Tag Archives: Obama Domestic policy

Sep 13 2015

The last individual in Europe, a short story


Re-Posted from Jon Rappoport’s Blog  originally posted on September 12, 2015 by Jon Rappoport

 

“The indoctrination effect, regarding the individual, is to make him think he no longer has an independent existence. Those who still have functioning minds are taught that ‘the individual’ was a concept that had a use at an earlier stage of evolution, when modern systems and structures were still developing—but ‘individual’ became an accurate synonym for ‘criminal’ when benign super-government took over…” (The Underground, by Jon Rappoport)

October 2, 2071, the Center of Centers, United Europe. Citizen G1435-X was brought into a secret conference room in the Department of Re-Education, Special Branch.

His interviewer held the title of Mental Health Representative of the People Level 14, or MHR. This is an excerpt from their conversation:

MHR: Are you aware of the size of the United Europe Government?

Citizen: I know that almost everyone I meet works for the Government in some capacity.

MHR: If you include corporations, which of course are in partnership with Government on many levels, the figure approaches eighty percent of the population.

Citizen: And there are the computers and robots, too.

MHR: The correct name is Machines for the Illumination of Everyone.

Citizen: What do you want from me?

MHR: That’s the whole point. There is no you.

Citizen: How can that be true? I’m sitting here.

MHR: No, that is an illusion. For convenience sake, an assumption is being made: ‘I am I and you are you.’ It facilitates this conversation. But in truth, we are one. We are in accord. We know the same knowing.

Citizen: Gibberish.

MHR: It would sound like gibberish to a disaffected part of the whole. A disaffected part, which is ‘you,’ simply needs to surrender. Then you will cease to be a diseased illusory series of thoughts.

Citizen: And this is official Government policy?

MHR: Of course. The culmination of all Government is the shared cosmic body. Another term for it is Universe.

Citizen: At one time, limited government was instituted to protect the freedom of the individual.

MHR: You mean at one time, an illusion was instituted to protect another illusion.

Citizen: I’m still me.

MHR: Against the entirety of Government? Do you realize how ridiculous that sounds?

Citizen: Where are you from? Where were you born? Where did you grow up?

MHR: These are all irrelevant questions. Even asking them is a violation of the law. They lead to making elitist distinctions favoring some over others.

Citizen: I’m not asking others. I’m asking you.

MHR: You’re assuming there was a time when I thought of myself as an individual.

Citizen: Didn’t you?

MHR: There are errors. People commit errors before necessary corrections are made.

Citizen: You’re evading my question.

MHR: Why do you hate everyone?

Citizen: I don’t.

MHR: You must.

Citizen: Why?

MHR: Because you refuse to merge with them.

Citizen: Merge? What does that mean? It’s a word that’s been twisted in the new language all of you speak. The phony language. Merge?

MHR: Oppositional Defiance Disorder. Language Aversion Disorder. Illusion Disorder. Individualist Disorder. You’re suffering from a host of mental illnesses.

Citizen: France, Germany, England, Sweden, the Netherlands, Spain. Do you remember those terms?

MHR: Of course I do. It’s part of my job. They’re on the Forbidden Words List. Only deranged persons insist on using them.

Citizen: What about the word ‘money’?

MHR: Also forbidden. The correct term is ‘credit’ or ‘allocation’.

Citizen: What about ‘freedom’?

MHR: That is a technical term. It specifically refers to alternatives methods of problem-solving a machine can opt for. It has no other meaning.

Citizen: You’re joking.

MHR: I assure you, I’m not. You undoubtedly believe the sentence, ‘An individual has freedom’ actually means something. But it was never more than a piece of propaganda.

Citizen: You have everything backwards.

MHR: You’re going to be entered in a program of re-education.

Citizen: It won’t work.

MHR: You’re not the first person to tell me that. You’ll discover, in the coming months, what ‘greater good’ means. You’ll also experience the joy of Oneness for All.

Citizen: How are going to manage that?

MHR: We’re going to connect your brain with the Kurzweil computer. You’ll download trillions of data that reveal the truth.

Citizen: Which is?

MHR: You and every other person in Europe are identical. You are, so to speak, copies of each other.

Citizen: And if I refuse to accept that?

MHR: You won’t have any data to the contrary.

Citizen: What?

MHR: The information we insert will crowd out whatever else is present in your mind. Think of what you now ‘know’ and believe as a lake. We will empty that lake into a huge ocean. Soon the lake will be invisible. For all intents and purposes, it will have disappeared.

Citizen: Suppose the opposite happens? Suppose the lake swallows the ocean.

MHR: Impossible. We will search out every word you use and provide new meanings. Proper meanings. Then you will think and speak according to the law.

Citizen: Do you believe I’m the only individualist in Europe? There is a rebellion underway.

MHR: Under what name? What is your organization?

Citizen: There is no organization.

MHR: That’s absurd. You would have to have an organization.

Citizen: Not true. That’s why you have a problem. If there were an organization, you could co-opt it. You could infiltrate it. You could offer it special favors. You could set it against other organizations.

MHR: The word ‘rebellion’ means an organized opposition…

Citizen: In your language it does. You think all human activity takes place in groups. But you’re wrong.

MHR: How could we be wrong? We control language.

Citizen: You control your language. But many individuals don’t accept your definitions.

MHR: There is only one language.

Citizen: Your language pertains to groups. But this rebellion, as I just said, has nothing to do with groups.

MHR: I don’t like where you’re going with this.

Citizen: Remember the French language? There are people who still speak it.

MHR: ‘French’ is a forbidden word.

Citizen: Keep telling yourself that. Remember a city called Vienna? Or Stockholm?

MHR: You’re not supposed to know those words.

Citizen: But I do. Vouloir, c’est pouvoir.

MHR: That language is outlawed.

Citizen: It loosely means, if you want something, you can get it.

MHR: I know what it means.

Citizen: So you speak French.

MHR: I have to, in order to know what is illegal.

Citizen: Do you remember the French writer, Albert Camus? And his essay, The Rebel?

MHR: The word ‘rebel’ is absolutely forbidden. It has no meaning.

Citizen: I beg to differ.

MHR: Rebellion equals mental disorder. The disorder is real. The rebellion is merely a form of compensatory behavior, a pretense.

Citizen: You think you’ve established a United Europe composed of androids, but you haven’t. That’s your pretense.

MHR: There is only one genuine human impulse: to do good for others. And the State owns that impulse.

Citizen: Do you know what you’re saying? How absurd it is?

MHR: The State must own it, in order to make sure the future is directed as it should be.

Citizen: So the State is defined as that entity which maintains all that is good.

MHR: Of course. How could it be any other way?

power outside the matrix

Citizen: Let me make an inference here. If the day dawns when all citizens adopt the new language, you will be able to forget the history you know: the old languages, the old cultures, the old cities. You’ll be able to forget the past.

MHR: Theoretically, yes.

Citizen: Will it make you happy to forget it, to let go of it?

MHR: Of course.

Citizen: I don’t think so. I think you want to be one of a small number of elite people who remember everything. I think you cherish the past. You want to possess it.

MHR: How dare you say that.

Citizen: You’ll be the rare person who can read Shakespeare, Goethe, Homer, Dante, Yeats. You’ll be a scholar in an invisible university.

MHR: I serve the cosmic body of the State.

Citizen: You serve only yourself and a few others. You want individuality, but you want to deny it to the rest of us.

—end of interview excerpt—

Apparently, at this point, MHR experienced an episode of some kind. Acutely elevated blood pressure, a burst vessel, a heart attack. The record is unclear…

Sources report that his interview with Citizen G1435-X was preserved in a secret archive, to be read by government leaders and understood as a cautionary tale…

Sep 12 2015

An Analysis of the Market last Week and What the Next Month may Bring


Re-Posted from Armstrong Economics Posted on September 12, 2015 by

Trading Community

It was a mixed session for Asia yesterday after what has been a very volatile week. The talk remains as to what China’s next move would/should be and “if” the FED were to move next week. Not just in Asia has this been the most awaited FED decision in years but it has been the hot topic just about everywhere. It was a clearer picture for core European Stock Indices with all closing lower on the day with 1% declines. The US did open lower but has rallied back up.

Next week’s long-awaited Federal Reserve meeting may not spur a wild market reaction, even if the central bank hikes rates for the first time in almost a decade. Economists are about equally split on whether the long-awaited move will come, though futures market trades are pointing to at least one more month of the Fed delaying its 0.25 percentage point.

The key that is really important is the trend. There is no question our model has been pointing to 2015.75 as the change in trend for interest rates. The Fed has been backed into a corner for unless interest rates rise (“normalization”), retire funds are doomed. The Larry Summer approach is of course one that benefits banks, not the population. He envision punishing people for saving money with charging them a tax (negative interest rates) to keep hoarding cash.

Therefore, we are not looking a just a 0.25% hike in rates, we are looking at reality hitting the Fed in the face. Do they take the irresponsible approach of Larry Summers? Or perhaps they realize you cannot punish people for existing and trying to save for a rainy day. The Fed will raise interest rates for they have no choice. If not next week, they can do it at any meeting monthly and they can call an emergency meeting any time as well,

Sep 12 2015

A Serious Proposal for a different method of funding government operations suitable for a technology based economy


money wave

The Federal government never has enough money and over the past decade they have created enough money, Dollars, that there is a title wave of them about to hit us; we need a different system that the politicians can’t subvert. This short post is a way to achieve that.

The following figures are taken directly from the following government reports: Bureau of Economic Analysis (BEA) monthly report of the GDP of the United States; Monthly Treasury Statement; the Bureau of Labor Statistics (BLS) monthly employment situation; The Monthly Statement of the Public Debt of the United States and the Department of Defense (DOD) Active Duty Military Strength Report. The Monthly Treasury Statement data is reformatted to calendar year format the government fiscal year format which runs from October to September so we can compare apples to apples.

First the Facts for 2014:

#1 The federal government currently spends almost $4.0 trillion a year ($3.885 trillion) of which some is derived from taxes & fees ($3.096 Trillion) and some is borrowed ($789.5 Billion). More on this subject later since the official GDP figures are different; so we use $3.2 Trillion here instead of the actual $3.9 Trillion, to be consistent with BEA numbers (explained later).

#2 There are some 151,012,000 people working for a living including ALL categories (the BLS does not count farm, self-employed and the military). This figure is the average for the calendar year 2014.

#3 If we assume there are 2,000 hours worked per year per person that equates to 302 billion hours worked per year. This is the only assumption used here and since many workers are part time this maybe an overstated number. Whether it is or not doesn’t matter to the discussion of the concept. It would only matter if implemented.

# 4 Therefore, if we divide the $3.2 Trillion spent by the Federal government by the 302 billion hours worked by all the citizens, that gives a ratio of $10.56 of federal spending per hour worked.

Now here is the concept:

The idea is based on an economic principle that my advanced econ professor taught me my senior year at Ohio University which is, basically just a form of a thought experiment. The principle is that if we make a change and the result of the change shows a result that is the same as before the change, then there was no real change in the output only a change in how we got there. The assumption then is that it makes no difference which method is used.

What follows is for federal spending only, state and local could also be added to this but that is too complex for this brief overview. This does include ALL revenue going to the federal government no matter the reason or program including social security.

#1 We eliminate ALL personal federal taxes and fees and ALL business taxes and fees as well which then reduces the governments’ income to zero (all borrowing is also eliminated).

#2 Simultaneously we reduce individual pay rates by the exact amount of the taxes they pay. For example if you were making $25.00 per hour but only taking home $20.00 per hour the change we make would be that you would now be making $20.00 per hour but paying no taxes so your take home would be the same as before $20.00 per hour (no change).

#3 Businesses would be required to reduce prices such that their income would be unchanged in a similar manner. So the net economic effect on the economy from this change (initially) would be zero since private and corporate spending would be exactly the same (no change).

#4 To compensate for this loss of revenue the federal government would be allowed to create fiat money (no real change from what they do now) at the rate of $10.56 per hour worked by the citizens.  And since there would still be 302 billion hours worked by the citizens (no change) they could spend $3.2 trillion dollars (no change).

$5 The result is that there is still the exact same amount of money in the economy in both the current system and the new system. All we did is change the method of how it got from the worker to the government.

You can see we have made major changes but nothing has really changed, we just changed the method of how we got from there to here. So therefore we are in accordance with the economic principle we started this section with being true.

I think you can see the benefits to this kind of system and, of course the devil is always in the details; however I believe I have considered most of them and they are not major obstacles. I do agree that this would take a lot of re-education to the public but I think it could be sold especially after 2017.
The major benefits are:

#1 The federal government can only spend more money when there are more people working more hours. That is an incentive to promote growth not dependency.

#2 No one has to worry about paying federal taxes so all purchasing and investment decisions are based on economics not tax avoidance. This makes for a much more efficient economy.

#3 The federal budget is always in balance. No need to borrow money and this also forces international trade to be in balance since the government doesn’t need to borrow from foreigners.

#4 Lower prices for products produced here would make the US more competitive and since the take home income is the same internal growth would be immediate.

#5 We end up with a labor based currency which is a improvement over what we have which is debt based. It also takes gold out of the equation except possibly for international trade since the current system we have of pegged rates does not work. However, that is a different subject for other papers.

#6 There are no downsides other than some federal agencies would no longer be required, such as the IRS and the FED. So actually the federal government would need less money.

The Equations:

The equations shown after this discussion are used in national income accounting to calculate Gross National Product (GDP). To show how this works we present an example using the real numbers for 2014. Again this is a simple macro model and the details are much more complicated then what is shown here. However, that doesn’t matter since the principle is valid and all the details can be worked out.

Note the BEA does not count borrowed money and transfer payments are not shown as growth. The BEA’s G also includes state and local spending much of which is transfer payments from the federal government. This means that the BEA figures for “government” used to calculate the GDP are not the same as shown by the United States Treasury for federal spending and borrowing. We will use the BEA figure of $3.2 Trillion instead of the actual $3.9 trillion pulled from the economy by the federal government for 2014 in this exercise.

GDP = Y = C + I + G + (X – M)

GDP = Y = $17.7 = $12.1 + $2.9 +$3.2 + ($2.4 – $2.9)

Where C (consumption net of taxes CN) can be defined as gross income (Cg) less federal taxes (TF) or CN= CG – TF

Where I (investment net of Federal borrowing or IN) can be defined as gross investment (IG) less federal borrowing (BF) or IN = IG – BF

Where G (government) can then be defined as government taxes (TF) + government borrowing (BF)

X is exports

M is Imports

Y = CN + IN+ G + (X – M) or

Y = CN + IN + TF+ BF + (X – M)

 

After the proposed change

CG = CN

IG = IN

G = Hours worked (HW) * $10.56

GDP = Y = CN + IN + G + (X – M)

GDP = Y = CN + IN + 10.56 * Hw + (X – M)

GDP = Y = CN + IN + (10.56 * .302) + (X – M)

GDP = $17.7 = $12.1 + $2.9 +$3.2 + ($2.4 – $2.9)

Obviously nothing has changed since in either the old method or the new method The GDP = $17.7 trillion. Properly packaged, presented and sold by someone would solve many of our problems and doesn’t hurt either conservative or liberal principles.

Notes and Comments:

Federal Spending is very different from what is generally shown or known, for example: The Monthly Treasury Report for 2014 (adjusted to a calendar year) Shows the Federal Government spent $3.585 Trillion dollars derived from $3.096 Trillion from taxes and fees and $667 billion from borrowing. However the National Debt during the same period went up by $789 Billion so there was additional cash needed for changes in payables and obligations and capital projects of $122 Billion. Therefore the federal government actually spent/used $3.885 Trillion in 2014 or 21.95% of the GDP.

Also as previously mentioned transfer payments to the states and cities i.e. block grants do not show as being Federal spending in GDP analysis. That is unfortunate since the federal government has strings attached which give them control of the money and that will get much worse after 2016 when the full force of the Affordable Health Care Act goes into effect.

The purpose of the quick review of my idea is to show that economically and monetarily this system works. It works because economics is about people and what motivates them. In one sense Karl Marx was right labor is the ultimate source of value, he was wrong in how to use that principle and that wrongness has lead to much suffering in the world as we tried to absorb his idealist thoughts (socialism) into the real world.

This proposed system is a method of merging both Adam Smith and Karl Marx while rejecting John Maynard Keynes completely.

Sep 10 2015

The Brzezinski/Obama Axis


Post By Prof. Paul Eidelberg

[September 23, 2009] Updated September 9, 2015 with a shocking epilogue]

Back in 1985, I wrote an article on Brzezinski for The Intercollegiate Review.  Before citing some of the more relevant passages of that article, it should be borne in mind that Brzezinski, a political scientist, served as President Jimmy Carter’s national security adviser. One does not have to read Carter’s Palestine: Peace Not Apartheid to know that Carter is an anti-Semite.  Brzezinski has earned the same reputation.

Not only has Brzezinski publicly defended the anti-Semitic canard that the relationship between America and Israel is the result of Jewish pressure, but he also signed a letter demanding dialogue with Hamas, whose charter calls for Israel’s destruction. It behooves us to understand the mentality of Obama’s [former] Middle East adviser.

Long before he became Mr. Carter’s national security adviser, Brzezinski rejected what he and most political scientists term the “black-and-white” image of the American and Soviet political systems.  “This image,” he says, “is held by traditional anti-Communists.”  Brzezinski thus affirmed he is not quite an anti-Communist.  In fact, he deplores anti-Communism as “a relic of the Cold War, of the age of ideology.”

Not only did Brzezinski reject the “black-and-white” image of the American and Soviet forms of government, he rejects the very notion of good and bad regimes!  Brzezinski is simply a moral or cultural (or historical) relativist, and relativism has certainly modulated Barack Obama’s mentality.

The influence of political scientists like Brzezinski is wide and deep. His relativism prompts him to negotiate with and appease terrorist regimes.  With Brzezinski as his adviser, Obama will be more disposed to appease Iran and betray America’s allies, above all Israel.

Since Brzezinski is a relativist, he denies the existence of objective or trans-historical standards for determining whether the way of life of one nation, group, or individual is morally superior to that of another.  (The members of the UN General Assembly must be pleased to hear this, despite the UN’s notorious record of condemning Israel without having ever condemned an Islamic state.)

Brzezinski’s relativism also makes him a “weather-vane” political scientist.  He turns with the winds of power. Working in a pluralistic and egalitarian country like America – a secular society – he conveniently adopts tolerance as his operational principle on the one hand, and equality as his primary value on the other.  He is quite at home with the moral equivalency that has shaped US foreign policy toward Israel and Islamic dictatorships.

Brzezinski views history through the lens of Marxism, which, despite its atheism, has much in common with Islam.  Both Communism and Islam are universalistic ideologies that reject the idea of the nation-state.  Both do not regard adherence to treaties between nations as obligatory.  Both Communism and Islam are militaristic and expansionist creeds that do not recognize international borders. Brzezinski’s globalism is evident in Jimmy Carter.  Under Brzezinski’s influence, Carter lowered the defense budget and pursued a soft line toward the Soviet Union. Obama is pursuing a very soft line toward Islam.

As a crypto-Marxist, Brzezinski deplores the nation-state. His book Between Two Ages: America’s Role in the Technetronic Era, declares that “With the splitting and eclipse of Christianity man began to worship a new deity: the nation.  The nation became a mystical object claiming man’s love and loyalty.  The nation-state along with the doctrine of national sovereignty fragmented humanity.  It could not provide a rational framework within which the relations between nations could develop.”  Brzezinski sees the nation-state as having only partly increased man’s social consciousness and only partially alleviated the human condition.

“That is why Marxism,” he contends, “represents a further vital and creative stage in the maturing of man’s universal vision.”  Marxism, he says, “was the most powerful doctrine for generating a universal and secular human consciousness.” Embodied in the Soviet Union, however, Communism became the dogma of a party and, under Stalin, “was wedded to Russian nationalism.”

Although Brzezinski poses as a humanist, he makes a most inhumane statement by saying that: “although Stalinism may have been a needless tragedy, for both the Russian people and Communism as an ideal, there is the intellectually tantalizing possibility that for the world at large it was … a blessing in disguise.”!!! Brzezinski could as readily say: “Yes, Muslims slaughtered more than 200 million people, but Islam brought hundreds of Christian, Jewish, Zoroastrian, Hindu, and Buddhist communities under a single universal vision, that of the Quran”!!!

Brzezinski, a self-professed secularist, is an internationalist whose moral relativism contradicts the moral law or natural rights doctrine of America’s Declaration of Independence. His relativism and internationalism contradict the teachings of the America’s Founding Fathers, who endowed the United States with a national identity and character, as that which animated Abraham Lincoln.  To put it more bluntly: Brzezinski’s political mentality, like that of countless other American academics, is anti-American. An Obama-Brzezinski axis has revolutionary significance. It may accelerate the de-Americanization and decline of the United States [as I warned six years ago.]

 

Epilogue September 10, 2015:

Obama’s nuke deal with Iran is the offspring of Brzezinski’s mentality.

Sep 8 2015

A Question of Money – Interest – Bankers


Re Posted from Armstrong Economics Posted on September 8, 2015 by

Dow-Bonds

QUESTION: 

Mr Armstrong, interesting article today, the story of the store of value (at least long term) has always confused me. One can look at saving accounts also as an asset as it yields the interest payment and one relinquishes the access to the money. No difference to bonds.

But your article causes some questions: as you stated before the FED buying bonds does not increase real money supply, so what caused the decline of purchasing power of money in the asset class of equities? Is it that the manipulating of interest rates distorted the actual confidence and time preference in the economy which can be measured by the velocity?

You posted earlier that the velocity has declined. People do not want to invest but save which is not an option for big money as it doesn’t yield any or very little return. Hence enterprises buy back shares and smart money has no other option.

Interest rate hike by the FED, eventually increasing retail participation, a cooling world economy, sovereign debt crisis and the flight to the Dollar. The outcome of your computer, a rise in US stock markets including a possible phase transition, seems comprehensible.

The only thing what leaves me with amazement is what do they really intend? I don’t believe that the families who run the banking system, operating for centuries in money business, do not understand that. I can only assume that for being protected by government the banking cartel buys the governments time and keep financing the deficits.

Best regards,

G

INTR-CCON

ANSWER: The problem in so many areas is that we can focus on one issue, but the answer is a complexity of variables. The history of interest rates has been provided on this site. Interest rates in a developed economy reflect the “option” value on the expected decline in purchasing power of money. If I expect it to decline by 5%, then I expect a profit and say want 8%. You in turn will pay the 8% only if you think you also can make a profit above 8% perhaps 10%+.

In an UNDEVELOPED economy, we transpose the depreciation risk of money with risk in general. Lacking any developed economy, one will lend only based upon the risk of getting repaid. Therefore, without a legal system, the risk is either the person or the political climate. When we look at the history of interest rates, I demonstrated that the rate of interest even within the Roman Empire increased the further you moved away from Rome. Hence, the lowest interest rates are in the dollar and they rise in other countries based upon perceived political risk. Greece’s interest rates are significantly higher than those in Germany. This is a reflection of political risk, not simple the future inflation rate in the Euro.

The Fed did not increase the money supply with QE easing and we have see that 9 months of QE in Europe has also failed to create inflation. What happened to the whole theory of the quantity of money impacting inflation? The problem lies in the definition. When US government debt was illegal to borrow against using it as collateral, then issuing debt DID NOT increase the money supply. When that was changed and you can post TBills as collateral to trade, then there is no longer a difference between debt and money.

1864$10CompoundInt (2)

The US government did not issue paper money after the Revolution until the Civil War. To encourage people to accept it (CONFIDENCE), it paid interest. In reality, this was a form of circulating bond. The term “greenback” referred to the issues that did not pay interest and were not purportedly backed by silver or gold. You turned it over and it was just green ink with no promises.

Fed-Excess Reserves

So the Fed buying in bonds did not increase the money supply and it failed to create inflation as expected BECAUSE it merely swapped bonds (money paying interest) with non-interest paying money (electronic entries). The bankers then complained so the Fed created the Excess Reserve Facility, where banks have nearly $3 trillion in cash. The SF Fed argues Milton Friedman said they should pay interest on reserves. That was only on the required reserves. The creation of the Excess Reserves totally negated the entire idea of stimulating the economy for the banks never lent the money out. It became a giant swap of bonds for cash deposits at the Fed which it then had to pay 0.25% interest.

Velocity-Q2-2015

So now turning to the VELOCITY of money, a decline here demonstrates that people are HOARDING cash (rising in purchasing power as assets decline), as well as banks (Excess Reserves). We have companies buying back their own stock further shrinking the supply of equities also fueling the deflationary spiral. The Excess Reserves at the Fed show just how much banks are hoarding cash.

Therefore, we can see the deflationary trend and the contraction right here. The US share market has been at the high-end of trading, but it did not breakout beyond our second target which was the 18500 on the Dow. The market indeed doubled as we warned coming out of the hold in the 6,000 level passing 12,000, which is the MINIMUM requirement to start a Phase Transition. We nearly tripled by the 2015.75 target beating our minimum doubling requirement, but this was still not a Phase Transition. Why? Retail participation has been at record lows in stocks. This is a bubble in government debt and why we are at 5000 year lows in interest rates.

Now top the conspiracy. “The only thing what leaves me with amazement is what do they really intend? I don’t believe that the families who run the banking system, operating for centuries in money business, do not understand that. I can only assume that for being protected by government the banking cartel buys the governments time and keep financing the deficits.”

Medici - Tommaso Portinari Fall of Bank

Moth-2-FlameBanking establishments are some of the WORSE investors throughout history. They always go bust and it is government that devours them every single time. Yes, the government has been protecting the bankers for they have also been fueling the debt assisting governments to borrow. Therein lies their own demise. EVERY major banking house have been destroyed by this very same flirtation with power. They are like moths attracted to the flame of a candle, hoping to dance by the light never realizing their wings may get burned.

ECM-Banking-Proprietary-Trading

 

The cycle has change. The wheel of fortune has completed its revolution. Governments are turning against the banks and looking to electronic currency. The days of rumored banking conspiracies is coming to an end as it always has. The banks will be a giant short. When the Sovereign Debt defaults become a contagion, the banks will not be supported by government.

Sep 7 2015

Money: What Is It? What is Interest? What is the Wealth of a Nation?


Re-Posted from Armstrong Economics Posted on September 7, 2015 by

Merkel-Lagards

Angela Merkel and IMF chief Christine Lagarde can laugh it up as Europe burns down. The whole crisis stems from antiquated ideas that center on what money actually is. If you do not grasp what the true function which money actually provides within the economy, then you will be unable to get anything else right either. This entire idea of austerity is the crazy notion that money somehow should be a store of value. This is up there on the list of myths with those who also argue that markets decline because of shorts rather than comprehending that eventually longs do also sell.

Money-Assets

Money is the OPPOSITE of assets and has always been historically. This is incredible important to understand far more than you may realize. If you want money to retain its purchasing power/value, you are creating a false image of how the economy functions. For Germany to be politically obsessed with the days of hyperinflation and constantly attempt to impose austerity, they are adopting the anti-asset position and that is the source of deflation.

Interest is actually supposed to be a measure of expected inflation and is essentially dealing in options. Whatever the rate of interest, the lender is expecting that the money will buy the same amount of assets upon repayment plus some profit in excess of the interest rate. Bankers want the same purchasing value back upon repayment plus their profit which is the entire purpose of lending money. Yet historically, the boom and bust cycle is the rise and fall in the purchasing power of money as measured in terms of assets. That is what is rising and falling – the purchasing power. When the purchasing power of money declines and assets rise, we call this a BULL MARKET. When the purchasing power of money falls, we call this a BEAR MARKET.

CALLMONY-MA

I have written many times that there is no magic level in interest rates that will cause the stock market to fall. As a market rises (BULL MARKET), interest rate MUST rise for that is the option on money and its future purchasing power upon return. Thus, it has NEVER BEEN the direction of interest rates that determines the direction of assets, for they are historically linked and must be. Only a fool, indoctrinated by Marxist-Keynesianism, cannot grasp that the economy cannot be manipulated by interest rates. This is why doing empirical studies of these two factors on a correlation model reveals simply that the stock market HAS NEVER peaked with the same level of interest rates twice in history. The level of interest rates is indistinguishable from a option premium on the future expectation of that particular asset.

bank-robberThe Federal Reserve keeps talking about the “normalization” of interest rates. They will not come out and explain what I am doing right now because it would expose that the emperor is naked. The Fed sees that negative interest rates proposed by the legendary banking advocate Larry Summers who may have been an agent from Hell sent to Earth to wipe out the economy, are highly destructive and amount to a tax on money. Negative interest rates can only be totally destructive to all asset classes and furthers deflation to the extreme. People then would hoard money outside of banks to avoid the tax and this leads government on their quest to eliminate physical money and embrace the age of electronic money. That changes the entire game and embraces economic totalitarianism.

Gold-Fluctuated

These people are fundamentally destroying everything because they are clueless about what is really money. Both China and Japan rose from the ashes without gold, proving that the wealth of a nation is not its gold reserves, but the total productive capacity of its people. Returning to a gold standard will not provide some magical check and balance where assets still rise in value yet gold/money would retain its purchasing power. They are totally lost in the rambling of their own mind. When gold was used as money, it rose and fell just as anything else that has ever been money proving it does not matter what you use for money, the same result will always emerge – money is on the opposite side of money. If you cannot grasp this fundamental realization, then you are doomed to screwing up the economy and society big time.

Caesar-5The only politician throughout history who truly understood this fact of life was Julius Caesar. To solve the debt crisis, he realized that the value of money rose above what it once had purchased and the price of assets reflected in terms of money had declined. He realized that say when a banker lent you money to buy a home say $100,000, and the market crashes, a $100,000 can perhaps buy two houses. The banker then reaps a huge profit demanding full repayment. Caesar’s solution? He appointed a board to revalue all assets to the point when the debt was entered. He then attributed all previous interest payment to reduce that capital borrowing and therein settled all accounts. He revitalized the economy and ended the debt crisis.

Money is merely a reflection of its purchasing power. It has NEVER been historically a store of wealth and cannot possibly be under any circumstances where assets rise in terms expressed in money. For assets to rise in terms of money, that means money must decline in purchasing power. This is rather simple to understand. Money is simply a medium of exchange that fluctuates in purchasing power rising and falling based upon human activity. We are lost in understanding the future because we cannot understand the past and the role of money no less debt and interest rates, which are merely an option on the future expectation of the purchasing power of money.

The wealth of a nation is the total productivity of its people. If I have gold and want you to fix my house, I give you the gold for your labor. Thus, your wealth is your labor, and the gold is merely a medium of exchange. So it does not matter whatever the medium of exchange might be. You will give your labor provided you know someone else will accept the medium of exchange from you in purchasing something else. It is the labor of the people and their productive capacity that creates the wealth of any nation. Germany rose from the ashes in Europe to be the strongest economy without gold all on the back of the total productive capacity of its people. The same is true for Japan and for China. Where corruption prevailed as in Russia and they relied upon selling a commodity rather than the productive capacity of its people, then its economy has not soared as did China, Japan,  or Germany. This also explains the third world status of South America and Africa. When a country exploits is natural resources to gain wealth rather than educating its people, its long-term viability will diminish with the reduction in the supply of its natural resources or in the case of oil, against rising cheaper alternatives. We do not get this fundamental principle correct, we will destroy our economies with excessive taxation, which in turn, reduces the total productive capacity of its people.

Aug 23 2015

Say Goodbye to the Euro by 2016?


Re-Posted from Armstrong Economic  August 23, 2015 by

Electronic-Euro

Politicians never get enough and never tell the truth. Perhaps they are right and can fool the people in general. Expect this move soon in your country. They are pretending they need to grab every phone call, text, and email, for terrorism when in fact they are hunting money. So what do you do when about 10% of the European population do not have bank accounts? You force them to open one. (see Die Welt)

Claiming they are no just simplifying terminology, every EU member state has to implement a EU directive before the beginning of 2016 which “entitles” every citizen to have a so called “basic” bank account. Therefore, that 10% of the European population without any bank account who prevent moving to a cashless society not must have a bank account by the end of the year for it is now some new right of a modern society when in fact it is their way of raising taxes to ensure they get everything they ever dreamed of. This has to now be extended to Include this entitlement for all homeless and of course the asylum-seekers.

Say goodbye to all freedom. Embrace 1984 – it was just a little late. Maybe this is why we need someone like Donald Trump. Anyone who is not part of this awful crowd of career politicians out to destroy all freedom by their greed. This may be the ultimate reason when the Europeans turn and run back to the dollar.
Jul 13 2015

New Greece Bailout Deal With EU Requires More Cutbacks


More debt when they can’t pay what they owe now — how can this work?

Jul 7 2015

EU Gives Greece Five Days To Avoid Bankruptcy…


Maybe they should vote again the EU didn’t get the message … lol

Jul 7 2015

FUNDAMENTALS OF NATURAL LAW: Greece Is An Example Of What Happens When You Violate Natural Law


All of this is 100% true but I would not give a break to the EU they knew what the deal was and the bankers did as well — there are no innocents in this and all must pay the price.

Black3Actual's avatarTHE ROAD TO CONCORD

I am just going to assume that you are aware of the financial mess Greece has created for itself.  This is no one’s fault but Greece — all of Greece.  This means the politicians and the people.  This is not the fault of the bankers.  The bankers have finally come to the point where they realized that Greece was not going to pay them back so they stopped lending.  However, Greece has not stopped spending.  That is what the ‘crisis’ is all about: the people of Greece refuse to live on what they make, they are demanding to get what the politicians who bribed them for their votes promised.  The problem is, those promises (bribes) were made by placing a claim on other people’s’ money — a claim the Greek politicians had no authority to make.  So now, when the bills are due and there is no money to pay…

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