In the UK, Debanking is Destroyed

Americans need to take heed of Nigel Farage’s struggle with NatWest. [The Rude Awakening] July 27, 2023 [WEBSITE]( | [UNSUBSCRIBE]( In the UK, Debanking is Destroyed - Brexiteer Nigel Farage’s bank accounts were canceled at Coutts. - His political views didn’t coincide with the banks. - Long story short: NatWest’s CEO resigned. [Biden to “retire” US dollar?]( [James Altucher]( A former advisor to the CIA and Pentagon now believes President Biden plans to retire the US dollar we know. And replace it with what he calls “Biden Bucks”. It is underway. On March 9, Biden signed Executive Order 14067, which could pave the way for Biden Bucks. [Click to see how to save your investment and retirement accounts](. [Click Here To Learn More]( [Sean Ring] SEAN RING Happy Thursday from a hot Northern Italy! Days like yesterday just warm the cockles. “Revenge is a dish best served cold,” says the old Klingon proverb. But this wasn’t revenge at all. It was justice. I can’t stand that business and government are in bed together. It’s the literal definition of fascism. But when banks and government are in bed together, it’s much worse. And yet, this time, the UK government gets a pass. Even the state-owned media, known as the BBC, didn’t act too terribly. They just took a shot and hit the wrong target. This, my friends, is a tale of how a BBC reporter tried to smear a Brexiteer but got a bank CEO fired instead. How It Started Just seventeen days ago, [I wrote the following]( “But We’re Better Pirates!” Cries the UK! You may or may not know of Nigel Farage. He’s the UK‘s biggest populist, and probably the most important politician in the United Kingdom since Margaret Thatcher. If it were not for him, Britain would still be in the EU. There’s no doubt about it. Recently, Coutts, a fancy private bank in the UK owned by Natwest, which is just the new name for the disgraced Royal Bank of Scotland, which was bailed out by Her Majesty‘s government back in 2008, decided to close Farage’s accounts. Without bank accounts, you’re pretty much a non-person in any country in the world. But this is the greatest example of this piracy gone mad. You would’ve read newspaper articles a couple of years ago, saying things like, “London is ready to surpass Zurich for private banking services.” The UK was seen as equal to Switzerland before this whole mess began, and I was very happy for England. I thought it was a great thing, and it just partially justified for me that Brexit wouldn’t hurt London as a financial center. But you know what hurts financial centers? Seizing assets! The UK has gone just as crazy as the United States in seizing Russian assets. And now they have gone about seizing and closing the accounts of UK citizens. Apparently, Nigel Farage is only one of these victims. That was correct. And there are many upset people in Ye Olde England right now. So let’s get to the meat and potatoes. Charity Chatter The next time someone tells me how much better the world would be if women ran it, they’re getting it in the schnozzola. Whether it’s awful CEO [Carly Fiorina]( convicted fraudster Elizabeth Holmes, hapless Liz Truss, ‘shroom aficionado Janet Yellen, convicted fraudster Christine Lagarde, or “Broomsticks” Ursula van der Leyen, sometimes, women are just as bad as men are. Add Dame Alison Rose to that list. My God, she’s made a meal of it. And her downfall is the most unnecessary, idiotic downfall of them all. The one inviolate rule a banker must follow: never open your mouth. Nothing is more important than confidentiality. Straight from the UK’s Financial Conduct Authority, the City’s chief regulator, are the [individual conduct rules]( - You must act with integrity. - You must act with due skill, care, and diligence. - You must be open and cooperative with the FCA, the PRA, and other regulators. - You must pay due regard to the interests of customers and treat them fairly. - You must observe proper standards of market conduct. It’s not complicated. I guess Dame Alison got a little starstruck when she went to the BBC Correspondent’s Charity Dinner and sat next to BBC Business Editor Simon Jack. From [The Times of London]( Jack sat next to Rose, 53, at a BBC correspondents’ charity dinner on July 3. The following day he published a story suggesting that Farage had been dropped by Coutts for failing to meet its wealth threshold, which a dossier compiled by the bank later revealed to be untrue. The 40-page document on Farage cited long-denied claims that he sang Hitler Youth songs as a schoolboy, and that he had retweeted “transphobic” jokes and was xenophobic. It revealed he was “debanked” because his political views did not align with the bank’s inclusive values. After nearly two weeks of relentless pressure, Dame Alison admitted that she made a “serious error of judgment” by conversing about Farage’s banking arrangements with Jack at that dinner. Rose said she didn’t reveal any “personal financial information,” but admitted she inadvertently left Jack with the impression that Farage didn’t meet Coutts’s wealth threshold. Coutts is NatWest’s private bank. She finally apologized to Farage. But, ridiculously, the NatWest board hesitated to fire her. [[CHART] Could Inflation Hit 20%+ In 2023?]( [James Altucher]( Take a close look at this scary chart pictured here… What you see is the money supply in America… And as you can see, the number of dollars in circulation has exploded in the last few years. In fact, more than 80% of all dollars to ever exist have been printed since just 2020 alone! Which is why some say inflation could soon explode even higher than it is now, to 20% or more. And if you’re at or near retirement age you must take action now to protect yourself… otherwise you risk losing everything. [Simply click here now to see how to survive America’s deadly inflation crisis](. [Click Here To Learn More]( The Government Jumps In Before you say, “Well, NatWest is a private company, so they can choose the clients they want,” I’ll simply say, “No.” There are two reasons for this. First, no chartered bank in any country is genuinely private. Everything they do is with government privilege, including getting bailed out. Second, in this case, NatWest, the former RBS, is still 39% government-owned. Until last year, the UK government was the majority shareholder. And rightly, they were concerned about their investment. Again, from [The Times]( One cabinet minister had said: “She has got to go. She has no integrity and has done material damage to the bank and its reputation. The chairman has also lost his credibility by saying it’s in the interests of customers and shareholders to keep her. Frankly, the whole board has got to go if it wants to defend her.” A second said that her apology was “not enough” and that it was “difficult to see how she can survive,” while a third said that “she’s got to go.” “She hasn’t understood from the outset just how serious this is,” they said. “She’s obfuscated at every turn.” Both Downing Street (Prime Minister) and the Chancellor of the Exchequer (Finance Minister/Treasury Secretary) “had concerns” about Dame Alison retaining her position. “Had concerns” in British English means “wanted her out.” Rose finally resigned yesterday. Sir Howard Davies, the NatWest Group chairman, said: “The board and Alison Rose have agreed, by mutual consent, that she will step down as CEO of the NatWest Group. It is a sad moment. She has dedicated all her working life so far to NatWest and will leave many colleagues who respect and admire her.” Add Davies’s statement to today’s list of missteps. Mutual consent? He should’ve sacked her weeks ago. I’m not sure if it’s the “we must defend women in high positions” excuse, he just really liked working with her, or he hated Farage that much. But he’s put himself in the firing line as well. And Davies is the former Executive Chairman of the Financial Services Authority, which regulated the UK financial services industry until 2003. That’s the aforementioned FCA’s predecessor. He should know better. I don’t expect him to last the week. All’s Well That Ends Well Though Farage has been thoroughly vindicated, he called for Rose and Davies to quit. He said, “Dame Alison Rose has now admitted that she is the source. She broke client confidentiality, and is unfit to be CEO of NatWest Group.” Once he heard she left, added, “She’s gone, and that’s a start, but I have to say that (Coutts chief executive) Peter Flavel… (NatWest chair) Howard Davies… it was the board that sanctioned this culture that talks about diversity and inclusion, and actually is very divisive.” “In my case, as you can clearly see, pretty poisonous stuff. I think any board member that endorsed that statement last night, where they said ‘yes, she breached confidentiality, but she can stay in her post’… frankly, I think the whole board needs to go.” That may very well happen, and it’d be right. Wrap Up Dame Alison Rose, a graduate trainee at NatWest in 1992, rose through the ranks to the top spot, only to lose her £5 million job over a conversation she never should’ve had. At the end of her tenure, NatWest stock is only slightly higher than where she found it. It’s a sad end to a solid career for Alison Rose. But it’s a happy ending for debanking in the UK. American citizens must take note and take the bull by the horns. Debanking is for the birds. All the best, [Sean Ring] Sean Ring Editor, Rude Awakening Twitter: [@seaniechaos]( In Case You Missed It… Fed Up to 5.50%? [Sean Ring] SEAN RING Good morning from bright, sunny Northern Italy! Since my in-laws are in town, we’re showing them around. Today, my father-in-law saw Micah’s school, where they’re holding his mini-summer camp. Then, I took him to Fabrizio’s, so he could see where the finest coffee in Asti is brewed. It’s nice to have family in town. We’ve been alone for so long, we forgot what it feels like. It sure taught us not to talk anything for granted. But if there’s one thing you can take for granted, it’s that the Fed will hike another 25 bps today. You may remember me writing about “the skip” last month when the Fed chose not to hike rates. I thought it was stupid then. Now I think it was indeed wholly pointless. But never mind. We’re back on the hiking cycle. But is this the last hike? Will the Fed go again in September? And what should the rate be? Let’s explore these questions in today’s Rude. Today You may wonder why I write about Jay Powell so intermittently now. First and foremost is that Federal Open Market Committee (FOMC) meetings are eight weeks apart. The FOMC is the “Gang of 12” that determines the Fed Funds Target Range. Today is the conclusion of their two-day meeting. The next meeting is September 19-20. This year's final two meetings are Oct 30-31 and December 12-13. Second, we know what Chairman Pow intends to do and how many more times he can do it this year. As for today, it’s a done deal. Barring any 6-sigma or Black Swan event between now and the announcement, the Fed will hike rates to a target band of 5.25% - 5.50% from 5.00% - 5.25%. [SJN] Credit: [CME FedWatch Tool]( How will the market react to the hike? I imagine any move in the markets today will only have to do with market stuff, not Fed stuff, unless… … Powell blows the press conference. And that’s something he’s done before. If Powell comes out swinging and says the hiking cycle isn’t done and we have much more to go, the market may fall. But honestly, I don’t see that happening. What about going forward? [CURRENCY WARS ALERT]( With Putin invading Ukraine…Rising tensions with China… Inflation, recession, supply chain issues, and the potential for greater violence is breaking out all over the world. It seems as if some of my worst fears have finally come true. [That’s why I’ve recorded this message from Pentagon City.]( To tell you exactly what you need to do to prepare for what comes next. Because if history is any indicator, soon…and I mean very soon… This war is not going to end well. [Click here to view my urgent message from Pentagon City.]( [Click Here To Learn More]( Tomorrow Many economists, including Ben Bernanke, think this is the Fed’s last hike in this cycle. I disagree. One reason is that Powell has not indicated that he’s done with this cycle. In fact, he already signaled there would be at least one more after today’s. That makes sense to me. Whether that hike comes at the next meeting in September or the following meeting at the end of October remains to be seen. Again, the market currently sees it this way: [SJN] Credit: [CME FedWatch Tool]( This will change minute-to-minute over the next six weeks, so it’s not definitive. But right now, the market is assigning only a 20.6% chance of a rate hike in September. Depending on the inflation numbers, this probability will move around. One thing we haven’t talked about yet is the money supply. The Fed has done a better job of cutting its balance sheet lately. [SJN] Credit: [FRED]( The Fed’s balance sheet has shrunk considerably since its peak in 2022. When the Fed wants to reduce the money supply and control inflation, it sells assets to financial institutions, taking money out of circulation. The big bump you notice on the graph is when we had our mini-banking crisis with Silicon Valley Bank, Signature, First Republic, and Credit Suisse all going belly up. A related measure is the money supply itself. The categories of the money supply are as follows: - M1: Includes physical currency, demand deposits, and other assets that can be quickly converted into cash or used for transactions. - M2: Includes M1 plus additional financial assets like savings accounts, time deposits (certificates of deposit or CDs), and money market funds. - M3: Includes M2 plus large time deposits and institutional money market funds. According to the Fed, the money supply has fallen slightly since its peak in 2022. However, it’s seen a recent uptick. [pub] Credit: [FRED]( These are good things, as a decrease in the money supply (loanable funds) is as essential to quell inflation as hiking rates. However, I still think there’s much more room to hike rates. Here’s the reason. The Taylor Rule In plain English, the Taylor Rule is a simple guideline for central banks to decide on the best interest rates for the economy. Economist John B. Taylor first proposed it in 1993. The idea is to help the central bank maintain stable prices and promote full employment. Here's how the Taylor rule works: - The central bank looks at the current inflation rate, which is how fast prices are rising. - It also considers its target inflation rate, which is the desired level of price increase. - Then, the central bank looks at the difference between the current inflation rate and the target rate. - Next, it considers the difference between the current level of economic output and the desired output level. - Based on these differences, the central bank adjusts its benchmark interest rate. For you math geeks out there, here’s the formula: i = r* + π + 0.5 * (π - π*) + 0.5 * (y - y*) Where: - "i" represents the nominal interest rate that the central bank should set. - "r*" is the equilibrium or neutral real interest rate, which is the rate that would prevail when the economy is at full employment and stable prices. - "π" is the current inflation rate. - "π*" is the central bank's target inflation rate. (Usually 2%) - "y" is the current output gap, representing actual and potential output differences. - "y*" is the desired or potential output level. The Taylor rule suggests that central banks should adjust their benchmark interest rates based on the deviations of inflation from the target (π - π*) and the output gap from the potential output (y - y*). By doing so, the central bank can attempt to stabilize inflation and keep the economy close to its full-employment level. Luckily, the Atlanta Fed does the math for us. [pub] Credit: [The Federal Reserve Bank of Atlanta]( After today's meeting, we know the Fed Funds rate will be 5.25% on the lower band. If we zoom in on the right side of the chart, this is what the Taylor Rule and its alternatives imply: [pub] The average of the Taylor alternatives is roughly 6.75%. There are many reasons why the Taylor Rule isn’t the be-all and end-all of monetary rate discussions. These include the complexity of economic conditions, evolving monetary policy strategies, enhanced communication strategies, crisis management, and empirical challenges. Still, according to Taylor, it suggests we’re still over 100 basis points (1%) away from where rates should be. I can’t believe Jay Powell doesn’t have at least one eye on that. Wrap Up To sum it up, sit back and enjoy an iced tea today. Nothing crazy should - should - happen. Powell raises rates, and we begin the guessing game once again. How far will he go? No one knows… … but at least we have some clues. Have a lovely day! All the best, [Sean Ring] Sean Ring Editor, Rude Awakening Twitter: [@seaniechaos]( [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2023 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. To end your Rude Awakening e-mail subscription and associated external offers sent from Rude Awakening, feel free to [click here.]( Please note: the mailbox associated with this email address is not monitored, so do not reply to this message. We welcome comments or suggestions at feedback@rudeawakening.info. This address is for feedback only. For questions about your account or to speak with customer service, [contact us here]( or call (844)-731-0984. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized financial advice. We allow the editors of our publications to recommend securities that they own themselves. However, our policy prohibits editors from exiting a personal trade while the recommendation to subscribers is open. In no circumstance may an editor sell a security before subscribers have a fair opportunity to exit. The length of time an editor must wait after subscribers have been advised to exit a play depends on the type of publication. All other employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of a printed-only publication prior to following an initial recommendation. Any investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. Rude Awakening is committed to protecting and respecting your privacy. We do not rent or share your email address. Please read our [Privacy Statement.]( If you are having trouble receiving your Rude Awakening subscription, you can ensure its arrival in your mailbox by [whitelisting Rude Awakening.](