The video below is another good analysis of our debt based money system. Be sure to watch the entire presentation. Mixed into this are some theories as to who or why we have our debt based monetary system. Regardless of whether you believe someone or some group is behind the architecture of such as system, this presentation still offers some good information into what is going on with our money.
Will we go toward a Renaissance 2.0 or will be pushed into the Dark Ages 2.0?
A point that comes up in Lesson 6 is that people borrow tomorrow’s dollar for consumption today. So, when you hear the average person has 9 credit cards with $12,000 in credit card debt, or that countries have 10, 20, or 90% debt to GDP ratios, you can surmise that they have pulled LOTS of future demand forward to current times. Thus, what do you think happens to future demand? There is none. And what happens to an economy with debt based money? It will contract.
The answer is not with $600 billion in QE from the Fed. The answer is a replacement of debt based money.
Mike Montagne has put together his presentation on his trade marked plan for a Mathematically Perfected Economy™ on YouTube. Reviewing this information is long and will have to be repeated before you can begin to understand what he is presenting to us. Overall, his point is that the charging of interest in regard to creating money for circulation will eventually bring about failure. As any system of economy built on interest, the rates of interest will have to be reduced to just continue extending the eventual failure of the system.
Start with the first video. Realize that not until the 5th or 6th video will begin to describe the Mathematically Perfected Economy™. I would like to see someone especially economists discuss this possibility. But I realize there will be losers in this plan. As Mike points out, these people are the ones who don’t do any work, but expect to be paid.
(NOTE: The below clip will auto play through all 20 of the episodes. You may need to click the full-screen button to see the figures that he shows in the presentation.)
Over at AntiSocialMedia.net, there is some interesting reading on the causes of our current market meltdown. Mixed into this are examples on how our Web 2.0 world is full of manipulation. I first saw this post and this presentation that talked about naked shorting but finishes with an example of how a reporter and book author uses Wikipedia and other sites to push his book while also doing a favor for those using naked shorting in their investing.
You can also check out other sites related to the naked short play here:
One wonders if CNBC was about to blow this wide open when someone went out and placed June puts at $2.50 on GE (see this) as a warning shot across the bow to stop any reporting on this. Hmm.
In case you missed the Jim Cramer interview on Jon Stewart’s show here are links (1) and (2). The first two are okay, but the real meat is in the last video embed below.
Jon Stewart: But isn’t that part of the problem? Selling this idea that you don’t have to do anything, anytime you sell people the idea that sit back and you’ll get 10 to 20% on your money don’t you always know that that’s gonna be a lie? When are we gonna realize in this country that our wealth is work that we’re workers and by selling this idea of “hey man, I’ll teach you how to be rich” how is that different than an infomercial?
A friend of mine who I haven’t talked to in a while emailed back and forth a bit about what is going on in the economy. He’s been pretty much out of the loop and just listening to MSM to know what’s going on. I couldn’t hold back and just piled on. After looking the email, I thought perhaps this could make a good post. May not be on the topic of “Where’s the Interest”, but it expresses my opinion. Right or wrong.
The Great Depression saw a 90% drop in stock prices. And it took 3 years to do it. One source I found says these things are completely planned and timed and all it takes is to figure out is the timing. He claims to have worked out the magic and now says to watch out for the Ides of March (March 15th). He also says dow 2800. So far he’s been correct in predicting the fall to the day in September (he said this in August), and also said the same for the Feb 9 date. Do I believe this? Not sure. But if you combine this along with the understanding on economic theory from the Austrian school (mises.org), then you can see this all happening. Again, combine the conspiracy theory with real economic theory and sprinkle in what goes on day to day, and it all spells doom. Just heard that the last 2 weeks alone represented 50% of ALL the outflows from the market last year. So, why is the market up? Market makes the opinion. They want you to put your money back in. Maybe your missing the bottom. Remember most the gains in the market are made in a very small number of days. You sit out, you lose. So, you better get back in before it is too late. Market makes the opinion. Also, why is retail spending up. Duh, people pulled 50% of all the outflows from the market last year in the last 2 weeks. People are flush with cash and are spending. Likewise as people get their severance check, they spend it. So, once people spend their 401k, IRA money, and their severance check, then they’ll result to their lines of credit (if they still have it.) How long until that all runs out? Don’t know, but wouldn’t that take some time? Again, the market took 3 years to fall 90% in the Great Depression. We entered the recession 18 months ago, maybe we’re half way there to the bottom.
All we need is a perfect storm or one big nail in the coffin to seal the deal. Derivatives. That’s the problem. The Bank for International Settlements (bis.org) or the central bank for central banks said that in last June 2008, there were $683 trillion dollars in derivatives. But this number was just a guess since there really isn’t any real accounting or value put on these things. How many banks do you know that post numbers “liberally”. They don’t. This $683 trillion may be low. What happens when this goes bust? The world’s GDP is $60 trillion. Our net assets are slightly more. There just isn’t enough money in the world to pay this stuff off. The answer. A new currency. A worldwide currency. If someone owns the currency, they own the financial system. If they own the financial system, they own you and your work. Is this tin-foil hat thinking? Perhaps. But nobody thought there was a thing as a black swan, until one day a black swan appeared. People had to suddenly rethink what they knew.
Citibank, Bank of America , HSBC Bank USA , Wells Fargo Bank and J.P. Morgan Chase reported that their “current” net loss risks from derivatives — insurance-like bets tied to a loan or other underlying asset — surged to $587 billion as of Dec. 31 . Buried in end-of-the-year regulatory reports that McClatchy has reviewed, the figures reflect a jump of 49 percent in just 90 days.
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The banks’ quarterly financial reports show that as of Dec. 31 :
— J.P. Morgan had potential current derivatives losses of $241.2 billion , outstripping its $144 billion in reserves, and future exposure of $299 billion .
— Citibank had potential current losses of $140.3 billion , exceeding its $108 billion in reserves, and future losses of $161.2 billion .
— Bank of America reported $80.4 billion in current exposure, below its $122.4 billion reserve, but $218 billion in total exposure.
— HSBC Bank USA had current potential losses of $62 billion , more than triple its reserves, and potential total exposure of $95 billion .
— San Francisco -based Wells Fargo , which agreed to take over Charlotte-based Wachovia in October, reported current potential losses totaling nearly $64 billion , below the banks’ combined reserves of $104 billion, but total future risks of about $109 billion.
Well worth the read. It is a short article that talks about how to setup basic barter type transactions in your community. An example Doublas Rushkoff, the article’s author, gives is a restaurant providing $1.20 in restaurant dollars for every $1 US dollar you pay upfront. Very similar to just giving you a 20% discount on your food purchase. It’s not a perfect solution or example, but you get the point.
What I really liked about the article though is his discussion on centralized currencies versus local currencies. Here’s the money quote:
Like most innovations of the Colonial era, centralized currency is a way to extract value from the periphery and bring it back to the center. People’s labor no longer contributes to their wealth, but to the lender’s. Eventually, the lending economy — central banks and banks — becomes bigger than the “real” economy of people doing stuff. Today, in fact, over 95% of currency transactions are made between speculators. Our money is used less for real transactions than betting.
There’s a few more choice paragraphs about the money changers and the charging of interest which you’ve heard here before. Make sure you check it out though, since he does a good job of summing up our monetary system. Also, if we completely collapse, some of this “local currency” idea may be worth starting while we work in our victory gardens.
NOTE: Thanks to Barry Ritholtz at The Big Picture who thanked Boing Boing who found the original article from H+. (Don’t you love all this hat tipping?)
You just don’t see enough people talking about this. And maybe that’s why the stock market hasn’t gone completely south yet.
In this MarketWatch commentary from Thomas Kostigen:
Few know what derivatives are worth. I spoke with one derivatives trader who manages billions of dollars and she said she couldn’t even value her portfolio because “no one knows anymore who is on the other side of the trade.”
Derivatives pricing, simply put, is determined by what someone else is willing to pay for the contract. The value is based on an artificial scenario that “X” will be worth “Y” if “Z” happens. Strip away the fantasy, however, and the reality of the situation is akin to a game of musical chairs — without any chairs.
So now the music has finally stopped.
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It isn’t the housing market devaluation, or the sub-prime mortgage market defaults that have us in real trouble. Those are nice fakes to sway attention away from the place where greed truly flourished — trading phony instruments to the tune of $700 trillion.
Good article that more people need to hear about. Kostigen goes on to say we need to value these derivatives and only after we’ve done that can the market move forward. Problem that I see is that nobody wants to truly know the score. Those that know about this problem are getting out while they can. Will you be left standing?
Interesting segment from NPR about banks refusing to follow through on the foreclosure process. Even though someone may have walked away from there loan, the loan isn’t “closed” until the foreclosure process is finished.
So with a previous post on how to claim your property it appears there are those people who don’t want their property. And some banks don’t want it either.
"In this manner, by creating ourselves our own paper money, we control its purchasing power, and we have no interest to pay, to anyone. You see, a legitimate government can both spend and lend money into circulation, while banks can only lend significant amounts of their promissory bank notes, for they can neither give away nor spend but a tiny fraction of the money the people need. Thus, when your bankers here in England place money in circulation, there is always a debt principal to be returned and usury to be paid. The result is that you have always too little credit in circulation to give the workers full employment. You do not have too many workers, you have too little money in circulation, and that which circulates, all bears the endless burden of unpayable debt and usury."-Benjamin Franklin explaining to directors of the Bank of England government issued money (link)
"People who will never turn a shovel full of dirt on the project (Muscle Shoals Dam) 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 charge at the hands of men who control the fictitious value of gold. Interest is the invention of Satan."-Thomas A. Edison
