I just read a tech piece on USDJPY to potentially squeeze lower by a pretty good tech chap who just happened to have got most things wrong last year. Well, we cannot blame the chartists these days with the Intervention Mechanisms operated by central banks to keep things rosy.

My personal theory is that they believe if they maintain the calm, people will be lulled into believing the bullishness, turning it into a self fulfilling prophecy. People like myself.

The storm appears to be abating and who cares about North Korea’s antics and false bravado ? Who cares about the deadliest month in Syria ? Who cares about the bird flu deaths in China ?

An interesting piece from the Harvard Business Review sheds some light on the detriment trusting big data. I thought, likewise for headlines. A headline can change a bad China number into a good one. Instead of reporting that it was below expectations, it is deemed as expansionary in the wake of the previous month. And the celebrations begin.

My 3 week long struggle with USDJPY has come to fruition of sorts. We are at the 92 handle today, taking much longer than the week I had predicted. GOLD/EUR is also repeatedly testing the 1250 level, which is looking like the resistance.

Something in me tells me that my trump trade of the year could be the Gold trade. It is akin to the burning feeling in me Aug last year on the JPY. With Gold, it is the war of the central banks, the Printers vs the Print Nots. The Printers would have us believe that Gold is not worth anything to their print-out cash. The Print Nots does not want Gold to rally too much as they load up (notice China keeping quiet ?). There is not enough Gold in the world to back the paper Gold that we buy just as there are not enough trees in the world to print the US money supply on.

The markets are coming to a start soon, I believe. Disconnect between economic reality and valuations, coupled with heavy central bank involvement. The crisis of confidence has taken root and will soon spread its wings.

I am short S&P via SDS US, long Gold vs EUR, still short USDJPY for my target of 92 and looking to short AUD and long VIX. As for bonds ? They are not in the real world, they are in the Fed‘s world, a safe haven for only the right stuff.

Some thoughts on a rainy afternoon while waiting for my new Bloomberg account.

Related articles :

Dyslexic BoJ : Sell USDJPY short term : tradehaven

Major Risk Off Imminent To April : asianmacro

Peter Schiff stated “It’s the politicians who don’t like gold, because gold imposes discipline on politicians. It keeps them honest, and politicians don’t want to be honest. They want to get elected.”

Don’t you think it’s a sad testament to the mentality of the American people that politicians must practice dishonesty in order to be elected or re-elected? Whatever happened to truth, justice and the American Way.? Apparently, the government banquet of unearned benefits replaced these marvelous virtues. The warrior lives by earning benefits. He sees through the illusion of living at the expense of others.

It’s quite probable that by the year 2020 more than two thirds of the nation will owe their livelihood to the government. I’m sure you realize that that could cause some serious problems. Common sense tells you that one third of the population cannot possibly support the other two thirds. Of course, politicians and common sense are mortal enemies. Therefore, there is no doubt in my mind that the political establishment will continue to steamroll down economic demolition road.

Politicians love easy money. Hopefully, we all know that easy money creates an illusory boom that must end in economic misery—the same misery we have experienced time after time. The warrior believes in the joy of existence. He avoids traveling down misery road.

Politicians and modern bankers despise the gold standard. It puts the brakes on their endless creation of paper money. It prevents a nation from expanding the money supply in order to spawn wasteful programs.

Here’s what happens under the classical gold standard.

Too many dollars in circulation cause people to wise up to the fact that their paper money is now overvalued in relation to gold. Eventually, they begin converting their dollars, francs, marks, yen or whatever into gold. Soon gold begins rapidly flowing out of the treasury.

Do you get the idea? The government (central bank) must immediately quit inflating the currency or risk suffering the probability of holders of the overvalued paper money demanding redemption in gold, eventually depleting the treasury of all its gold. Obviously, the prospect of losing your gold and your power to foreigners or other interests is anathema to the political establishment. The only real and honest alternative is not to resort to inflation in the first place—which is an idea that causes dishonest politicians nightmares. Can you imagine the horror of not possessing the power to steal from Peter in order to give to Paul? Plain and simple, inflation is theft.

With the adoption of a 100% Gold Standard, the orgies of spend, spend and spend more until the nation suffers an irrevocable economic catastrophe would come to a decisive end. The American people would have to return to the days of actually living within their means, saving money—and completely forget about “prospering” at the expense of others.

I know. How cruel of me to suggest that it’s better to trade value for value than live at the expense of your fellow citizens. How dare I even suggest removing the government from the role of a Santa Claus. How could I be so depraved as to claim no one has a right to force innocent people to sacrifice their hard-earned wealth for someone’s unearned needs and desires? Well, a warrior lives by his own wits.

Let’s leap to the next logical step and eliminate all government interventionism. We must embrace the social system of Laissez faire (unhampered) capitalism. In addition, let’s get rid of social altruism and allow free enterprise to create a “society” of rational individuals. The warrior respects gold; because all we need is gold—and possibly silver for small purchases.

Robert A. Meyer
The Libertarian Way

“If you can issue a thousand pounds worth of IOU’s to everybody, you’ve got a thousand pounds for nothing” Paul Fisher, Executive Director, Bank of England.

“The financial crisis of 2007/8 occured because we failed to constrain the private financial system’s creation of private credit and money”

So um, let me get this right: if I create money by printing  a thousand pounds in counterfeit notes, I’m a criminal. But if my local bank creates money by extending a loan of  a thousand pounds – not by transferring existing savings from one account to another – but literally tapping in a few zeros after the digit 1, that’s ok, that’s legal because, well it’s a bank. Right?

Apparently so. Shocking as it may seem, banks don’t need to borrow money from a saver in order to lend  money to a borrower. Banks don’t need to have real money to make a loan at all. To get a bank loan, all they  need to do is open an account in your name, type in some digits and that’s it. When you next check your online statement, you will see a large amount of money in your account – which means you also have a large amount of debt.

And that is the critical thing – the basis of our whole economy is debt. At present only 2% to 3% of money circulated in the economy is in notes and coins. The rest is IOU’s of one kind or another that are sliced and diced into a dizzying range of financial products. But strip away the complexity and we find that almost every pound we need to run our shops, businesses, schools, hospitals and factories  must first be borrowed from banks. And while as  individuals, we may be hugely successful and amass fortunes,  collectively as a society we can never pay back that debt.

That is the extraordinary assertion in this video by Positive Money and it means that the efforts by our current government are no more than  a failed attempt to patch up a broken system. What we need is system change: take away the power of banks to create money and  create a stable money supply that is not based on debt. Ensure that this is done by an independent regulatory body that invests directly in the real economy, not banks.

These are two of the key suggestions made by Positive Money and while I am sure the granular picture is more nuanced and complex, let us not leave it to the experts to figure it all out. Not this time anyway. After all,  it was the experts – the bankers, mortgage advisers,  economists, investment experts and stockbrokers that drove the economy over a cliff in the first place. So what makes you think they know any better?

We all need to understand what is happening if we are to find a way back.

Elizabeth Warren just realized that the minimum wage should be $22 if it had kept up with economic growth. She suspects in her tender, socially conscious heart that greedy employers have been shafting the lowest level employees. But she’s laying her suspicions on the wrong bunch of people. She might want to read up on the currency debasement of the central bank, the command economy vampire that sits at the center of America’s supposedly free market economy.

Follow (The Debasement Of) The Money

Before 1965, quarters and dimes were 90% silver. Quarters from before 1965 are currently worth a little over $5 and dimes are worth a little over $2 based on the silver content.

But the government had to stop making money with any actual precious metals because the central bank had been debasing the money supply for decades to fund the expansion of the welfare/warfare state. Roosevelt first debased the $20 bill which used to be a certifacte for one ounce of gold, way back before 1935. Thirty years after the debasement of the paper dollar, silver coins had to be debased as well. A few years later in 1971 Nixon would legally and figuratively “remove” every scrap of gold from paper dollars. But first in 1964 all the silver was quite literally removed from all new coinage.

Minimum Silver Wages

The minimum wage was $1.00 from 1956 to 1960. It was $1.25 from 1963 to 1966. Keep an eye not on the dollar figures, but on the metal content…

The minimum wage in the two years before 1966 was five 90% silver quarters. That 90% silver $1.25 is roughly $25 in today’s money. Let me be clear: if the minimum wage had stayed at a mere $1.25 an hour and the central bank had not debased the money supply forcing the reduction or removal of the silver content, minimum wage workers would have been roughly two or three times better off today in terms of real purchasing power than they currently are with a nominal minimum wage nearly six times the nominal amount prior to 1966. Because of money supply inflation, the minimum wage is nearly six times as high…but buys roughly half as much…or less.

Put another way, a pre-debasement quarter can still buy you a gallon of gas…with change left over. A gallon of gas cost about 15 minutes of minimum wage labor in the early 1960s. Gas has actually gotten cheaper relative to gold and silver money since then. A minimum wage worker in 1963 could work for ten minutes, then send the wages of those ten minutes (two 90% silver dimes worth about four of today’s dollars) forward in time and buy a gallon of gas. It takes today’s minimum wage worker about three times as long to earn that same gallon.

Every nominal increase in the minimum wage after the silver was removed from the coinage has been a lie.

Real purchasing power of the minimum wage peaked in 1969. It should come as no great shock that was almost dead center between when silver was taken out of the coinage in 1964 and when gold “taken out of” the dollar in 1971.
Capitalism didn’t leave the bottom earners out in the cold. The central bank has been stealing from the poor and giving to the government and the well-connected.

So, to all you minimum wage-earners: a tiny percentage of the population is indeed stealing from you. But it’s not the “capitalists”. It’s the fasco-communist central bank on behalf of the US government. You’re getting more by government decree, but you can buy a whole lot less. Don’t worry, however. Every other wager earner at all levels is harmed, too (which is why it’s more important than ever for all of you reading this to get the best advice possible not just on how to keep inflation from picking your pockets, but also how to multiply your purchasing power in spite of it.)

Gary Gibson, The Dollar Vigilante’s Editor, cut his teeth writing for liberty and profit as the managing editor of the now-defunct Whiskey & Gunpowder financial newsletter. He now writes for and edits The Dollar Vigilante. In his capacity as managing editor of TDV’s monthly subscription letter TDV Homegrown, Gary insists on playing Russian Roulette by basing himself in the USSA heartland so he can round up information on how the TDV readers stuck in the USSA can best survive and profit in the increasingly turbulent times in the morally and financially bankrupt empire.

THE PARTING SHOT

Minimum Wage Is A Destructive, Fascist Price Control

Not that anybody with any economic sense or honesty would support a minimum wage. Lest anyone think that we are arguing for an increase in the minimum wage, let me be clear: we wish to see this panacea of the economically illiterate die once and for all.

I know it seems like a minimum wage is just creating a price floor for wages that prevents people from getting paid what illiterate, bleeding hearts would consider unfairly low wages. But some labor simply isn’t worth even that price floor! Just because the government says a job is worth $7 an hour doesn’t mean the job is worth that much. Governments are never ones to shy away from fighting economic laws, but they may as well decree that a man can fly by flapping his arms. The minimum wage simply means a lot of jobs of extremely low skill and economic worth simply get destroyed. No one bothers to hire the masses of young, extremely inexperienced or low skilled people whose labor simply isn’t worth the minimum wage.

A wage is just a price for labor. And price controls –including minimum prices for labor– always create scarcity. Sure, some people end up getting paid more to do what their job is really worth. But there is an equal or greater number of people who will not get hired as a result. It’s easy to see the million people who are happy to be getting paid too much for low level work…but not quite so easy to see the three million people who didn’t get hired because artificially raising the price of their labor to some arbitrary minimum caused the available work to become tragically scarce.

Think of it this way: why not just actually raise the minimum wage to $22 right now? And why stop there? Why not make it $220?

When you up the numbers, even the most economically illiterate fascist socialist understands that artificial wage controls would wreak havoc throughout the economy. Yet these people think that the economy can withstand just a little bit of fraud and tinkering…just a teensy bit of gun-backed distortion to help out the lowest skilled.

Fact is, it helps a few low skill workers while harming many more. But to be honest, the relatively free enough market is still robust enough to keep going along despite centralized, coercive controls like these. But shit doesn’t stop being shit just because there’s less of it. In the case of the minimum wage, all of society is that much poorer because of this government-induced scarcity of income for productive activity…but the most harm is done to the weakest economic players who never realize their professed defenders in Congress have helped them out of a job.

Regards,

Gary Gibson Editor, The Dollar Vigilante

Related articles

• A $22 an Hour Minimum Wage (slog.thestranger.com)
• What Do Washington State CEOs Know About the Minimum Wage that Other CEOs Don’t Get? (slog.thestranger.com)
• Elizabeth Warren Asks: Why Isn’t The Minimum Wage $22/Hour? (crooksandliars.com)
• Sen. Brown to call for increase in minimum wage to $10.10 per hour at Boardman restaurant (vindy.com)
• Proposed Bill Would Raise Arkansas Minimum Wage by $2 an Hour (arkansasmatters.com)
• Brown Touts Hike in Minimum Wage (wkbn.com)
• Democratic Senator Argues Case For $22 An Hour Minimum Wage Increase (washington.cbslocal.com)

What does that mean?  You use to page $1.50 for a gallon of gasoline, and now what are you paying?  Here in CA at a shell station close to where I ride the train, the cost was already $4.37.  What’s means the $1 in 2007 is now worth 34% cents today.  The price is showing you the true inflation rate.

I also see that reflected accurately in my pay buying less.  don’t you.  So what happen to truth in reporting.  The government doesn’t want you to think about it.  They are using it (inflation) to effectively decrease their debt, by making the money’s value decrease.  So if they own 17 trillion dollars, and they keep pumping money into the money supply, then they really only owe one third of the value of that debt.

Think about how that works for your debt.  Let’s say that you owe $10,000 and now you want to pay it off.  Well the drop in value of the dollar is great for you, because in real terms you are only having to pay 33 cents on the dollar, or $3333 for the $10,00o.  This works for all debts.

Weird how your debt is better than your earnings.  But that’s the scary part.  Debt is a promise, and you are not really paying what you promised.  It makes you a big liar, like the government.  No integrity, like the white house.

The rich corporations and banks don’t want to inflate things, but the government is over its head in debt.  Because what happens next is that everyone raises their price so they can have more value to cover the rising costs.  But, at the same time, the pay for jobs will go down, because the profit margins for the rich, the stockholders and the CEOs won’t go down.  They need  higher prices and lower pay to keep their greedy little accounts growing with worthless money.

In real terms, the government is owned by corporate america and the banks.  They are beholden to floating the economy.  Because of that, they lie constantly about what things are worth.    Lance Roberts has written a solid piece in how those figures have been compromised.

The fabric of American society is totally immersed in the deception.  This series of lies and alteration of consistency in reporting inflation; the fact that the media doesn’t report these adjustments shows that corporations have something at stake in not reporting it; the fact that what the American government did in bailing out the automakers, AIG, and the banks was totally illegal.  This huge system of capitalistic control of government where both parties are owned by wall street and the banks, really should spin your head.  This total disregard for the law shows you how bad the situation really is.

Corporate america has we the people by the balls.  They own the news media and the government in which most people trust.  As Ralph Nader stated, “

It isn’t just the government under the CONTROL of corporations–the government IS the Corporation now! The corporation IS the government!”

The Media you watch is controlled by corporations!

6 media companies

Suggested readings:

Aftershock by Robert Reich

20 biggest Donors for 2012 election — Mother Jones

Deadly Monopolies — P2P Foundation’s Blog

Ralph Nadar on Corporations

By Michael, The Economic Collapse

Why is the global economy in so much trouble?  How can so many people be so absolutely certain that the world financial system is going to crash?  Well, the truth is that when you take a look at the cold, hard numbers it is not difficult to see why the global financial pyramid scheme is destined to fail.  In the United States today, there is approximately 56 trillion dollars of total debt in our financial system, but there is only about 9 trillion dollars in our bank accounts.  So you could take every single penny out of the banks, multiply it by six, and you still would not have enough money to pay off all of our debts.  Overall, there is about 190 trillion dollars of total debt on the planet.  But global GDP is only about 70 trillion dollars.  And the total notional value of all derivatives around the globe is somewhere between 600 trillion and 1500 trillion dollars.  So we have a gigantic problem on our hands.  The global financial system is a very shaky house of cards that has been constructed on a foundation of debt, leverage and incredibly risky derivatives.  We are living in the greatest financial bubble in world history, and it isn’t going to take much to topple the entire thing.  And when it falls, it is going to be the largest financial disaster in the history of the planet.

The global financial system is more interconnected today than ever before, and a crisis at one major bank or in one area of the world can spread at lightning speed.  As I wrote about yesterday, the entire European banking system is leveraged 26 to 1 at this point.  A decline in asset values of just 4 percent would totally wipe out the equity of many of those banks, and once a financial panic begins we could potentially see major financial institutions start to go down like dominoes.

We got a small taste of what that is like back in 2008, and it is inevitable that it will happen again.

Anyone that would tell you that the current global financial system is sustainable does not know what they are talking about.  Just look at the numbers that I have posted below.

The following is the global financial pyramid scheme by the numbers…

-$9,283,000,000,000 – The total amount of all bank deposits in the United States.  The FDIC has just 25 billion dollars in the deposit insurance fund that is supposed to “guarantee” those deposits.  In other words, the ratio of total bank deposits to insurance fund money is more than 371 to 1.

-$10,012,800,000,000 – The total amount of mortgage debt in the United States.  As you can see, you could take every penny out of every bank account in America and it still would not cover it.

-$10,409,500,000,000 – The M2 money supply in the United States.  This is probably the most commonly used measure of the total amount of money in the U.S. economy.

-$15,094,000,000,000 – U.S. GDP.  It is a measure of all economic activity in the United States for a single year.

-$16,749,269,587,407.53 – The size of the U.S. national debt.  It has grown by more than 10 trillion dollars over the past ten years.

-$32,000,000,000,000 – The total amount of money that the global elite have stashed in offshore banks (that we know about).

-$50,230,844,000,000 – The total amount of government debt in the world.

-$56,280,790,000,000 – The total amount of debt (government, corporate, consumer, etc.) in the U.S. financial system.

-$61,000,000,000,000 – The combined total assets of the 50 largest banks in the world.

-$70,000,000,000,000 – The approximate size of total world GDP.

-$190,000,000,000,000 – The approximate size of the total amount of debt in the entire world.  It has nearly doubled in size over the past decade.

-$212,525,587,000,000 – According to the U.S. government, this is the notional value of the derivatives that are being held by the top 25 banks in the United States.  But those banks only have total assets of about 8.9 trillion dollars combined.  In other words, the exposure of our largest banks to derivatives outweighs their total assets by a ratio of about 24 to 1.

-$600,000,000,000,000 to $1,500,000,000,000,000 – The estimates of the total notional value of all global derivatives generally fall within this range.  At the high end of the range, the ratio of derivatives to global GDP is more than 21 to 1.

Are you starting to get the picture?

Every single day, the total amount of debt will continue to grow faster than the total amount of money until the day that this bubble bursts.

What we witnessed back in 2008 was just a little “hiccup” in the system.  It caused the worst economic downturn since the Great Depression, but global financial authorities were able to get things stabilized.

Next time it won’t be so easy.

The next wave of the economic collapse is quickly approaching.  A full-blown economic depression has already started in southern Europe.  Unemployment is at record highs and economic activity is contracting rapidly.

The major offshore banking centers in Cyprus are on the verge of collapsing.  It was just announced that they will now be closed until Tuesday, but nobody really knows for sure when they will be allowed to reopen.  And there is already talk that when they do reopen that there will be strict limits on how much money people can take out.

And now the IMF is warning that the three biggest banks in Slovenia are failing and that a billion euros will be needed to bail them out.

The dominoes are starting to tumble, and the United States won’t be immune.  In fact, the greatest financial problems that the United States has ever seen are on the horizon.

But you can just have faith that Ben Bernanke, Barack Obama and the U.S. Congress know exactly what they are doing and will be able to save us from the coming financial collapse if you want.

The mainstream media will provide you with all of the positive economic news that you could possibly want.  They are giddy about the fact that the Dow keeps hitting all-time highs and they would have us all believe that we are in the midst of a robust economic recovery.  You can listen to them if you want to.

But when you are tempted to believe that everything is going to be “okay” somehow, just go back and look at the numbers there were posted above one more time.

There is no way that the global financial pyramid scheme is going to be able to hold up for too much longer.  At some point it is going to totally collapse.  When that happens, will you be ready?

Related articles

• Fraudulent Guarantees; Fictional Reserve Lending; Comparison of US to Cyprus; What About New Zealand? (safehaven.com)
• They’ll Steal Your Savings, Too – Cyprus Tax (goldkingint.wordpress.com)
• JP Morgan now threatens the stability of the entire global financial system. (lunaticoutpost.com)

For those of you who are my elder readers, you should recognize the name Bialystock, one of the two main characters in Mel Brooks‘ brilliant broadway and film productions of The Producers. Their scheme, as you will no doubt recall, was to con little old ladies (through kinky sexual favours) into financially supporting a theatrical production that was sure to offend, and most especially and specifically, flop.  The government would not bother auditing the business transactions for a failed musical, they surmise, and as a result, they could take the little old ladies’ money and move to the tropics.

This same scheme has been going on for years in the world economy. Booms and busts are orchestrated. When the boom generates as much money for large corporations as can possible be made, suddenly there’s a deep recession and the intentionally bad business practices of the elites are rewarded with bailouts paid for by you and I.

Who are the Producers? There are many names. Rockefeller, Rothschild. The NWO. Bilderberg. If I missed any of you Lords of the Globe I humbly and sincerely apologize. Their game is in power, control, and money. He who controls the money supply controls the nation, James A. Garfield once said (I am throwing a lot of names at you, but you’ll get the idea). Or, as Max Bialystock and Leo Bloom would say, He who controls the little old ladies’ corsets controls the nation.

My point is that everything that happens in the economy is never by accident. Max and Leo’s arrest parallels that of Iceland’s way out of the Great Recession (jailing the people responsible), but for the rest of the world, Max and Leo live on, waiting for another boom and bust.  There is no such thing as humility in the Market, and from the looks of things today, that will never change. So when you see things happening in the economy, good or bad, think of Max and Leo. They’re the ones who are really pulling the strings. The only question that remains is, what will be our next Springtime for Hitler?

Related articles

• Mel Brooks on how to play Hitler (larkalong.wordpress.com)
• Next Stop Paradise at the Eco-Nomic Living Expo (nextstopparadise.com)
• Earth Station One Episode 151- The World of Mel Brook, Harrumph!! (erthstationone.wordpress.com)
• 10 Biggest Mistakes of the 20th Century (surfer53.wordpress.com)
• “I was born in Jerusalem and exiled by Titus” (bokertov.typepad.com)
• Next on Earth Station One.. (erthstationone.wordpress.com)
• Free expression, offensiveness, and sex (floridawriters.wordpress.com)
• Carl Reiner I Remember Me AuthorHouse (selfpubbooks.wordpress.com)
• Winter Games (litlove.wordpress.com)
• Rape Squads and Saudi Dollars (aworldchaos.wordpress.com)

As the days go on, I wonder to myself why most of us exist, and what we were meant to do with our lives.  For most you put your lives in the hands of a higher power, most of ya’ll put your lives into your own hands.  That may be fine and dandy, but what if we were all just co-exisiting to go to school, get a higher education, get a job, and make money, and have a family.  Although making money and surviving this “inhumane” world could also be called, living “The American Dream.

Money, at one point in my life, was so important to me.  I have learned from my parents that money isn’t everything.  You may work as hard as you can, and get all the money you want, but is that what really makes you happy?  If yes, sorry to say but you are one shallow human being. Actually Im not all that sorry.  I can honestly say I used to be in that place.  Like most people, there are tons of things we could be doing with our lives, but 95% of the things we like to do, or would die to have the privilege of doing, cost money.

There is a girl I know, she is in a dark place.  I wouldn’t say she was obsessed with the fact of having money, just a little bit excited of paying off debts.  Although in her very sad life, she considered the most un-mentionable things.  How would you feel if a friend would go to the extent of selling drugs, or even herself to get the money she needed.  Yes, I know, the thoughts are un-bearable, but what if what we are living for isn’t what he thought?

Drastic thoughts I know, but just bear with me.

When people crave for money, but they don’t want to work hard for it, that is when temptations set in and money becomes sinister.

-Put your life in God’s hands.

coin-dollar (Photo credit: David Guo’s Master)

“Money is an idea backed by confidence.”- L. Ron Hubbard

I found a lot of truth in this statement. A lot of people when you ask them what money is will tell you that it is a dollar, or a coin that a country has or uses for transactions. (And that is if they are intelligent enough to know that, and do not just say a buck, or denero.) I saw that this was true by observing how much the value of the U.S. Dollar has dropped. Over the years due to the estimated inflation rate of the United States, the amount of goods that the dollar will buy has dropped drastically. This is based on a lot of different factors (keeping in mind that I am just a self-educated college drop out who used to sleep through Economics) consisting of the laws of supply and demand, population growths, debt, and consumer rates. All of these factors dovetail together and form the basis of the money system that we have established. For example, if I have 100 bullets and I sell them for $50.00 USD then that means that the price per bullet is $.50. If there is a dramatic demand based on some event that occurs and the demand drastically outweighs the supply, then you can expect inflation to kick in or hyper-inflation in some places, and the price per individual unit will increase based on this quotient of supply/demand. So now that bullet that was $.50 will not sell for $1.00/bullet, so that lot of 100 will now be an even $100.00 USD.

Now, you may be reading this going well duh, everybody knows that, but as I am a tutor and a course room instructor in a Church, you would be shocked with how many people I run into that cannot put 2 and b together on that one. The math is above them. Which leads me into the second part of the equation and what dramatically influences everything from job creation to the political system that everyone is bickering about. Education!

The current level of education in the society today is so slipshod and poor that one has to just shrug their head and shake it in disapproval. I have ran into a lot of different 20-40-60 somethings that could not adequately read a paper, and then pass a check on what the different definitions of the words meant. This is a dangerous foreshadowing of where the future of our country is. When the bulk of the people around you cannot adequately read or compose a logical sentence, or even write legibly, then you know that you are in trouble. This is due to an educational system that is set up to fail with such areas as “no child left behind” and other such policies.

If you were to fundamentally change the educational system and make each student accountable for what they were doing, and made them apply what they were reading to the world outside, you would be amazed at the shift that would occur in the job force and thus stimulate the economy and raise the level of comprehension and competence in the young people of today.

Now, how does this tie back to money? I’ll get to that now.

If you were to clear up the above definition with everyone that you ran into, and really got them to see how this is, then you would then have people who would be less inclined to see the devaluation of the dollar, and they would see how this happens. Such things as the amount of printed money in circulation, and how minting more does not solve the problem, but makes it worse, or that minting a trillion dollar coin is just like walking around and trying to order a subway sandwich with Monopoly money. They would begin to see that if I am an individual with a real skill or have a real product then I can exchange that with another person for some other good or commodity that they have and I find exchangeable. This is the main problem with today. The world we live in is so digital, that the young people of today are only proficient in using computers, and, aside from me feeling like a caveman and this blog stretching the limits of my computer knowledge, making products that are increasingly less intangible. Thus, the flat ball bearings of our society are given the “menial tasks” of fixing roadways, and bridges, and we are surprised when the quality of these things is poor, and ill planned.

So to sum up and hopefully tie my thoughts together. You can see above, that when one really understands the above definition of money, it sill help to sort out all of the misinformation put out there by the current news sources, and through ones own study, can lead one to his own understanding of the subject of money.

Thanks for reading! Like this? Like it and share if you do!

It really seems like a peculiar question anyway, doesn’t it? After all, in a market economy no one is asking what is the optimal supply of socks or hammers. So why ask this question about money? Let us assume that a society has selected gold as its money. Any increase in the supply of gold in the money stock will have inflationary effects, i.e. there will be more money chasing the same amount of goods. This does not mean that no one should mine gold anymore. Gold will still have some limited industrial use, use as jewelry, crowns in dentistry, etc. But no more gold is required in the money stock.

Now, since gold is relatively expensive and laborious to mine, and because it is extremely durable, any increase in the gold stock in a given year will be very small compared to the total above ground stock that has been built up for thousands of years. A healthy and vibrant economy will be producing more goods and services at a rate faster than the increase in the gold supply. Thus, the result will be a gradual fall in the price level and stable wages, although these wages will be higher in real terms. Everyone in the economy will be better off over time. With the value of money slowly increasing there is an incentive to save and invest; this will lead to excess capital accumulation and even more increases in productivity and real wealth. A virtuous cycle will be born. This was the process in the United States for much of the 19th century and the early part of the 20th century. The exceptions were periods of war when the government printed money to finance the wars and inflation took off. After the wars were over, prices would come down again.

Sadly we have been so conditioned in the present economy to view falling prices as a bad thing. As if it is bad for our dollars to buy more goods! This is preposterous. The falling prices in the fictional economy explained above were not due to a depression but rather a rise in productivity above that of the rise of the money stock. Similar to prices in electronics and computers falling over the past several decades, this is not a bad thing at all. Profits will not fall with falling prices because productivity has increased to compensate for it.

And thus, in less than 500 words we have destroyed both the Keynesian and monetarist views of the money supply.

What if U.S. workers were paid more as the nation’s productivity increased?

If we had adopted that policy decades ago, the minimum wage would now be about $22 an hour, said Sen. Elizabeth Warren (D-Mass.) last week. Warren was speaking at a hearing held by the Senate’s Committee on Health, Education, Labor and Pensions.

Indexing the minimum wage to productivity?  Brilliant!!!  Now instead of 7.7% unemployment, we would have 15-20% unemployment!!!  Because, you see, companies will either increase prices to raise revenues to the level where they can afford to pay $22 an hour, or companies will not hire someone unless their work results in revenues of $22 an hour for the company.

I don’t know a lot of workers who are productive enough to earn $22 an hour for their companies.  And hey, why stop at $22 an hour?  After all, if $22 an hour is good, then $110 an hour is 5 times as good!!!  Hey, this economics stuff is easy!!!

Rather than jerk around with statistics, how about we point the finger at the real culprit, Senator?  Here’s a hint:

If the Fed wasn’t inflating the money supply and destroying the value of the dollar, we wouldn’t need a higher minimum wage.

PEOPLE, PLACE &TIME

Our existence in the real world can be viewed to be made up of three components: people, place and time. If one of them is missing in any judgement or assessment of mans’ state then that assessment is likely to be erroneous. Only on an abstract level will it have any validity but that is not the real world.  This simple but big idea (three components) seems to be lost to the academic world. It emerges in a derivative form, in journalism in the questions: who, what, why, where, when & how but they miss the wood for the trees.

In the first post ’Money is Reification’ we showed that money is an abstract. As such it can be manipulated into any course based on acceptance of created initial assumptions. This is of course what is happening in the banking and financial sectors. In the build up articles we looked at how banks multiply money, not even their own, and lend those multiples to other people and charge them interest and fees. The financial sector create artificial instruments and then sell them to others and in the case of ‘Derivatives’ the ‘Credit Default Swaps’ originally worth about $350 trillion until the aberration of confidence was lost, they then crashed and no one really wants them now.

Previously we looked at the ‘real economy’ or the production of goods and services and we looked at the ‘money supply’ or artificial economy that should facilitate the real economy.  The money supply fails too often and for too long, whilst those operating the money supply are generally very wealthy. For me their wealth is not a problem but what is a problem is the depravation of so many people who are under paid or deprived and without work because the money is not around to fulfil their needs and their desire to work to fulfil those needs.  It is well known that just about everybody wants more than they have, so the demand is there. It is also well known that most companies can and want to supply more of their goods and services, so the supply is there. They are just not being allowed and matched up. This is the fault of the money supply. There is both ignorance of how to get the money supply to work and there is money to be made by some in it not working. This is what needs attention and solving. This is a major issue.

The American Central Bank that is the Federal Reserve Bank is not owned by the Government it is a private institution. It is owned by other banks such as JPMorgan, Goldman Sachs, Chase Manhattan and others. Needless to say when they advise government they make sure it benefits whatever schemes the owning banks have got going at the time or are in their pipeline. As America has been and probably still is the most powerful economic force in the world it can solicit agreements and compliance from other bodies (companies etc.) as well as countries around the world to do its bidding, using the carrot and stick method. There is a long established relationship between the Bank of England and the American Federal Reserve Bank. It goes way back to the Rothschild Bank and its influence on the Bank of England with the original Mr. J.P.Morgan being an employee of the Rothschild Bank. Morgan , dare I say it, learnt the fiddles and opportunities to be had in the banking system and set up in America and built relations with his connections in the Bank of England.

If you look around, how many countries now have an ex Goldman Sachs employee running its financial affairs? Greece and Italy both have and are being so called rescued by ‘IMF’ and other institutional money. Britain’s new head of The Bank of England, a Canadian, and Mark Carney is also ex Goldman Sachs. Is  this goodbye England? Our assets are soon to be gobbled up by the American elite as has been the fate of Greece recently and countries like Argentina in the past. Keep laughing, because his appointment is a good indicator that many of you are f***ed.

Another simple but big idea that is buried under a mountain of deceits and deviations is:- ‘ The Wish is The Most Powerful Thing in the World’. When enough people wish the same thing it must eventually come about. However, as other political commentators such as Noam Chomsky have stated – “America wants compliance and countries that show defiant independence are punished”. This is not surprising when you have the American elite putting out their ‘Policy for the new American Century’ which states “Military Dominance of the World & Economic control of the World” It is, also, extending this to its own citizens despite the freedom of speech constitution etc. Oppression and Tyranny can work in small doses but it will be overrun by the people when there are enough of them opposing it.  When you couple the wish is the most powerful thing in the world with the majority of people wishing something thereby holding the greatest power, it becomes obvious that the only practical political system is Real Democracy.

What of all the self contradictory wishes that people have? I hear you asking. This is a matter of the necessity for self control coupled with individual psychological development. Mind fitness and health are as necessary as physical fitness and health. Governments ignore this because they cannot carry out their propaganda campaigns and maintain psychological honesty and thereby health. That is contributory to why 30% of Britain’s population has a psychopathology per person every year.        On a larger political level individual contradictions are overcome by all the people voting on the country’s main issues and laws.

Market driven collapse and the 1930s example was looked at and the big idea of ‘Confidence’ and the devastating effect the loss of it had and can have on the market and the economy. Currently we have a similar condition with competition from, what was once classed as, the third world that is taking away the growth market from ours and most western economies but taking market share from the basic economy also. Thus western economic recovery is unlikely. We looked at the synthetic economy that is the financial industry and saw that money build up was inflating share prices and propping up trust in government bonds despite the huge debts that governments have. How much of a debt does a government have to own before investors say “we are not buying any more bonds”? Financial institutions know if there is a bond collapse then there will also be a stock market boom because the money taken out of bonds will be put into shares the only other place for the money to go is holding it in cash .With less than 1% interest rates that is not an investment option only an investment loss. Non western and third world exchanges are a possibility but that is handing over economic power and some control to those countries, which is something the USA and its elites do not want, it is contrary to their aims.  What then if stock prices inflate? That appears to be a good thing? In the current context it isn’t. This is because most share prices are already in excess of the true value of the respective companies. Investors will eventually realise that their shares are overpriced and fear of falling values will precipitate selling. How do you reinvest money when there is nowhere to go with it? Mass panic and selling should set in. Financial institutions realising all this are and will try to stabilise the market and prevent mass selling.  As long as they can artificially maintain this the market will not collapse. However if confidence in bonds collapses then the market will fail.  When is that likely to be? After all the government debts are rising dramatically and have been for some years and Japan has been in this situation for a couple of decades. Japan has survived because other western countries gave it alternative investment opportunity. But currently all western countries are in the debt problem, it is global.  Thus if we don’t invest in the so called third world countries then economic collapse will follow as described above. To repeat then the crux of the matter is in the failure of confidence in Government bonds and when will that happen and what will cause it?  Many people are saying it will come about through currency wars. That is countries will deflate their currencies so as to be able to offer cheaper goods and thereby exporting more of their own produce whist inhibiting imports. Of course some countries will lose market share and economic decline ensues. In a global economy there can  be significant losers. This currency war has begun with Japan deflating by about 30%. Britain by about 10%. More will no doubt follow. If the real economies decline as a consequence then company values will decline and along with it their share price. If this is widespread then the stock market could fall significantly, as previously described, setting off a mass selling scenario. With this collapse, then in its wake, people will be storming banks for their money.

One thing must be realised in all this and that is that the American Government and the American Power Elite are not the same thing. The latter uses the former and will gain its advantages at the expense of the American people and any other country or people in the world. They will pick up everything cheap when it collapses.  See the Argentinean collapse. For example 50% of Argentinas’ agricultural land was bought by US companies and converted to genetically modified soya production.  If you have the information access then see Greece and the current cheap buyouts.

MIND

Mind is the biggest factor of the three components of the real world. The minds imagination can out multiply anything that exists in the world an infinite number of times. The academic obsession with proof will always reduce our existence to a level of ignorance that physical evidence demands. In other words the truth will always be outside of the academics grasp.  E.g. Economic models and The Law will always be inadequate for they do not address people (in particular the mind) place and time.  These three components are dynamic, unpredictable and in the case of people irrational. Morality is dependent on these three components they cannot be subordinated to a rule they must determine the rule. The man made law of the land is contrary to this.  This is not an abandonment of Law and economic theory but they must be put into true perspective and their inadequacies addressed.

From looking at the power of the wish, what are going on in people’s minds and then manifests is what rules. The occasional natural disasters accepted. Power cliques can rule as long as they have acquiescence. They have managed to do this on a wide scale through history. Mostly through persuasion under threat with collective hysteria playing a part. Today by propaganda and information deceit along with punitive contingencies. People, however, are increasing in intelligence and in the realisation of being controlled. Law is only considered to be valid, by scholars of Jurisprudence, if it improves people’s freedoms, usually by common cooperation. Not surprisingly laws that benefit self interest groups only or are there for the convenience of administration won’t last and are commonly abhorred. Government cliques (such as our MPs) or private companies such as those that own the American Federal Reserve will always screw up the money supply through self interest. This is true wherever cliques rule over the populace. Cliques must be held in their true place.

Maximum freedoms are achieved by common choice. That is by True Democracy.

See my book ‘DEMOCRACY: THE CON OF THE CENTURY .                               By   G.M.SOLON

China’s money supply has already exceeded the amount sufficient to sustain the economy, said financial columnist Yu Huifong. Since the ideal money supply is around 1.5 times higher than GDP, it should be around 75 trillion yuan (US$12 trillion), Yu said, adding that excess supply could push up commodity and property prices and hurt consumers. Read More, Want China Times

What is the Federal Reserve anyway?

We hear about it all the time but what do we really know about the Federal Reserve? If you take a one, five, ten dollar bill etc., and look at the top, it clearly says, “Federal Reserve Note.”

Anti-Federal Reserve folks argue that it’s a private entity run for profit. Pro-Federal Reserve people argue that it’s separate from the government operating within it, and that money should not be part of the political process. Of course, saying that something is independent but “within in it” is what George Orwell called “double think” and “double speak.” That’s a common tactic of any dictator or oligarchy.

“The Federal Reserve System fulfills its public mission as an independent entity within government.” “As the nation’s central bank, the Federal Reserve derives its authority from the Congress of the United States. It is considered an independent central bank because its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government, it does not receive funding appropriated by the Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms.

However, the Federal Reserve is subject to oversight by the Congress, which often reviews the Federal Reserve’s activities and can alter its responsibilities by statute. Therefore, the Federal Reserve can be more accurately described as “independent within the government” rather than “independent of government.”

Source: http://www.federalreserve.gov/faqs/about_14986.htm

The Federal Reserve is Independent

Does it really matter if it’s “independent within government,” or “independent of government?”

in·de·pend·ent

[in-di-pen-duh nt]

adjective

1. not influenced or controlled by others in matters of opinion, conduct, etc.; thinking or acting for oneself: an independent thinker.

2. not subject to another’s authority or jurisdiction; autonomous; free: an independent businessman.

3. not influenced by the thought or action of others: independent research.

4. not dependent; not depending or contingent upon something else for existence, operation, etc.

5. not relying on another or others for aid or support.

Source: http://dictionary.reference.com/browse/independent

So, the obvious question is if it’s independent, then how is it within Government? The answer is that it cannot be both things simultaneously. It’s a technicality that Congress questions the Federal Reserve chairman, currently Ben Bernanke, from time to time. It’s also a technicality that the Congress can change its responsibilities. If Congress were to alter what the Federal Reserve does, it would basically cease to exists in its current form which is to expand and contract the money supply for member banks, which they call “depository institutions.”

The Federal Reserve’s job is to expand and contract the Money supply to the benefit of its large private bank shareholders.

This expansion and contractions of the money supply is where the shareholder banks benefit from the creation of money, but not from the stock itself. Can you see the careful wording the Federal Reserve is using to confuse the issue?

“The Federal Reserve exercises considerable control over the demand for and supply of balances that depository institutions hold at the Reserve Banks. In do doing, it influences the federal runds rate, and ultimately, employment, output, and prices… The Federal reserve implements U.S. monetary policy by affecting conditions in the market for balances that depository institutions hold at the Federal Reserve Banks”

Source: http://www.federalreserve.gov/pf/pdf/pf_3.pdf

The Shareholder’s of the Federal Reserve are Private Banks

pri·vate

adjective

1. belonging to some particular person: private property.

2. pertaining to or affecting a particular person or a small group of persons; individual; personal: for your private satisfaction.

3. confined to or intended only for the persons immediately concerned; confidential: a private meeting.

4. personal and not publicly expressed: one’s private feelings.

5. not holding public office or employment: private citizens.

Source: http://dictionary.reference.com/browse/private?s=t

“The 12 regional Federal Reserve Banks, which were established by the Congress as the operating arms of the nation’s central banking system, are organized similarly to private corporations–possibly leading to some confusion about “ownership.” For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.”

Source: http://www.federalreserve.gov/faqs/about_14986.htm

So, it’s made-up of member banks that are private. It’s independent, and it’s structured similarly to private corporations. Therefore, it’s a private central bank with immense power to expand the money supply and skim enormous profits at the front-end of the expansion. This is also known as counterfeiting. We have an economy that is run by a giant private counterfeiting ponzi-scheme.