by Cathal Haughian
250,000 capitalists read the Financial Times, and it has been our undertaking to chronicle our understanding of capitalism via our book The Philosophy of Capitalism. A USA led team has answered the question ‘What is The Nature of the Monetary System?’ The Monetary system has three layers – the core is Religion and the unconscious mind – as they formed first. The outer layer is operational and intersects with geopolitics, it explains:
Why we need to beat Russia
We may see Syria as a testing ground for Imperial Power. Russia has tested our influence and shown the World it’s wanting, so it’s crucial to appreciate why and of what consequence.
Our Imperial weapons give definite form to our Empire. And nothing has shaped our Empire more than the FIAT. The deformation began in 1971, when the US imposed her Power to re-define the rules of the monetary system for her sole benefit. The ability to print IOU’s in exchange for real value is more clever than theft as we borrow and do not pay back in kind due to inflation. Our enemies, adversaries and vassals must found their financial systems upon the printed dollar which they must purchase with hard earned money. That seizure has financed a vast network of military bases, bribery, assassinations, coup d´états and perpetual war.
What’s not to like? All that Power without taxing the produce of the American people. So why have we lost in Syria?
Let’s begin by appreciating that the global “FIAT system” is responsible for our moral crisis and departure from virtue. As we embrace further the gods of greed – listen to the masses cheer for Clinton and Trump – we must recall that virtue is knowledge of what is good. We are getting weak because we have forgotten what is good for us.
The root of this evil is our love of easy money, or FIAT money, defined by those with power as “wealth by decree” which places an arbitrary value upon “wealth issued by men” such that buying power has no natural governor, as it did when gold was freely traded along currencies in truly free markets. But whom, may we ask, has the power to decree wealth? And with such great power to do so, who can be trusted with such great responsibility?
No one. That is who.
But nonetheless, governments and monarchies throughout the ages have been entrusted to issue wealth by decree. All have failed, because power corrupts, and absolute power corrupts absolutely.
So in every FIAT timeline we see the more powerful become wealthier and the wealthy become more powerful, because it is they who control the issuance and distribution of wealth. Inequality of Wealth, therefore, always reaches its peak at the end of the FIAT timeline. As social position offers more favours than purpose and production. What has happened is what always happens – you have a system politicized to such an extent that political access – and not profits from innovative new solutions – Become the core of the incentive structure.
Notice how productivity declined after Bretton Woods and later when Bretton Woods was abandoned. One of the problems of easy money, not the only one mind you, is the financialization of the economy. Financialization drains key human capital and generates malinvestment. Nuclear engineers are doing MBA’s so that they can work as investment bankers! Trillions of dollars have been invested in real estate developments that provide no productivity gains. Easy money kept fracking companies alive –producing an endless glut of gas that had nowhere to go but heat tar sands in Canada – what waste!
This is the real economic evil of our current monetary system – malinvestment – with two insidious effects:
- A halt in fundamental scientific breakthroughs and
- The West, apart from Germany and Norway, has run at a loss for decades
If the common man had a say in all this, he would declare his modest holdings to be the pinnacle of wealth, by his decree. He will offer you his apartment for your mansion, his hot dog for your lobster, his bike for your car and so forth. If this sounds ridiculous, then think how absurd it is to offer stacks of paper for these same items, which (based upon the numbers and signatures printed upon them) you would gladly accept, by decree.
We know that paper is just as intrinsically worthless as the electronic digits they represent in a bank account. The issue here is who holds the power of decree. The little people never will. The monied men hold this power – like a parasite feeding upon any who deign to offer value at the marketplace.
And that is the cut of the second edge my friends. That is the death blow. The Fiat produced a parasite – the financial sector – that in its greed is killing the real economy. So when we read about absence of opportunity with such empathy, know that the parasite suffers too, as the problem of debt reaches higher toward senior capital.
When we see debt piled on debt just to prolong the dying system, take note that a few monied men enjoy the fruits of this easy money for a time before defaulting … and with no collateral to make lenders whole, many walk away with nothing more than an impaired credit rating – into a waiting system where debt is harshly devalued.
Monsanto can darken the sunflower harvest in the Ukraine, and Allianz can steal a few tranquil Greek islands, but the ambience is never quite the same as when hard working people had their just rewards, and goodness and charity and kind souls rejoiced – with compassion and cooperation – while loving the narrative of a life written while desiring only the product of their work.
The world this Global Reserve Fiat creates is one of misery and strife where evil and greed feeds upon the spirit, and the world becomes an immoral wasteland of modernity. The worker is discriminated against as all pressure and stress is heaped upon his future, as the law discriminates between debts held as an asset vs. debt held as a liability.
You see, reader, while we all hold “deposits” at banks, which is an euphemism for bank debt, only the lending class (and I use this term in the broadest sense) get to hold debt on their balance sheets as a wealth asset, whereas the little people hold debt as an obligatory liability. If there is a default, all the better as the law allows them to seize the “secured” assets as collateral. Is there a flaw in my thinking? Let us see…
You may say that banks are able to hold debt as an asset because they have the capital to cover that debt – to which I would say, “Really ??!!” As we understand the nature of debt in this modern era of aging debt, and the derivatives that attempt to hedge those obligations, this is simply not the case, as the lessons of Enron, AIG, Lehman, MF Global – ad nauseam – clearly prove. The empire of debt is hallmarked by misery for the masses though this is no accident, for a system cannot discriminate in and of itself. Financial laws are written by and for the hidden agenda of monied men, how can we conclude otherwise? A few of which see war or systemic crisis as an opportunity to rewrite the social contract e.g. the tax payer takes over bank debt, see Ireland, Britain and soon Australia and the Eurozone.
Look at the workers as they make their way home on the subway, standing tightly together, neither wanting nor caring to utter a word to one another, their grey features melted by the stress of their “wealth as debt”. Their one shot at consciousness ground away while vampire and zombie stories speak to their existence. Look at the once prosperous cities around you, like Detroit, or Camden, crumbling into 3rd world ghettos. Not exactly a world that the 1% wants to live in, but one they deserve – one of their making.
They can insulate themselves in the Hamptons for only so long until the sirens sound. It has always been this way, and it will always be this way, until man changes his nature by recognizing what is good for him.
Now, the East – China / Russia / India – challenge the Global Reserve Fiat. And when the dollar fails, and it will: For debt is the essence of fiat, and when it defaults, the system defaults with it.
Fiat Debt is unstable for two reasons:
- Because no natural ecosystem is able to sustain unlimited, continuous exponential growth – as all 100% fiat (debt-based) valuation systems require. More debt is required to repay existing debt plus interest. The basic operational problem: you can inflate a system easily by issuing new “secured” debt against collateral and thereby increasing collateral value (think about mortgages as buying power to buy houses, pushing house prices up, collateral looks fine even if debtors cannot pay interest or principal – as long they can easily refinance or banks can sell recovered properties in a real estate market spiked by easy credit and demographics (like in the US from 2001-2005, or London and Sidney now). Easy credit can paper over affordability and to some extent demographics. Now this definitely does not work in reverse; you cannot even stop because once credit stops flowing, prices start to tatter; and in the latter stages even an decrease in the rate of increase might be enough to crash the system.
- Because it is entered into and created so lightly, and it is based on the assumption of a fixed future performance by an entity or individual. And when the 98% – their future burdened by intolerable debt, unemployment and declining wages – decide to walk away? The fear of that decision has been driving interest rates down for decades, to make it bearable not for the good of mankind but to prolong the system. This brings into relief an internal contradiction: wages decline in sync with interest rates because the bargaining power of workers evaporates as Central Bankers reduce the cost of capital, contributing to the substitution of labour and labour wages by that of the machines and AI software. Until the workers walk away from more debt for less income, we watch this balancing act between debt pretending to be wealth, and wealth being treated as a “bad investment”. All performed for the benefit of gradually changing our definitions, as we evolve into a new equilibrium determined by the East – Their collective gold reserves will be large enough to re-price the currencies and free the markets.
As we look at the precarious nature of our faith-based money, we must acknowledge the moral implications of “dishonest money”. Seizure by decree, whether judged just by Constituted Power, is immoral. But the fact that dishonest money is so easy to create, control and redistribute helps one understand the wave of immorality that has swept over our world.
Paying tribute with labor and exchange rates is not enough for the empire of debt. Rather, its vassals must accept and embrace the ideology of the empire as well – “Wealth as Debt” and Globalism. It’s their separation in language which causes the confusion – Globalism and Absolutism – for they are one and the same thing.
When Russia and China stockpile honest money, they attack our most potent weapon and father of our decline. Our Imperial weapon will die by both edges of its own sword, one being the contempt with which it is so easily created to bend the will of the world to its bidding, and the other sharp edge which the wicked are blind to recognize: The evil that sound money prohibits.
Will Russia and China attack the fiat dollar using overt enemy action? Possible, but not probable: as they can simply undermine “confidence” in the FIAT and wait upon the 2% to bury the blade. The Dynasties of Wealth – Have you ever wondered how we hedge our holdings through turmoil? The top 85 patricians of which own more wealth than the bottom 3.5 billion humans – will move first. The 1%, then 2% and whoever else left standing will be forced to follow through.
Only Gold has the history, depth, unique qualities, loyalty of the elite and transitional power to challenge any man, any nation, any system on earth, past, present and future. The Dynasties understand this, because they have both witnessed and authored this axiom across generations of asset accumulation.
When they vote, they vote with their ability to make markets, and then reap the profit from the market they make, offering favor to those who protect their interests. They easily control men through greed and are beholden to Gold alone. Gold transitions their wealth recycling system through change.
As the sand peters past the last curve of the hour glass the Dynastic hand is clear to see. So the Neo-cons need to beat Russia, and soon, as only Globalism can keep the markets enchained.
Reader, enjoy this free pdf: http://beforethecollapse.com/2015/11/12/a-free-pdf/
I wonder whether someone could explain what links the capitalists who read the FT and the whoever it is who seeks to chronicle “our” understanding of capitalism (Mr. Haughian and who else?). Also, whether those who possess “our understanding” share any personnel with “a team”. It’s not clear. If it were a bit clearer, it might help potential readers decide whether to read an article that starts with the unorthodox assertion that money is fundamentally about religion (if I’ve read that aright).
“the unorthodox assertion that money is fundamentally about religion (if I’ve read that aright).”
Walter Benjamin, a Jewish-German essayist worked this conception out in the late twenties of last century:
http://mundanomaniac.blogspot.de/2016/03/walter-benjamin-on-capitalism-and.html
Fiat is all about faith. However, once it is unleashed it must expand exponentially until that faith is destroyed but not before all the unsavory aspects of this expansion manifest themselves. Rome did this, expanding its empire and monetary debts with that expansion until the citizens lost faith as their meager wealth was stolen. Collapse quickly followed and the world plunged into the dark ages.
Fiat is all about faith. However, once it is unleashed it must expand exponentially until that faith is destroyed but not before all the unsavory aspects of this expansion manifest themselves. Rome did this, expanding its empire and monetary debts with that expansion until the citizens lost faith as their meager wealth was stolen. Collapse quickly followed and the world plunged into the dark ages.
I might add though that gold silver and such have their problems when issued as money also. The rich can easily over an intermediate time frame accumulate all the metal and create a feudal type of system as the rich are want to do. Only a regulatory system over money creation in the hands of the people can effect equality to at least some degree of fairness for society as a whole.
That explains why the US dollar has the words “In God we trust” written on it instead of “In Gold we Trust.”
…though it should it read: “In Yahweh we trust”
Who else? Well, the book is just my hobby, I like to understand the society I live in. I accept submissions from CEO’s and financial capitalists. And a few academics: one Nobel winner. The team who wrote the above is strictly confidential. But, interestingly, they’re far far wealthier than me and can speak of dynastic wealth coming from a long line of wealth. The major thinker is from a top American dynasty – though I personally don’t agree with everything written by him. But I thought it’s important to have an American write this.
I do not agree with the repricing of the currencies:
China and Russia will never have enough gold to to this – the US would instantly go for this gold, like a carpet to be drawn under their feet. The gold will be there for reputational reasons, to show they own at least as much as the US – but they can not allow the US to draw it out. China and Russia will have a parallel system to Bretton Woods with similar rules: The gold will be in Moskau, Bejing and probably India – those countries may settle in gold with each other, but it will not be allowed to leave physically.
That’s what I think will happen.
“I accept submissions from CEO’s and financial capitalists. And a few academics: one Nobel winner. The team who wrote the above is strictly confidential. But, interestingly, they’re far far wealthier than me and can speak of dynastic wealth coming from a long line of wealth. The major thinker is from a top American dynasty – though I personally don’t agree with everything written by him”
Who are you trying to kid here.
I’m calling bollocks. You’re a 25 year old TESOL teacher who’s been reading gold bug ‘literature’.
Thanks, Cathal Haughian
I think that people should also read your comments for the Economist
https://www.economist.com/users/Cathal%20Haughian/comments
Yesterday I spoke to a dear friend after many years. At the end of our talk she told me loved me and expressed gratitude for my friendship.
Lest you think gold represents wealth, her expression was the real deal. Today I still feel rich beyond compare.
Bravo, Bull’s eye! Loved the above article anyway. He does stress that the _elites_ love their precious metals, some of the rest of us have other and bigger fish to fry.
Mathew 19:24
And Jesus said to His disciples, “Truly I say to you, it is hard for a rich man to enter the kingdom of heaven. “Again I say to you, it is easier for a camel to go through the eye of a needle, than for a rich man to enter the kingdom of God.”
The lady friend’s quickened spirit expressed love, which causes ascension beyond the ego in both the giver and the recipient. Most of the rich or super rich concentrate far too much on material wealth accumulation, leaving little time for spiritual ascension toward any higher Self and are stuck with their own camel -sized ego, or small self, which ain’t heaven, in any sense, but more a barrier to enlightenment than a credential for claiming it, as the Illuminati do.
In the extreme case of this dynamic they end up running a world religion of fake money, and all can go down with that folly, unless we rise above it.
Envisioning the replacement is still a real test of my imagination. Maybe Cathal’s online book has some ideas. I found Steven Starr’s comment here, below, a summary of private FED money vs interest- free money quite worthwhile, but of course the world system has to be thought through as well.
Hence why a commodity currency like gold and silver are so necessary. It defeats the unipolarist and chains him down to reality.
He can’t gin up more gold without digging it up himself this depriving himself of a limitless profit margin.
Why is then the price of gold being kept so low,even when the oil prices are going down ? why is this price of gold good for the Fiat “society” if they consider Russia and China as their enemies,while both countries are buying gold in large amounts ? Or are they so sure in what they’re doing is the good way in destroying Russia and China economically ? Maybe the corruption is winning everywhere and they know this very well – and I mean not just material corruption.If not,and Russia with China will fight back,how can they do that without provoking a war ? I,personally,don’t think in peaceful solution,for who is a liar,is also a thief,and became a criminal and soulless.In his soul the love has no place and the truth has gone.Therefore he is the sun of Darkness.How can the Son of Light have peace with him?
To Your first question why Gold is Held at lowprice: I think because for now they continue the game. Draghi is flooding the Banks with money which goes to the Stock and speculative Market. For now Bonds are easy money. But when they decide to have the next Crash Gold will go up.
Dr Paul Craig Roberts has a good commentary about why and how the price of gold and silver is being kept artificially low.
http://www.paulcraigroberts.org/2014/01/17/hows-whys-gold-price-manipulation/
This is funny headline: “V. Putin to meet with Finnish colleagues”. Yes, they are his colleagues for sure, western partners in crime maybe.
Kerry, another partner goes to Russia to fix a new deal in secret. The masses will never will know.
Give them a pep talk and they will create narrative.
Very busy at work at the moment but I must get back later and comment on this article which contains outright falsehoods and portrays an almost complete misunderstnding of money, what it is and the concept of Fiat money. The author has absolutely no idea of the Fact that all money is Fiat.
Perhaps the author can write more about how ” law discriminates between debt held as an asset vs. debt held as a liability” ? Is that basically credit card debt which has to be paid back at interest rates of 10-30% to the banks versus our cash deposits held in our bank as debt to us in accounts being paid interests of 1% with minimal legal cover ?
The banks have insurance for individuals who declare bankruptcy but like what happened in Cyprus, when the banks declared bankruptcy, no one gets their money back when banks go down. What about FDIC for the little depositors with small amounts of money? Is that a chymira, too? Of course, that program’s efficacy is based on the premise that only a few banks here and there will fail and not that many banks will fail at the same time.
Looks as if the next bailout is going to be a lot more painful and will directly enrage the quiescent American people which is why we have pied piper Trump creating his trumpen proletariat preparatory to the police state created for “our protection”.
It hurts my heart to see the madness descend upon my people and cruelty become the “flavor of the day” i.e. the “we came, we saw comment” and Trump dehumanizing Palestinians as he plays the proud Papa of a fine Jewish baby.
Think outside the ballot box.
teranam13
“It hurts my heart to see the madness descend upon my people and cruelty become the “flavor of the day” i.e. the “we came, we saw comment” and Trump dehumanizing Palestinians as he plays the proud Papa of a fine Jewish baby.”
these words are fascinating,I lay down my hut
Awesome comment. Thanks
Much to ponder in this article, Cathal. I really appreciate such a level of understanding regarding “DEBT”. Most humans…well, most Americans, at least, cannot get their brains around the concept that debt creates/is money. Just mention “fractional reserves” and how banking systems world- wide can create money from nothing. The “fiat” money that governments “print” via electronic digits is a different beast. One can study what MONEY/DEBT really is–how it manifests itself.
I do have to mention one thing you wrote regarding the masses:” we forgot what was good.” I would have to say that’s pretty much a nostalgic myth. We are born into a system that programs us totally. Only a passion to understand our culture and deeper ideas can bring us consciousness of this wildly complex matrix. Thanks for your efforts.
Why Russia needs to hold its own:
from counterpunch
http://www.counterpunch.org/2016/03/23/a-world-war-has-begun-break-the-silence/
The fiat system will only last as long as the participants allow it to. Why do the BRICS, Iran etc still use or allow the sale of their products\labor for USD? It is this participation that funds the US military which threatens the very same countries, like a chicken and egg scenario. Whilst Iraq, Libya, and Syria are/were weak by comparison to resist US military during the change from USD to Euro or other currency for trade, BRICS et AL should have no problems in forcing the use of non USD for their goods. Why have they not done so as they can adequately defend them selves?
Capitalism versus Statism https://mises.org/library/capitalism-versus-statism
From the very first we run into grave problems with the term “capitalism.” When we realize that the word was coined by capitalism’s most famous enemy, Karl Marx, it is not surprising that a neutral or a pro-“capitalist” analyst might find the term lacking in precision. For capitalism tends to be a catchall, a portmanteau concept that Marxists apply to virtually every society on the face of the globe, with the exception of a few possible “feudalist” countries and the Communist nations (although, of course, the Chinese consider Yugoslavia and Russia “capitalist,” while many Trotskyites would include China as well). Marxists, for example, consider India as a “capitalist” country, but India, hagridden by a vast and monstrous network of restrictions, castes, state regulations, and monopoly privileges is about as far from free-market capitalism as can be imagined.1
If we are to keep the term “capitalism” at all, then, we must distinguish between “free-market capitalism” on the one hand, and “state capitalism” on the other. The two are as different as day and night in their nature and consequences. Free-market capitalism is a network of free and voluntary exchanges in which producers work, produce, and exchange their products for the products of others through prices voluntarily arrived at. State capitalism consists of one or more groups making use of the coercive apparatus of the government — the State — to accumulate capital for themselves by expropriating the production of others by force and violence.
Murray Rothbard and Ludwig Von Mises articulated it so well.
Thank you for clear explanation what is wrong with our world and what is the source of this wrongness. What I still don’t understand is why West needs to beat Russia. Why not China, India or whole Asia?
Why all the hate is focused only on Russia?
Russia is still recovering economically and militarily from the trauma of the Soviet Union disintegration. In Syria, Putin put Russia back on the world’s military map. In my opinion, Russia is more exposed to Nato attack and interference, so attacking the weakest party is just common sense.
Now the East can undermine “confidence” in the FIAT dollar, influencing guys like my friends, that wrote the above article, who really only care about their personal buying power – who will get scared and move into gold.
You see, these dynastic families predate the Nation States they reside within, they may not really care about ‘America’…per se.
” I still don’t understand is why West needs to beat Russia”
Careful, it is not the West! It is Zionism – which is a particular nasty and virulent form of Fascism – that has taken over all Western nations.
Zionism goal is to enslave all Goy-nations. The fake-Jews consider it to be their fake-religious fake-duty.
Will it work? Of course, not. The law of nature doesn’t allow for such foolishness.
(But Zionism’s insane, genocidal megalomania might well bring Gaia and all its inhabitants to the brink of extinction.)
” Why all the hate is focused only on Russia?”
Russia was already twice in Zionism’s grip during the last 100 years: after the Zionist Bolshevik ‘Revolution’ and during the Yeltsin years.
And twice the Zionists failed to finish Russia off. Narcissistic and demented wussies as they are, they will never forgive Russia for this.
The Zionists were among those Jewish subjects of the Russian Empire who sought safety in emigration. The Zionists were not Bolsheviks.
The US as hegemon and exceptionalist has every reason to seek to “contain” Russia. Not obviously anything to do with Zionism. Israel can work with Russia if it has to.
After the fall of the Soviet Union, many of our Jewish friends self-deported. One has to ask, “What paranoia drove this emigration, when there was no real persecution?” Could it be guilt over Bolshevism and parasitic rents taken on the Russian people?
Let’s also not forget, the extraction economy visited on Russia during the Yeltsin years was the brainchild of “our friends” from Harvard.
http://www.thenation.com/article/harvard-boys-do-russia/
The Oligarchs who attempted to take over Russia were predominantly from the tribe, and they borrowed “credit” from their Wall Street in-group partners. The parallels to Jacob Schiff and the funding of Bolsheveiks are just pages from the same historical playbook.
Private Credit as money is the money power, and funds the destruction of nations and people.
http://www.come-and-hear.com/dilling/chapt12.html
Mefobills
I don’t know if you read zweistein’s comment. He referred to the “Zionist Bolshevik Revolution”. The Zionists were not Bolsheviks.
Zionism was birthed with the merger of Herzyl’s writings and “private banker money as Capital.”
Jewish supremacism and the International Jew existed long before Zionism. Kabala Illuminism indurated to practice in Talmud after sacking of the temple.
Our Jewish friends “money farmed” using the East West Mechanism (exchange rate differences in metals). The caravan routes were the enabler for this secret mechanism.
Their money farming usury found new expression in Amsterdam after Vasco de Gama broke the East/West mechanism. Private credit and stock market capital came into being here. They also printed up bibles, emphasizing the old testament, in order to brain wash the English, hence return to England.
Evil has a long game, that goes well beyond human life spans.
From Amsterdam it spread out to London and other points ( Germany). Zionism is only part of this greater movement and a direct descendant of usury money. The private bank of England came into being before Herzyl lived, but used the same Zio mechanics.
Political power always was part of this greater system. Don’t be confused because we call money power + politics + Talmud = “Zionism” today. It has now metastasized further to encompass Zionist Christians and Secular.
Those that try to divorce Zion from Talmud, Cabala, and Zohar, as well as Jewish money history are not doing the truth a service.
I find this attempt to divorce Bolsheviks from Zionism odious. Bolsheveiks were most certainly financed with private bank capital out of wall street. The first thing Trotsky did was establish a private bank.
Sorry, but this shows a woeful ignorance of the nature of money. For starters, let’s not forget that the Great Depression occurred under a gold standard. Second, contrary to what is apparently popular opinion, most ancient coinage had little to do with the actual weight of the metal. One could start by reading Aristotle and understanding the idea of “nomisma,” and then pass to Mitchell Innes’ article “What is Money” [https://www.community-exchange.org/docs/what%20is%20money.htm] and “The Credit Theory of Money” [https://www.community-exchange.org/docs/The%20Credit%20Theoriy%20of%20Money.htm]. See also Wm. Vickrey “Fifteen Fatal Fallacies of Financial Fundamentalism” [http://www.columbia.edu/dlc/wp/econ/vickrey.html].
For the real causes of the abuses–for that is what they are–of the financial system, read Michael Hudson (highly recommended by Paul Craig Roberts) “Killing the Host.” Better to study and assimilate these rather than to squabble pointlessly in a commbox.
If I recall correctly the gold standard of which you speak, was a banker’s gold standard, silver was undervalued and pegged by law at a fixed relation to gold– hence the populism of William Jennings Bryant. In any case, I remember reading Rothbard’s What has Government done to our Money in my callow youth. Carl Menger’s regression theorem explains where money comes from. Where we are now is uncharted territory.
Much in these articles and comments I do not grasp, I must confess, but for those who can appreciate it better, here is a video discussing some points from Prof. Hudson’s book:
http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=15948
Hear hear.
Money is virtual. Always has been, always will be.
Alan,
Thank you for stating what I began to state in my earlier comment. The Mises, gold-bug crowd simply know nothing when it comes to money. All money no matter what you choose to use as it is Fiat. The authors, as previouly stated, do not understand money and put on blinders and ear plugs when one attempts to speak upon the history of money. Since their arguments and false ideologies are and have been easily debunked they counter with absurd comments and falsehoods.
The statement that production has fallen since Bretton Woods is a lie with no basis in reality. It is the bank money, debt money system, and fractional reserve that creates and preserves the rentier class. Fiat has no correlation to the lack of law and requlation that permits the financial parasites to control wealth distribution. No matter whether money is gold, wood, copper, tally sticks paper, thin air or manure he who controls it controls governments and legislation. Finally, if money is a commodity what stops the oligarchs from hoarding it? If it rises in value how does the working man get his? When there was a gold standard there also was a chronic lack of money in circulation. I wish the members of Ludwig”s cult would all follow him to where he is now.
The Federal reserve creates the FIAT dollar . . . the Federal Reserve is a privately owned Central Bank, whose existence actually is in violation of the US Constitution. The Fed was given the ability to create unlimited FIAT dollars, which it has ultimately used to purchase and control all the politicians, media, and educational systems of the West (for one example, see “The Veener of Justice in the Kingdom of Crime https://www.youtube.com/watch?v=eHgbRYgpGGs )
Note that dollars could be created by our government and not the Fed. There is no need for the US to issue currency that requires payment of interest! Because Federal Reserve notes are printed for a *private* bank, they become liabilities and obligations of the United States government.
Private Central Banks do not exist to serve the people, the community, or the nation. Private Central Banks exist to serve their owners, to make them rich beyond the dreams of Midas and all for the cost of ink, paper, and the right bribe to the right official.
Behind all these wars, all these assassinations, the hundred million horrible deaths from all the wars lies a single policy of dictatorship. The private central bankers allow rulers to rule only on the condition that the people of a nation be enslaved to the private central banks. Failing that, said ruler will be killed, and their nation invaded by those other nations enslaved to private central banks.
Excerpts from http://www.barefootsworld.net/fedsecrets_00.html :
The Federal Reserve System is not Federal; it has no reserves; and it is not a system, but rather, a criminal syndicate. It is the product of criminal syndicalist activity of an international consortium of dynastic families, who own its stock.
The Federal Reserve system is a central bank operating in the United States. A central bank is the dominant financial power of the country which harbors it. It is entirely private-owned, although it seeks to give the appearance of a governmental institution. It has the right to print and issue money, the traditional prerogative of monarchs. It is set up to provide financing for wars. It functions as a money monopoly having total power over all the money and credit of the people.
When Congress passed the Federal Reserve Act on December 23, 1913, the members of the 63rd Congress had no knowledge of a central bank or of its monopolistic operations. Many of those who voted for the bill were duped; others were bribed; others were intimidated. The preface to the Federal Reserve Act reads “An Act to provide for the establishment of Federal reserve banks, to furnish an elastic currency, to afford means of rediscounting commercial papers, to establish a more effective supervision of banking in the United States, and for other purposes.” The unspecified “other purposes” were to give international conspirators a monopoly of all the money and credit of the people of the United States; to finance World War I through this new central bank, to place American workers at the mercy of the Federal Reserve system’s collection agency, the Internal Revenue Service, and to allow the monopolists to seize the assets of their competitors and put them out of business.
The President of the United States appoints the Governors of the Federal Reserve Board, who are then confirmed by the Senate, which creates the fiction that the Federal Reserve is part of the Federal government. It is not, the Fed is privately owned. The Federal government has never owned a single share of Federal Reserve Bank stock. The Federal Reserve Act stipulates that the stock of the Federal Reserve Banks cannot be bought or sold on any stock exchange. It is passed on by inheritance as the fortune of the “big rich”. Almost half of the owners of Federal Reserve Bank stock are not Americans.
Federal Reserve notes are actually promissory notes, promises to pay, rather than what we traditionally consider money. They are interest bearing notes issued against interest bearing government bonds, paper issued with nothing but paper backing, which is known as fiat money, because it has only the fiat of the issuer to guarantee these notes. The Federal Reserve Act authorizes the issuance of these notes “for the purposes of making advances to Federal Reserve banks… The said notes shall be obligations of the United States. They shall be redeemed in gold on demand at the Treasury Department of the United States in the District of Columbia.” These notes, printed for a private bank, then become liabilities and obligations of the United States government and are added to our present $19 trillion debt. The government had no debt when the Federal Reserve Act was passed in 1913.
—
“People who will not turn a shovel full of dirt on the project nor contribute a pound of material, will collect more money from the United States than will the People who supply all the material and do all the work. This is the terrible thing about interest …
But here is the point: If the Nation can issue a dollar bond it can issue a dollar bill. The element that makes the bond good makes the bill good also. The difference between the bond and the bill is that the bond lets the money broker collect twice the amount of the bond and an additional 20%. Whereas the currency, the honest sort provided by the Constitution pays nobody but those who contribute in some useful way. It is absurd to say our Country can issue bonds and cannot issue currency. Both are promises to pay, but one fattens the usurer and the other helps the People. If the currency issued by the People were no good, then the bonds would be no good, either. It is a terrible situation when the Government, to insure the National Wealth, must go in debt and submit to ruinous interest charges at the hands of men who control the fictitious value of gold.
Look at it another way. If the Government issues bonds, the brokers will sell them. The bonds will be negotiable; they will be considered as gilt edged paper. Why? Because the government is behind them, but who is behind the Government? The people. Therefore it is the people who constitute the basis of Government credit. Why then cannot the people have the benefit of their own gilt-edged credit by receiving non-interest bearing currency on Muscle Shoals, instead of the bankers receiving the benefit of the people’s credit in interest-bearing bonds?” — Thomas A. Edison, New York Times, December 4, 1921
The Lost Science of Classical Political Economy
http://neweconomicperspectives.org/2009/12/lost-science-of-classical-political.html
Debt, Deficits, and Modern Monetary Theory
http://hir.harvard.edu/debt-deficits-and-modern-monetary-theory/
Modern Monetary Theory – A Primer on the Operational Realities of the Monetary System
https://papers.ssrn.com/sol3/Data_Integrity_Notice.cfm?abid=1723198
Taxes for Revenue are Obsolete–Beardsley Ruml–Chairman Fed. Res. Bank NY
http://www.constitution.org/tax/us-ic/cmt/ruml_obsolete.pdf
Modern Money Mechanics
https://ia801400.us.archive.org/13/items/ModernMoneyMechanics/ModernMoneyMechanics.pdf
Bank of England Quarterly Bulletin
http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/qb0801.pdf
http://s3-eu-west-1.amazonaws.com/htcdn/Interim-Report-110411.pdf
The Sovereign Money Illusion
http://www.3spoken.co.uk/2014/11/the-sovereign-money-illusion.html
All 100% confirmed.
The Money Masters Full Documentary- The rise of the bankers
https://www.youtube.com/watch?v=UrJGlXEs8nI
The corrupt Federal Reserve is NOT Federal
https://biblicisminstitute.wordpress.com/2014/08/24/the-corrupt-federal-reserve-is-not-federal
The only thing that guarantees wealth throughout all crises, wars, system crashes and civilizational collapses is ownership of arable land + means to work and defend it.
I have no doubt that the Empire will drag us all down as it goes down crashing and burning. In a world without Nike, Gucci, Samsung, in fact, without globalism; where you have to work for what you eat, what’s a bag of gold worth as opposed to a bag of flour? You can’t eat gold.
By no means. It can simply be taxed away or declared eminent domain. Nothing is absolutely safe.
“Our Imperial weapons give definite form to our Empire. And nothing has shaped our Empire more than the FIAT. The deformation began in 1971, when the US imposed her Power to re-define the rules of the monetary system for her sole benefit.”
The story began much earlier. Right after World War II, at a Conference known as Bretton Woods. It is then, and there, that the US, by creating the IMF and World Bank, became what it is today.
Yeah, the there have been several stages of degeneration…WW1, 1944, 1971, 2008… we are in uncharted territory. Those stages are examined in other chapters. Enjoy, Cathal
This article looks deep and radical, but it is surface. If the problems of the system were to be found in fiat money, the system would quickly be overhauled to fix it. The problems of the system are to some extent manifested in fiat money–but those are precisely the problems that those in charge want it to have. If fiat money didn’t exist, they would have to invent it precisely to get the kinds of outcome the rest of us deplore. Indeed, it didn’t exist and they did invent it and in broad terms they got what they want. There are some unwelcome side effects and contradictions, but those would also come from anything else invented with the same objectives.
The real problem is that the system is run by elites with the objective of making those same elites wealthier and more powerful. The secondary problem is that ultimately, you can always get more wealth faster by stealing it than by building more. This is particularly true if you measure in relative, short-term, and individual, terms. Sure, if wealth is generated partly by selling to consumers and you make the consumers too poor to buy stuff, the overall economy may suffer. But relatively, if the other guys have half as much stuff and you have more because you took it, you are now more than twice as rich as before–whereas if the whole economy grew 15% or something and your wealth just grew along with it, from a relative perspective you didn’t get richer at all. Which may seem senseless, but it makes more sense if you think about power as well. And in the short term, if you can make a fast buck who cares if the cumulative impact of a series of fast bucks is a drain on society’s wealth? You can always re-invest somewhere else (well, until you can’t). And it may be true that if all the elites keep doing all the same stuff they will combine to make everyone poorer, but looking at it individually if you go for the stealing strategy you’ll still be better off than some other individual going for a constructive strategy (This is called a “collective action problem”).
It so happens that those are the terms the elites think in. So they are going to constantly come up with new ways to get their hands on all of society’s wealth (and if you think environmentally, all the world’s wealth) at the expense of the rest of us and indeed of the globe itself. Also they’re going to do their best to make sure wealth is power, and lack of wealth is lack of power. Fiat currency is just one manifestation of this drive to own all the capital, take all the profits, indebt all the population and so on. The move from fiat currency controlled by governments (vaguely responsive and responsible to the people, at least some of the time) to fiat currency controlled by “independent” central banks (somewhat run by banks but still with some degree of public function and oversight), to fiat currency largely controlled by private banks and financial institutions (completely unaccountable to and with no responsibility for most of those using the currency involved) is another aspect. And the question isn’t really about “fiat”, the ability to arbitrarily define and create currency, the question as with so much else is who gets to decide, who is in control.
And the answer to that “who” is, it should not be billionaires–in fact, that there should not be billionaires. It should be the people much more broadly making the decisions.
On a side note, “What has happened is what always happens – you have a system politicized to such an extent that political access – and not profits from innovative new solutions – Become the core of the incentive structure.”
The major problem is that in any system in which profits are the priority and greed is a–indeed the–respected virtue, the only way to get it to work much at all is to hedge that greedy pursuit of profits about with extensive rules to stop anyone from cheating to get stuff in destructive ways. But at the same time, it must give rewards, wealth and political power, as “incentive” for the greed. Immediately we reach the contradiction: Greed brooks no barriers to reduce what it can get, and the system grants greed the levers to break those barriers. Productive capitalism can never last very long because the greedy will get political access and change the rules to allow destructive behaviour.
A secondary problem with this statement is that frankly, innovation is vastly overrated. Let’s look at Flint, Michigan. Is the problem there a lack of innovation? No. The problem is that the elites are leaving no money on the table to keep up the basic, old fashioned elements needed for prosperity like plumbing, electrical power, roads, transit, education, health care and so on. Out of all that kind of stuff, only education and communication infrastructure have much “innovation” about them. The problem is lack of ability to mobilize simple hard work and needed resources, not lack of ability to innovate. Present day elites love talking about “innovative solutions” because they mean things they can put a toll booth on whether anything actually new or useful was involved or not–infinitely extended patents for trivialities.
To the extent that innovation is important, these same elites spend a lot of PR dollars trying to convince us that it is generated largely by profits–but it is not. It is more likely to be generated by people driven by interest and excellence than by money, and much much more able to be built on if the new knowledge is widely available and usable than if it is walled off with secrets and patents. That’s how science works, by standing on the shoulders of giants, not cutting them off at the knees. Public sector scientists, open source software are where innovation tends to happen. Internet? DARPA. The Web? CERN. The “cloud”, “containers”, supercomputer “clusters”? Linux. Iphones? Whole host of government-produced technologies, government loans and subsidies went into the development of those.
Fantastic comment. One of my buddies, from the Netherlands, read your comments on the ‘Capitalism Requires World War’ piece and wondered if you should write part of the book?
Though, please note that you’re reading the beginning of the answer. It gets a little deeper ;)
Your writing chimes with a famous, though anonymous, American critic that goes by the pen name ‘NOTArealAMERICAN’… I wonder if you’re him? ;)
I’m a Canadian. Deeply complicit, but not quite the actual belly of the beast. More a remora.
Purple Library Guy
What you say applies to most societies since even before agriculture. The main differences now are innovation and scale. Capitalism has been uniquely good at using technology to exploit potential energy, and thereby to raise billions of people from subsistence. As a consequence, however, where other societies have collapsed because they destroyed their immediate habitat, capitalism is now capable of making the earth as a whole inhospitable for humans. Climate scientists have made practical proposals for avoiding the latter without entirely foregoing the benefits of capitalism. In the face of catastrophe, which is more likely to be effective: root and branch reform of society (or at least talking about it), or lobbying the powers that be to implement the practical proposals? It is possible for the people to modify the behaviour of the corporations, (just extremely difficult). It is less obvious how the people are to overthrow them (especially when so many seem not to want to) and what put in their place. (Russia and China are still going to do their bit to destroy the planet, even if they extricate themselves from using U$ reserves. State capitalism is not obviously environmentally friendly.)
“In the face of catastrophe, which is more likely to be effective: root and branch reform of society (or at least talking about it), or lobbying the powers that be to implement the practical proposals?”
Unfortunately, neither it would seem. But certainly the latter, while it sounds oh so reasonable, cannot work in practice and never ever has. Even the more realistic approach, creating enough unrest that the powers that be implement practical proposals out of fear, cannot work for any length of time. Most recently, that was tried in northern Europe–social democracy and all that jazz. Look at them now. In America, whither the New Deal? Same place as the dodo. Capitalism is not inevitable, but while it exists it does have a structure, not rules precisely but a way of operating. You can make changes with a shock to the system, but its basic nature will reassert itself over time. And what is true for social reforms to make capitalism more humane to people is also true for environmental reforms to make capitalism more humane to the natural world–under great pressure, maybe things can be done, for a while, a bit–but limitations on exploitation whether of nature or people are limitations on profit & accumulation, and capitalism’s basic nature is to destroy such limitations. Trying to make it be something it isn’t, cannot work.
Given which, it doesn’t really matter whether it was capitalism which “raised billions of people from subsistence”–we are where we are now, and now it is time for capitalism to go and for something else to be innovated. Still, I feel the need to put a question mark or two there. It’s hard to untangle all the causal strands of history, but IMO capitalism has been oversold as an engine of prosperity. Every system oversells itself; medieval kings swore blind that they ruled by divine right, but I really doubt they did. In the case of capitalism, from the beginning it threw as many people into poverty as it enriched; industrialization under capitalism brought unprecedented productivity and also unprecedented misery–and if the story was mixed in, say, England, it was largely unmixed in, say, India, where the advent of capitalism in the form of imperial English rule created famine and destitution as the locals were forbidden various forms of industry the better to let English manufacturers sell to them. This sort of deliberate breaking of industry and progress was common throughout the New World, Africa and Western-dominated parts of the Middle East as well. It may be objected that this was a matter of imperialism, not capitalism. But this was not the imperialism of medieval Spain, which simply grabbed the gold or whatever other goodies were on hand and took them home. The point here is that the operation of capitalism as we knew it in the West was deeply mingled with the operation of capitalism in all these other places. For the clothing factories of England to operate at full capacity, there had to be cotton plantations and above all no weavers in India. Many places in the Caribbean were forbidden to manufacture so much as a nail, and one of the key disputes between England and the Colonies in the American revolution was that key interests in America wanted to promote local manufacture, perhaps with some protectionism, while Britain wanted the American colonies to remain purely clients for British manufacture. The theory of free trade and comparative advantage was popularized largely to rationalize precisely this process of maintaining dependence for the Americans and others. But the point I’m getting at is that capitalism was rarely independent, truly internally oriented. It needed to create markets for export by destroying the ability of places outside to function without importing, it needed to gain access to materials by forcing places to export them. This is known in some circles as the process of “underdevelopment”–creating or deepening poverty in one place so that capital can magically “raise . . . people from subsistence” somewhere else. And the total population of the places that got underdeveloped is larger than the total population of the places that got developed–while even in the places that got developed, capitalism created both wealth and poverty. There is no doubt that capitalism, as Marx might put it, “Developed the productive forces”–but the record with respect to actual people is distinctly mixed. And where it was positive, it tended to be the result of massive unrest, trade unionism and so on, creating a shock that temporarily inflected the system towards sharing the wealth a bit. But this never lasts. We’re currently at the vanishing tail end of such an inflection.
Could it have been different? Could technology have developed anyway in some more egalitarian system? Dunno. I’m not even sure that the kind of social setup I would prefer was even possible at any sizable scale with pre-internet technology. Formal representative democracy across a whole country probably couldn’t be done without fairly rapid transportation, communication systems like the telegraph, and mass literacy which also requires the printing press and so forth. That IMO is why it never seemed to happen before around the 18th century but then spread rapidly.
Similarly, I don’t think a more consultative kind of democracy, that includes economic democracy, could have been done without the kinds of tools that can be made today using social-media-like software and internet communications. Not on scales much bigger than a town, anyway. This is why so many people in the 20th century tried to set up such things and generally ended up with centralized state capitalism. But it can be now. My current favourite example of the kind of new approach to egalitarian decision-making that is now possible can be found here:
http://www.loomio.org
Now that it is almost certainly possible to replace capitalism with something better, I think we have a duty to try to do so, particularly since as you point out, “capitalism is now capable of (and I would add inherently disposed to) making the earth as a whole inhospitable for humans.”
I’m convinced, take out your pen and write ;)
This is the 16th edition so it’s quite a advance book now, but some chapters can always be improved or new one’s created. The book is never allowed to exceed 400 pages.
The chapter entitled ‘What is The Nature of Economic Growth’…is quite a nice read.
Purple Library Guy
As an engine of innovation, capitalism has not been oversold. (I think the case is well made by William J. Baumol “The Free-Market Innovation Machine”.)
We are where we are, as you rightly say. There is a logic to capitalism, even if not an inevitability – but where we are is in part the result of specific deliberate decisions (to recognise the corporation as a legal person, for example) and distinct processes (like lobbying of government by corporations) and contingent facts (that the transformation of energy our technology makes possible happens to pollute the atmosphere).
Just as it was not inevitable that we arrive where we are, it is not inevitable that current trends continue.
Your account of how Western imperialism and capitalism combined to devastate the world is, I think, accurate. (One correction. – Spain and its compradors in the Americas exploited the land and its resources for five hundred years. It didn’t just ship the gold home.)
You may be right that loomio or something like it will make anarchism a practical possibility. Not any time soon. In the meantime, right now, captialism, free market and state, is destroying our habitat. There are measures that can be taken now to avoid the worst consequences. (And change has been effected in the past, admittedly on an altogether smaller scale – the use of lead and the pushing of tobacco.) The measures advocated by climate scientists and economists may provide the time needed for a new improved model of society to arise.
First things first.
Even if you believe that the realistic objective is to force a short term modification to capitalism while we figure out what to do next, the best tactic is to push for something more. Why in the political realm supposed realists seem so insistent on telling people (well, telling leftists mostly) that they ought to go into a negotiation asking for only what they want or maybe even less than that, is beyond me. When it comes to negotiation and similar political horse trading, it is best to fight for much more than you think it necessary to get; there’s no reason to pre-bargain yourself down, the opposition will be quite energetic in that. If you push for only what you think it might be realistic to get, you are likely to get less than nothing.
Furthermore, in general when it comes to political struggle, moderates should value extremists. Extremists are the bad cop. If you’re a moderate, the extremists aren’t people you should be embarrassed about, upset about or trying to suppress. To the contrary, they are one of your most potent weapons. In my opinion, you can always tell a fake moderate who is actually a quisling (or a useful idiot) precisely by their systematic attempts to neutralize more extreme viewpoints on “their side” (It is noticeable, for instance, that the Democratic establishment fights the left fringe of the Democratic party harder than they ever fight Republicans, who they are always seeking to “compromise” with). Martin Luther King would not have gotten as far as he did if Malcolm X were not waiting in the wings. One of the messages moderates, to be effective, should adopt when dealing with opposition is along the lines of “No, I’m not going to water down my demands further. My demands are already the middle ground! You can either meet what I think is necessary and perhaps de-fuse the situation, or you can make me fail. Then the radicals will be the only avenue left for the people I represent, their positions will be vindicated, and you can go deal with them instead. Good luck with that.”
The notion that an advanced economy can make the transition to operating as an on-line community would be extremely fanciful even if the notion had been worked out in any detail, which it hasn’t. To think it practical to campaign for it rather than try to mitigate the effects of climate change, in the hope that it will wean the world off hydrocarbons, is folly.
The hydrocarbons are not the problem. It’ s the accumulated idiotery of the human race causing all the trouble.
Some examples?
Saving one resource while destroying three others. Reducing a bit of CO2 emission over here whilst augmenting that of CH4 or other over there. Really smart!
Building up countries and then bombarding them back to the stone age, and then having to rebuild them again. This putting billions into warfare and related is quite probably causing more harm to our planet than all other non war-related industries together.
Half of Indonesia’s remaining tropical rain forest was (and is) burning to enable us idiots in Europe and the US to burn some ‘bio’-fuel in our cars and feel really good about ourselves, while the rest of that palm oil ends up in food as a cheap replacement of healthier oils that are produced locally. Rain forest destroyed, biotope of orangutangs and other precious fauna and flora as well, mega loads of immediate CO2 released, future CO2 because of long haul transport of that oil, etc. IOW, endless debilism.
Shiploads of car tires sailing around the world from port to port to be sold at the place where demand (price index) is highest. A tire trade specialist told me once that the average car tire circles the globe several times before arriving at its point of sale.
The 190 or so bobos joining COP21 in Paris all came flying in, the yearly carbon footprint of these morons is larger than all of my, or your, family’s in a lifetime. Have they never heard of tele-conferencing? One of the greens of France at COP21, a guy called Nicolas Hulot, told us years ago that we should forget our cars and choose alternative means of travel, and that while he was travelling all over the world and at home driving a Volkswagen gas guzzler with a V10 engine. He lives and works in Paris where public transportation is marvelous, truly tops, no need for a car. Here in the south in my town I can take a train in two directions twice a day, and a bus to the next town twice a week, but will have to order the ride two days in advance. I don’t mind and try not to use my car as much as possible and to combine errands.
The weather on our globe has changed, but there’s no proof that this is because of CO2. CH4 would possibly be another story but none of our ‘worried’ leaders is mentioning that. None of that stuff coming out of our exhaust pipes so how could they tax us? About their geo-engineering almost nobody ever talks. But the particle cover they create at those altitudes surely influences the weather, a lot! Less solar energy on the earht’s surface but higher temperatures at altitude and a strong greenhouse effect. Why they’re doing this is obvious…
Know what? I no longer want to be part of this shit. Will go live of my piece of land, chemical free, and barter as much as possible. Screw them…
Smart Parasites–audio interview with Michael Hudson
http://michael-hudson.com/2016/03/smart-parasites/
Thanks!! I am downloading it now and will listen to it in Friday.
Cheers!
The Saker
I’d like to give an example of what kind of madness results from our “Russia bad, US good” behavior.
Lithuania buys gas from Norway even though Russian gas is cheaper. Meanwhile, Norway buys fracking gas from the US even though Norway produces gas of its own. We are told it’s cheaper for Norway to buy fracking gas from the US than to use Norway’s own natural gas from its own wells.
(1) http://www.lngworldnews.com/lithuania-gets-first-2016-lng-cargo/
(2) https://www.energyvoice.com/oilandgas/europe/104746/first-shipment-us-shale-arrives-norway-ineos/
Cathal Haughian, I have been reading your book online, and it is really interesting. What do you think of Craig Murray’s website? ( He is an ex British Ambassador)
There is a very interesting discussion that has been going on over the last two days, about Terrorism on Craig’s website.
https://www.craigmurray.org.uk/archives/2016/03/terrorism/
I just wrote this..
On September 11th 2001, I was on a Flash Course – at Learning Tree International near Euston Station in London. I had asked to go on the course..My employer paid all the costs. When I got home, my wife was like – well its hard to describe…My wife had given up her job in the City when our second was born…She became a Childminder – a Full time Mum – not just for our two – but for several children over the years.
It just so happens that on September 11th 2001, she was looking after Twin Blonde Baby Girls – only a few months old. The Grandmother of the Twins was in one of The Twin Towers in New York when The First Plane hit. She was terrified. She could not contact her son in London – but contacted the mother of the twins – my wife was looking after – when she was still inside the building…
Then the phone went dead.. We all felt almost certain she had died…but we could not contact her for well over 24 hours.. Communications between London and New York were completely saturated. We simply could not get through.
I went back on my Flash course the next day. All the trains were running normally into London – but not packed..I reckon one third of people were too frightened to turn up.
I did not know what had happened, but was determined to find out.
This Was PERSONAL.
It took me nearly 18 months, before I was sure.
I then told everyone – and they all thought I was mad.
But you can’t argue with the laws of physics and maths – or if you do – then that is your problem not mine.
She got out of the building and ran and survived.
Tony
Someone, anyone (the author,even) –
Who are the “team” and what have they to do with readers of the FT?
And what has money to do with “religion and the unconscious mind”?
Is it not more useful to start with its role as a means of exchange, store of value, and unit of account?
Money is obviously a belief system, a human invention that has no existence or intrinsic value in nature. All it has is the agreement of human beings to use it as a store of value and medium of exchange, until that agreement breaks down. You can use it to exchange the value of one thing for another thing as long as everyone involved believes that the belief of everyone else will hold. And they are right, until the commonly held belief is shredded, and no longer held by anyone!.
Read the Big Reset http://www.thebigresetblog.com/index.php/the-book/ by Willem Middlekoop, a Dutchman with a blog by the same title. It has a list of currencies (money) that once were used, but suddenly disappeared, including a couple in Germany and at least one in the United States. Some Latin American countries have had multiple different forms of money that have been born and have died. Ecuador had the Sucre. They were “dollarized” about 20 years ago. Sucres no longer exist and belief in them was severely shaken several times (flight capital, into dollars, in Miami.bank accounts……same with many other countries in this Hemisphere, repeatedly.
People unconsciously accept and use a currency until their faith is shaken. Then their unconscious mind awakens and becomes consciously concerned with how to avoid the vaporization of their savings and investments denominated in the currency that has lost the confidence of rapidly growing numbers of its holders, who seek to dump it, fast, while they still can.
People use a state currency when they have to pay their taxes in it and the institutions of the state are strong enough to enforce the taxation.
It has nought to do with faith.
Tax drives money. Money is credit. Money is virtual.
Your first paragraph is surely right.
Your second alludes to the (I think fascinating) history of money and monetary regimes.
Your third repeats your first, so I agree with it, but I think you make too much of the term “faith” (or I am reading too much into the author’s reference to “Religion” – capital “R” – and “the unconscious”). We are not talking about religious faith. We are talking about faith that the current social arrangements will persist – a faith that is borne out until it isn’t. Talk of the “unconscious” is also unnecessary. We are in the habit of trusting that the social arrangements in place yesterday will be in place today. We do waste time thinking about it unless events force us to.
If this is all that is meant, I agree.
Just senior Capitalists ( there are a handful of academics, one Nobel winner ) from the USA, UK, France, Germany, China, Russia.
What is actually is a “senior capitalist”?
Older CEO’s and money managers.
Quite so. This a well thought out piece with only a few minor lapses in monetary theory not worth quibbling about because the general thrust is right on and the conclusion is correct. The system is failing and will take down everything other than the bear bones economy that will always exist. Russia under the Putin regime is a dissident within the New World Order (how I hate this term but it is concise) Bank of International Settlements (BIS) system. The Chinese elite are in greater trouble but should be able to pullout if they follow sound economic principles for here on out. The western financial house of cards is rapidly reaching a point of destructive instabilities and needs to re colonize Russia just to keep the money as debt system going for the short span of years the looting of the Russian people’s wealth would provide. Russia has its own internal monetary flaws which leave it vulnerable to western financial attacks and needs to secure these weak areas, mainly her central banking system as tied into the BIS and debt money paradigm thinking. Russia is the only respite of humanity to the fascist police state corporatocracy the western elite are trying to establish on a world wide basis as they orchestrate events and operations on many fronts simultaneously, both domestic and internationally, to this end goal. And so we must regard Mr. Putin as the leader of the free world, and as strange as that mean seem it is a true fact.
Rocky… suits. I can’t watch many movies because all I see is actors playing roles – fake. Suits the US system.
Russia seems far more genuine and when it comes to fighting they also have the real thing, no Sylvester Stallone’s required.
I know I haven’t written this very well…but it is just a part of my history…experiencing – the change than came in with Margaret Thatcher in the UK…she wasn’t all bad – in fact compared to our current lot she was a bit of a star…I know Northern English swear words are not allowed here – and it is your website..I will try and turn my feelings down a bit… and use a bit of précis.
the bbc did andy pandy, dead in the water and the power of nightmares.
BT reached the the pits…and obviously – well they couldn’t get any worse could they…??
I am not paying BT anything and haven’t since 2001..They haven’t provided any services.
Yet the bbc keeps sending me an annual DEMAND..
I have the envelop in front of me now…I haven’t opened it yet
“quick Renew simple easy convenient tvlicensing.co.uk”
I can’t stand Murdoch…but at least Madonna can sing…
and my wife just loves Sky TV…and she also watches the bbc…
So I guess I am going to have to pay it..
It says – You are an old man now and can have yours for Free??…
I’ll open it (nah can’t do it)
No it says you paid us far too much via direct debit…here is a refund…you can switch to this other company if you like…but I didn’t even open the letter…
Then I get another one…we have just lowered your annual cost substantially – cos you couldn’t be bothered changing suppliers and stayed with us.
That was British Gas…
This is the bbc
£145.50 – pay or we will take you to court
I don’t watch TV….but I know a lot of you guys at the bbc.
You used to be really good – Brilliant – the Best in the World.
But you are not now working for us British people, nor the rest of people in the world
Why should I pay you horrible liars anything?
You are not on Our Side.
We are British
Tony
How Thatcher helped Pol Pot
http://www.globalresearch.ca/how-thatcher-helped-pol-pot/5330873
I don’t watch western NATO war mongering lies propaganda since 1998, I don’t have any TV or Radio since 1998. Yet right now they demand 790 EUR from me for the period 2011 to 2014 alone and the authorities want to storm my small flat on April 5th. No joke.
That’s freedom in Germany anno 2016!
Google for GEZ: https://www.google.de/search?q=gez+&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a&gfe_rd=cr&ei=PXfzVuS8BJPF8AfS7InoDQ
gut zu hören von dir
Translation MOD -“good to hear from you”.
Tnx, loyal supporter ioan
Riba = Usury = these days they have deceptively and falsely changed this word into the more positive version which they call “interest”.
https://youtu.be/8nvw5E-wi7g
Concerning the Islamic Prohibition of Using Paper-Money as a Medium of Exchange
http://www.bogvaerker.dk/fatwa.html
My deepest condolences to Russia’s Rostov plane crash :((((((((((((((((( Tragic final selfie of beautician killed in Russian plane crash http://www.smh.com.au/world/tragic-final-selfie-of-beautician-killed-in-russian-plane-crash-20160321-gnnxi8.html
(btw, if it really was only bad weather is not proven, there were some odd things)
btw, if it really was only bad weather is not proven, there were some odd things
Watching the security camera video, if the crash was caused by bad weather, it was extremely odd weather.
A few more pieces of MH370 have been found in Mozambique. Apparently this fits the drift modeling according to Guardian and so the operation to map a large section of previously unknown ocean floor is continuing.
Originally the drift modeling for that stretch of ocean with westerly prevailing winds that is being searched, showed that wreckage should turn up on west Australian shores.
When a piece of wreckage turned up in Madagascar, the drift modeling was re-checked and found that wreckage from that area of the ocean with westerly prevailing winds, would indeed end up on the African shoreline rather than simply traveling with the wind to Australia?
What utter tripe. The world changed because monetarism/neoliberalism emerged to overturn Keynesian orthodoxy. They just took advantage of the crisis of cost push inflation caused by the OPEC embargoes to attack labour in favour of big business interests.
Not because the gold standard was finally (and wisely) abandoned.
Why is this low level ‘analysis’ even on this site? It’s not even first year undergraduate grade worthy.
….”was finally (and wisely) abandoned”…..ah wisdom….hahaha…For who and by whom was it abandoned?
It was abandoned for the same reasons it always was. A gold standard is an artificial and arbitrary constraint on fiscal policy.
But if you’d rather have unnecessary unemployment and underfunded social spending for no good reason, feel free to argue for it.
Bankers love gold.
Actually bankers love paper and will soon be delirious over digital . Gold pays no interest and requires storage fees. Digital will be the bankers nirvana until it isn’t
In Mises upside down world perhaps.
Why mine when you can print. Why print when you can click a keyboard ?
Hayek
Replacing the gold standard with the current system of commercial banking was also of benefit to end-users (us). It makes transactions cheaper. Not so sure allowing commercial banks and investment banks to merge was such a good idea, though…
Cathal
Thank you for taking the time to reply.
I would like to know what you mean by the reference to religion and the unconscious. Others have said money relies on faith. I think they mean trust.
What do you make of the usual criticisms of a gold standard:
The supply of money depends on the supply of gold, which depends on the number of gold mines. In the 19th century, shortages of gold led to prolonged deflations, and the discovery of new gold mines to inflations. We want the economy to grow at least enough to drag the bottom billions out of poverty. There is not enough gold to back the necessary money.
A gold standard is in effect somewhere between the European ERM and euro. We have had the drawbacks of such a system demonstrated for us. It throws the burden of adjustment on the real economy and there are not going to be fiscal transfers to ease the pain.
Hi Ewan,
The chapter/answer is split into three parts. And you’ve just read the first part.
The final part answers your first question.
Your second question is hard to answer. There isn’t much data from the 19th century.
It is generally assumed that the total price of all goods in the economy is always equal to the total income distributed. Though sure, gold is not perfect, see the second part of the chapter.
Regards,
Cathal
Cathal
Do the next installments the following subsidiary questions:
Have you looked at the feasibility of bimetallic standards and commodity index standards?
Individual states cheated in the Gold Standard – how avoid cheating in your new system?
“I wouldn’t start from here.” – The history of the period from Bretton Woods, through Nixon’s suspension of the gold peg, up until now has left the world exposed to U$ risk. Any switch in monetary regime or reserve currency is going to cause the RoW huge capital losses. How respond?
Do you think you might have wrongly identified where the problem lies? Fiat money is in itself neutral. Capitalism was every bit as exploitative under the Gold Standard. State communism imposed fixed exchange rates. Welfare capitalism could flourish under fixed exchange rates (as it did post-War) or under fiat money and floating exchange rates (it is neoliberalism that has caused the damage)..
Ewan, I’m just answering the question ‘Why we need to beat Russia’.
And I think I’ve done that.
Russia has won a battle in Syria, but this is Global war.
The main contributor uses the pen name Roacheforque at wordpress.
Check him out, he’s very smart.
Cathal
Just as a footnote: “I’m just answering the question, Why we need to beat Russia” is not entirely accurate about an article that is devoted mostly to fiat currency, reserve currencies, debt and a gold standard.
This video explains the problem of fiat money as well as any.
https://youtu.be/jqvKjsIxT_8
We’re close to the end of the current money life cycle (nearing the end of the dollar). Buckle up.
Interesting article that essentially repeats what’s been said before (but in a more intellectual prose):
FIAT is doomed, as is any monetary system resting on faith and not pure free-market capitalism.
Purple Library Guy reiterates this sentiment: fiat is a self-construction of the PTB that offers advantages to their lifestyle of cronyism, theft, and control over this nation and all other nations forced to interact with the FIAT machine.
I must admit: honing in on faith as the foundation of currency really drives this whole geopolitical drama home. Do I see a Broadway play in the future?
As for the constant references to your “senior capitalists”… Isn’t that a bit absurd given you’ve shown the current state of capitalism to be no more than a shark tank? And each statement you make linking yourself to them puts their immorality and narcissism on you..
In any manner, the writing is on the wall – you’ve just put it in better calligraphy: the Western cabal are facing a loss of confidence in their now-recognized broken faith producing machine. The cogs on this machine don’t produce wealth for it’s people, they simply take it from others and let the crumbs fall. Much like parasitic cell metastasizing it’s host.
The only problem is these senior bean counters hold all the guns and launch codes. We’ve got sociopaths locked in the control tower, and the mob is at their feet. Will they push the self-destruct button or accept their crimes?
Well Nils,
Broadway can wait ;) Actually, well, the book has changed over time. This is the 16th edition, and weaker contributions are replaced by better ones. I’ve found that the older guys are just more insightful and knowledgeable and I’d guess the youngest contributor, aside from myself, is now 60. That’s what I mean by senior. Actually, I’m not sure why they write, they must have different motivations. But I think they’re worried…
Enjoy the book,
Cathal
They will never accept their crime
This comment by the author is pure nonsense, and leads the reader into a cul-de-sac of bad thought.
‘What is The Nature of the Monetary System?’ The Monetary system has three layers – the core is Religion and the unconscious mind – as they formed first. The outer layer is operational and intersects with geopolitics, it explains:
First of all goods credit predates money. Humans evolved with gift economies where they traded with each other and simply remembered who owed who what.
Next was talleys, which were a mark of goods owed – giving the goods credit a patina of law.
When tribes exceeded 80 people it became necessary to have talley marks.
This is not to be confused with the British Talley system, where the king issued talley sticks, and since they could be taken up in lawful taxes, became money.
All money is fiat, and gains its law by its stamp. Silver and Gold by weight were issued by the temples in exchange for barley weights, the first time this type of money came into existence. Prior to that temple workers were paid in grain. Note that gold was weighed in barely “grains” on a balance scale.
Probably in Lydia is where the first “stamped” money came into being, and the stamp gave the former metal money its value.
The true nature of money is law. The modern “debt money system” came fully into being with the bank of england in 1694. Prior to that, it was 700 unlicensed Sephardic Jews of Amersterdam’s stock market, who invented modern stock market capitalism. Why? They had lost their rents on the gold silver exchange mechanism after Vasco de-Gama discovered the Southern route.
They emigrated to Amsterdam because that is where Portuguese ships unloaded gold and spices. They followed the money of their former vocation, and this is why Portuguese got so rich so fast. Jewish donkey caravan routes from East to West were overturned by shipping, and the lesson was learned. Jewish money power must attach itself to maritime shipping, and the next target was England.
When England was finally monetarily conquered in 1694, a debt spreading money system for the first time took control of a country. It is no accident the population soon had a debt hook thrust into its mouth.
This debt spreading system is what people think of money today, but it is really CREDIT.
Credit is a type of money that pops into being from nothing, and when it returns to the ledger it disappears. Credit has its own name, lets use it and call it what it is.
Lawful floating money can be made of Gold, or paper, or electronic digits in a computer. This type of money does not need to be Credit. Floating money does not have a time base, nor is it compelled to return to a double entry ledger for destruction.
Our friends operated a rental theft mechanism using Gold and Silver for centuries, draining the West of Silver and moving Gold from India.
Jesus was killed for 30 pieces of silver, and in those days silver was generational debts -to discharge the debt, slavery was acceptable. It’s no accident that Greek’s who came under this silver system ended up dying in the silver mines in order to pay the usury on their sliver debts. Solons law reforms were a direct response to overturn this parastic usurious money system.
The law for silver in those days was completely different than the law today.
Waxing poetic about metal as money does humanity a disservice. It is not a panacea especially when metal is divorced from the reality of the necessity for law. Law has the opportunity to code for morality.
Private credit is NOT lawful money by its very nature. It is a con game of the highest order, but that does not automatically make Gold or other metals have some sort of magic properties.
Keynes and “fiat” are bandied about by the metal bugs, so now the words have a loaded meaning – and the intent is bring forth an emotional response.
Sector balance equations by Wynne Godley lay bare the difference between private debts and public debts.
A debt money system goes into positive unwanted feedback, where no new loans are being made, and yet the debt instruments continue to recall their former credit. In many cases the debt instruments cancel and force the the former credit to disappear. This type of credit economy has a sawtooth with a rise in credit issuance and then a fast dramatic drop during depression/recession. In order to cancel the debt instruments the “bankers” then go into harvest phase and claim land and other fungible assets formerly pledged on double entry ledger. This is why big businesses are attached to finance and are made up of the body parts of small business.
“Internationalism” is the desire of debt money system balancing its books across markets and time. But, this ignores the true law nature of money. Money should be sovereign and not exceed the reach of law of the sovereign people.
Note that gold and metal can be melted down and spirited out of country causing the collapse of money supply. This is exactly what happened when the jews were kicked out of England and allowed to take their Gold and Silver with them.
http://www.sovereignmoney.eu
Featured by ZeroHedge:
“Why We Need To Beat Russia”
Tyler Durden’s picture
Submitted by Tyler Durden on 03/24/2016 19:28 -0400
Submitted by The Saker, authored by Cathal Haughian
http://www.zerohedge.com/news/2016-03-24/why-we-need-beat-russia
Comment at http://www.zerohedge.com/news/2016-03-24/why-we-need-beat-russia
“””””KesselRunin12Parsecs
KesselRunin12Parsecs’s picture
“The deformation began in 1971″
Bullshit!… I stopped reading there!
It began when the jews blackmailed Woodrow Wilson in 1913… (finally succeeding after):
– Failing in the War of 1812, after the 1st Bank of the United States charter ended
– Failing to assasinate Andrew Jackson, after the 2nd Bank of the United States charter ended
– Succeeding to assasinate Abe Lincoln, but failing in their dream of a private central bank at the time (because he saw ‘greenbacks’ as a viable currency & refused to borrow money from Rothschilds at usurious interest rates to fund the Union side of the Civil War, which was fought so that jew carpetbaggers could move in and take over Southern infrastructure)”””””
The “jews” blackmailed Wilson, assassinated Lincoln after he fought the Civil War to let them expropriate the South, tried to assassinate Jackson, and tried to exploit the War of 1812?
I think you’ll find (have already found) that, if you try to ascribe everything to one single cause (particularly a phantom cause), you very soon lose touch with reality.
So, what is an extraction economy, and how did Russia get hosted? This is non-trivial, as Russians became disenfranchised, and were walking around drunk, and stopped having babies. Population collapse is civilization destroying and an act of war, albeit with hidden money power mechanisms.
Russia was convinced to give up their “earth” for dollars, yen, and euros. Russia was to mine and extract natural resources, and those resources would go elsewhere to be fashioned into goods.
Labor acts on resources to fashion goods, giving labor value. Russians were then denied their labor value in the same was as are africans. Former nuclear scientists and high quality trained labor soon found themselves dispossessed from the ability to trade their locally made goods and services.
Those that won in the Russian extraction economy were those who had access to foreign capital markets (credit formation in Dollars mostly), and those who managed to take control of Russian natural resources, like Yukos. Think carefully on this, the oil in the ground, the Patrimony of all Russians, would vector in future to a small group of people who claimed it as “theirs.”
To further extraction gambit, Russians were encouraged to take out loans in dollars. This means that locals soon sell their soul to gain access to dollars to pay ever increasing usurious debts. Since Rubles have an exchange rate to the dollar, then exchange rate mechanism can be manipulated to then make foreign denominated debts ever harder to pay. Russian labor could not acquire dollars to pay dollar loans, in a mechanism almost identical to that visited on Germany during the Weimar years (post Versailles). Russians were not selling their fashioned goods for dollars, but instead their earth.
Today, the economic blockade on Russia is forcing Russians to balance their economy. Russian labor will soon be able to remove minerals from their earth, and use their labor to fashion goods in a more balanced economy.
The idea that foreign trade always brings benefits does not stand up to analysis. There can be mutually beneficial trade, and there can be parasitic trade.
Recently, the dollar was made strong in exchange due to manipulations, while simultaneously, Saudi’s were convinced to pump like crazy. This was to deny Russian’s foreign exchange as Russia was then reliant on oil exports.
Since all foreign trade is really barter, then any future money system should have something like a Keynes bancor to mark trade. A bancor is an accounting device, not money. Floating exchange rates are just one more sneaky gambit used in forming extraction economies tied to the Western System. Perkin’s book, “economic hit man” explains the mechanism.
Russia barely survived and hopefully has learned some lessons. The Ruble, as all monies, is really a lawful device used by a people to trade their output. Their output needs to be traded fairly for equitable exchange. It is impossible to exchange fairly when debts are denominated in a foreign currency.
Zionism is the cult of the ‘elect’ , wherein your salvation (or ‘election to Divine favour ‘) is predetermined. It is Calvinist in origin, and inevitably leads to a disregard for the perceived ‘non-elect’ (damned ) and paranoia (fear of being unelected.)
Aristocracies have this same psychology from their belief in inherited favour through bloodline (intensified through centuries of selection.) Their paranoia though is rooted in truthful recognition of perpetual envy (which they desire for it is the basis of their self-esteem ) but not its evil twin malice (which leads to plotting against their power.)
The Jewish Orthodox ‘chosenite’ psychology renders all who are not Jewish ‘goy’ (unchosen or rejects by G-d). Zionism gives them the belief of entitlement over the goy (the non-elect) , even to the point of theft of their land and goods. Exactly like the aristocracies/nobility. Israel is the manifestation on earth of that G-d-ordained entitlement.
That’s why the Christine Zionists, pace their end-times millennarianism (the Rapture) are their perfect psychologi cal mirror.
The Zionism you reference was the secular Jewish nationalism that was part of broader nationalist movements post WWII (and before.)
But that would not have justified the colonization of Palestine. so it morphed – became forced , deceptive and evangelical and led to genocide. however slow and protracted.
Zionism. therefore. is essentially fascist whatever the religious flavour, Jewish or Christian as it demands an un-elect or untermensch. And the chosen are free from any rules of engagement with the un-elect.
So cannot dialogue with fascism since that requires an egalitarian spirit and a commitment to honour.
As a result, I cannot be as sanguine as you that Russia will be met in any such spirit by those at the helm of Israel, or the United ‘Exceptional’ Snakes.
The Jewish
Very good comment at ZH: http://www.zerohedge.com/news/2016-03-24/why-we-need-beat-russia
Thu, 03/24/2016 – 20:28 | 7358996 Orc from Mordor
“””””All Russians remember that Trotzky (who was a jew) came from New York with a suitcase of American money to make a revolution. And he had quite a lot of power up to 1937 when Stalin took the power from him and jailed all his (removed for language MOD). That is why the jews so much hate Stalin. And that is what the famous “Stalin’s repressions” of 1937 were about. Trotsky was about to make the world revolution, Stalin wanted to build a strong Soviet empire, which he did. And Trotsky got an ice-axe in his smart jewish head in Mexico.
All Russians remember that before the Revolution, most people could not even read and write and starvation was a usual thing everywhere. And during the Soviet period we enjoyed free medicine, free education, free higher education, paid sick leave, paid maternity leave of 1 year, 40-hour working week, and so on. So we don’t care for your propaganda about murderous Bolsheviks, cause it’s bullshit.”””””
The Bolsheviks weren’t murderous? You’ve got to be kidding.
First of all, read up on Suvarov’s book, “icebreaker” to get an idea of Stalin.
http://www.jrbooksonline.com/pdf_books/icebreaker.pdf
With regards to the Bolsheveiks, read 200 years together:
http://www.biblebelievers.org.au/200%20YEARS.pdf
All of the millions of white Russians murdered in the Gulags is no joke, and should not be dismissed with a rosy a-historical view of the Soviet period.
Yes, financial capitalism is parasitic, where power concentrates into a hidden pyramid. Communism also is pyramidal, where money power and state power coalesce into the hands a few super-oligarchs.
Other much better economies have existed in mankind’s history, for example Canada’s sovereign system from 1938 to 1974.
Don’t fall for false dialectics.
Thanks for the Z H reminder Martin.
Id forgotten how amusing the insults-exchange on the comments thread could be – they are a very witty lot over there.
Also laughed at this:
* * * * *
“Beating the Russians is too much
trouble. It would be cheaper to
disband stupid useless NATO and pay
the Russians a few kopecks for protection.
Anyway they fight way better than NATO and
they make a lot less noise than imbeciles like
Ash Carter and Breedlove.
The neocons will undoubtedly be opposed to this
but we could have the Russians build a time
machine, for a few roubles using parts they
have lying around the workshop, and use it to
transport all the assholes to an alternate reality
where what they say actually makes sense.”
Too bad that guy isn’t POTUS, he’d have VVP rolling around the White House lawn laughing ..
and get a discount on the protection deal.
America is increasingly desperate to maintain its Dollar Dictatorship over the world.
As William Engdahl notes, propping up its oh-so-precious Dollar Imperialist system is one major reason why America launched its war of aggression against Libya under the guise of “humanitarian.”
It seems that Muammar Qadaffi had ideas about creating an Islamic Gold Dinar currency that would represent an alternative to the dirty American Fiat Dollar.
And for this “crime,” the Americans decided to regime change and invade Libya by sponsoring and arming Islamicist terrorists like the Libyan Islamic Fighting Group–and subsequently spreading this terrorist plague into Syria.
The American Empire is the world’s preeminent terror nation–from its covert CIA-backed “moderate” terrorists in Libya and Syria to the American military and its limitless war crimes throughout the planet.
If there were a real War on Terrorism, the United States of America long ago would have been deservedly dismantled and neutralized as the threat that it is.
Hillary Emails, Gold Dinars and Arab Springs
http://journal-neo.org/2016/03/17/hillary-emails-gold-dinars-and-arab-springs/http://journal-neo.org/2016/03/17/hillary-emails-gold-dinars-and-arab-springs/
Transcript of an interview with Michael Hudson:
Junk Economics and the Parasites of Global Finance
http://www.counterpunch.org/2016/03/23/junk-economics-and-the-parasites-of-global-finance/
I was quite intrigued by this part of the post:
“The root of this evil is our love of easy money, or FIAT money, defined by those with power as “wealth by decree” which places an arbitrary value upon “wealth issued by men” such that buying power has no natural governor, as it did when gold was freely traded along currencies in truly free markets.”
What is money? Answer:
1. Medium of exchange
2. Unit of account
3. Store of value
The “easy money” you mention (meaning the $USD) is fine for 1&2 but not so good at #3. The truth is that the masses have been fooled into believing that this miracle dollar can forever defy the laws of gravity and perform all these functions! There is a conflict between a debt based dollar being created at will (debtors naturally demand it’s devaluation) and at the same time performing as a long term savings vehicle (savers demand this instrument maintain purchasing power). The poor dollar cannot forever perform all these necessary functions!
The answer is banks creating money at will in a free floating exchange rate regime (this way REAL economic activity will be rewarded by free market exchange) and a free floating PHYSICAL gold market for savers to store excess production! You nailed it! It can all be found here.
A final comment, besides why would you dear saker provide a forum for such hog wash, basing the money supply on gold or silver means that the money supply can only increase when the supply of gold or silver increased- regardless of the growing population or expanding economy. A pure metal-based money system has historically resulted in depressions, not enough money to meet economic needs. If the author was to respond with “hyperinflation” scares I will explain what are the actual causes of it.
The author fails to do what all legitimate ones should, that is “know your history”.
Where does the author suggest a money supply based directly on gold (or silver)? From the post:
“such that buying power has no natural governor, as it did when gold was freely traded along currencies in truly free markets.”
BTW I agree that a hard money gold standard would be a disaster (won’t ever happen anyway). The problem is saving in debt.
All money involves debt. For every debt there is a credit.
A monetary system is a scoresheet of debt and credit.
John G, agreed. Money is debt/credit. My question is why the hell would any sensible person SAVE is this encumbered entity! To be clear I have no problem with creation (ex nihilo) of credit for credit worthy endeavors. The problem is when the entire world saves in this conflicted credit massive imbalances occur. Just look at the insane structural imbalances in world trade.
Why not save in unambiguous wealth!
Humans create debts and credits with each other. Debts or credits are canceled by returning a like good or service in exchange.
Money may stand in for the good or service at the moment of transaction.
Money that comes into being as a debt e.g through hypothecation at a bank, is created based on debtors signature. The new debtor in the course of making a new loan, is the actual creator of this type of money. This “credit” as money has a time base and is recalled to the ledger for destruction as a function of its debt mirror.
Treasury money, and talley sticks before it, were issued by the Treasury without a debt mirror. This type of money can stand in at the moment of transaction and not be recalled to the ledger. It can flux as a permanent utility. The Greenbackers post Civil War understood this, and some of their writings discuss their desire to have greenbacks pass down to the next generations as a permanent patrimony.
Ancient Venice also operated a money system that was “positive” wealth money, and only later did they descend into a usury system.
Money is not debts and credits. Money discharges debts. The holder of money has the ability to demand goods and services.
That today’s modern human creates private credit simultaneously with a debt instrument has hypnotized most into bad thought.
Bankster’s want the people hypnotized, so their credit schemes will continue to host and milk the sheeple.
Think about this carefully. A third party creates the money at debt and usury. This third party is between two way trading relations of human evolutionary history. Therefore, this third party is a parasite, a cost to production.
Please stop spreading hypnotism. Money is not metal, it is not credit, and it is not debt. Money’s true nature is law. Aristotle was right.
Promulgating money as metal or credit/debt is a perversion in thought which directly leads society toward being hosted by rent seeking parasites.
So, can anybody volunteer to me how the IMF, BIS, 2010 accords, and the addition of Yuan/Renminbi into the SDR basket of currencies plays into this great game?? Thank you
Chris Hedges interviews Michael Hudson: How We Got to Junk Economics
http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=15948
Get some good growing land, even one acre will help you, and try to create a self defense group of similar minded people around you. Then you might have a chance of surviving, at least until the government’s neo- Bolsheviks show up with anti-racist killers. Then it’s Holodomor all over again.
Excellent work. Possibly a masterpiece.
Interesting analysis. First time I have come across someone that understands and has articulated the poison to Western Economies that is ‘financialisation’. Something that I and my colleagues call ‘financial-planning’ which is underpinned by a range of business school and MBA myths.
The US used to use ‘technology planning’ which is the acquisition and use of technology to create a competitive advantage. Following WW2 the US was dominant across all technologies. It dominates non today. If the US does not turn back to technology planning it is doomed. That is a fact.
Countries like China, Russia, Japan, South Korea and few others that use technology-planning will always out manoeuvre the US and its allies. Fiat currency and debt is a weapon that can be used against countries that use financial-planning.
Should have added that the Reagan administration developed a high sophisticated (profound I would say) capability to return the US to technology planning. It went into operation under Reagan and was achieving its mission objectives but was taken down by Bush 1 for ‘political reasons’ – probably under the instruction of Wall Street.
Money and Banking-Part 10: Monetary Creation by Banks
http://neweconomicperspectives.org/2016/03/money-banking-part-10-monetary-creation-banks.html
Your basic point is well made. Especially your point about lowering interest rates destroying productive investment. I find your reasoning a bit spotty but correct in the essentials. Interest is all about the productive power of time. Lowering interest rates reduces the time value of money. Investment projects undertaken with the cheaper money grow in number until the last project undertaken can return no more than the lower interest rate. This means the time required to produce a good increases lowering the return per period of the investment. One can say it takes longer to get a return of the money invested or it takes longer to receive a specified physical good.
Consider an investment which costs C and will return a payment in n periods of R. The present value of R is given, say, by R/(1+r)^n where r is the required return per period on the project to undertake the project. So employ profit maximization reasoning to get the present value of profit.
This means
MR/(1+r)^n = MC
Increasing the period n will lower the present value of marginal revenue to the marginal cost of output must be lower. So similarly with respect to factors of production
(dR/dq)(dq/dL)/(1+r)^n = dC/dL = w (wage)
for labor L and for capital K
(dR/dq(dq/dK)/(1+r)^n = dC/dK = r (rental price of capital)
The derivatives with respect to capital and labor are partial derivatives.
Increasing the number of periods n until payout will force down the marginal cost of capital and labor reducing the wage of labor and the rental price of capital per period. Note that as written the production function is not time dependent so the answer is simply a function of the waiting time. In practice a longer payout period is likely to imply a production function in which the marginal product of capital and and labor is time dependent and declining as well. Then w and r will be even lower.
The standard argument for lowering interest rates to increase borrowing for investment and employment increase is a disingenuous argument which mires both capital and labor in increasingly unproductive projects which waste resources. It is the essence of financing bridges to nowhere and solar power projects which need fossil fuels to operate. The solar tower power project in the Mojave Desert at Ivanpah was built with the aid of a $1.6 billion federal loan guarantee–a hallmark of poorly thought out projects.
Nevertheless money has to be issued and aggregate demand has to be maintained. Just not through loans. It should be issued directly to the populace to spend. Note that from the Fisher equation MV = PY. That is, the money stock times the velocity of money equals the price level times the real output. A very classical expression in macroeconomics and an identity. The usual assumption in a healthy economy is that the velocity and price level are constant. Then a change in the money stock, dM, is proportional to a change in the real output dY, i.e.,
dM = (P/V)dY
Essentially, an increase in the money stock requires an increase in real output. That is the symbol system of finance and the real system of production are locked together. Spending new money into the economy, provided the resources are available for production, will induce the production of new goods and services to back the new money. Properly done, new fiat money creates its own backing.
Issuing new fiat money through loans is a way to make the 1% wealthier. It just allows those who create money to demand something real in return for lending it. When the loan is paid back the interest is real and the money itself vanishes into the nothing from which it came.
Gold as money is no different. You can’t eat gold so it must be spent as well into the real economy to induce useful real production. The only difference with gold is that gold mining is a very expensive printing press. You now must loan it for a rate of return greater than producing (printing) gold.
Note that the money supply and real output are bound to one another in the Fisher Equation. You can’t increase output without increasing the Money stock so long as P/V is constant. Velocity depends on the time period of production and P is a measure of real value. To gimmick P is to cheat on the measure of real value and 1/V is a measure of waiting time in production technology as well as the holding period for money. This ratio requires honest people to maintain it. Given that, output changes require corresponding changes in Money Stock. Abusing fiat currency is not a fault of fiat currency. Condemnation of fiat currency as a substitute for condemning the people in authority who are abusing it is simply foolish. Indeed, the biggest abuse is accepted by the public. That abuse is the act of loaning new money into the economy instead of giving it directly to the public to spend as issuing agents directly into the economy.
The equal sign in economics equations is a liar.
It cannot code for time.
Also, the equal sign assumes that swaps are equal. For example, QE is the creating of new keyboard credit at a private central bank, which then buys/swaps debt instrument.
The keyboard credit is “now” general purchasing power and the debt instrument has a completely different nature with time based usury encoded.
Anybody who whips out the mathematical proofs in economics are already using faulty logic. The equal sign is a two way function approximation. The math doesn’t work, or should be carefully scrutinized to see the falsehoods.
Rent seekers manipulate prices or exchange rates on a daily basis, all the while “swapping” financial instruments as if they were real assets. In all of these cases, the swaps are not equal.
The Oxfam report this year states 62 people instead of the 85 you mention (last year) as having more wealth than the bottom 50% of humanity (3.5 billion people). This number (62) has evolved in steps from the 388 reported in 2010.