67, 155–156, 164, 202

  Federal Reserve Act of 1913, 3–4

  the Fed. See Federal Reserve

  financial crisis of 2007–2008

  Brazil outside of, 54–57

  cause of, 1

  developing nations and, 4–7, 250

  Europe and Trichet involvement, 182–183

  extent of, 5–6

  the Fed and, 3–4

  US ignition of, 247

  Fischer, Stanley, 220, 247–248

  FOMC. See Federal Open Market Committee

  foreign exchange (FX), 64, 69, 72, 78

  Foreign Exchange Commission, 22

  Fraga, Armínio, 247

  free trade agreements (FTAs), 176

  Fukuda, Yasuo, 135

  FX. See foreign exchange

  G3 banks, 159

  assets of, 2

  conjured money and, 230

  global GDP and, 249

  no exit plan, 248

  policies of, 155, 179

  G7 banks, 56, 184, 188

  on Brexit, 237

  Bush on, 24

  currencies of, 12

  demands of, 98

  easy-money policies of, 141

  the Fed and, 4