Sunday, January 26, 2014

Are MiLords Stupid?

Yes it is true.  Greed by the 1% has gone over the top and the Ponzi scheme known as fiat currency in a debt based fractional reserve asset chain is about to fall.  Not content with 10 to 1 income disparities prevalent in the 1960’s, the 1% have used the unlimited power of the printing press to create layers upon layers of rehypothecation, derivatives and credit default swaps to effect 400 to 1 ratios, thereby dooming the economy.  I suspect that MiLords, the .1%, (see blog entry MiLords Are Not United for a fuller definition) are not happy that the game is ending prematurely due to unbridled greed by the foot soldiers of the Oligarchy, the merely rich 1%.  But does that mean that MiLords are stupid?  Have they lost control of their own game?  Is the Oligarchy about to fall along with the dollar?

At first glance it would appear that a strategy that sacrifices a currency that has reigned supreme as the world Reserve Currency since 1944 is not very smart.  That shipping all the gold in Fort Knox to China is not very good preparation for the reset defined by the next financial conference that will supplant Bretton Woods.  That killing the golden goose by allowing the manufacturing base to deteriorate and be replaced by The Great Wall-Mart of China, is short sighted.  This is a strategy that bespeaks of goals for a single lifetime, not the visionary foresight of an Oligarchy entrenched for centuries.

So are the MiLords who control such things really being that stupid?  Are they being replaced by a patient China forging a dynasty that will last a century?  Will the next Bretton Woods be held in Hong Kong with a gold backed Yuan emerging as the new standard?  Are we on the brink of the creation of a new world order?  Or are MiLords way ahead of us all, dumbing us down with bad diets and trinkets from Wal-Mart?  Do they have a plan that relegates China to the status of the merely rich?

I don’t know the answer.  I don’t even know if I am asking the right question.  I do not begin to know how to factor in the nuclear chess game, or the impact of China’s own banking problems or the effects of tribalism when the pillars of the world come down.  I also wonder if Rothschild would have been able to control the markets if the Battle of Waterloo could have been reported on the internet.  All of this is above my pay grade.
So I would like to shift the question away from the IQ of MiLords and take a serious look at us.  Are we the 5% (that is all that it would take I think) smart?  Are we awake?  Are we diligent enough to uncover the game?  MiLords are wearing no clothes.  Can we strip away their cloak of invisibility?   Do we care enough about shaping the coming new world order to arise out of our stupor and engage the enemy of ignorance?  Are we too lazy, too apathetic, too blind to challenge what is?

Maybe the task is not to name MiLords.  Maybe the task is to name the 5%.  Not to form a movement that is subject to the “Iron Law of Oligarchy,” but to create a consciousness that permeates the air.  Oxygenated air that is rich in knowledge that burns with Critical Thinking. Do we need a symbol that we can draw with our toe in the dust to self identify?

China has a plan.  MiLords may have a plan.  But it may not matter if there is a great awakening.  I repeat the tag line for this blog:

“The Opportunity to shape the artifacts of our lives into forms that align our goals with our values and complete our humanity has never been greater.”

Saturday, January 18, 2014

Rehypothecation and The Shadow Banking System

To hypothecate an asset is to pledge it against a loan or liability without turning it over to the lender.  If we borrow against a property in the game of Monopoly, we don’t deliver the property to the bank, we simply turn over the deed as a symbol of our hypothecation.  Pawn shops don’t accept hypothecation, they want the watch or the ring or the gun.  They want real collateral in their possession.  Quality collateral is that which more than covers the extent of the liability.  When a loan is “under water,” or “upside down,” it is no longer backed by quality collateral.

If the bank holding such a pledge uses it to secure another transaction by pledging (rehypothecating) it to another bank and that bank uses that pledge to pledge it to another, we call this a collateral chain and at some point it becomes difficult to determine who really owns what.  Quality collateral ceases to exist.  The word chain can be likened to a pyramid or Ponzi scheme as the links between the owner and the property become ever fainter.  This daisy chain of rehypothecation has the effect of creating new assets out of thin air.  The wealth effect of money creation by The Federal Reserve has for all practical purposes been extended beyond money to other asset classes such as land, houses, precious metals, etc. Let freedom to create bubbles ring.

The Federal Reserve was established to create money backed by debt.  Loaning money at interest and then reloaning it as it is repaid and reloaning it again, has the effect of creating new money.  The more times it turns over in a year the more the money supply expands.  We call this the velocity of money.  For about 60 years the money supply was allowed to grow at a moderate rate, allowing the 1% to get rich but not too rich.  Then in 1971 Nixon took the dollar off the gold standard and in the following years the link between the dollar and quality collateral grew ever fainter.

To compound the matter, while the money supply started to grow at a much faster pace (1971 – 2008), The Shadow Banking System was given more and more freedom to set up elaborate collateral chains which in turn generated obscene bonuses for the bankers who racked up enormous paper profits out of thin air.  This out of control banking system crashed in 2008 and in an effort to prop up the corpse The Federal Reserve began to pump enormous amounts of money/debt into the market.  They didn’t call it printing money out of thin air, they instead called it Quantitative Easing.  So we went from dollars backed by gold, to dollars backed only by Treasury Notes purchased by banks all over the world, to dollars backed by … nothing.
The money supply grew from near zero to $100 billion from 1913 to 1971.  It increased eight fold to $800 billion by 2008, a dangerous pattern.  The system crashed as junk collateral was pawned off as quality collateral. The criminals who perpetrated this hoax have been deemed too big to jail by the Attorney General of the United States of America.  In the next five years the money supply passed $3,700 billion, a curve so steep it looks like a wall.  Meanwhile the income differential between CEO’s of large corporations and the average worker under them went from 10 times to 400 times.  Billionaires on Wall Street proliferated at an alarming rate.

Why did the world financial system continue to buy into this thing called Reserve Currency, defined by Bretton Woods and denominated in US dollars?  Why was it possible to establish Petro-dollars as the only way to buy oil even after the gold standard was dismantled?  The answer is complex and involves complicity of the Banksters who manage The Shadow Banking System all over the western world.  In the final analysis it hinges on the web of rehypothecation underlying the paper empires created by banks.  The disintegration of collateral.  And one big lie.

The lie was that we still have the gold.  In fact the whole system depended on keeping the price of gold from going through the roof.  The dollar cannot have value if it is too weak to buy gold.  So for decades the Banksters manipulated gold in the market - leasing it, hypothecating it, rehypothecating it, shorting it, leveraging it, burying it in paper contracts and yes even selling it outright to flood the market.  Until there is no gold left in the vaults.  The stash of thousands of tons belonging to the citizens of America and to other countries who gave it to us for safe keeping, is gone.
Today for every ounce of real gold, there are 100 ounces of paper gold.  And the real gold now lives in India and China.  China will call the shots at the next Bretton Woods conference and it will not be held in New Hampshire.
Let us be clear about two things.  Quantitative Easing is nothing more than printing money out of thin air.  And rehypothecation is nothing more than confiscating an asset and throwing it into a bottomless abyss, a mire known as the shadow banking system.  It is an elaborate scheme to transfer wealth to a few, the few that I am calling MiLords (the .1% or mil or one in a thousand). Quality collateral is nowhere to be found and this elaborate paper scheme to defraud the masses is about to unravel.  Beware.

Do not let fancy words invented to disguise crime fool you.  Do not let the rule of law be subverted by companies too big to fail led by executives too big to jail.  Do not let the Banksters point the finger at gold hoarders, or whistle blowers, or food stamp recipients.  Do not let the false battle between Republicans and Democrats pull attention away from the real issue.
The Federal Reserve and its minions are perpetrating a giant fraud, selling the American people down the Yellow River for 30 pieces of gold.  Bad analogy.  They have sold all the gold in Fort Knox for 30 years of unbridled wealth accretion and if the truth be told they are guilty of treason. 

Rehypothecation indeed!

Tuesday, January 7, 2014

Are You A Critical Thinker?

Yes, you respond, almost as a reflex.  I will posit here that there are several factors that might run counter to this response.  You might be open minded, fair, intelligent, questioning, well read and quite rigorous in your decision making process and yet come up short.  Critical Thinking does require all of these traits but let’s take a look at some more factors that can put you behind a very dark glass, or worse, inside of a very black box.
Are You Examining and Reexamining Your Assumptions?

For example you may be starting with the assumption that we in America live in a participatory democracy.  Yes, it has its faults but it is the greatest democracy in the history of the world and it is the best that we can hope for.  We need to strive to tweak the system by working for change, voting for our brand of politician, and speaking out against corruption.  Someone else might laugh and say, you are na├»ve.  We live under an Oligarchy and we are participating in a superficial form of sham democracy and the general population is seriously deluded with almost no understanding of what an Oligarchy is let alone that we are living under one.  How would you even begin to reconcile these two views?

Getting into a heated argument will not qualify as Critical Thinking.  Rather we need to uncover some strategies to take us to a new level of challenging our assumptions.  We will return to this below.
Are You Asking The Right Questions?

It is possible that asking to what degree we are operating in a democracy, a political consideration, is not the best question to get us where we want to go.  We could start with an ethical question: how can we deal the problem of greed and self interest?  Or we could ask an economic question: what is causing the growing disparity in incomes and wealth? Or we could ask a financial question: how does the 100 year old debt based monetary system skew free enterprise?  Or a legal question: how does contract law trump national sovereignty?

Wait a minute you say, this is getting way too complex.  I would respond with this:
“I would not give a fig for the simplicity this side of complexity, but I would give my life for the simplicity on the other side of complexity.” – Oliver Wendell Holmes

The journey to the other side requires a lot of effort.
Do You Know Your History?

I would suggest that we know far too much trivia and not enough about the history of political organization, the history of money, the history of the commons, the history of innovation, patent law, contract law, mining rights, systematic exploitation, religion, imperialism, anti-trust legislation, banking, etc.  The list is long and arduous. 

There are not enough people who have a sufficient grasp of history to support healthy discourse that would rise to the level of Critical Thinking.  We have a lot of really smart specialized people who are not fully educated.  Without a firm foundation in history, Critical Thinking is impossible.
Do You Understand the Present?

We suffer from an explosion of information that is impossible to fully encompass into our framework.  And so we come to rely upon various sources that we trust.  And we separate ourselves further and further from the source.  The so called Main Stream Media (MSM) becomes the arbiter of knowledge and custom for most and the population at large flounders in an ignorance that serves the interests of the few.  It is ironic that the free flow of vast quantities of information is masking the manipulation of the memes that dictate outcomes.

So ask yourself the question: am I digging it out or am I surfing the web?
Shaping Our Strategies

I maintain that there are more than enough honest self proclaimed Critical Thinkers out there to transform our world in short order, if we would take our game to a higher level.  As it is we are stuck in boxes with labels and spend a lot of time flailing in frustration against the myriad systems that entrap us.  We cluster around our particular causes that promote something near and dear to our hearts: less government, more government, an end to human trafficking, global warming, poverty and hunger, lower taxes, universal healthcare or cleaner air.  We are not bad to do so. 

However, we could seek to formulate a strategy that changes the way things are done.  We could doubt the very foundations of the systems that we have come to accept as inevitable.  And in our doubting we could imagine a world that honors our humanity.  I return to the tag line for this blog:
“The opportunity to shape the artifacts of our lives into forms that align our goals with our values and complete our humanity has never been greater.”

But it is a steep mountain of complexity to climb to get to the simplicity on the other side.

Friday, January 3, 2014

Nickel Energy

That’s what the Chinese are calling it, “Nickel Energy.”  Not a bad move actually considering the bad reputation that cold fusion has been saddled with.  And Low Energy Nuclear Reactions (LENR), well it leaves a lot to be desired considering how popular nuclear energy is in some circles.  So potentially the most disruptive technology to come along since fire was mastered, is being virtually ignored in the most powerful country on earth, while it is being embraced in China?  Wait, let’s parse that sentence.  Maybe we aren’t the most powerful country on earth.  Maybe the country smart enough to buy our gold at a price kept artificially low by J P Morgan on behalf of the Fed, is already ahead of us and we just haven’t faced up to it yet.

In July I ended my post on LENR with this sentence: “So the lesson here is this.  Pay attention.  LENR is not only real, it will have impact.  And how it is controlled through the use or misuse of patents could shape our future.”   With China now firmly in the picture and the US media pretty much ignoring the science, it would appear that patents might not be the issue.  The game will be played out on a much bigger stage than the pliable US Patent Office.  Andrea Rossi is the name most associated with nickel and hydrogen to make clean safe energy.  Andrea Rossi lives in the USA.  We could have used LENR to save the dollar.  Instead we are treating LENR like a poor cousin….. a poor cousin now being adopted by the Chinese. 

A colleague and I have formed NuClean Energy to work on low heat, energy efficient applications.  (The similarity of NuClean to nuclear is intentional)  We have known for some time now that LENR is real and that it is coming.  We also believe that it is a candidate for generating distributed power.  It could actually make the grid superfluous 50 years from now.  So maybe having the Chinese team up with a US company to develop the technology will be a good thing for the world.  Maybe MiLords will not get it under their control and it will rain cheap clean energy on the just and the unjust.

Sorry I can’t send you to a link to this story, unless you can read Chinese.  It is not being reported here yet.  I have to run now.  I need to modify some refrigerator plans to accept an LENR heat module in place of wood or solar.  Maybe that new refrigerator company should be called Sunwood Nuclear instead of Sunwood Ice. 

And guess what?  Nickel is just one of the candidate metallic elements for LENR.  Nickel Energy might just be the first one out of the bag.  We live in exciting times.  Yes, MiLords, the times they are a changing.