RIP – Daphne Caruana Galizia

Daphne Caruana Galizia, the journalist who led the Panama Papers investigation, was assassinated with a car bomb on October 16th, 2017.

She made enemies out of a lot of powerful people during her career, and she just paid the ultimate price for it. The question now is, who will investigate her murder? Who would dare to? Perhaps someone as fearless as she was. Perhaps they will be next. Whoever it is, the truth about this incident must be known.

Julian Assange, upon hearing the news, issued this over Twitter: “I issue a €20k reward for information leading to the conviction of her killers.”

Somehow, I don’t think that money is the primary factor for those who would take up this challenge. Power to them, and luck.

Daphne Caruana Galizia‘s notebook, Running Commentary, can be viewed here.

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A Tiger By The Tail

The world, in its current state, is not sustainable. No reasonable person would argue that it is. This does not refer to population; there is more than enough land and food for all. Besides, populations tend to self-adjust based upon available resources. In other words, there is no need for a cull. Equity is the problem. Capitalism, in its current form, which has been adopted by nearly all the countries of the earth with a central bank (excepting North Korea, Iran, Cuba, and some small Pacific island nations – Monaco and the Vatican being exceptional cases) isn’t sustainable either. [I feel it is important to disambiguate this point further. The capitalist system which is in use today can be, and has been, referred to as crony-capitalism and/or disaster capitalism and does not reflect the tenets of pure capitalism. Adam Smith himself put the emphasis on local systems and stated that one should not take more than one’s share lest the entire system collapse. This is often left out of economic theories.] The problem then is, how do we change the system underpinning all our TBTF* sub-systems? It won’t be pretty, but it inevitably must be done. As Henry Kissinger (I am NOT a fan) famously said, “If there are things that have to be done, you should do them quickly.” Many people will undoubtedly suffer, and many of them will die. This horrid reality does not escape me. It is more than unfortunate that TPTB* have organized the world in such a way as to make this unavoidable. All we can do, as a community, is minimize this peril by helping each other make it through to the other side.

Anarchy

It’s not what you think it is. Anarchy is a state of total freedom, but not without consequence. Anarchy is not ‘natural law.’ Anarchy is quite the opposite. Anarchy allows individuals to retain their individuality. It does not mean that there are no longer any rules, or that rules do not apply. People still have to live together, after all. Anarchy simply puts the power in the hands of those affected. The concept of ‘mob-rule’ comes to mind when such things are discussed, but it need not. It can be argued that people are generally kind and compassionate and generous. We may have lost sight of this fact given our current state of economic inequity, but it remains a fact, nonetheless. How could we have survived as a species otherwise? As a social animal, community has always been the foundation of society.

Blockchain

Blockchain, very simply put, is a wholly transparent contract. It has no limits and can be applied to any human endeavour involving more than one person. Many people are intimidated by this techy-sounding phrase, but it is something, at its root, with which we are all familiar; only it is digitized, in order to make it common and accessible to all, and verifiable.

Crypto-currency

The world needs a global currency. Why should banks et al. make money from the exchange of one currency into another? Why should they have the power to create wealth and distribute it to whomever they please? Why should banks and central banks constrain human potential in order to turn a profit? What purpose do they serve anymore, anyhow? The banks (Bank of America, HSBC, et al.,) central banks (the Fed, ECB, et al.,) and uber-banks (IMF, BIS, et al.) have had all of humanity under their collective thumbs since they were conceived.

Which coin will be the standard? Will there be several as with Coca-Cola vs. Pepsi vs. Royal Crown? Will there be too many to count? As long as they are freely interchangeable, who cares, right? My personal feeling is that there will be many, but that all will be as interchangeable as good delivery gold bars from different banks, with no exchange rate. The closest comparison which can be drawn is the Linux operating system, which is open-sourced and comes in many ‘flavours’, all of which are compatible with most other versions.

De-centralization

It may just be time to bring back the city-state. Borders are illusory and they are political. Their time too, has passed. This is not a call to mass migration; on the contrary, it is an invitation for all to participate in the global economy without consideration for whence they were born, and without a need to re-locate, but without hindrance to do so, if desired. Under this new paradigm, there will be no need for entire populations to flee oppression or war. There will be no power structure to impose these conditions, and there will be no will of the people to engage in same.

Encryption

Privacy will not need any protection. Privacy has always existed. Be it through secret code, hidden retreats, occult groups, or VPN*, the dark web is nothing new. The need to protect it arises from those who would intrude, such as the state; but if people want to communicate privately, there is no reason they should not have the means to do so. Blockchain can provide this function. People don’t want to be nothing more than just a number. IBM tried that during WWII and the mental image stuck. People don’t want to be issued tattoos. On the other hand, people don’t seem to have a problem tattooing themselves. If we pick a number (or a hash) for ourselves, it becomes part of us. This is the key to being both public and private at the same time.

Freedom

We must be allowed to live our lives as we see fit. We must not be told that since we live in one particular place, we must do certain things with our time. We must not have to live our lives surveilled. It must not be assumed that we are all potential criminals. In order to acquire the freedom to live as we choose, we must either be emancipated or we must emancipate ourselves, and we’ve been waiting long enough to be emancipated. If it hasn’t happened by now, it just isn’t going to happen. It is time to take matters into our own hands and take the bull by the horns. But what do you do when you have a tiger by the tail? If you let go, it will eat you. If you hang on, you can do nothing else. Eventually your strength will wane, and a lot faster than the tiger’s. So what option is available? The only option left is to kick that fucking tiger in the balls so hard and so often that he will want to get as far away from you as fast as possible, instead of making you his meal. This is what we must do to the control structures, and the people who run them, set up to dominate our lives. We must make the job of ruling over us so disagreeable that none would want to have it. This is the nature of anarchy and the birth of freedom. Free to work in our chosen domain, free to raise our children and educate them with our values, free to do what we choose to do with our bodies and with our lives; these should not just be catchy clichés, they should be steps along the path to autonomy. We are adults, after all; it is time we started treating ourselves as such and acting like adults should act.

Globalism

Some of the tenets of globalism are noble and commendable, but the current crop of globalists are not the sort of people you would want in charge. The problem with it is that, under the current plan, the goals of globalism are to be implemented by force or by coercion. This cannot be acceptable. Certainly there should be a common currency. Certainly there should be more co-operation and less competition. Certainly there should be acceptance of individual beliefs and cultural differences. Certainly equality should reign; but not in the two-tiered Orwellian (or Clintonian) sense. Some should not be allowed to be more equal than others. Being ruled is so middle ages.

Hegemony

Hegemony will, for the first time, be organic and not imposed. Hegemony will no longer mean that an entity controls the whole, it will mean that the whole is one, and that ‘control’ is obsolete. The entirety of Earth’s population will have control over their own lives and society will necessarily move in a positive direction. The word ‘progress’ will finally have meaning as it will apply to the betterment of all mankind, not just a select few.

Internet

The internet, perhaps the greatest human development of all time, has made blockchain technology possible and relevant. The world-wide web is the ether through which all human interaction can take place, irrespective of time or location. It is anything to anyone at any time. It facilitates communication and has done more to shrink the size of the world than planes, trains, or automobiles combined. Without communication, co-operation is not possible. The internet is, to paraphrase Aristotle, the means by which the whole of humanity truly can be greater than the sum of its individual parts.

Joy

What other goal can be more noble, than to wish that all sentient organisms everywhere can experience eternal joy, in any form that it should take? Lasting joy is the best possible outcome.

Kin

Family is the nucleation point of society. Family is the seed. We must come to realize that ‘family’ and ‘community’ and ‘society’ and ‘civilization’ are all synonymous. We are all born of the same family, extended or not. We are all kin. If we learn to treat each other as such, only then will we be able to hope to treat any others we might meet along the way as equals, and learn from each other, and share with each other all the joys that make living a worthwhile endeavour for us all. If there are others out there, we are already family as we share the greatest commonality known: life itself.

Longevity

One of the only two reasonable goals of humanity (progress is meaningless without set goals,) longevity or immortality will be the one thing which makes patience into the true virtue it really should be. When time itself is not a factor in human decision-making, only then will the unattainable be within our grasp. Time is the ultimate constraint. Short-term realizations at the expense of long-term benefits will be a thing of the past. Risks will no longer need to be taken if all the time in the universe is at our disposal. Investigations into the mysteries of life will be complete. Succinctness will no longer trump truth.

Maturity

Maturity is the other of the only two reasonable goals of humanity. It is only when we reach maturity can our exploration of exoplanetary endeavours be justified. If we are the first in the universe to reach such a level, we should be beyond reproach as far as standards of morality toward all life forms are concerned. If we are not, we should be at a level beyond pettiness, such that we can engage with more advanced civilizations and share with them as we would share amongst ourselves. If we are to be the seed of intelligent life in the cosmos, we should then put forth the very best we have to offer.

Reset

It is coming, one way or another. It is very near, and people can feel it. There will be a transition, and it will be rough. Many will not survive it. The consequences of a reset would be, for the short term, disastrous. We should not kid ourselves. The JIT* delivery system would make a great many of us vulnerable to starvation, as most of us are nine meals from an empty pantry. Certainly, all the systems we rely upon to deliver and provide medicine, water, payments etc. could not and would not withstand the rapid transition to an anarchic state.

Ownership as a concept would have to be revisited. Essential factories would need to be owned and operated by the workers, as would water treatment plants, farms, hospitals, etc. There would be massive disturbances in all forms of manufacturing, processing, distribution, and not least of all, social services. Payments would be suspended, and the nature of salaries as compensation for work and their incremental nature would also need to be re-thought.

Robotics could be an enormous benefit, not a job-killer as it is perceived today. Robots could free all humans from meaningless work in order to pursue higher goals, spend more time with our children, help the community, or just sit under a tree. Automation of all the necessary goods and services is nothing to fear if we are all equal. There will always be jobs to do, but with so many people available to do them, nobody will mind doing an hour or two of work every month.

Education would benefit, as well. Instead of being forced to regurgitate mantra which benefits private industry, the field of education could be opened up to alternatives not currently discussed. Universities will morph into discussion groups and the PhDs will simply be those whose ideas are accepted. Paper credentials will become meaningless. Credentials will come with proofs.

Will there not be groups who will try to dominate? Yes, but their power will be limited as their small group can never gain an advantage over the rest. There will be no means by which a small group can come to dominate a larger one. Why shouldn’t those who hold even the most extreme views not be allowed to share them within their community? Segregation is generally seen as a bad thing. Self-segregation, on the other hand happens all over the world. From a motorcycle gang to a China-town to a support group, if those birds choose to flock together, whose to stop them? As long as there is no territory to fight over, all ideologies, while not necessarily being welcome, could be readily tolerated.

There will be a crash. When is not known, but soon is an apt estimate. The global economy is running on fumes, despite what the stock-pushing MSM is saying. The inevitability is such that preparations must be made. Stocking up on non-perishable foods is one thing, but preparing to abandon an over-arching system of control is just as important, perhaps more-so. Why should we allow TPTB* the time to get their shit together, as it were. Humanity will not wait for them to re-fasten the shackles they have burdened us with. It will move forward without them. We no longer need them. Their guidance was necessary in the times of rampant illiteracy, but is now irrelevant. We can do these things for ourselves. Good riddance.

Does this vision of the New World Dis-Order seem utopic? Does it look out of reach. Under the current system, it does. Fast-forward ten or twenty years, add blockchain to the mix, bring down all the overt control systems, and all the limitations on our species could easily be lifted. It will come at a price, but the alternative is a possible ELE*.

*Glossary:

  • ELE – Extinction Level Event
  • JIT – Just In Time
  • TBTF – Too Big To Fail
  • TPTB – The Powers That Be
  • SHTF – (when the) Shit Hits The Fan
  • VPN – Virtual Private Network

Recommended Resources:

 

 

 

Of Bulls And Bears (and why they’re both screwed)

As a follow-up to two recent articles (here and here) on Turkey, Eurasia, and the coming crash of the US$, please consider the following.

As Russia’s Sergey Glazyev said, “As soon as we and China dump the dollar, it will be the end of the US’ military might…” Keep that in mind as you read the following.

China’s current credit crisis causes concern for the world’s economies, but not for China. China can amass all the debt it wants in order to finance its economic revolution and the New Silk Road. There is no limit because the money it is using is free money. This is why they support shadow banking, why they lend enormous amounts to institutions, corporations, entrepreneurs, and citizens; it’s not their money they are lending. They are using their manufacturing sector to pull as much cash as possible out of the west and using that to finance their future. Their own foreign debt is financed by Americans paying interest on obligations. Even their US holdings were financed with American money. Trillions of dollar-store knick-knacks can buy a lot of T-bills. Merry Christmas.

Once they have squeezed all the blood they can out of the dollar, they have no need for the US anymore. This is when they will start calling in their US debt, gradually at first, but accelerating until the dollar is out of breath and collapses, well short of the finish line. This will kill the US dollar, and remove its ‘reserve’ status.

America owes China about $1 trillion, give or take, and owes Japan about $1.1 trillion. Japan is very close to China, both physically and culturally (in many respects – much closer than it is to America in any case.) This will become important in the near-future.

Eric Clapton – Nobody Knows You (3:19)

 

The United States allowed China to become one of its biggest bankers because the American people enjoy low consumer prices. Selling debt to China funds federal government programs that allow the U.S. economy to grow. It also keeps U.S. interest rates low. But China’s ownership of the U.S. debt is shifting the economic balance of power in its favor. …Owning U.S. Treasury notes helps China’s economy grow by keeping its currency weaker than the dollar. It keeps Chinese exports cheaper than U.S. products. …China would not call in its debt all at once. If it did so, the demand for the dollar would plummet like a rock.”

America, as it turns out, is at China’s mercy. China and Russia have become very close, best buds, if you will. The New Silk Road is a plan to bring the Chinese economy to Europe’s doorstep. Beijing and Moscow are connected by a rail line which passes through Kazakhstan. Russia now controls most of the energy going into Europe through pipelines that run (or are being built) through Turkey. Turkey has a virtual stranglehold on the EU because it will have all the pipelines supplying European energy running through its territory as well as having control of the Euphrates river which delivers water to the middle-east. Because of Russian military strength, Turkey listens to Russia. Saud will soon see (or already does) that it makes a lot more sense to sell their oil to China and Europe, and now that Russia can protect them in the middle-east, they have no need for America anymore, nor Israel, for that matter. The petro-dollar will die the same death, America will leave the middle-east once and for all, and Israel will stop settling Arab land, one way or another. They will never have felt so alone. ISIS will be eradicated in short order, to boot.

Once the dollar is crippled, the stock markets will obviously take a nose-dive, but here’s where the insidious part of the plan goes into action – all western investors will be wiped out in one fell swoop. Sure lots of slick investors have a bearish hedging strategy against a Chinese credit crunch, but just think about it. If you are bullish and bet long stocks or dollars or whatever, you will lose it all; but even if you are bearish, what will you be paid with, dollars? Sure you will win all your bets, but your dollar rewards will then be worthless, too… and I haven’t even mentioned derivatives.

There will be nowhere left to turn. Only stackers will be able to eat, and only those heavily invested in crypto-currencies will manage to keep up their standards of living… in another country, of course.

In this new reverse alchemy, defenestration would become a popular pastime and paper gold would turn into lead, one bullet at a time.


Europe will suffer greatly as their currencies collapse, and Saudi and Russian energy will be very expensive (Saud has to make up all that money they’ve lost trying to kill US shale,) but they could still pull through. They might even sell a lot of luxury cars to the new billionaires in the east. Canada could also survive, as it could simply trade one global hegemon for another and sell its resources to China, instead. A very weak dollar would be good for exports, after all.

America, on the other hand, would finally be punished for all its bull-y-ing as city after city would very swiftly be turned into so many Detroits.

America would be rid of its arrogant bull’, and bears would once again roam free, smirking.


 

*UPDATE*

If anything ever goes wrong with the Chinese economy, they always have the option of selling their American holdings (T-bills) despite the fact that this would weaken USD.

Is North Korea The Excuse China Needs To Launch Monetary Armageddon?

The BIS, since its reporting is lagged, can provide cover for secret Chinese plans to crush the USD.

“This collapse in foreign exposure to China is confirmed by Bank of International Settlements (“BIS”), although this data is only to q3 2016.”

This may be hiding the underlying move by the Yuan.

“The forced deleveraging of China’s WMP-driven excess was not helped overnight by disappointing trade data as both import and export growth slumped.”

“The question now is not if China’s economy will slow, but rather how fast,” Mr Frieda added.

If ever there was a good time to sell some US assets, now might be it.

Erdogan: Richest Man On Earth?

Maybe ‘the most powerful man on Earth’ would be more appropriate. Let me explain.

Turkey and the EU have been in limbo now for almost thirty years. Turkey has wanted to join, but there have been doubts about its stability… well-founded doubts.

Recently, the west’s relationship with Turkey has soured. Erdogan has been playing both sides of the conflict in Syria. There is little doubt that he has sponsored mercenary forces to overthrow Assad, that he has moved Daesh oil, and that he has attacked both the Russians (by downing a Sukhoi) and the Americans in Syria:

“The Turkish statement clearly dismissed speculations that Ankara forces hit US-backed fighters in Syria by mistake.”

It would seem that Turkey has said goodbye to its EU aspirations, and perhaps the EU has also:

“The European Union has warned that the bloc could redefine the entire status of its relations with Turkey in light of recent developments in the country and amid growing disputes between the two sides.”

As I have written in past articles, if Turkey looks to the west, America wins in the middle-east along with its allies Israel and Saud. They would essentially control all the pipelines through Turkey, the Euphrates river, and the Mediterranean. Assad would be ousted, eventually. The Russians would lose access to the Mediterranean, and would be blocked at the Bosporus. New terror groups would undoubtedly spring up to threaten Russia from Georgia and Chechnya. This would give the west more power over Ukraine and Crimea, where the focus would undoubtedly shift. The globalists would win, too, by the way.

If Turkey looks east then the New Silk Road will be a ‘fait accompli’ giving China land access to the EU and giving Russia more say about what happens near its borders (with Georgia and Ukraine.) New pipelines would be built to bring Iranian oil to markets in the EU. The China/Russia/Iran/Kazakhstan connection would win over India, in time, as well as Saudi Arabia. The price of oil in America could quadruple overnight, shale or no shale. Populism would soar across the west and the EU, and Assange would be free to leave the Ecuadoran embassy in London.

Turkey looking east would almost instantly save Assad, sever the links between America and Saud, which would lead to the destruction of the petro-dollar scheme, which would kill the US dollar, which would, in turn, bring down all the central banks in the EU. The world’s derivatives markets are highly sensitive, especially these days, to the effects of any downturns with the central banks, just ask Douchebank (ahem) I mean Deutsche Bank. Actually, don’t; they’ve been very tight-lipped about the whole situation.

Deutsche Bank Tells Investors Not To Worry About Its €46 Trillion In Derivatives

 

The entire derivatives market is worth an estimated 1 quadrillion dollars, and if anyone of its substantial pillars were to fall, well, let’s just say that things would not end well. If the whole thing fell apart, it would be the end of America, and the EU, as we know it.

See here for a nice graphic representation.

So there we have it, Erdogan looking east would blow up the western world’s economy more assuredly than any bomb Russia could drop. Putin could end up beating the Americans simply by making nice with Erdogan. He wouldn’t even have to launch a missile. Good thing the west was thinking ahead, allowing a scapegoat like Trump, who would certainly be blamed, to win the white house.

Who’d have thought that the entire populist movement, the western banking system, and the fate of the western world, for that matter, depends not on Trump, or Le Pen, or on Farage, or even on Wilders, but rather on a paranoid dictator worth 1 quadrillion dollars headquartered in Turkey named Recep Tayyip Erdoğan, and all so he can kill some Kurds?

Putin maybe, but he’s always been good at chess, and there ain’t no Bobby Fischers left.


UPDATE

It would appear that Turkey and Russia are indeed getting closer…

Russia’s Gazprom CEO Alexei Miller said Wednesday that the energy giant will begin the offshore laying of the Turkish Stream pipeline in the second half of 2017 and plans to complete the construction of two legs by the end of 2019.

…much closer.

Turkey, Russia clinch agreement on S-400 air defense system deliveries

Russian President Vladimir Putin and Turkish President Recep Tayyip Erdogan will meet face-to-face in Sochi on May 3 to discuss these and other matters. Clearly, the rapprochement since Turkey shot down a Russian jet is going well, much to the dismay of the west.

Vladimir Putin believes that Russia and Turkey are restoring full-format relations

“I’m sure that those steps that we are taking together will change the fate of the whole region,” Erdogan said.”

And they lived happily ever after…


Follow up to this article is here.

The Cremation Of Care Goes Dutch

The title of this article “Cremation Of Care” (9:41) comes from the name of the ceremony held at the Bohemian Grove every July where some of the most powerful people in the world come together for… well, for who knows what?! In front of a giant owl-god, Molech, the concept of care is burnt in effigy.

The image is of the Kindlifresser (child-eater) in the Swiss capitol of Bern, feasting on a sack full of children.

You will soon see how these two notions relate to the upcoming video.

Do you remember “Confessions Of An Economic Hit Man” (Part 1 – 53:35) in which John Perkins claims to have played a role in an alleged process of economic colonization of Third World countries?
Well, consider that the first chapter. This is the second chapter. It’s much worse.
(Original in Dutch, with English subtitles.)

YELLENOMICS 101

They say that getting to the summit is only half the journey; you hafta’ make it back down again, too. It’s getting to be a pretty big drop.

bofa-2

How long do you think it’s gonna’ rain? Forever?

e279ce2d-0727-47ab-9377-142e9528bb39_text

And what do you think will happen when it stops?

Dow Jones Industrial Average, 1900 - August 17, 2007.
 

Dow Jones Industrial Average, 1900 - 1940.

The greatest economic mind in America (supposedly) thinks she can keep the ball rolling indefinitely. Some, including Al Bartlett (1:13:53), would disagree.

dj20k_blogcrop

Change…

…pocket change that is, is changing.

One dollar coins (Loonies) were popular as a forgotten novelty; two-dollar coins (Toonies) were not. I remember working in the service industry back in those days. Everyone complained about the amount of change they would have to carry around in those money belts. The money belts grew more robust. Waiters today are in for a surprise.

The nickel and the quarter will be eliminated in favour of a twenty cent piece, called a “Twenny.” (I don’t know that for sure, in fact, I just coined the phrase. Nevertheless, I think it sounds catchy. In France they are called “des pièces de vingt centimes” but then everything takes more words to say in French… maybe that’s what makes it romantic.)

This move, on it’s own, will likely lighten waiters’  loads (and necessitate another re-design of the money belt,) but there’s more.

The five dollar bill will be replaced by a coin. $5 bills represent just under 2% of the Canadian money supply. [It won’t be long now for the tens.] A two-hundred dollar bill will also be introduced. And all this for 2017. What ever happened to banning the ‘C’-note? In the cancellation of a bill, is a demand for it not being created? As they cancel more and more bills, and create new ones, won’t they be feeding the monster they wish to slay? Getting people to hoard cash is not good for banks. The Bank of Canada eliminated the thousand-dollar bill in 2000 for this purpose, and put the blame squarely on drug-runners and money-launderers. Movement of physical cash is closely watched at the borders and at all points of entry. Are they developing cover for a digital monetary system? Are they really going to ban cash? These recent actions lead us to believe that they will not, but sometimes an event must be manufactured with nothing but ‘good intent’ behind it acting as a catalyst to ensure it’s quick demise. Kissinger might find it easier to pop the balloon rather than let it deflate on its own. That would require intervention. Intervention always incurs cost.

Either this brings us closer towards the European system, or the people at the Mint are preparing for inflation. You don’t think of the economy in the same way if it costs a million of something to buy a loaf of bread. Being a millionaire is easy in some places. Debasing currency (by lowering the cost of production,) even fiat, always leads to inflation. The central banks have been struggling to find a way to increase inflation to keep this sham system afloat, and it looks like this turned out to be their best-worst option. Will this replace the need for ‘helicopter money‘ or is it just an addition? Perhaps it’s all been scripted in order to introduce a global [?digital?] currency. Either way, UNPA member Justin Trudeau is paving the way for his ascension through the UN. [Read the “Welcome” message in the UNPA link.]

Portugal had to wreck its economy for the former Prime Minister (1995-2002) António Manuel de Oliveira Guterres (a notable socialist, ECFR, and Club of Madrid member – not to mention his long list of distinctions) to be elected Secretary General of the UN. That’s quite a cover charge for entry to the big boys’ club. I wonder if it was on a dare or a bet, or if it was just an initiation, of sorts. With that against him, his loyalty would be assured. Amongst other positions, he had previously served as the UN’s High Commissioner for Refugees.

Is Canada next? The Asian money doesn’t seem to think so, but the Canadian government’s recent action in the Vancouver housing market was a clear signal for Asian markets to ‘keep away.’ The manipulation practiced by Wells-Fargo, Shkreli, Volkswagen, and the gold market pale by comparison. Where’s RICO when you need him?

It looks like the Lone Ranger is gonna’ need some more silver bullets, and gold ones; or maybe Dorothy could just click her heels… rubies and sapphires might have some value, but emeralds are not a good investment.

The Legend of the Oogy-Mi-Booli Tribe

Before glaciers covered all the lands, there lived a tribe of rather primitive people, the Oogy-Mi-Booli. They occupied the forested region bordering the mountain steppes of what is now Lower Slobbovia. The village was on the only river in the area.

Sure, they could write and add and irrigate and such, but they were primitive in their thinking, in their predominantly short-term thinking. However, they thought themselves sophisticated because their economy was so complex. More on that later.

One evening, to everyone’s astonishment, a group of hunters had brought home with them a gargantu-nocerus, alive! Despite dispatching many of it’s kin, they had spared this one from the kill. Apparently, the gargantu-nocerus had spoken to one of them, the shaman. It wanted to make a deal. The animal was a young mother (after experiencing child-birth, gargantu-nocerususes lactate for life) who had just lost her only offspring to an even more gianter beast.

[Gargantu-nocerus milk was extremely nourishing; it was what sustained the hunters and allowed them to haul back such massive quantities of meat for the women and children of the tribe. Unfortunately, it didn’t keep. During a hunt, it was customary for the fastest runner to bring back as much milk as he could carry so that all the children in the village could have a taste before it went sour. Animals would chase him. Often-times, when the hunt was far, or the weather was hot, he would return with nothing but rancid butter.]

Upon arrival at their village (called Kshepaw-Oozju-Rendoo, where everybody lived in the same lodge-house,) the shaman called out all the villagers (which they found troubling, given the late hour – they had been tending to their pagan rituals) and instructed them on what needed to be done.

The animal in question, in a bargain for it’s life, was to be revered, made sacred, and placed in what was to remain, for all time, the most prominent spot in the village… on the roof of the communal house. It would be pampered, and cleaned, and fed, and attended to, and most of all, it would be protected from it’s other natural enemy, the enormo-saurusus (which stayed far afield of the human village on account of the smell.) The animal would be their de-facto emperor. In exchange, it would provide them with all the fresh gargantu-nocerus milk they could drink.

So the villagers got to work. A throne needed to be built, scaffolding had to be erected to reinforce the roof, and stairs needed to be constructed for the scores of volunteers attending to the behemoth which slept above their beds. Their prayers to the new emperor overhead would mostly be about structural failure, design flaws, and engineering specifications, or a desired lack, thereof, and sometimes, during the dry season, about getting more rain. Being mostly carnivorous – they ate some fish and insects, too – they didn’t need the rain for crops. They just enjoyed playing outside in it. The only thing better than rain showers, in the eyes of the people, was being ‘blessed from above’ by the animal’s showers of excrement. What an honour that would be, to be shat upon by the emperor! But first, they had to get the beast up there. Once they did, they could harvest the super-nutritious milk.

Needless to say, the task was a monumental one, but little by little, the throne was fashioned, the scaffolding and the stairs were built, and it didn’t all come crashing down onto the villagers’ heads. With this new supplement to their diet, gargantu-nocerus milk, the children grew up healthy, and strong, and with the belief that this lifestyle had to be protected, for the sake of the next generation. Stronger hunters make for bigger hunts. Bigger hunts make for more people to go on bigger and bigger hunts. Can you say ‘exponential growth curve’ or ‘doubling function’?

Every year, the gargantu-nocerodes’ genitals would be rubbed down and its musk would imbibe the rags. These rags would then be used to lure other gargantu-nocerodes during the hunt, making it less time-consuming, hence, more beasts could be felled.

One year, the emperor’s health began to fail, and another had to be captured in order to take its place. This tradition grew with time as did the need to expand the lodge-house. The hunts had never been so successful, and gargantu-nocerus meat could be smelled cooking for miles around, all day long. Boom-times !!

Well, with all the additions to the lodge-house, and with all the fires used to cook the Oogy-Mi-Booli’s meat, the forest in which they lived began looking more and more like the adjacent steppes, where the gargantu-nocerus roamed, treeless. The tribe’s economists (who were necessary now that the economy was booming) started developing insurance schemes, derivatives contracts, and other tools to mitigate the losses should anything really bad ever happen (of course, ‘really bad’ had only one result: doomsday. Nevertheless it re-assured the people that the smart ones, the bankers and businessmen, really did know what they were talking about.) It had gotten so bad, that the trek to get wood was now even longer than the trek to the hunting grounds. A generation later, there was no wood to be found anywhere, not even up-river, where the bankers lived.

The emperor’s excrement was gathered with nets (it was fibrous enough, given her vegetarian diet) and was used to stoke some of the fires (so much for manna showers – austerity became a noble goal,) but it was not enough. Eventually, people started to use wood from the lodge-house to cook their plentiful meat. When all the walls and the roof had been consumed they had reverted back to covering those surfaces with gargantu-nocerus skins. After the floorboards had been used, the scaffolding was next.

Life became like a game of ‘shortest straw’, nobody knowing when the shavings of wood they salvaged from the structural members of the scaffold would weaken it enough to initiate its collapse. The architects and the engineers (all the chief’s men) were called in by the shaman to reassure the people that “…at the present rate, the structure could withstand this whittling for decades to come, long enough, surely, to find a more permanent solution to this most pressing, but not by any means urgent situation. Everything’s fine; nothing to see here. No need to panic.” But ‘present rates’ tend not to stay ‘present’ for long; they grow.

One morning, while everyone else slept, the emperor’s head attendant peeled off some splinters of wood from the creaking structure to boil a pot of water for the emperor’s morning tea. Before anyone knew what had happened, they were all crushed by the weight of their utopic dream. All but the bankers, that is, but they all starved to death within a month.

Growth kills.

The Most IMPORTANT Video You’ll Ever See (part 1 of 8)  (9:17)

Yellen: Make It Rain

Switzerland just said no (with 78%) to a guaranteed income (helicopter money) for all its citizens.

With an unemployment rate of about 3 1/2%, they didn’t really need it. The fear was that it would encourage immigration. That seemed to be enough of an argument for Swiss adults to decide they did not want an extra 2500 CHF (625 CHF per child) per month. The system was to replace welfare.

The practice remains more or less untested. It was first posited by economist Milton Friedman in 1969. The basic principle is that if a central bank wants to raise inflation and output in an economy that is running substantially below potential, one of the most effective tools would be simply to give everyone direct money transfers.

Canada tried it in limited amounts and found that it did decrease poverty, but at what price? Some had trouble dealing with it and feared it would push the country further towards socialism. The Canadian program is set to launch in 2016. Canada’s unemployment rate is twice that of Switzerland which means it might have more popular support.

Finland is set to begin in 2017. France, United Kingdom, and parts of the Netherlands are set to implement similar programs soon. Will the US be next?

Helicopter money indeed, but for whom? Cui bono?

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image: ©laphotoshoppe [at] gmail [dot] com

Eh You (Au)

If someone is vehement about not wanting you to buy something, it’s probably because they want it for themselves.

Additionally, if they vehemently want you to sell them that same thing, this can only serve to reinforce the impression that gold really is the only thing worth having.

“Awww, forget about gold, it’s so ‘passé.’ What you want are these financial instruments – ‘paper gold’. They’re more modern, and sexier, easier to trade, and no storage fees; not to mention that there are 400 times as many of these as gold! By the way, if you want to sell me some of your gold, I have a few of these choice opportunities for you. Besides, would you prefer carrying a briefcase, or a trunk? C’mon let’s go have a drink and talk it over.”

“Yeah I could really use one or two of those, what with work, mortgage, loans, an education for the kids, and don’t get me started about my…”

If you can’t spot the sucker, the sucker is you.

Lift-off, or Splash-down?

Today is the day the Fed decides whether it will raise interest rates or not. Nobody at all is talking about this but, heck, they might even go negative. From a nominal 0.10%, if the rate is dropped 0.25%, that would turn (near) ZIRP into (full-on) NIRP.

Maybe there will be a bomb scare and the meeting will be called off. That way ISIS can be blamed, guns can be confiscated, Christmas spending won’t be affected, the Fed won’t be scrutinized, and the hike can happen in January when it won’t matter so much, if at all. Everybody will be broke by then anyway.

We will have to wait and see. In the meantime, watch for falling… uh… objects.

*Update*

No bomb scare, no NIRP (yet,) no good sense from the Fed. Today’s hike caused already over-priced markets everywhere (even Brazil) to climb even higher. Is this a good thing, or did the Fed screw up once again?

If hikes are no good, and Nirp is no good (punishes responsible savers,) what options are left? When all markets are manipulated (to paraphrase Carney,) how does this bode for the entrepreneurs who are supposed to lift us out of recession? How are they supposed to make projections? How can they justify risking investments and hiring their workforce?

Defenestration did not appear to be a significant problem.

In the end, the Fed did not surprise, and raised interest rates for the first time in almost a decade in a widely telegraphed move while signaling that the pace of subsequent increases will be “gradual” and in line with previous projections. The Federal Open Market Committee unanimously voted to set the new target range for the federal funds rate at 0.25 percent to 0.5 percent, up from zero to 0.25 percent. Policy makers separately forecast an appropriate rate of 1.375 percent at the end of 2016, the same as September, implying four quarter-point increases in the target range next year, based on the median number from 17 officials.”

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© laphotoshoppe

China Secures SDR

While the world was busy watching the aftermath of the Paris attacks, the IMF just gave its recommendation to place China’s Renminbi in the global Special Drawing Rights (SDR) basket of funds.

In an ironic twist, while the IMF has historically delayed the moment of acceptance, it caved just months after China officially devalued its currency for the first time in decades to stimulate its exports, and has unleashed an unprecedented campaign (using overt and covert means) to stabilize the Yuan as capital outflows in the past several months have soared. ”

This puts pressure on the faith in the US dollar and its world reserve currency status and has many international consequences, as well.

*Update*

Today is the day. Is the beginning of the end nigh for the US dollar?

“In 2009, amid the West’s scramble for signs of recovery, Zhou Xiaochuan, the governor of the Peoples Bank of China, called for a new financial order with a global reserve currency replacing the U.S. dollar. The Financial Times noted, “If, as expected, the imf this month approves the inclusion of China’s renminbi as a reserve currency, it will mark a small step for Mr. Zhou’s 2009 vision but a big move for the renminbi.” ”

“The US Dollar might have reached the top of its strength and could see a downward correction in the next few weeks.”

With the Fed expected to raise interest rates in December, more outflows from the US dollar to the Yuan (renminbi) and some downward pressure on the dollar can be expected in the short term. Long term, the dollar still looks strong, but the renminbi is set to catch up.

It’s official, the yuan will be part of the SDR basket starting Oct. 1, 2016 with a weighting of 10.92%. Could this be a catalyst for portfolio re-allocation? If it is, and if new buyers of yuan stem the outflow of capital from China, the yuan may soar undoing all the devaluations to date and, ironically, hurt the already faultering Chinese economy. Could China’s hard landing turn into a crash?