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Page VI Index
Sierra Madre (02/24/2008) "Where we are at - a thumbnail sketch of History"
Farfel (09/28/2008) "Is America on the Cusp of a Military Coup?"
Sierra Madre (original post: usagold.com 24February2008; 16:40)
Where we are at - a thumbnail
sketch of History
Evil has a thread that goes all through recorded History. But for practical purposes, we can start with the English Civil War. Charles I of England was beheaded in 1649 and this was perhaps the first attempt in History to destroy the Divine Right of Kings to rule. A consequence of this murder was the establishment of the Bank of England in 1694, the first example of the rule of Bankers instead of Kings.
The second example of the takeover by Bankers of the role formerly filled by Kings, was the French Revolution, and the guillotine for Louis XVI of France.
Since the French Revolution, the world is ruled by Bankers. That is not an advertised fact; the advertising is that we have Democracy, but the fact is that Bankers rule.
Bankers are businessmen with power to rule, and that means that these rulers have SHORT TERM objetives. They must be short-term objetives, because profits are elusive and vanish; they must be captured rapidly. This fact determines the behavior of Bankers.
A good ruler cannot think short-term. Kings did not think short-term; they thought in terms of generations, of dynasties which they wished to preserve, of their nations which they considered as their children.
Bankers think short-term, and that determines the way our world is going: in pursuit of the short-term, to its destruction.
If we look at the record of the last hundred years, we see a progressive deterioration in every sphere of human life, notably in the fundamental fact of the quality of money, which is the cement upon which Society is built.
The deterioration came about as a result of the short-term objetives of Bankers, who wished to gather profits as rapidly as possible, in as great amounts as possible, with no regard for the long-term.
Thus it was, that the Federal Reserve was founded, to guarantee that the Bankers of the US could reap greater profits by indulging in CREDIT EXPANSION, a deadly imprudence in the long-run, but very profitable in the short-run. The Fed was created to protect any bank that "ran into trouble" - which it would naturally do, following the mindset of Bankers, to maximize profits.
Once the protection was in place, ALL banks had to be as imprudent as the next bank, or risk being left behind in the race for profits. Thus, the Fed established imprudence as the norm for Bankers.
As the former head of Citibank said, "While the music is playing, we're dancing." And when the music stops? When the music stops, the head resigns and things go on from there, with more short-term measures.
The last hundred years is the record of the elimination of all sorts of obstacles to CREDIT EXPANSION. The last obstacle to a really vast expansion of credit, was Nixon's decision to "close the gold window" on August 15, 1971.
Nixon followed the Bankers' advice, and with the short-term advantage in view, eliminated the last obstacle to credit expansion, eliminating GOLD as a limiting factor. This is THE MOST REVOLUTIONARY EVENT OF HISTORY.
Since then, no real money exists in the world. The currencies of the world are exclusively DIGITS. A Banker's wet-dream! No limits!
DIGITALIZATION of money has been highly efficient - "money" can be moved around the globe in micro-seconds. No more cumbersome obstacles to worry about like "gold flows" out of the country.
DIGITALIZATION made "globalization" as we know it, a possibility. This is not true trade, for true trade implies an exchange of goods for other goods, and DIGITALIZATION makes that fundamental fact irrelevant. Payment - so-called payment, for it is not true payment - consists today not in giving goods in return for goods, but dollars or euros or yen or pounds or rubles, DIGITS all of them, as payment for goods for which nothing or little was given in return.
But, listen to the praises of "globalization"! It is so efficient!
As James Howard Kunstler says in The Long Emergency, "Efficiency is the straightest path to Hell". Absolutely right!
Cutting corners and taking shortcuts makes for efficiency, but it means abandoning Principle which governs the Long Term. Who cares for the Long Term? Not the Bankers!
They follow the philosophy of William James, "Pragmatism". If it works, it must be true. A variant of the same is "If it's pleasant, do it". No regard for Principles which are eternal. Only the short-term is of importance, because that is all the Rulers are thinking about, the Short-Term.
And so, we are living in a world where the International Monetary System is based on no principle at all, but only on the result of ad-hoc measures taken because they were practical in the short-term, like Nixon's decision, which has overthrown our world, nothing less.
International Finance - in DIGITS which are simple numbers lacking any substance - is also a mess which no one has a clue how to fix, how to keep working. And this is not hard to understand: if no principle has guided its construction and structure, how can a human being tackle its reconstruction? It cannot be done. It is not possible to rebuild something which is a hodge-podge of ad-hoc arrangements, lacking any ordering principle.
So there we are: living the result of being governed by Bankers, people with short-term objetives. But, still we believe in Democracy, which is the bread and cricuses invented by the Bankers to keep us distracted and hiding the little man behind the curtain, who is moving the levers.
Thanks for reading my thumbnail sketch of History. (If you read this far!)
Farfel (original post: usagold.com 28September2008; 19:41)
Is America on the Cusp of a Military Coup?
It is now abundantly clear that Wall Street engineered a "false prosperity" these past two decades, as follows:
1. Goldman Sach's proxy, Robert Rubin, engineered collusive hedge fund raids against various currencies during the Nineties (e.g. SouthEast Asian currency crisis, South American currency crisis, Russian currency crisis, etc) for purposes of driving capital into the US dollar, US bonds, US stocks, and US real estate.
2. Goldman Sachs's proxy Robert Rubin introduced the concept of hedonics, a means of hiding the true inflation picture from the public. Hedonics utilized subjective measurements for distorting price increases (e.g., if a computer's price increased 25% and the computer speed increased 50%, hedonics would state that, in reality, the computer price dropped since the computer speed increase more than compensated for any negative impact resulting from the price jump).
3. Goldman Sach's proxy Robert Rubin engineered all variety of duplicitous measures for controlling the gold price in order to hide the true inflation picture. Through aggressive usage of paper gold leasing, super-sized gold miner hedges (e.g., Barrick Gold's massive forward sale of FIVE year's of its gold production) and reckless Western central bank gold sales, the gold price dropped dramatically even as money supply surged alarmingly, averaging a 10%-12% increase per annum. In theory, the gold price should be a function of MONEY SUPPLY movement, not merely US Dollar strength. That is because, for those of short memory, there was a time when the US dollar served as merely a paper proxy for gold.so that the more paper/digital proxies for gold in circulation, then the more the price of gold MUST increase.
4. Goldman Sachs proxy Rubin engineered a variety of commodity/currency carry trades for purposes of pumping international liquidity into US markets. The currencies of commodity nations such as Canada and Australia were shorted collusively into the dirt while key "commodities" (notably gold and silver) were attacked simultaneously. The fall in commodities and national currencies dependent upon commodities became a vicious spiral downward - and the net result were outflows of liquidity into the US dollar, US stocks, US bonds, and US real estate. Wall Street firms amassed billions in profits through this collusive illegal effort while unwitting counterparties (notably gold and silver investors) were DEFRAUDED of their rightful profits. Of course, the most egregious carry trade (the YEN carry trade) was accomplished, not via the "commodity" short attack, but rather by convincing acquiescent Japanese financial authorities to maintain their interest rates far below USA rates.
5. Interest rates effectively dropped to zero following the tech bubble collapse in order to shift the stock market bubble into a real estate bubble. Once again, the market was subverted from finding its proper equilibrium level through inappropriate interventions by a Fed controlled by the Treasury controlled by Wall Street investment firms.
6. Real estate mortgages were securitized in order to enable Wall Street firms to treat a growing problem as though it were an asset rather than an escalating dangerous debt. Moreover, the securitization of such debts allowed Wall Street cronies to reap gargantuan profits from yet another derivative concoction built upon a foundation of nonsense. These "combustible" securities were sold to a cartel of Wall Street cronies very much similar to the Mike Milken junk bond cartel of the Eighties - in which certain "club members" knew the mortgage securities were bogus while many others were conned into believing that they were true "assets."
These six fore-mentioned strategies are merely the most notable in a litany of market subversions utilized by a USA government that is categorically and unashamedly controlled by its Wall Street masters. There is no longer even the pretext or hint of a Chinese Wall between Wall Street and US Treasury. That the politicos are merely servants to Wall Street is best exemplified by the Paulson coronation. During hearings to determine Paulson's suitability for the position of Treasury Secretary, a long list of subservient politicos failed to ask the ONE question screaming to be answered:
"Mr. Paulson, given that Robert Rubin, a former Chairman of Goldman Sachs, controlled the US Treasury under President Clintonand given that you served recently as head of Goldman Sachsthen would you not say that Goldman Sachs exerts too much influence over the Treasury of the USA?"
The failure to ask this foregoing question - THE obvious question that any six year old child would have considered - negates all claims by USA Repubs and Dems to any semblance of "independence." Unfortunately, the major reason for politicos' dependence upon their financial masters revolves around one indisputable fact: the typical USA politician seems barely capable of balancing his own bank account, let alone interpreting a budget or understanding financial/economic esoterica.
And the question that should be asked of the allegedly "independent" Senator Obama is this:
"You claim to represent a "change" in America - yet you have brought former Treasury Secretary Robert Rubin into your circle as an economic advisor.so, Senator Obama, given this fact, tell us whether there will ever come a day when the American people can be liberated from the tyrannical control of their financial affairs as exercised by Goldman Sachs and its various Wall Street cronies?
There can be no genuine "bail-out" for the financial system until the market is allowed to operate freely again, rather than operating under the thumb of various monopolies, cartels, oligopolies, and compromised market regulators whose key members pay themselves bulti-billions in undeserved bonuses, stock options, obscene salaries, and tax-deductible perks. Any erudite economist would tell you that a free market cannot operate efficiently when it is subverted constantly by financial, political, and Big Media elites.
The only appropriate bail-out ideally should include the following conditions:
1. NO bail-out until the key financial "advisors" of the nation are replaced summarily. That means a speedy farewell to both Paulson and Bernanke, to be replaced by two choices determined by an "economic jury," comprised of 12 senior academic economists selected randomly from 12 randomly selected universities.
2. NO bail-out until the financial regulators operating the SEC and CFTC are replaced summarily. You cannot restore the integrity of the USA financial system while the same regulators who allowed this mess to develop remain in place. Nor is it encouraging to learn that the CFTC is finally getting around to "investigate" the artificial suppression of the silver market when what is truly needed is a formal body to investigate the CFTC itself. It is far past time to determine the exact nature of the myriad connections linking Wall Street to the SEC and CFTC. We have already learned of one most egregiously corrupt connection, specifically the fact that Hank Paulson was a member of the committee that awarded Richard Grasso, former head of the NYSE, approximately 300 million dollars as a farewell gift for looking the other way while Wall Street rigged a tech bubble in the late Nineties for purposes of lining crony pockets at the expense of the USA middle class.
3. NO bail-out until genuine Chinese Walls are erected between Wall Street, the Treasury, the Fed, Big Media, the Presidency, the Senate, the Congress, and the judiciary. As it stands, Wall Street cronies have far too much influence over the principals comprising each sector - and until there are laws in place with real teeth that GUARANTEE the autonomy of each sector, rather than their subordination to Wall Street interests, then America will continue to operate as a plutocracy rather than the democracy originally intended.
4. NO bail-out until, first and foremost, the massive extraordinary compensations afforded key Wall Street partners, corporate chieftains, and market regulators are terminated and, most importantly, retroactively disgorged. In other words, there is no reason to expect the hapless USA taxpayer to contribute a penny toward this "emergency" bail-out until the true beneficiaries of the past TWO decades' false prosperity make their own contributions to the effort. For example, it is entirely preposterous to allow 200 Goldman Sachs partners to walk away with 15 BILLION dollars in bonus compensation awarded in 2006 - an obscene reward provided for generating bogus profits - while the poor fireman, nurse, paramedic, school-teacher, sanitation worker, etc., struggling to pay their monthly apartment rent, must pay increased taxes for the errors of Wall Street ways.
5. NO bail-out without radical political reform. What that means is that, upon election, politicians must pass certain minimum standards requirements, no different than standards they demand their electorate pass all the time. For example, the electorate must pass tests to prove eligibility to drive a carand it is only appropriate that tests be devised to ensure that politicians have at least a minimum understanding of economy and finance.otherwise Wall Street will once again gain excessive leverage over the nation's politicians since, in most cases, the politicians hand Wall Street that leverage on account of their gross ignorance pertaining to all things related to money. Most importantly, the two party system is outdated and allows for financial elites to exercise excessive control over politicians of both parties. There must be new laws that ensure THIRD PARTY protections, such that Third Party candidates can no longer be hidden from view, such that Big Media can no longer exclude Third Parties from the national debate. Until Third Parties have such protections, then the USA plutocracy will continue to subvert every aspect of democratic ideals.
6. NO bail-out until compensatory damages (plus interest) are awarded to gold/silver investors who have had their investments artificially suppressed or destroyed by a collusive Wall Street cartel acting in secret against those investments, not for the benefit of a nation, but rather solely as a means of feathering their own nests. As part of this settlement, ALL SHORT SELLING AIMED AGAINST GOLD/SILVER INVESTMENTS SHOULD BE OUTLAWED UNTIL SUCH TIME THAT A STABLE PRICE EQUILIBRIUM WITHIN THE GOLD/SILVER MARKET IS ACHIEVED. If this results in a radical revaluation of both the gold and silver price, well so be it. In the past, America did well enough despite huge revaluations of gold and silver prices, and there is no reason to think it cannot do so again.
I could list many more issues that should be addressed prior to a bail-out but I consider the foregoing points to be of salient importance.
We are witness to a genuine existential event transpiring in the markets or what some would describe as a "rogue wave." What that means is that all standard methodologies previously utilized to deal with market problems are likely to be ineffective in any long run sense. Instead, it is far past time to employ radical measures to terminate the rogue wave and allow for speedy heeling of a very corrupt dysfunctional economic system.
If the nation fails to take such drastic measures, then it is quite possible that further existential events will transpire, the kind of shocking left field events that few Americans would imagine to be conceivable.
As America continues down the path of economic corruption, moral relativism, and lowest common denominator cultural priorities - all acting synergistically with each other - who knows what might transpire? There is tremendous frustration and fury developing with the current abysmal status quo.
If the nation were to awake to a military coup someday and the overthrow of the current dysfunctional government, frankly, would it really be such a shock?
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