Part I - Globalism and the Demise of Free Market Economy
Capital seeks the highest rate of return. Why invest in the US when China is growing GDP at 10%, Brazil 6%, India 8%, it's a no brainer; exactly. Go with the flow. Capital seeking the highest return seeks Globalist control, or does it? All of the financial pundits trying to figure how to make a killing on the markets next big move obviously just don’t get it. Wealth proliferated in the United States because it was a bastion of free enterprise not a feudal society. There are forces trying to push us on to that path of feudalism (one world government) and conversely capital is fleeing the country. We must collectively rail against those forces and by returning to the path of freedom for the individual, rather than a corporate run state, then prosperity will also return.
It is probably too late for the US economy, Its a no win situation with the FED; A Bernanke re-appointment will only mark a rubber stamp approval for the current policy and we do not need another Paul Volker either. He’s ok with raising interest rates to ridiculous levels. His rationale for 19% interest rates was something like; not every American can afford the American dream, they’ll have to live like rats in apartment complexes sporting double declining depreciation schedules. Either way the banks make money when they are inflating or with high interest rates, while the people are the ones paying the bill.
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It is widely suspected if not a fact that the entire meltdown has been fabricated by Goldman, JP Morgan and others with collusion on the part of Paulson, Geitner, Bernanke, Frank (most notables among others) and the ever unwitting Obama which is no less intended to make americans debt slaves of the "banks" operating as hedge funds. Americas wealth has been stolen by these people and to support the current political agenda is to be complicit in this act of legal plunder. The system will most likely fail by revolution or under the weight of the horrific debt piled upon it; the citizens. We already have a plan in place of how our government shall be run, it is embodied in our Constitution.
Milk Toast Capitalists
Case in point; Warren Buffett. A persuasive speaker, although he doesn't know the meaning of being a capitalist; what it is to INVEST rather than allocate funds. If I were a widow or an orphan, this is the guy I would want to watch my money. As misers go, he's top of the list, Scrooge has nothin' on this guy. So, why am I being so hard on Mr. Buffett, you might ask.
If economies depended on Mr Buffets brand of Capitalism we would never, read again; never, have innovation. INNOVATION. This is the crux of the issue. The key to what made, and will keep The United States of America a great nation. Who would have in invested in Ford's first assembly line, Edisons' first light bulb, Alexander Bells' telephone – NOT Buffett. Chocolate; yes, Coke; yes, Insurance (read ponzi scam); yes, Buggy whips; (do they still make those) probably a yes there as well. NO; Plasma TVs, DVD's or IPODs. NO; hang gliders, G5's, satellites or stealth airplanes. Do you see where this is going. Mor to the point Buffett has approximately $26 billion invested in US banks with anticipation of making a profit based on a taxpayer financed bailout.
So this is Capitalism in twentieth century America, this is the role model we are given to emulate as aspiring entrepreneurs or on a more basic level; citizens in a free market economy. And is this not endemic of the larger economic picture, the institutions controlling banking, lending and investment.
Where was this conservative, if not miseresque, line of thinking when social security was diverted in the General Accounting Fund. It is “ok “ for Congress fraudulently raid funds for retirement and health care (regardless of whether this is a constitutional mandate) and then giving it away as foreign aid to India, Israel and the rest of the third world. And not to mention the IMF, so that Brazil can pay interest on the bad debts while the "presidente" retires with billions in a Swiss account. Makes Warren look like a really smart guy. And who is looked to for the repayment of the debt – not the ones that stole the money. That is a historical fact. Meanwhile average americans loose their farms because we can no longer export Ag products to Brazil. Say good by family farm, hello Corporate farming and subsequent control of the food supply. Meanwhile Brazilians live under austerity maesures and we (the US) sends 8 bill a year to the IMF to be given to Brazil so it can pay the interest on its debt. Get this; no one wants to guarantee the investments of a group of private bankers when their ponzi scheme loans go bad. So after all the money taken from the wages of the earning class has been dispersed, the money that is the fall back plan of every american worker, ...then what. Are there even more dollars that can yet be bilked out of the unsuspecting citizen.
The Grinding De-Evolution of the Democratic Dream (thank you Bruce Cockburn)
Back in the day the ideal was when a steelworker in Detroit might deposit money in a the Main Street Bank where it might be lent to an automotive company to re-tool or expand. Now days the bank seeks a higher rate of return loaning the money to build steel mills in China. Would the steel worker knowingly deposit money, “invest”, at low interest return with a company, a bank, that eventually seeks to undermine his livelihood? This is a hypothetical example that has played out over the past 40 years in the US and this does not take into account the unfavorable tax structure put in place by our own elected representatives.
So if the return at the bank isn't so great, how about the stock market? Our steelworkers retirement plan has been buying the company stock for 30 years and in a few years he will retire. As the market reaches a new high the back office traders at the same brokerage that holds his retirement account also handles managed accounts that trades as a hedge fund under a different logo. The hedge fund borrows the stock from the vast pool owned by the steelworkers retirement fund and sells it into the market causing the price to drop. Meanwhile the “offshore” division sells more shares it does not have (or able to borrow) – a naked short – and outright panic ensues. The story ends happily for the hedge funds that are able to buy the shares, even the fictitious ones, back at 10 cents on the dollar, while the retirement of tens of thousands of workers has been stolen – YES, STOLEN, as in THEFT. It did not disappear, the capital was transferred from one account (in this case thousands of accounts) into a few (very privileged) accounts. A hypothetical example, certainly, and exactly what has happened. THIS is capitalism in America? No, this is not capitalism.
Let's review the sequence of events for a moment. Steelworker works 30 years buying stock in his (employers) company. Assume for a moment this person has two options available to him: 1) ...hold his stock and sell his shares as needed when he retires, or 2) loan the shares to a hedgefund that will use the sale to precipitate a market collapse and return the shares to his account at 10% of the original value. As with the example of bank deposits, it is obvious that any person in their right mind would not loan their own assets to be used against them. In both cases the Bank and the Broker assume authority to use the funds or stock in their best interest even if it is against the will of the investor. This is exactly the ANTITHESIS of a Free Market.
Extrapolate: FFWD 2012, Fractional Reserve the Root of All Evil
The Pundits all tell us where to invest, The Buffetts, the Fabers, the GS's the JPM's where to put our money to avoid the collapse or make a killing. New ETFs to track the BRICs, gold, interest rates; a smorgasboard of financial products. The new and improved financial products, not to be confused with the old financial products; where past performance does not indicate future return. AGAIN, why would any American invest in a system that will undoubtedly undermine its' own livelihood? The nearest sane rationale is most likely: “because it is the only system available”.
The only system available, let's look at the foundation of that system. Money, currency, the medium of exchange of any economic system. Without every citizen in this country understanding the function of money and how it is created we will undoubtedly repeat the mistakes of the past. There is a mandate in the Constitution for all currency to be backed by gold and silver. Ten there is the Federal Reserve (a group of private banks with European interests, not “Federal” at all) that was begun on the “fractional reserve” model when in 1913 congress gave the FED $750 million. Through the seriously flawed accounting practice of “Fractional Reserve Banking” which at the time required a 10% reserve; approximately $7.5 billion in US Dollars (Federal Reserve Notes) was created. A tidy sum in 1913, and from then until 1929 the participants in that fraudulent activity created an unprecedented stock market boom as well as consolidating control of 95% of the wealth and means of production in the United States. An in depth discussion of incredibly sinister implications of this relatively simple concept is beyond the scope of this essay. A very significant compilation of data has been assembled in the video, “The Money Masters” (link:
How much further can this road possibly take us. If the US economy implodes others are sure to follow, it will not be an isolated incident. And perhaps there are those that have a vested interest in this type of scenario where the end game is not monetary but one of political control. Global Warming anybody? Hell, even the hard asset guys are spouting guns, gold and glory waiting to see the gold price go stratospheric while the whole country melts down. Is this capitalism, is this a free market.
How can we become investors and not allocators of capital. How can we invest with our own best interest in mind, have control of the assets in the process so that we may choose to participate in a level of measured risk commensurate with return. A return that we or our beneficiary's will live to reap benefit that will not be confiscated by some mechanism of legal plunder (whether by government through taxation or theft by the sanctioned commercial institutions) masquerading as a free market.
Part II - Taking War to the Beast
The people on the front lines know best how to fight a battle. Over 300 members of congress have signed a Bill to allow insight into the transactions the FED has made, which are now the liability of the American taxpayer, with little progress to be shown. One of the fundamental tenants of the Declaration of Independence is “Taxation Without Representation”. It is “Representation” that is the root of the crisis because it is the poor, non-existent, or in most cases ADVERSARIAL “Representation” that has brought us to this point in history. Adversarial because in most cases our elected officials are working against the publics best interest. It is truly amazing how a few million of personal aggrandizement can result in billions and trillions in payoffs to the big players where taxpayers assume risk and private interest receives the profit.
To share the blame equally, it is an “ill informed” public that is largely unaware of the fundamental issues confronting them on a daily basis. Issues that are largely ignored in Main Stream Media (MSM) which is owned and controlled by the Powers That Be (PTB). It is by the advent of the “internet” that we are able to communicate about actual events as they happen rather than waiting days or weeks to read about them in a broadcast or newspaper. It has also allowed an exchange of information that until this time been suppressed.
Our first line defense is in our representation. For it to function we need an informed public. The validity if the information the public receives is critical, and on a more subliminal level the ability of a person to discern the validity of the information they receive. It is better to believe nothing than to believe that which is wrong (to paraphrase Jefferson), which even presupposes a differentiation of “right” and “wrong”. Why so many of our representatives are able to set aside the intrinsic understanding of “right” when the obviously “wrong” choice leads to instant gratification and an upwardly mobile career path. The error of the “wrong” choice has played out across the cumulative careers of most DC politicians since the FED was voted into existence in 1913 under very suspicious circumstances.
The Pain of War Cannot Exceed the Woe of Aftermath (Led Zeppelin)
Before waging a war one should first weigh the moral and ethical and even financial motivations involved as it is usually financial motives crusading (for lack of a better term) as a moral objective that most wars are fought. If “Taxation Without Representation” sparked the Boston Teaparty and the American Revolution, what will be the consequences of “Inflation Without Representation”, “Bailout Without Representation” or the impending “Economic Slavery Without Representation”.
The best offense is a good defense. Our best defense is in choosing the moral high ground; “We hold these truths to be self evident” that we are endowed with certain “unalienable rights”. If the battle is waged with words and peaceful action, only then could we have any hope of winning and thereby minimizing the “woe of aftermath”.
Our first line of defense of Representation would therefore need to be re-verified and re-established and it might best be accomplished by an immediate re-call of any elected official that is not responsive to the voting district in which he serves. Only with a unified front to the PTB in the House and the Senate can we press forward with the objective of deposing the usurpers of power and reinstating a Constitutional government. In order to achieve this we may ultimately need to rely on all of the faculties provided by our Ten Amendment rights; free speech, assemblage and possibly the right to bear arms.
Of crucial interest is here is the right of free speech particularly, in regard to MSM and an accurate and real time portrayal of events as they occur. Perception shapes reality and by MSM we are presented with illusion on a daily basis to shape this reality. We need an objective presentation of facts so we can make decisions independently and the best venue to date has become the internet. It has allowed a real time depiction of events and a free flow of ideas to discuss actions and consequences. To carry this concept a step further we need a real time look over the statesmans shoulder to verify that the best interest of the voting public is being served rather than special interest. Within the application of the new technology we must apply them within the context of our Constitution, whereby the technology is used to promote and preserve our liberty not circumvent it. These should be the foremost issues in front of Congress today, not in trying to verify thousands of pages of the next bailout bill or design a new economic stimulus paid for by debt monitization. These efforts are diverting useful energy into no win situations especially from the stand point of the American citizens.
The Drums Will Shake the Castle Walls...
Be part of the solution, not part of the problem. We have journalists that report on subjects they do not understand, lawyers defending the right of coercion and economists, brokers, financial moguls and pundits all striving to complicate issues that should be maintained clear and concise in terms of public consciousness.
If our United States Treasury is given Constitutional authority to coin money, why then does the Treasury write an IOU to the FED in the form of a Treasury Bond, a debt instrument requiring interest to be paid, ultimately by the taxpayer, in exchange for Federal Reserve Notes in order for the government to pay it's obligations, when it could simply create the currency by using the power it has already been given, and in the process not incur the stifling interest to be paid a group of international bankers. The huge sums of money in interest payments alone on the national debt could ultimately be put back into the economy in the form of reduced taxes and funded pensions, a benefit that would be immediately realized by individuals and business alike.
...the Ring Wraiths Ride in Black
Simple truth is obscured by a cacophony of legalese, misguided journalism, government handouts used to buy votes, special interests, lobbying... the list goes on. Without the FED the government is held to accountability, a discipline based on the premise that it can't spend that which it does not have.
Under the Constitution, if the US government decided to increase money supply there are means granted to the Treasury so long as the currency is backed by gold or silver. It is possible that the principle could be expounded upon to allow backing by other commodities held in store by the government and redeemable by dollars. Such a plan would be in keeping with the original idea of a sound currency set forth by the founding fathers, which by its very nature precludes a “fractional reserve” banking system and the myriad modes of theft given the bankers to employ, and exactly why the very gates of Hell will be unleashed to prevent it from happening.
Take it Back, Take it back, Take it Back...
Dawn rises on Wall Street, hours earlier US Marines taking position in the “”Too Big to Fails”, Investment Banks and “Major” financial institutions. An army of accountants and lawyers led by GSA officials seize books and assets. The situation is repeated at the FED.
As the Institutions are taken apart, National interests are separated from private. Trillions and quadrillions in Credit Default Swaps are left for the private institutions to settle in bankruptcy court, the Chinese Government having a keen interest in the proceedings. The private accounts of the perpetrators are not off limits when fraudulent financial gains are involved.
Banking Model - Monetarist Policy
The dilemma of a closed loop keynesian (fractional reserve) system where: x dollars represents total money supply and .9x dollars are then loaned at interest rate i , money must be created to pay interest and total goods and services are now represented by 1.9 x + i.
This is anathema to a free market (capitalist) society as the value of currency is debased and costs of existing goods will nearly double unless additional goods and services are induced into the system (which is not always the case).
A logical base for a capitalist system of monetization would be; money supply (M) equals cost of goods and services (C) (M = C).
Costs (C) for purposes of this discussion would be consist of Goods (raw materials, components or commodities), Services (labor), Profit (P) and Interest (i), therefore:
M=C+P+i
Banks make loans of amounts based on C (raw materials, goods, inventory, real property).
Loans are made by evaluating the means to repay and thereby based on factors C,P and i.
If money is loaned for a project, ie to build a house, all costs are assessed; land, materials, labor, and usually includes profit margin for the builder. Profit is included in the equation as it is differentiated from a commodity, and needs to be factored into the monetarist equation as does interest so it can be paid without constraining the system.
When the house in the example has been built and assuming it has been paid for free and clear by the owner what is the moral argument for a bank to loan against its value.
1) it must not create the money out of thin air - it must loan from deposits on hand.
2) the owner(s) of the deposit(S) where the loan originates should be compensated in higher interest payments for assuming additional risk
3) It could be also argued that the interest rate should decline as the loan is repaid and default risk declines since asset value at some point exceeds loan value.
From the perspective of the origination of money; gold was held in a vault and script (deposit receipts) were issued and traded as currency. Interest was not paid on gold and therefore why should interest be paid on script that is not loaned (and thereby incurring some underlying risk). In todays market gold is charged a storage fee for safekeeping in a vault, something that might be reversed in an asset backed (capatilist) economy.
Intuitively from a mathmatecal standpoint, Capital is to Mass as Energy is to Currency; E=Mc2 : M=Cv2 (c,v "squared" resp)
Money supply (M) = Capital (goods and services) X velocity of money (v) squared. Velocity of money being interdependent with interest rate varies wrt economic growth 1.0
These are some ideas of the type of plan that is required. It must be constructed by economic minds to create an enduring system. By legal minds to prevent usurpation of power. And the military to enforce the statutes against any foreign agressor, even in the instance of financial aggression. And most importantly it must be understood by every man and woman that a fair and equitabele system (not re-distribution) must be maintained.
Only with a plan that is based on economic fairness the the common man will the US be enabled to be the beacon of freedom it once was, and is intended to be. There is still a long way to recover, but years of misery and suffering will be prevented so long as the members of congress realize who they are there to serve, who pays the bills, and exactly the clearly defined limits of their authority.
Part III – Epilogue, The Next American Revolution
The Story The Dog Poet Never Told
Prophets don't prophesai what the do not see, analysts analyze only what happened and reporters talk about it. It is within the realm of a free people to act on their own behalf for the greater good. How can we create our own destiny if we do not know what it is we seek. Like the Equilibrium Theory proposed by John Nash, there is a balance whereby benefit to all parties involved is maximized. We are currently living the antithesis of that theory whereby everyones benefits are being minimized. Nash advanced his theory in pursuit of trying to come up with an original idea. But the idea is not new. It has been carefully outlined and documented in the Constitution of the United States of America. Nash said it mathematically, Jefferson said it with words 175 or so years earlier. The idea persists because it speaks to fundamental truth that is self evident.
As a society we need a cohesive vision of how to put our Nation back on a solid foundation. It cannot be done by divisive politics, deception or one world government. We must unanimously develop a forthright plan and advance the objective of restoring the United States as the democratic republic. Our primary objective should be therefore; to take back control of our financial destiny and in so doing abolish the FED.
