This article is very, very long and in-depth. I'm CCP'd about half of it here.
I really do think we have started WWIII and most
don't see it or even want to think about it. Can it be stopped??
Doubtful... While we all worry about this monetary system or that being
predominant, the el-ites only see the end result.. People clamoring for a
One World Order (out of chaos) Population reduction and they still get
to be in charge.. A win-win for them. They're even willing to toss some
of their own under the bus to make it look good. Tell the average person
about this and they'll laugh at you.
What can you do??? Survive.....
Susoni
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Snip
Ex-Judenrat and Nazi collaborator, Georges
Soros. He busies himself with the destruction of currencies and people.
His financial worth is $23 billion. His moral worth is somewhat lower.
Credit Defaut Swap (CDS), mortgage backed
security (MDS), bottom-up investment, high frequency trading, naked
short sale… these are the kind of complicated terminology you encounter
when you start exploring the financial jungle.
But don’t be mislead. This overuse of jargon is
designed to confuse and destroy any motivation to explore further.
Clearly ‘they’ don’t want you to understand because they are hiding some
rather dirty secrets wrapped up in apparently complicated jargon.
Scratch beyond this seemingly complex veneer
however, and the reality of finance is surprisingly simple… and
disgusting. The objective of this article is to explain, in layman
terms, finance principles and the slavery most individuals and states
are subjected to. I will also show why things might soon change
dramatically and offer some sound advice for such times of financial
turmoil.
Finance, a brief overview
Who are the actors?
In world finance duality prevails. You are
either a master or a slave. The masters are a small clique of
excessively wealthy individuals devoid of conscience. They have various
names: international cabal, banksters, elites, ultra-wealthy, 0.1%,
oligarchs, global banking elite, etc.
Their only goals are money, power and control.
They will never have enough and they are ready to do anything to get
more. Their geographic and ideological core is the anglo-American empire
but they know no borders, have no country, no notion of nationalism or
patriotism. For them nations are like hotels, there to be used, abused
and when no longer useful, destroyed. They feel a deep contempt for
people who they see as little more than slaves to be exploited, abused
and deceived.
What is money?
Now that we know a bit more about the cast of
this drama, let’s deal with money. Have a look at a 20 dollar bank note.
What do you see? Well, it’s basically a piece of paper with images and
text printed on it. Despite all the BS about currency as the reflection
of the nation’s economy, the backing of reserve assets, this bank note
you are looking at is nothing more than that: a piece of paper with ink
on it.
A pre-1971 $20 note. Notice the mentions “gold certificate” and “twenty dollars in gold coins payable to the bearer on demand”
Think about it. For the banksters to print a 20 dollar bill, all they need is paper and ink. How much do you think it costs to print
a 20 dollar bill, considering that millions are printed at a time?
About 10 cents. But when this note is presented to you, it has magically
become worth 20 dollars of very real work, goods or services. The same
goes for 50, 100, 500 etc. bills.
That’s the most important thing to
understand:money is created out of nothing. But the lie is so big, so
repellant to the mind that we have much difficulties accepting this
fact.
Of course it hasn’t always been this way. For
most of modern history banknotes were backed against a tangible asset,
usually gold. So you could go to a bank and exchange your note for real
physical gold (see picture on the right). But since 1971 the dollar is not convertible into gold anymore. It is backed by nothing.
So its only value is the one we ascribe to it.
Collective belief is a prime factor in the kind of magical economics
we’re talking about here. Market sentiment is a powerful factor for the
best and for the worse. I will develop this point later.
Who creates money?
Money creation can be a good thing. In the
past, nations could directly create money as a fair reflection of their
economical states, interest free, in order to stimulate their
development. But the time of sagacity in economics is long gone. Today,
nations borrow insane amounts of money, with a positive interest rate.
This money is created by a few private banks, also known as central
banks and does not even reach the citizens pockets. Yes you read it
right, this bank note you are holding was created by a member of the
financial ‘elite’ out of thin air. But the sweat, the energy, the work
you spent to earn it is very real.
The fallacy used to justify the printing of money by private banks is that governments are unwise and if they were allowed to print
money, they would create far too much and destabilize the market. That
is a lie, the record for the most money ever created at one time
occurred in the aftermath of 2008 crisis (see “quantitative easing“,
another jargon term that simply means “print like crazy”) and it was private bankers, not governments, that created it.
How much money is created?
Growth of M1 (red) and M2 (Green) monetary mass indicators (1981-2013)
The short answer is: “We don’t exactly know but
it sure is a lot”. The quantity of money is called “monetary mass”.
Depending on the kind of money (coin, note, travelers check, credit
card, saving, etc.), monetary mass is divided in sub-groups labeled M1,
M2, M3, etc.
The problem is that the US Federal Reserve,
(which is not American, federal or a reserve, but a private bank serving
exclusively the interest of its owners) stopped publishing the figures
relative to the total amount of money it creates. Only partial figures
(M1 and M2) are disclosed and they show a dramatic unsustainable
increase. But M3, the most extensive indicator, has not been released
since 2006.Why not publishing M3 if its level was reasonable?
What is debt?
Money can be given (in exchange of goods and
services) but it can also be lent in expectation of a future repayment.
For centuries, interests were deemed illegal and amoral but this time
too is long gone.
Today loans come with interest. When you borrow
$100, you’ll end up repaying $120, $150 or $200. Interest rates are
justified as a compensation for risk. Again that is total BS. When you
borrow money the bank takes your house (for example) as collateral. So
if you fail to repay the money they created out of nothing (without even
borrowing fiat money from central banks), they will take your very
tangible house. In this sense you are the one who is taking risks and
you should be compensated for it, not them!
The fallacy of positive interest rates was
exposed further when central banks started proposing negative interest
rates to other banks. This is a desperate attempt to inject money into
the corrupt and therefore vulnerable banking system. Of course, negative
interest rates are only proposed to the banks while we, the people,
keep on paying positive interest rates.
Notice that in the very principle of debt lies
one of the most destructive aspects of modern finance: the rich have a
lot of money so they’re able to lend. The poor have no money so they
have to borrow. At the end of the loan, the rich cash in the capital
they lent + interest (they’re richer), the poor pay for the capital +
interests (they’re poorer). In this sense, debt is one of the the main
causes of growing inequality.
Today the world’s 225 richest (of whom 60 are
Americans) have a combined wealth of over $1 trillion. That’s the annual
income of the poorest 3.5 billion human beings.
Who sets interest rates?
The looting of Greece brought millions into poverty and into the streets.
The ones who create money are also the ones who
set the interest rates. To preserve the illusion of fairness and
separation of powers, they have created puppet organizations called
“credit rating agencies” (Fitch, Standard & Poor, etc.) that
“evaluate” the reliability of the borrower. If the reliability is low,
the interest rate is high. Or so we are told.
Credit rating agencies have been repeatedly
found guilty of fraud. They unilaterally set interest rates in order to
control the fate of a company or a nation.
Take the example of Greece. Overnight the credit
rating agencies dramatically raised its interest rates. But Greece
couldn’t stop borrowing because it had to repay previous loans. Suddenly
the weight of the debt became unbearable pushing Greece to the edge of
bankruptcy.
At this point Greece had no more negotiating
power and had to accept the looting of the country by the elite, who
took control of public services, natural resources, etc. This kind of
egregious banditry is euphemistically called an “IMF package“.
Privatize the gains, socialize the losses
In the Greek example, profitable activities were
privatized (that is transferred from the public sphere to a few private
oligarchs) for a ridiculously low price, or for free. But if a private
activity is not profitable, the reverse occurs: the losses are
socialized i.e. laid at the door of the people who have to pay for them
with their tax money.
That’s what happened, for example, with Fannie
Mae and Freddie Mac, two private insurance companies who generated
massive losses and were “bailed out” by the US treasury. In this case
hundreds of billions of taxpayer’s money was used to cancel the losses
generated by those private corporations.
Inflation
Massive money creation (QE – Blue curve) increases the price of stocks (SP500 – brown curve) and commodities (red curve)
When prices of consumer goods (bread, milk,
light bulbs…) increase and salaries stay the same, there is inflation.
We are told that the reason why government should not print money to off
set inflation is that they would overprint and people would use all
this excess money to buy more goods, leading to some scarcity, which
would increase the prices.
But the 2008 crisis proved this to be a lie.
Private banks created $trillions and inflation didn’t rise. Why? Because
the created money didn’t go intoour pockets. Remember inflation figures
only cover consumable goods, it doesn’t encompass stocks or commodities
(raw material, grains, etc.)
After 2008, those markets started to
frenetically bubble despite a very negative economic context. Stocks
(SP500) have increased more than 200% since 2009 and commodities have
gained 100% (see diagram on the right). That makes it pretty clear that
the created money goes straight in the pocket of bankers who use it to
speculate on those markets.
Capital VS labor
Corporate profits (blue curve) VS wages (red curve). Today wages represent less than half the US GDP
In a nutshell, money works for the rich (capital
gain) while, on the contrary, the poor work for money (wage). Over the
past year, wages as a part of GDP have been shrinking while capital gain
has been increasing.
The diagram on the right shows those changes and
illustrates the massive transfer of wealth from the people to the
wealthy elites. This means that corporations, the conjunction of capital
and work, favor more and more their rich shareholders while financially
squeezing their workers.
Tax is money collected by the state from
individuals and corporations in order to fund public services
(hospitals, schools, roads…) which is one of the few mechanisms that
allows for the redistribution of money from the richest to the poorest.
Notice however that a substantial share of taxes
doesn’t fund public service but interest payments which dwarf
government spending like education or food stamps. This, despite the
historically low interest rates. So, imagine what would happen if
interest rates surged…
Income tax bottom rate (dashed curve) and top rate (red curve)
If states managed to collect enough tax they
would not need debt and would not fall into financial slavery. That’s
why dominating economic doctrines praise tax reductions.
But don’t be misled. Tax reductions don’t
concern us. While labor revenue (money from the poor) is heavily taxed
and keeps rising, capital revenue (money from the rich) is barely taxed.
In many countries (Belgium, Netherlands, Greece, Portugal…) capital
gain tax rate is even equal to zero.
And if that wasn’t enough, tax rates on high
revenues keep dropping while tax rates on small revenues remains
relatively constant (see diagram on the right).
If you want to stop contributing to such an
unjust taxation system, you might want to open an account in one of the
numerous tax havens scattered around the world. But when you’re informed
of the amount of the minimum deposit and minimum balance, you’ll
understand why tax exemption is only for the rich.
Cashless society
For years the establishment has been pushing a
cashless society. Of course this is an obvious step towards more
totalitarianism where every single transaction is monitored. In a
cashless society, a government can decide to quash dissidents by
instantly cutting them off from the economy. Submit or starve will be
the only two solutions.
But this is also a way to ensure that the people
won’t escape the unjust tax system. The rich already have bank accounts
in tax havens, legions of lawyers and accountants (fiscal
optimization), off shore companies and tax exemptions at home so they
don’t need cash to escape taxes. On the other hand, the people try to
avoid the suffocating tax load by using cash.
Dollar overabundance
Value of the dollar relative to a basket of other currencies (1971-2013)
While tons of dollars are created daily, one
might wonder how this overabundant currency doesn’t lose its value
because, usually, when supply exceeds demand for any kind of goods, the
prices drop. Actually, over the past few decades, the dollar has been
steadily dropping relative to other currencies (see illustration on the
right).
However this drop is limited because of a forced
demand for the dollar. In 1944, the infamous Bretton Woods conference
instituted the dollar as the world reserve currency, the only one tied
to gold while all other currencies were tied to the dollar. As a
consequence, the dollar became the currency used for international
trade.
For example, when China sells its manufactured
product to a foreign country, it is paid in dollars. Since China exports
a lot, it has billions of dollars in reserve. Through this forced
purchase of dollars, China helps limit the drop in value of the dollar.
In this sense, China and the whole world, through the erosion of their
dollar reserves, fund the wealth of the elites who pocket the tons of
newly created dollars.
The forced use of dollars on the international
scene doesn’t only apply to Chinese goods. Oil, the largest commodity
market, is dealt in dollars exclusively. If you want to buy a barrel of
oil you’ll have to exchange your currency for dollars (known as
petrodollars) and give them to the oil supplier. During such a
transaction you weaken your currency (by selling it) and you strengthen
the dollar by increasing its demand.
A bleak situation
From the above one can only conclude that the
situation looks pretty desperate. For decades we have been condemned to
live with the hegemony of the dollar, fund the lavish lifestyle of the
dollar creators through the erosion of our dollar reserves. We have been
enslaved by debt and seen our countries looted and destroyed by
soulless banksters. While our resources keep shrinking, the elite keep
getting richer.
It seems like an insoluble problem: they have an
almost endless supply of money, they control the banks and through them
manipulate the markets. They own the media, they pull the strings of
politicians and therefore make the laws.
A house of cards
The power accumulated by banksters so far could,
in theory, have provided them with an endless reign. But their greed
and wishful thinking pushed them to take more and more undue risks,
exposing the whole banking system to some very real threats.
Leverage
Leverage defines the ratio between the money invested by a bank divided by the money owned by a bank.
Common sense suggests that, if a bank owns one
dollar, it should be allowed to invest one dollar (leverage = 1). Thus,
if the bank loses its investment, it can pay for the loss with the money
it owns. This couldn’t be further from the reality of banking.
For any deposit of 1 dollar, banks are usually
allowed to invest 10 dollars (this is called fractional reserve.
Leverage = 10). In plain terms, it means that if a bank loses 10% or
more of its investment, it is bankrupt.
The bankruptcy of Lehman Brother was financial but also moral.
But that is just the beginning, it gets worse.
Lured by an unending greed, banksters started lending money to each
other, creating fake deposits that would enable them to invest ten times
the amount of these fake deposits an so on. In this case, leverage can
reach 100 or more.
But it was still not enough as was revealed
after the bankruptcy of the Lehman Brothers bank that was found guilty
of manipulating data by removing some of its investments from accounting
books in order to make their leverage ratio look better (this case is
known as the Repo 105 scam). Do we really think Lehman Brothers is the
only bank cooking its books?
Long story short, banks are investing way more
money than they own. Thanks to those investments that reach into the
$trillions, they totally control most markets and, of course, they make
huge profits when the market goes in the direction they want. But they
also take tremendous risks if the market goes in the other direction.
Derivatives
The derivative market is almost ten times larger than the world GDP
The delirious leverage levels of the banking
industry leads to tremendous risks but other factors add to the
precariousness of this financial house of cards.
During the 2008 subprime mortgage crisis, you
probably heard about “derivatives”. Once again this is a deceiving term
that carries the veneer of “innovative financial product offering high
potential profit”.
In reality, derivatives increase the already
sky-high leverage levels previously described. They also mix together
the potential profits and risks of various assets. As a result, unknown
toxic assets are hidden in seemingly harmless financial products.
The derivative market is gigantic. In 2011 it
amounted to approximately $700 trillion (10 times the GDP of the whole
world). As a result, huge quantities of these toxic derivatives spread
throughout the global economy: individuals, towns, counties, nations,
companies and of course banks, hold massive amounts of derivatives
without even knowing what assets, and therefore what risks, they are
attached to.
The mixing up of assets has also led to a strong
interdependency between every asset. Because the amounts involved far
exceed the solvency of nations or banks, if one asset doesn’t behave as
expected, the whole financial house of cards could collapse.
High Frequency trading
The rise of high frequency trading (2006-2012)
Another risk factor is high frequency trading.
Today, a majority (50 to 70% in 2010) of trading is not operated by
humans but by machines running algorithms. This is called ‘high
frequency’ because such machines can place an order in 30 milliseconds.
Because of this technology, it is not unusual to see thousands, if not
millions, of orders passed within less than a second (far too quick for
any human regulating intervention).
Nobody knows exactly how those different
algorithms interact with one another, but we know that they can generate
some nasty domino effects.
Those “glitches” are also called “flash
crashes”. For example, in March 2011, cocoa dropped by 13% in a few
seconds. In May 6, 2010 the Dow Jones lost 1000 points (9%) within a
day. That’s the largest day loss in history. On March 16, 2011, the US
dollar sank 5% against the Japanese yen within minutes.
Notice that those dramatic drops didn’t follow
any relevant news release. They were the results of algorithmic
‘decisions’. To hide the seriousness of the situation, Wall Street
authorities “canceled” those abnormalities by freezing the quote and
going back to the initial values.
The inquiry about the Dow Jones 2010 “flash
crash” portrayed a “market so fragmented and fragile that a single large
trade could send stocks into a sudden spiral“.
Manipulation of gold/price price
For centuries, gold was used in international
trade and was considered as a safe financial haven. It was de facto the
international currency, the safest investment of all. In the minds of
many, gold is still a competitor to the dollar. So, in order to hide the
weakness of the dollar relative to gold, and prevent a subsequent shift
of capital from the dollar to gold, the price of gold has to be
suppressed. Gold had to be made unattractive.
99% of traded gold (Futures + FX) is totally virtual
This manipulation is conducted by 11 colluding
banks (Barclays, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC,
JPMorgan, Bank of America, Mitsui, Societe Generale, BNS and UBS), who
control the LMBA, the largest (virtual) gold market by far. Their
maneuvers are so blatant that they have been repeatedly found guilty of
rigging the price of gold.
In trading there is no difference between
physical gold and virtual gold. So, bankers are using massive quantities
of virtual gold through operations called naked short sales: they sell
gold before buying it!
Because of their massive transaction capacities,
they sell to drop the price without actually having anything to sell
and then buy at this low price! How’s that for a screwed up system!?
This way, the price of gold is artificially
reduced and the banks make a substantial profit. Notice that during the
whole operation no physical gold is ever touched or owned.
Banksters resort to such risky tactics because
the US has already sold all its physical gold to suppress its price.
Today 99% of silver and gold transactions don’t involve physical metals
(see diagram on the right). On the silver market, 130 days of global
mining production would be required to cover open short positions (i.e.
speculators who don’t own physical silver and push silver price down).
Physical silver/gold
Global gold production VS demand (1950-2013)
Gold/silver artificial low prices have pushed
many producers (mining) out of business and forced the surviving ones to
minimize their investments (exploration, production tools…). Meanwhile
the mining costs are rising sharply with a 150% increase between 2003
and 2009.
This suppressed price has led to a weakening
supply of physical gold and silver and stimulated demand (industries,
jewelers, central banks, individuals…)
As a result, supply grows slower than demand.
This situation applies to the physical gold market where the gap between
demand and mining production has kept widening since 1970 (see diagram
on the right).
While overall demand for gold has doubled since
1990, the type of gold product that reports the highest demand increase
is coins and bullion with a 150% surge between 2008 and 2013.
Global silver production VS demand (1950-2011)
The situation on the physical silver market is
very similar. Silver is in deficit since 1980 (see red curve in the
diagram on the right).
While Silver demand has gained 15% over the last
three years, the main surge is to be found in silver coins and bars
that recorded a 76% increase in demand in 2013 compared to the previous
year.
As a result of the growing gap between supply
and demand, some signs of shortage are starting to appear. The UK Royal
Mint ran out of gold sovereign coins in 2014 due to “exceptional
demand“. The US Mint sold out of Silver Eagle coins in 2013. The
Canadian Mint experienced similar issues. When asked about silver
shortage, the sale director of Royal Canadian Mint replied: “Demand
right now for silver is through the roof and it shows no signs of
slowing at this point. Sourcing silver is becoming very difficult“.
One temporary solution to deal with the shortage
is for large holders of precious metals to release their reserves into
the market. But those stocks are not limitless. Silver inventory at the
Shanghai Futures Exchange has declined more than 90% from nearly 1,200
tons in February 2013 to around 100 tons in October 2014. In a similar
vein, COMEX, one of the main gold operators, experienced a collapse of
60% of its gold inventory between April and August 2013.
On Dec 12, 2014, Gunvor Group Ltd., the world’s
fifth-largest oil trader, closed its precious metal branch because “of
difficulties in finding steady supplies of gold where the origin could
be well documented“. This statement confirms the ongoing shortage but
also suggests that some operators might be selling gold that is not
supposed to be sold.
In such a context, we might wonder why several
countries (Netherlands, France, Belgium, Austria,Germany, Switzerland,
Venezuela, Lybia, Iran,…) attempted to repatriate their national gold
around the same time. Are governments afraid of a sudden currency
crisis? Are they afraid that the host countries (US, UK) have sold their
gold? Do they see a new Bretton Woods coming and want to maximize their
negotiation power? Do they think the host countries (US, UK) might not
be very safe havens in the near future?
WW3 has already started
