Sunday, January 5, 2014

Gold Will Break Below $960 – It’s in the Script

As gold broke below the psychologically important level of $1,200 an ounce late in December of 2013, the mainstream financial media burst with headlines like this one from Marketwatch, "Gold’s Safe-Haven Role is Over".  The Nobel prize winning economist from The NY Times, Paul Krugman, penned a wicked missive on the ‘barbarous relic’ by invoking Keynes and the absurdity of miners going to “great lengths to dig cash out of the ground, even though unlimited amounts of cash could be created at essentially no cost with the printing press.”

The basis of a vibrant and dynamic society is an open and free marketplace where people ‘vote’ with their decisions on where to spend money, where to live, what to read, who to vote for, etc.  In the United States, a good example of what occurs when decisions are centralized is healthcare and education-  the key decisions are made outside the mainstream of the marketplace and the country ranks far below the rest of the developed world, even behind countries with considerably less economic wealth.  As central planning and regulations remove potential players and solidify the positions of special interests, the quality of education and healthcare has plummeted.

So what does this have to do with the price of gold?  Everything.


Thursday, December 26, 2013

Vladimir Vladimirovich and the Grey Lady

Bill Keller, editorialist for The NY Times and former executive editor of the paper, has recently penned a strong attack on Vladimir Putin arguing that Putin’s leadership “deliberately distances Russia from the socially and culturally liberal West”, describing the Kremlin’s policies as “laws giving official sanction to the terrorizing of gays and lesbians, the jailing of members of a punk protest group for offenses against the Russian Orthodox Church, the demonizing of Western-backed pro-democracy organizations as ‘foreign agents’, expansive new laws on treason, limits on foreign adoptions.”

Keller, who during his tenure as executive editor of The NY Times argued for the invasion of Iraq and wrote glowingly of Paul Wolfowitz, makes no mention of Moscow’s diplomatic maneuvers that successfully avoided a US military intervention in Syria or the Russian asylum given to Edward Snowden.  Keller, who had supported the US intervention in Syria by writing, “but in Syria, I fear prudence has become fatalism, and our caution has been the father of missed opportunities, diminished credibility and enlarged tragedy,” also made no mention of Seymour Hersh’s stinging dissection of the Obama administration’s misinformation campaign regarding the sarin attacks in Syria.  Hersh’s piece, which drives grave doubts into the case against Assad actually having carried out the attacks, was not published in The New Yorker or in The Washington Post, publications that regularly run his work.

Friday, November 29, 2013

JFK and 9/11: The Common Threads

Criminals leave signatures.  There is consistency in their motives, methods, alibis and techniques.  A detective from the Spanish National Police said that investigators knew within minutes of reaching the mangled remains of commuter trains in Madrid where almost  200 commuters were killed that the Basque terrorist group ETA had not carried out the attack-  a fact which was concealed by the Spanish government for several days in a vain attempt to save an election.  The investigators immediately saw that the signature was wrong; it just didn't smell right.

President Kennedy was murdered on November 22, 1963 and less than two years later American Marines entered South Vietnam beginning the US intervention that would end ten years later with the fall of Saigon and millions dead.  Less than two years after the September 11th attacks in New York and Washington, the United States began the Iraq War, which would end eight years later with the withdrawal of the coalition forces, leaving Iraq destabilized and clearly within the sphere of Iranian influence.

Apart from the similar aftermaths, both events have common elements both in their buildup and execution as well their social ramifications.

Monday, November 11, 2013

From the Summer of Love to the Arab Spring

Those who believe that the world of being is governed by luck or chance and that it depends upon material causes are far removed from the divine and from the notion of the One.
— Plotinus

On May 27, 2010 the planet Uranus entered Aries and in December of that same year, in Tunisia, Tarek Bouazizi self-immolated himself after his electronic scale and the fruit he had bought on credit were confiscated from him by a corrupt policewoman.  That spark sent flames throughout the Middle East, toppling regimes from Libya to Yemen.  Uranus would make its definitive entry into Aries on the fateful day of March 11, 2011, coinciding almost to the hour with the earthquake and ensuing disaster at Fukushima.  Aries is the first sign of the zodiac and the most self driven while Uranus is the planet that represents revolution, innovation and change- together they make a radical, ego driven cocktail.

Uranus reflects many of the traits of the time it was discovered, 1781, when the American Revolution was in full bloom and the French variant was ready to boil over.  The last time the restless Uranus had passed through the cardinal sign of Aries was between 1927 and 1935, a time when two of the most revolutionary (Uranus), and megalomaniacal (Aries) leaders in history consolidated power.  Uranus will not definitively leave Aries until March 6, 2019, by which time the world will have undergone profound changes.  We cannot say with certainty whether another calamitous dictator will appear on the world stage, but, at least in the West, we are devoid of inspired political, cultural and spiritual leadership and someone with exceptional qualities could become the focal point of a world thirsty for meaning and direction.

Saturday, October 19, 2013

Somtimes a Man Stands Up During Supper

Paula Modersohn-Becker.Rainer Maria Rilke, 1906
by Rainer Maria Rilke

Sometimes a man stands up during supper
and walks outdoors, and keeps on walking,
because of a church that stands somewhere in the East.
And his children say blessings on him as if he were dead.

And another man, who remains inside his own house,
dies there, inside the dishes and in the glasses,
so that his children have to go far out into the world
toward that same church, which he forgot.

(Selected Poems of Rainer Maria Rilke trans. By Robert Bly)



Monday, September 30, 2013

A Bad Month for the the Dollar

September was not a good month for the U.S. dollar.  The world’s reserve currency is sustained in large part by the Petrodollar, the agreement by the Saudis and OPEC to price oil in dollars and only accept dollars for payment.  The US gets a guaranteed demand for its fiat currency and in exchange the US has agreed to protect militarily Saudi oil fields.  However, after President Obama was forced to back off his plans to attack Syria in support of the Saudi backed insurgency fighting the Assad regime, one of the pillars of the Petrodollar scheme was shaken to its core.
 
If America has no more stomach for war in the Middle East, how certain can the Saudis be that  America will protect the regime militarily if the need arises?  Now that the President has acquiesced to public opinion in his decision on whether to use military force, can he be counted on in the future to hold up his end of the bargain in the Petrodollar scheme?  The United States may have by far the world’s largest military, but what use is it if it can’t be used?   And even when it is, seven years of war in Iraq  has done little more than bring the country under the influence of Iran.

Sunday, September 8, 2013

Syria and the Swinging Pendulum

The Tide has Changed 

Since 9/11 the state’s power has grown exponentially and it’s ability to wage war and infiltrate a digitized populace has reached epic proportions, but the pendulum has reached its apogee.  The Obama Administration has made a terrible miscalculation regarding the public’s reaction to it’s proposed military intervention in Syria and it appears the President will not be able to garner the votes needed in congress to pass the resolution in support of his plan to attack Assad.

As Private Manning sits in a prison cell and Eric Snowden lives in exile, AIPAC is working tirelessly to lobby congress to pass the war resolution, but the public’s heart is with Snowden and Manning, not Netanyahu.  If Obama and AIPAC lose this vote their grand plan to confront Iran’s nuclear aspirations will crumble.  If Americans reject a military intervention in order to punish Assad for his supposed use of WMD’s,  how will they ever support taking on the Iranian regime for just having them?  This is not the same America that re-elected George Bush in 2004.

Sunday, August 18, 2013

Trayvon and the Matrix

The Trayvon Martin affair was one of the most important media events in recent memory.  The major networks spent endless hours of prime time discussing it, but what made the episode so exceptional was who benefited from the incredible amount of coverage.

At the heart of the story were two young men who both made poor decisions- one died, and the other almost wound up in prison for life.  But is this so exceptional in America?

In fact, it’s all to common.  Data from 2008 shows that more than four minors (under 18 years) were murdered a day in the US- four Trayvons a day.  Was it the racial aspect of the case that was so exceptional? Yes, but not for the obvious reasons.  More than 80% of interracial violent crimes are black on white, which would make one think it more likely that a black on white crime would galvanize the nation, but that wasn’t the case.

Most reasonable people probably saw the tragic elements as the most outstanding feature of the Trayvon/Zimmerman encounter.  Both young men let their pride get the better of them. If only Zimmerman had stayed in the car, if only Trayvon had not began an altercation. The story is filled with the regret of how we weave our own demise- true tragedy.  But the media wanted to make this a racially charged issue, but for whose benefit?

Tuesday, October 11, 2011

The Infomocracy Dilemma: Revolution or Disengagement?


A very small yet conscious minority has come to the realization that the current world regime is one giant corporate infomocracy that needs to be terminated with “extreme prejudice”, disengagement being the weapon of choice.  The next revolution will not be carried out by mobs of angry people, guerrillas, terrorists or, god forbid, politicians.  It will be accomplished by a small (10%) militant minority that will simply unplug the matrix.



A Very Condensed Case for Revolution

An enormous, dictatorial corporate cartel is ruling the world through its proxies in government, banking, academia and media.  Our entire western culture has become an insidious farce with the sole purpose of maintaining the enslaved masses in their conjured up democracies, religions and histories.  Two developments have increased its control exponentially:  globalisation and the information revolution. 

The world is entering the final acts of a great social, political and economic shift.  The international currency regime, the keystone of control,  is peering into the abyss; the middle east is being turned upside down; the bankrupt United States government is fighting several wars and maintaining more than 560 military bases in over 120 countries.  The insatiable greed and desire for world control have created a breach in the system.  People are becoming aware while their masters scramble for control as the chaotic climax approaches.

Thursday, September 15, 2011

Zionism vs Dominionism

Both Eric Cantor and Michele Bachmann have extreme religious views.  In Cantor's Zionism  God expressly desires a piece of land in Middle East be ruled and occupied by Jews.  Bachmann's  Dominionism asserts that Christians should play a special role in the American Republic.  However, the major news outlets have treated their religous beliefs very differently.  While it is open season on Bachmann, Cantor's Zionism is off limits.  In a bizarre marriage of extremism, Zionism and Dominionism are joined at the hip; one never speaking a word against the other.  But which one is truly dangerous for America?

Michele Bachmann

David Remnick, editor of The New Yorker, and Jann Wenner, editor of  Rolling Stone, have a problem with Michele Bachmann’s religion.  Two recent articles by both magazines focused almost exclusively on her religious convictions, which, in the words of Matt Taibi make Mrs. Bachmann “batshit crazy. Not medically crazy, not talking-to-herself-on-the-subway crazy, but grandiose crazy, late-stage Kim Jong-Il crazy”.

Recent American history has for the most part avoided deep discussions regarding the "validity" of personal religious beliefs in politics.  This is no longer the case and a can of worms has been opened by The New York Times, The New Yorker, Newsweek and Rolling Stone that will have implications for all the political forces in Washington, not just the Christian right.   

Taibbi’s piece came out first, and he painted her  in very Taibbiesque colors as a politically shrewd religious fanatic. The copycat hatchet job in The New Yorker came off as boring and tactless with far too much cringe factor.  Ryan Lizza’s 8,500 word piece began with the shocking revelation that the middle aged Bachmann is careful not to be photographed in casual clothes.

The New Yorker of years gone by could have summed up Michele Bachman's religious beliefs with a terse sentence describing how God spoke to her and told her to become a tax attorney for the IRS: enough said.  The remaining 8,450 words could have been spent on William James or the origins of Lutheran communities in Texas.


Thursday, August 11, 2011

What QE3 Will Look Like

The recent financial fireworks in the US and in Europe have made it clear that QE3 is close at hand.  The third installment described herein is much more than just another revving up of the printing presses, as it will involve a paradigm shift intent on restoring currencies and maintaining the current  power structure.

It's an all too common mistake to see the central bankers and their mainstream media propagandists derided as incompetent fools.  These “fools”control the money and the message and it's their game to lose.  Most pundits think the powers that be have lost control and can do little more than kick the can down the road. They are wrong.  We are about to witness one of the greatest orchestrated events in human history; a monumental sleight of hand that will restore economic prosperity, keep the masses happy and most importantly- maintain the parasitic elites in power. 

Tin Hats or Tin Men

Mainstream sources deride conspiracy theorists as simpletons unable to  deal with the complexity of the world;  the tin hat crowd are in need of a “God” or “bogeyman” to explain the evils of the world.  The sophisticated academics and journalists tell us that history is the product of countless interests fighting for limited resources. The cabal of bankers is nothing more than a mirage conjured up in the thirsty imagination of simpletons.

If one wears a shiny tin hat then the problem, and the solution, are very different: the 1%  crowd have created an enormous pyramid scheme supported by magnificent lies preached from schools, televisions, governments, churches, newspapers, universities and the like.  The mission is to wake up their brothers and the whole misbegotten scheme will melt into a sea of crisp consciousness.

What is is not in doubt is that the world reserve currency is nearing the end of its viability at least in its current form. The only other two options, the euro and the yen, are in as bad or worse shape.  The end game has arrived for the current monetary system which began with Bretton Woods in 1944. The sub prime crisis, the Fukushima earthquake and nuclear disaster and the PIGS (Portugal, Ireland, Greece & Spain) were the final nails in the coffin of the dollar reserve system. 

Sunday, July 10, 2011

Who's Afraid of Ron Paul?

Congressman Ron Paul
Bankers, War Mongers, Drug Dealers, The New York Times, The  Military Industrial Complex, the Neo-Cons, The Wall Street Journal, The DEA, Organized Crime, The CIA, the FBI, The FDA, The Department of Education, The Federal Reserve and the IRS.

“With politicians like these,who needs terrorists?” Ron Paul

Ron Paul is neither a big man nor a loud one and his polite demeanor effectively disguises a vicious fighting spirit. No other politician in recent history has been the been lone dissenter on so many congressional votes.  From Mother Teresa to Gaza, only one man dissented: Ron Paul. He transcends party lines, confusing the mass media who are not sure whether he is a radical left wing peace nick or a John Birch Manchurian candidate.

Right or Left?

“We can achieve much more in peace than we can ever achieve in these needless, unconstitutional, undeclared wars.” Ron Paul

As shocking as it may seem to The New York Times, Fox, The Wall Street Journal and CNN, The Constitution and The Declaration of Independence actually call for a peaceful, free Republic unencumbered by Government.

What other member of Congress is for ending the war on drugs, phasing out Medicare and Medicaid, making Social Security optional, legalizing prostitution, ending The Fed, halting all aid to Israel, lowering taxes, and closing all American military bases abroad? How do you define Ron Paul within the current political spectrum? You can’t. He simply doesn't fit into any of the convenient labels available for the two party charade. The Ivy Leagued Wall Street/Washington nexus doesn't know what to make of man who is against two of the most dreaded things in life: war and taxes.

Monday, June 20, 2011

Bankers & Fools

After a tense week with world markets teetering on the edge of collapse Angela Merkle finally met with her French counterpart Nicholas Sarkozy and they ended the seventh month chill in their once cozy relationship. According to  The Independent, they faced a serious impasse regarding bank haircuts in the "déjà vu all over again" Greek financial crisis. Sarkozy fought tooth and nail to guarantee that the largest holders of Greek debt, the French banks, wouldn’t get a clipping. Merkel made a valiant effort to demand accountability from the banks but she finally caved in, giving great comfort to the second largest holders of Greek debt: the German banks.

According to the Financial Times, French banks are holding $53 billion in Greek debt, Credit Agricole alone is $30 billion invested, while German banks are holding $34 billion. Colloquially speaking, Frau Merkel and Monsieur Sarkozy know who their daddy is.

Follow the Money

One key question is missing from the discussion of the Greek sovereign debt crisis. Imagine a close friend is moaning non-stop about a debt owed to them that looks like it won’t be paid. Worst of all they borrowed the money from someone else in order to lend it! Most attentive and caring friends would make that most indelicate but necessary of inquiries. Who did you borrow the money from?

We are blessed to have a corporate media so polite  that they don’t burden us with these embarrassing questions. Where did the French and German banks get the $87 billion to lend the Greeks? They would have you think that these are the deposits of hard working Europeans, small businesses, corporations and maybe even tax revenue from governments. This is not the case. Banks use their assets as reserves against which they either “create” money to lend or borrow "created" money  from central banks, in this case, the European Central Bank. When buying government bonds, which supposedly have no risk, they use maximum leverage and actually have no reserve requirements.

Wednesday, June 15, 2011

The Fake Bull Market: A Dollar Mirage

José Tomás
The SP 500 hit an apocryphal low of 666 during the financial crisis  in March of 2009 from which point it has surged to more than double in price in about two years. This bull market is one of the most robust in  US equities history; its only rivals are the end of the roaring 20’s and the late 1990’s.

There probably couldn’t be two more diametrically opposed moments in US history as the to late 1990’s and the post financial crisis period. The late 1990’s were a period of massive innovation, relative peace, budget surpluses and low unemployment. The US military was resting on its laurels after a swift, definitive victory over Saddam Hussein and the once ominous Soviet threat had disappeared, mired in a decade of decay. Microsoft, Yahoo, Oracle, EBay and the like had made advanced technology once again part of the America brand after the 1970’s and 80’s when it seemed Japan would overtake the US as both the world's dominate economy and innovator. But the nineties were a lost decade for the Japanese and saw a serous decline in their economic power relative to the United States. The 1990’s were the culmination of an American century and victory in the Cold War;  the long, sustained bull market made sense.

Tuesday, May 31, 2011

The Moral Hazard of Modern Banking: How Banks Create and Destroy Money

The Money Lenders by  Quentin Metsys - 1466
"I'm just a banker do doing God's work."  Lloyd Blankfein

Much has been said about both the moral hazard of banks being bailed out and people bailing out of mortgages. The major question raised was, would this ‘bailout’ contagion infect the integrity of our economic and political system?  But far more interesting and much less discussed are the mechanics of modern banking and their moral implications.

During the housing boom trillions were loaned out in mortgages creating a housing bubble and the eventual collapse of the financial markets. But where did all that money come from? The vast majority of people think that banks borrow money from the Fed or depositors at one rate, lend it at another and make a spread. This concept is completely false. Banks create money, loan it out, make their margin through compound interest, and destroy the same money that they created as it is paid back.

The Mechanics of Fractional Reserve Banking

The mechanics of modern banking are opaque, misunderstood and arguably dishonest. Modern fiat money, the dollar, euro, yen etc are all based on debt. For every dollar in existence, there is somewhere an IOU for the same amount. This is best illustrated with an example of a typical mortgage.

Imagine Jack wants to by Jill’s house for $100,000 and he has no money to buy it so he goes to his local bank and asks for a mortgage which is approved. The bank will ask Jack for a promissory note, an IOU, for the $100,000 and once he signs it, they open an account in which they create from nothing $100,000 for Jack in exchange for his IOU. That $100,000 is a liability for the bank, their asset is the IOU. The bank just ‘created’ $100,000 which is backed by the good faith of Jack to pay it back as well as the deed to the house he bought.  Now the bank loans that money to Jack, with compound interest. The interest is the fee the bank charges for monetizing the debt. Jill would not have wanted an IOU from Jack for the 100K, so the bank did him the service of converting his IOU into dollars, and for this service they charge him interest. As Jack pays down his mortgage principal, the value of the IOU will be drawn down as well, until all the money ‘created’ is destroyed, and the IOU is worthless.

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