Basel III: How The Bank For International Settlements Is Going To Help Bring Down The Global Economy

A new set of regulations that most people have never even heard of that was developed by an immensely powerful central banking organization that most people do not even know exists is going to have a dramatic effect on the global financial system over the next several years.  The new set of regulations is known as “Basel III”, and it was developed by the Bank for International Settlements.  The Bank for International Settlements has been called “the central bank for central banks”, and it is headquartered in Basel, Switzerland.  58 major central banks (including the Federal Reserve) belong to the Bank for International Settlements, and the decisions made in Basel often have more of an impact on the direction of the global economy than anything the president of the United States or the U.S. Congress are doing.  All you have to do is to look back at the last financial crisis to see an example of this.  Basel II and Basel 2.5 played a major role in precipitating the subprime mortgage meltdown.  Now a new set of regulations known as “Basel III” are being rolled out.  The implementation of these new regulations is beginning this year, and they will be completely phased in by 2019.  These new regulations dramatically increase capital requirements and significantly restrict the use of leverage.  Those certainly sound like good goals, the problem is that the entire global financial system is based on credit at this point, and these new regulations are going to substantially reduce the flow of credit.
The only way that the giant debt bubble that we are all living in can continue to persist is if it continues to expand.  By restricting the flow of credit, these new regulations threaten to burst the debt bubble and bring down the entire global economy.

Not that the current global financial system is sustainable by any means.  Anyone with half a brain can see that the global financial system is a pyramid scheme that is destined to collapse… but Basel III may cause it to collapse faster than it might otherwise have.

 

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From The Economic Collapse Blog:

So precisely what is Basel III?  The following is a definition from the official website of the Bank for International Settlements…

“Basel III” is a comprehensive set of reform measures, developed by the Basel Committee on Banking Supervision, to strengthen the regulation, supervision and risk management of the banking sector. These measures aim to:

  • improve the banking sector’s ability to absorb shocks arising from financial and economic stress, whatever the source
  • improve risk management and governance
  • strengthen banks’ transparency and disclosures.

All of that looks good at first glance.  But when you start looking into the details you start realizing what it is going to mean for the global financial system.  Banks are going to be required to have higher reserve ratios and use less leverage.  Banks are going to have to be more careful with their money, which is a good thing, but it is also going to mean that credit will not flow as freely.  Unfortunately, the only way for a debt bubble to survive is if it keeps expanding.  Anything that restricts the flow of easy money threatens to bring a debt bubble to an end.

These new regulations are going to be phased in between 2013 and 2019.  You can see a chart which shows the implementation schedule for the Basel III regulations right here.

So why is bringing the debt bubble to an end a bad thing?

Well, because it will cause the false prosperity that we have been enjoying to disappear, and that will be an exceedingly painful adjustment.

Sadly, most people have no idea what is happening.  Most people have never even heard of “Basel III” or “the Bank for International Settlements”.  Most people just assume that the people they voted into office know what they are doing and have everything under control.

Unfortunately, that is not the case at all.  The truth is that an unelected, unaccountable body of central bankers is making decisions which deeply affect us all, and there is not much that we can do about it.

This unelected, unaccountable body of central bankers played a major role in bringing about the last financial crisis.  The following is a brief excerpt from a recent article posted on Before It’s News

If you have any questions about the power of these Basel Banking Regulations you can also see the effects that Basel II and 2.5, mark to market accounting, had on the Housing Markets in the United States of America in 2008. There were many causes for that housing bubble, then housing crisis, but Basel II and 2.5 was most assuredly the pin that popped the housing bubble that led to the financial crisis of 2008-09.

But do most people know about this?

Of course not.  Most people want to blame the Republicans or the Democrats or Bush or Obama, and they have no idea about the financial strings that are being pulled at the highest levels.

It is so important that we get people educated about how the global financial system actually works.  The following is a summary of how the Bank for International Settlements works from one of my previous articles entitled “Who Controls The Money? An Unelected, Unaccountable Central Bank Of The World Secretly Does“…

An immensely powerful international organization that most people have never even heard of secretly controls the money supply of the entire globe.  It is called the Bank for International Settlements, and it is the central bank of central banks.  It is located in Basel, Switzerland, but it also has branches in Hong Kong and Mexico City.  It is essentially an unelected, unaccountable central bank of the world that has complete immunity from taxation and from national laws.  Even Wikipedia admits that “it is not accountable to any single national government.“  The Bank for International Settlements was used to launder money for the Nazis during World War II, but these days the main purpose of the BIS is to guide and direct the centrally-planned global financial system.  Today, 58 global central banks belong to the BIS, and it has far more power over how the U.S. economy (or any other economy for that matter) will perform over the course of the next year than any politician does.  Every two months, the central bankers of the world gather in Basel for another “Global Economy Meeting”.  During those meetings, decisions are made which affect every man, woman and child on the planet, and yet none of us have any say in what goes on.  The Bank for International Settlements is an organization that was founded by the global elite and it operates for the benefit of the global elite, and it is intended to be one of the key cornerstones of the emerging one world economic system.

Even though most people have never even heard of the BIS, the truth is that the global elite have had big plans for it for a very long time.  In another article I included a quote from a book that Georgetown University history professor Carroll Quigley wrote many years ago entitled “Tragedy & Hope”…

[T]he powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basle, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations.

Today we have such a system, and most of the public does not even know that it exists.

And when the next great financial crisis strikes, there will probably be very little ever said about the Bank for International Settlements in the mainstream media.

But right now the BIS is helping set the stage for the great credit crunch that is coming.

Get prepared while you still can, because time is running out.

 

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Comments

  1. Naaaaaaah!!!!!

  2. Basel III defines gold as AAA – grade collateral, and effectively, it’s the only stuff that’s gonna survive the coming shitstorm.

  3. http://www.bis.org/about/index.htm
    I wish the world would accept Basil III. I would mean that gold would become a tier 1 asset.

    • PLUS, Margins are raised substantially. 
      It is a “partially Gold-Backed currency” patadigm. 
      Hopefully, no rehypothecation! 

  4. Basel III regulations stipulate higher capital requirements for banks and significantly restrict their use of leverage.  Uh huh and the check is in the mail.  

  5. From what I’ve heard on Basel III it will destroy the shadow banking empire, cause immense damage to the TBTF banks, including the US banks and the Japanese banks.  If the BIS has their way, the banks under them would suffer fatal consequences. Collateral will be found to be nonexistent.  The banks will be forced to call loans in to restore capital, much like the crunch of of 2008 and the Lehman failure when credit locked up for nearly 6 months.
    The Basel III capital controls has the potential of forcing banks to STOP lending.  No credit?  No economy, no loans, no businesses, no consumer credit, no home loans, etc etc etc.  When a country and society is unable to access credit under reasonable rates and terms, that country can easily go from the 21st Century to the 18th Century overnight.  I’ve seen credit shutdowns, 3 of them from 1980 to 2009.  They are gruesome and leave people and businesses wonder what they did wrong when by all accounts, they did nothing wrong.
    If I was to venture a conspiratorial guess, I would say the BIS could be part of that elite Bilberberger, lluminati One World Order group that seems hell bent on ruling the world.  What better way to effect that plan than to shut down the supply of credit worldwide and then call the tune.  If you can’t get credit and if the businesses you patronize are shut down since they can’t even acquire inventory due to a credit lock up, look out.  
    Whether this is the plan and it’s designed to improve the asset structure of a bank or something more sinister, it could be very damaging.  The average Euro bank is leveraged between 35 and 50 to 1 and that’s if the loans are solid, paying as agreed and well secured.  Banks in Europe are loan rich and liqudity poor. They tread on thin ice. If their assets supporting the capital base is weak and there are runs on the bank, even after the Fed shipped $1.25 trillion in FIAT inthe last 3 months, these banks could be crippled.  Their leverage could be as much as 100 to 1 and that is a bad place to be in. 

    US banks may be leveraged  between 13 and 15 to 1 but their asset bases are not particulary strong.  They liquidity is strong at over 2 trillion but is BASEL III is applied, they might be temporarily crippled.   It”s difficult to make any strong predictions as a result of BASEL III implementation but if BIS is calling  the tune it does not bode well for our banks.
    They maybe sons of bitches but they are our sons of bitches.

    • The BIS can ask Central Banks to effect Basal III, but they don’t have to agree to all the rules, plus the schedule of actuating the parts is wholly determined by the central bank of that country. 
       
      In the case of Gold becoming a Tier 1 asset, The Fed said no. The ECB said yes. The BOE said…yeah…about that….we have no gold!
       
      I think the margin increases are a good idea though, I hope that they will get invoked, although the timings of these things, may take years. It might become too little too late. 

    • At which point we tell the federal reserve to take a flying leap and the states or government issues new currency and we start over.

    • As far as banking goes, AG, you The Man!  
       
      Still, we all have our own thoughts concerning banking, bankers, and banksters.  IMHO, credit has been treated as money when it is not and this has played a major role in developing the situation that we now face.  Anything that reduces the leverage and increases the capitalization of the TBTF banks is a good thing, IMO. There is PLENTY of room to argue which method of achieving these goals is best, however.  I would favor a phased in approach and not an all at once approach.  Banks DO need to maintain more capital AND use less leverage.  
       
      IMHO, the entire world monetary system is a corrupt enterprise that has far more in common with a Ponzi scheme than anything legitimate.  If the Basil III rules cause a banking collapse, I agree that would be a bad thing.  But, I also think that if this unsustainable system will collapse anyway, sooner might be better than later.  The longer this BS goes on, the bigger and badder it will become.  Better to have a big problem soon instead of a HUGE problem later.  Of course, any selfish folks our age will be hoping to be safely dead before the financial SHTF.  Those of us with kids and grandkids will not be in that camp for sure.

    • Just over a year ago I applied for the post of a Basel III analyst at a UK Bank. They were offering £5000 a week. I thought, hell, I’ll have some of that! Gave my resume and gave some of my thoughts on how the Bank should prepare for Basel III. I said they should buy as much physical gold as possible and delever out of sovereign debt.
       
      … I didn’t get the job. Lol.
      As you can tell I never seriously thought I’d get the post, it was fun sending my details of though! One day someone who read that will go FUCK!!! :)

  6. THE

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