September 15, 2009
Supremely simply solutions often thin the hubris of complexity!
In the previous post we left the discussion at the conclusion of my describing two fundamental types of “Financial Markets”, I summarily identified them as “FM1”, describing the current machinations of the Markets and “FM2”, the more appropriate or as I said, the “peak” historical version.
Picking up from there, let us continue on with the subject!
When reference “FM1” and “FM2”, I am referring to the above, two, enumerations (One might consider referring back to the complete “FM1”/FM2” discussion.)
- “FM1” is not a form of “Capitalism”. It is, in fact, a form of “Contrived-Collective Economics”. Like I said: They will call it whatever they want, the will not, however, tell you what it truly is! This is the providence of the “Flat Earth Idolater”.
- “FM2” is, when in practice, a truer form of “Capitalism”. It offers value in exchange for equal/equitable value. It has market “tensional economic forces” that impose native, self-correcting, mechanisms. Instruments of “Higher Value/Lower Risk” command more “equitable exchange value.” Those Instruments of “Lower Value/Higher Risk” command the opposite.
- “FM2” is a systemic medium that is integral to a true “Wealth Creating Economic Engine” and exists as an enhancing, “Value Added”, enterprise.
- “FM1” is the complete and perfect image of “FM2” in opposing form. It is only a “consumer of wealth” and it does so in the form of a “force multiplier”. This “force multiplier” affects “wealth consumption”, primarily, in the following three ways: (a.) Transactional fees regardless of market movement and direction. (b.) Leveraged positions create a “multiple” effect with each “tick” in market movement (e.g, 1 “tick” can yield a loss of 10.) (c.) Systemic market volatility insures “loss” for some component of the transaction regardless of market movement/direction. George Soros, by creating or contributing no beneficial effect, has become a billionaire by virtue of these very practices.
- “FM1” practices are the “core” reason for the Mortgage Market collapse regardless of what is said to the contrary. The entire event is the consequent effect of “speculative practices” both Market and Politically motivated.
- “FM1” practices are the reason for why “retirement” and “municipality” investments/funds have been vaporized.
- Today, “FM1” practices are used to control global currencies and debt by manipulating “currency values”. One example is to devalue currency to facilitate the payment of static debt (expressed in specific denominations, e.g. $1000) with currency that can be purchase for $.65 on the $1. Not a bad deal unless you are a debt holder expecting to receive $1000 of equitable value!
- “FM1’s” concurrent adventure, a further example drawn from the previous “bullet”, in play can be witnessed with the increased popularity of trading “Gold” as a “hedge against inflation”. Understand that when you buy Gold it is a “hold only” investment. After all, you can’t use it in actual economic exchange (i.e., try buying a loaf of bread with a nugget of gold or a gold coin, it’s illegal.) However, when one purchases Gold as a “hedge” you are actually surrendering real currency (real “fiat” currency). Well then, here’s how it works and has for the last 60 years: Gold mysteriously appears as a fashionable “hedge” mechanism, the panic to “hedge” drives Gold prices up as no one buys Gold when it’s not fashionable, well, not unless you are manipulating the market. Well the flood of currency moves in to make its Gold purchase and then, guess what happens? Ever hear of a Pronouncement that Gold is no longer a “Hedge”? Nope, it never happens, you find out only when Gold is now at 50% of what you paid for it which alerts you to the reality that you just lost 50% of the currency you surrendered for its purchase and you paid for all this to happen! The majority of the World Gold Supply is in the possession of Central Banks, yes for you Americans, the Gold may still be in the Repository at Fort Knox, but the U.S. Treasury doesn’t own the Gold, it’s owned (okay, it’s “leveraged”) by the Federal Reserve. It’s important to make this point because of what I’m about to tell you: I’m of the opinion, and historical money supply numbers when compared to historical Gold values proves it, that the Gold Markets are a perpetual “FM1” version of market management whose sole purpose is to “vaporize” over-supplies of “fiat currencies” and yes, if you don’t already know, the U.S. Dollar is the Global Reserve Fiat Currency. Crude oil, by using the faux-econ of “scarcity”, is also used in much the same way.
- The statement by the President and Mr. Geithner are nothing more than a “ruse” peddled to “overwhelm” the senses of a misinformed Public. The Federal Reserve can and always has printed as much money as it can lend. It’s a Bank for “pete’s sake” and banks love to lend money because this process enables financial interests to generate more economic control with the degree equal to the leverage they create. Point being: The Banks have always had sufficient money to lend because there is no reason for the Fed NOT TO PROVIDE IT. After all, consider this: The FED gives up NOTHING to print money! NO, the problem they don’t want to address is the VERY PROBLEM the Public observes, intuitively, when they look at their Wages and Bank Accounts! It’s a matter of Income!! The reason why Banks don’t lend money is because you haven’t sufficient income to support their lending it to you! Trust me, the Government knows this however, if they were to acknowledge the truth of the systemic flaw, they would also then have to acknowledge their FAILURE! AND,
“Government never admits an error! It simply covers the previous with new and inspired Legislation that masks the former with an even Greater Failure!”
“Markets of Imagination” is the faux-econ of contemporary Globalists Idolatry. It exists only to perpetuate a New Norm and not the purer function of Capitalism or its arbiter, the Republican (representative) form of Government.
The Government you think exists is NOT the Government you have! Then again, for some, perhaps it is!
Change, true change, occurs when uncommon people assemble about a common ideal and insist upon its perfection and tirelessly assure its occurrence. It will not occur in the present form of our Nations practices of Government as your ambitions are wholly different than the current System. However, there are more of us, than there are of them and if your like me, We’re not leaving!
Fellow Americans, the world over, that’s just the way it is! I don’t make this stuff up!
Curtis C. Greco, Founder