 |
| Rolling pound coins (© 2019 LightColourShade) |
“Any serious financial or natural disaster could trigger the long overdue collapse and bring the Ponzi-type deck of cards down almost overnight on top of us. In the meantime Washington and European governments will simply throw its people’s wealth and promised benefits at the problem thus buying them more time to do what they do best — steal all the money and power they can.” (Jim Sinclair)
The cornerstone of this ever snowballing cozenage was firmly laid when fiat money was first introduced in Europe sometime in the 19th century in the form of “bills of credit”, although the first historical example of paper as fiat money was in China back in the 10th century and the experiment, by the way, didn’t end well. Another famous bank run was the South Sea Bubble, which produced bank notes not backed by sufficient reserves.
The definition itself of fiat currency / fiat money is already revealing enough as to the nature of the economic system behind it: ‘a monetary system in which the money used as the circulating medium of exchange is not backed by or directly convertible into any specific physical commodity, but rather has value because the society that created the system has assigned it value.’
“Fiat money/currency. Legal tender, especially paper currency, authorized by a government but not based on or convertible into gold or silver. money declared by a government to be legal tender though it is not convertible into standard specie.” ‘Historically, there have existed monetary systems where currency used in trade was directly exchangeable for a predetermined amount of a physical commodity, which was usually a precious metal such as gold, silver, platinum, palladium, or copper, although some systems had money that was redeemable for other commodity items such as crops, beasts of burden, or food. Therefore, “a certain amount of bullion is stored in the Treasury while the equivalent paper in circulation" represents the bullion”.
In fact, specie backed money or hard currency is the only real-value paper money that should exist in healthy, non-speculative financial system based on some honour and honesty, but that, alas, is pure utopia.
‘By the World War I most nations had a legalized government monopoly on bank notes and the legal tender status thereof. In theory, governments still promised to redeem notes in specie on demand. However, the costs of the war and the massive expansion afterwards made governments suspend redemption in specie’ — that’s when we definitely kissed good-bye to the specie currency.
‘Since there was no direct penalty for doing so, governments were not responsible for the economic consequences of “running the printing presses”, and the 20th century found itself facing a new economic terror: hyperinflation.’
By the same token, common sense tells us that in a healthy economic system total amount of the banknotes printed in the country should be equivalent at least to its GDP + gold reserve + available natural resources.
Since ‘all money not directly based on specie redeemable on demand is “fiat money”, it means that today all the currencies are fiat money, because none is based on specie redeemable on demand (generally gold).’
 |
| New York stock-exchange. The stock exchanges are fashionable places for speculation.
'Any act of placing money in a financial vehicle with the intent of producing returns over a period of time, most ventured money—including funds placed in the world's stock markets—is actually not investment but speculation.' Investment, therefore, is a fancy word for speculation.
|
Quantity theorists claim that the assets — the gold and bonds of the central bank or the tax collecting ability of the government that issued it — all paper and credit money is backed by are irrelevant to the value of the central bank’s money. Since, despite that, all modern central banks do in fact maintain assets as collateral against the money they issue, the question is why these assets are universally held!
On the other hand, confidence in a fiat currency could fall if the gold reserves 'backing' that currency were reduced, especially during a period when confidence was already in a fragile state for other reasons.
Instead, ‘hard currency or strong currency, in economics, refers to a globally traded currency that can serve as a reliable and stable store of value. Factors contributing to a currency's hard status can include political stability, low inflation, consistent monetary and fiscal policies, backing by reserves of precious metals, and long-term stable or upward-trending valuation against other currencies on a trade-weighted basis.’
Political stability depends in turn on economic stability which is increasingly wobbly due to the insatiable greed of the elites. Inflation has been growing at different rates ever since money was invented, which allows for unbridled speculation, little wonder that financial moguls has always been afraid of and therefore eager to stamp deflation at any cost. Global monetary and fiscal policies hardly qualify as consistent, given that big fortunes have at their disposal a whole host of loopholes and tax havens that nobody has the intention of shutting down in the foreseeable future. Instead of cutting taxes for everyone, which would be a reasonable move, the rich are almost exempt of paying taxes while imposing high rate taxes on middle classes.
Some experts suspect that “backing by reserves of precious metals” belongs in the realm of applied mythology that modern economists are so good at. Whether the Federal Reserve System, and central banks in general still preserve the golden ingots or bullions they are supposed to store as reserves is anybody's guess, and for all we know the vaults might be filled with gold-plated lead (or tungsten) bullions instead. After all, can we verify what’s really going on with the accounts of the central bank and the Treasury, or how Governments interchange or send money among each other?
They capitalise on the fact that "the average American or citizen of any other country is blithely unconcerned that his or her plight is the result of a complex of personal and economic and governmental actions...beyond the normal citizen's comprehension and control". Plus “economics has been made intentionally complex by banking interests intent on concealing what is really going on”.
 |
| Paternoster Square, City of London. (Pillar of British economy and World Centre of Financial Wheeling-Dealing) |
“There is no other possible end state then a full collapse of paper and digital wealth, which in today’s world would be a catastrophe of civilization-destroying capacity.
The dollar collapse will be the single largest event in human history. This will be the first event that will touch every single living person in the world. All human activity is controlled by money. Our wealth, our work, our food, our government, even our relationships are affected by money. No money in human history has had as much reach in both breadth and depth as the dollar. It is the de facto world currency. All other currency collapses will pale in comparison to this big one. All other currency crises have been regional and there were other currencies for people to grasp on to. This collapse will be global and it will bring down not only the dollar but also all other fiat currencies as they are fundamentally no different. The collapse of currencies will lead to the collapse of ALL paper assets. The repercussions to this will have incredible results worldwide." (Silver Shield)
The current global economic system, that is, a debt-based monetary system is an economic system where money is created primarily through fractional reserve banking, in other words, banks issue more credit than they hold as reserves. While the scheme could work if used in moderation, it becomes unsustainable on a large scale.
It’s like a giant wheel of Governments, firms, households etc. borrowing money that doesn't exist physically to pay off debts of money that doesn't exist either. It’s not real economy, but rather virtual economy that manipulates some inexistent abstract values that eventually turn the whole system into virtual reality. Until someone cries out loudly ‘THE EMPEROR IS NAKED!’, and the whole house of cards tumbles down upon our (not their) heads.
In scientific terms, if all of a sudden virtual money disappears or people stop taking it for face value, stock markets will crash.
Information technology has made the scheme even easier to run: today money is basically numbers on the computer screen. Whenever a bank gives a loan it doesn't take money from the existing deposits, gold and other assets, instead it simply writes a new data entry — for each, say, dollar banks lend 10, expecting to collect interests on money they don’t have. As a result, almost all money in the system is debt money, and while there’s debt there’re interests paid, but problems start when the debtors can’t pay any more.
If all nations are in debt, the question is: who are they in debt to? Some say to private banks. But which private banks? The Federal Reserve Bank in USA; The European Central Bank in Europe (except Great Britain); and The Bank of England which, it turns out, are the private central banks or at least have both private and public aspects, and they in turn are controlled by a private financial institution — The Bank for International Settlements, based in Basel, Switzerland. The entity, by the way, advocates for printing more money as a possible solution for the "financial" crisis. Probably no one outside a cabal of puppeteers knows for certain who really calls the shots in these institutions -- hardly anyone who is in the public eye. There might even exist “invisible banks” operating under the cover of official banks, so the real culprits will never be held accountable for the global financial trickery. Take, for example, The Shadow Banking System (I logically deduced its existence, googled it and it popped up!) — "the collection of financial entities, infrastructure and practices which support financial transactions that occur beyond the reach of existing state sanctioned monitoring and regulation. It includes entities such as hedge funds, money market funds, conduits and structured investment vehicles". In short, vacuum in different packagings. And the best part of it is that it's LEGAL!
 |
| Bank for International Settlements headquarters in Basel, Switzerland |
It’s obvious that ever growing sovereign debts are unpayable in the foreseeable future, if at all, so countries and companies sell gold bullions, thus artificially raising the price of gold to reduce their debts. A solution would be to write the debts off altogether (a number on a computer screen can be deleted as easily as created).
At this point, it’s pretty clear that neither US no Europe have the intention of ever paying off the debts, it's all about speculation with interests, stringing fools along and buying time to pass the buck to future generations. No one takes loans they’re well aware they can't possibly liquidate in the foreseeable future and intends to do so.
‘MBS (mortgage-backed security) fraudsters, bank balance sheet fraudsters, derivatives fraudsters and their malfeasant regulators” won’t stop until we have mortgaged every asset in this world in a desperate attempt to salvage the "live now, pay later" society’. (Ron Holland)
Numerous legal loopholes exist for the rich and powerful, such as, for example,
Shell corporations — "companies that are incorporated, but have no significant assets or operations. Shell corporations are not in themselves illegal and they may have legitimate business purposes. However, they are a main component of the underground economy, especially those based in tax havens. They may also be known as International Business Corporations (IBCs), Personal Investment Companies (PICs), front companies, or "mailbox" companies.
A classic tax avoidance operation is based on the buying and selling through tax haven shell companies to disguise true profits. The firm does its international operations through this shell corporation, thus not having to report to its country the sums involved, avoiding any taxes. Oxfam International calculates that the flux of money flowing out from developing countries and deposited in tax havens at $50 billion a year.”
What is the source of widespread belief that growth and expansion of economies can continue forever on a conspicuously non-expanding planet? Unless the laws of physics start to change, never-ending growth cannot take place in a finite system. Of course we could always spill our economies out into other planets or parallel universes.
Highly praised modern virtues, such as ambitiousness, aggressive business making, competition, competitiveness actually led to savage capitalism and economy based on single use trashy products -- all because as a species we are absolutely unable to grasp the concept of measure.
An example of an absurd organization is an international agency that makes a publicly funded living by measuring Corruption Perception Index meant to measure perception and not "reality" — which is basically as useful as measuring the quantity of sea foam on the beach — a mere survey task that a statistical agency could have perfectly coped with! Those holding cushy artificial jobs in the agency argue that "perceptions matter in their own right, since... firms and individuals take actions based on perceptions”.
No wonder those on the lower trophic levels can only survive if they game the system, and those in the high places are busy trying to horde as much wealth as the agonising system can render. The so-called “elected” leaders are but puppets in the hands of elite clique of global financiers and corporations. Consequently, governments pursue nolens volens the same profligate policy as “any attempt to exercise some control on financial system is immediately thwarted by financial ringleaders”, which ensures cartel bank profits, housing bubble collapse, property acquisition by the banks and national assets being sold off again at car-boot sale prices, etc. among other traits of an economy based on speculation and consumerism.
As a result almost all the governments and the entire population of the planet has been sucked into a vicious circle of debt, while banksters speculate with interests and a shadowy "power behind the throne" is fleshing out as a new global government. Who controls the Debt, controls/rules the world.
True capitalism has long since been dead, what we have today is neo -feudalism with corporations, etc. as new feudal lords. For the global elite, mass murder blamed on political opponents is a legitimate tool in the plan to take down national economies and install a one-world totalitarian government and banking system run in neo-feudal fashion.’
(The diminishing dollar: the price of gold in U.S. dollars is jumping, ... by Scaliger, Charles)
‘The envisioned global central bank would operate along precisely the same lines as the Federal Reserve or any other modern national central bank: It would issue fiat currency (money not backed by a precious commodity such as gold), manipulate interest rates, and (at least in theory) "control inflation”.’(Why changes in gold production don't matter by Steven Saville.)
Note, for example, that services, particularly banking, insurance, and business services, account by far for the largest proportion (about 90%) of British GDP while industry continues to decline in importance, so if the bubble suddenly bursts, literally overnight Britain could find itself between rock and hard place, begging for international aid.
Companies worldwide sack staff when the profit growth rate decline or technological progress makes the workers redundant, despite the fact that the staff has earned them huge profits in the previous years.
Equatorial Guinea aid money goes to the dictator who keeps his gold (that is, the aid money) in European banks which collect interests on it or use it as credit money — thus the money stays at home and makes more money;
Governments slash salaries and pensions, which will lead to progressive pauperisation of a large part of the society, and then will pay some pencil pushers for useless research to determine the growth rate of pauperisation;
“The middle classes around the world are being impoverished just to pay interest on the sovereign debts to the banking elites who are enjoying the life of the filthy rich.”
Undoubtedly, borrowers are to blame for taking out loans they can’t repay, but so are lenders for giving out loans without prudence.
You may well ask, why banks would loan money to someone clearly insolvent. The debts themselves are presented as financial products that can be then foisted off to some dupes, and also serve as bogus assets that help inflate a bank’s worth.
However, looking at the bigger picture one might get a "perception" ;-) that, as in a sci-fi story, all this utterly insouciant financial policy and reckless money-lending is part of private banks' strategy to grab as much taxpayers' money as possible until public treasuries run dry and every human on this planet is so badly in debt that their very survival depends on the banks, which in turn will lead to totalitarian world government that only an alien invasion would overthrow.
 |
| Bombay Stock Exchange Only the members of the highest caste allowed |
The scheme is pretty simple: German, French and other private banks gave loans to insolvent countries (the same way ‘they scrambled to lend money to deadbeat borrowers on overpriced homes’) knowing that in case of default EU will have to rescue them for the sake of stability in the euro zone. The bailout is paid by European Union Rescue Fund that is set up and replenished with the taxpayers' money. This money is then used by Greece and the like to keep repaying ever-growing interests on sovereign debts to their creditors, that is, German, French and other private banks. Thus, the top money-lenders have found a way to tap sneakily and indirectly into public money and pump it right into their pockets.
In all fairness, I must add we are all at fault:
we crowd in droves to greet Royal parasites living off the taxpayers' money with flags when they parade by,
we pay to see millionaire sportsmen,
we pay to gawk at mediocre movie stars that turn indecent profits,
we buy pointless technological toys that only benefit their creators,
we pay to bellow to the roar of yelling pop star’s concerts, and we’re clearly unable to judge the products on their own merits and not on any advertising claims, etc., etc., etc.
We make them rich — we deserve to be swindled and exploited.
So, in the end, it's all about human nature — most people regardless of social class, religion, colour or creed would do as the rich do if given the chance to take their place.
Either way, economy based on speculation and squandering is doomed to collapse sooner or later. Let's hope later than sooner!
The bare truth about the current status quo. Very insightful.
ReplyDelete