I cannot stress enough that Mario Draghi has really destroyed the European economy on an unprecedented scale. I know people who worked on trading desks years ago when Mario Draghi before he was head of the ECB, was there to observe how things operated. His policy of perpetual low to negative interest rates is a barbaric ancient theory based on the assumption that if you make it insanely cheap to borrow, people will run out and buy everything. He has kept this failed theory up for 10 years without success. He owns the bulk of sovereign debt in Europe; he cannot sell or even stop rolling over without causing a major debt crisis among member states. The ECB is trapped and incapable of managing the economy whatsoever.

Add to that the fact that Draghi never considered the impact upon those who saved all their lives to retire and suddenly discovered their life savings earned nothing. He leaves the ECB in October. But the May elections are approaching and the stress his Quantitative Easing has inflicted upon Europe is causing a ripple effect within the political discontent. With the economy turning down hard once again into 2020, he has no means to even try to pretend he can manage the economy. We are headed into a NEW ERA in which the belief in central banks and government being in control is about to collapse before our eyes.

We are witnessing a real major crisis unfold. Of course, this will make our Rome WEC probably the most interesting for Europeans and how to survive this Draghi’s nightmare. Where there is such confusion, there is a tremendous opportunity as well for those who understand the events. There are always winners and losers when history is in the making.

Most employers provide vacation and sick leave. However, most employers do not allow sick days to roll over from one year to the next. The norm is to often cap at a certain number of days or hours. In the private sector, most employers do not allow employees to accumulate sick leave. Paid sick leave is part of the benefits package for 85% of full-time workers and 74% of all U.S. workers, according to a March 2018 survey by the U.S. Bureau of Labor Statistics.

Government employees receive benefits that are simply unavailable to those of us who actually produce something in the economy be it a good or service. There is no federal law requiring employers to offer paid sick leave, but as of 2018, 10 states and the District of Columbia require employers to provide some form of paid time off for employees who are sick. Even some cities enacted laws, including San Francisco, that require employers to provide a certain number of paid sick days. However, federally, the Family and Medical Leave Act (FMLA) allows qualified employees to take up to 12 weeks of unpaid leave under certain circumstances.

In the case of governments, they simply bestow upon themselves benefits that are bankrupting their governments. California’s government has been allowing employees to accumulate paid sick leave to the point they are being handed checks in excess of $400,000 for paid sick leave they never took. More than 450 state workers took home six-figure checks when they left their jobs last year in 2018. The record was one check for $456,002. He is by no means the only person to exceed $400k. Add to the fact that these people have NEVER contributed to their guaranteed pension and it is not hard to imagine that this house of cards is rapidly collapsing.

The cost of government is doubling because they have to pay out pensions for people retiring and then they must hire someone to replace them. Now they are paying two people. This is simply unsustainable and it is the key to understanding the pending collapse in government. Capital will flee the PUBLIC sector and run to equities where you are not taxed on gains until you sell the assets. That is, of course, what Elizabeth Warren wants to tax. Gains that you have on assets before you ever sell anything. Curious, that you are the hated rich if you have income greater than $250,000 in a year. Hm!

Canada has been selling off most of its remaining gold reserves to the general public. They have been selling gold coins and reaping better prices than dumping 400-ounce bars to bankers. The figures from the Bank of Canada and Finance Department show that the country held 77 ounces at the end of February. They sold over 21,000 coins in February. Through most of 2015, the country’s gold reserves stood at more than $100 million. US. Finance Department figures show that Canada sold 41,106 ounces of gold coins in December and another 32,860 ounces of gold coins in January.

That left Canada holding 21,929 ounces of gold in its reserves as of the end of January, and as mentioned, all that is left now is 77 ounces after February. The official statement was:

“The decision to sell the gold was not tied to a specific gold price, and sales are being conducted over a long period and in a controlled manner.” 

“The government has a long-standing policy of diversifying its portfolio by selling physical commodities (such as gold) and instead investing in financial assets that are easily tradable and that have deep markets of buyers and sellers.” 

Behind the curtain, governments do realize that eventually they must move to a cashless society in order to retain power. This is fueling the debate behind closed doors on how to address the monetary system. As we hear about MMT on this side of the curtain, behind it there’s a question as to whether money really needs the banking of this “barbaric relic” of the past, as John Maynard Keynes once called gold coins, and many are starting to regard him as right after all. Of course, this is self-serving, for they have really screwed up the finances of all governments on this journey down Socialist Lane.