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Comments

ralph

Lindsey Williams was 100% right. Oil collapsed on cue for the elections. Hasnt helped Mcinsane much YET. However, that can change fast. The Arabs are on the path to being bankrupted by BIG OIL, and Dubai to become a ghost town. The dollar will collapse soon after the electiions, and we will have run-away hyperinflation and 3rd world status. Who is going to buy all of Paulsons new bonds to finance wall st. bailouts and largesse? Arab petrodollars certainly will not.

K

EU is pushing for the end of BWII and reversion to something like the original BW. Hat tip to Mish.

Grok

Elaine, thanks once again. Flat out.....the best description of SWF's I've read. Your knack for breaking down complex issues and terms are a treasure.

DrKrbyLuv

The thieving "New World Order" elites are consolidating power, finances and business very effectively. The irony may be that the biggest beneficiaries may be China, Russia and India as the consolidated NWO is being built on a rotten foundation.

Western protests against China, India, and Russia have begun to look hollow. China and Russia and India supposedly are inhumane countries, yet their citizens are united behind their governments in a renewed nationalistic fervor.

China and Russia rose and recovered faster than expected and quickly became exporting giants. Meanwhile, the west is like a junkie on the floor choking in their own puke.

The world cannot be lead by a bankrupt country that runs up huge deficits year after year. The world cannot be lead by a country whose own citizens no longer trust their government. The world cannot be led by a country whose leaders openly act in treason against it's people.

Of course, the elite power brokers never intended on leading the world in their new order. They seek to manage and control the world through brutal tyranny.

I think Elaine is right, the Chinese and Russians may simply sit back and watch the NWO consolidation with a smile. Knowing full well that they will be the banking power for all.

Buffalo Ken

Oh very heaven sakes lets not be so melodramatic (I know coming from me that probably doesn't mean much....but...).

People are People. When push comes to shove we prefer smaller groups. Governments, just like corporations, are NOT alive. People are alive. Nations reflect the history of the People who live (or lived) in the Nation.

Most People just want some peace and harmony. Can we agree on this simple concept?

Peace,
Ken

P.S. If interested, click on my name above for a website with some idea in this regard. This is not an advertisement because the ideas in the aforementioned site, just as the ideas here, are FREE. That is what is great about the internet. Peace.

Buffalo Ken

Oh sorry, I meant my name below!

Up, down, left, right - ain't nothing but directional.

Time now. Time is not a direction. Time is of the essence. That is why a Time Machine can only happen in imagination.

Peace,
Ken

P.S. "blues" - I'm interested in what you have to say about "gold", but I think in a way, gold is everywhere.

Buffalo Ken

And shapes have mass. Shapes matter in a primary sense. Shapes literally matter more than numbers, but unlike numbers shapes are always in flux.

An element like gold with all of its unique attributes (kinetic and electrical) is special and we know this on a deep level. Same goes for silver and platinum and I'm sure many others.

I expressed prior to the Olympics my sentiment regarding China. My favorite part of the Olympics that I saw was watching the Chinese divers. I was blown away. They were beautiful, incredible, focussed, and amazing to me. Plus every now and then they smiled.

Peace,
Ken

DrKrbyLuv

Are we seeing the beginning of a huge awakening taking place in the world?

I think all of us "contrarians" have wondered over and over why no one seems to notice that we are living in a vicious lie. Here's some encouragement:

"Israeli Bestseller Breaks National Taboo"

"Dr Shlomo argues that the idea of a Jewish nation is a myth invented little more than a century ago."

15/10/08 "Information Clearinghouse" - - TEL AVIV - "No one is more surprised than Shlomo Sand that his latest academic work has spent 19 weeks on Israel’s bestseller list – and that success has come to the history professor despite his book challenging Israel’s biggest taboo."

"Dr Shlomo Sand argues that the idea of a Jewish nation – whose need for a safe haven was originally used to justify the founding of the state of Israel – is a myth invented little more than a century ago."

"In addition, he argues that the Jews were never exiled from the Holy Land, that most of today’s Jews have no historical connection to the land called Israel and that the only political solution to the country’s conflict with the Palestinians is to abolish the Jewish state."

"Translations are under way into a dozen languages, including Arabic and English. But he predicted a rough ride from the pro-Israel lobby when the book is launched by his English publisher, Verso, in the United States next year."

“Zionism changed the idea of Jerusalem. Before, the holy places were seen as places to long for, not to be lived in. For 2,000 years Jews stayed away from Jerusalem not because they could not return but because their religion forbade them from returning until the messiah came.”

“I was not raised as a Zionist, but like all other Israelis I took it for granted that the Jews were a people living in Judea and that they were exiled by the Romans in 70AD.

“But once I started looking at the evidence, I discovered that the kingdoms of David and Solomon were legends.

“Similarly with the exile. In fact, you can’t explain Jewishness without exile. But when I started to look for history books describing the events of this exile, I couldn’t find any. Not one.

“That was because the Romans did not exile people. In fact, Jews in Palestine were overwhelming peasants and all the evidence suggests they stayed on their lands.”

"Dr Sand pointed to the strange state of denial in which most Israelis live, noting that papers offered extensive coverage recently to the discovery of the capital of the Khazar kingdom next to the Caspian Sea."

"Ynet, the website of Israel’s most popular newspaper, Yedioth Ahronoth, headlined the story: “Russian archaeologists find long-lost Jewish capital.” And yet none of the papers, he added, had considered the significance of this find to standard accounts of Jewish history."

"Dr Sand attributed his colleagues’ reticence to engage with him to an implicit acknowledgement by many that the whole edifice of “Jewish history” taught at Israeli universities is built like a house of cards."

http://tinyurl.com/5ywz9k

******************************************

I think Zionism is simply another ploy of the powerful elite bastards. They are equal opportunity thugs who will enslave christians, jews and muslims equally.

Hopefully the truth will begin to emerge on other lies and ploys such as 911, the Federal Reserve (and all central banks), bin ladin, the anthrax attacks, etc.

I hope the bastard elites stay up at night worrying about what the "ignorant masses" may do to them if they catch on.

Buffalo Ken

OK - I promise (if anyone cares).

My wife and I are leaving for some NC Mountain "Anniversary Time" (10/19/1991 - hows that number!), so I won't be posting again for awhile.

All the best for everyone striving to make a different for the better.

Peace,
Ken

KC

This is great stuff, Elaine. I was going to say you know where all the bodies are buried, except they aren't buried. HankyPanky and his friends are like Zombies roaming the earth. They won't be happy until they suck the last bit of wealth out of our pockets.
Just in time for Halloween!

Josh Neumann

It's things like this that make me ashamed to call myself a republican.

Josh Neumann

I'm ashamed to call myself a republican.

Grok

This was reported in the MSM. Reuters! What's next.....unbiased reports from Fox News?

http://www.reuters.com/article/newsOne/
idUSTRE49E5Q620081015


(all one line with no spaces)

RobG

And when the pirates meet to divide up the booty - laughing ar, ar! 'There fine booty on those ship of state'. 'Set sail for more plunder me; and nary a navy frigate defending the fleet - arrrr is good to be a pirate'.

Next use stealth to appear as they are doing a service while looting. 'We're cleaning up the mess left behind. This is going to work.' (fingers crossed behind back, too ... hard ... to ... keep ... straight face). Yahoo:

"We're not proud of all the mistakes that were made by many different people, different parties, failures of our regulatory system, failures of market discipline that got us here," Paulson said in an interview on Fox Business Network.

But he said he had "no regrets" about the steps the government is taking now to address the problem.

"We will mitigate the impact on the real economy and we'll get this financial system working again," he said.

Paulson rejected criticism about the new approach the administration announced on Tuesday to have the government purchase $250 billion in stock from private banks, in effect partially nationalizing the banking system.

He said the initial stock purchases would total $125 billion with the money going to the country's nine largest banks, whose executives were summoned to a meeting with Paulson at the Treasury on Monday where he applied pressure to make sure they all participated.

Paulson said it was essential that the nine banks, which hold 50 percent of the nation's bank deposits, to participate so that there would not be a stigma attached to the program. He said it would encourage other banks who were in greater need of capital to take part.

"When there's fear in the marketplace and there's concern in the marketplace, no one wants to raise their hand and say, I need capital," Paulson said.

Grok

Try:

http://tinyurl.com/3s9c6r

DeVaul

Paulson needs "decapitation".

whine and cheese

Japan bailout US?

http://biz.yahoo.com/ap/081016/as_japan_us_bailout_lawmaker.html?.v=1

Bear of Little Brain

Professor Sand also said that he was not prepared to write and publish his book until he was safely installed in his professorship. He felt that doing so any earlier would have hindered his career. Terminated, more likely.

BTW, over here in the land of the Mother of Parliaments, a Dr. Frederick Toben was arrested in transit when his flight made an intermediate stop at Heathrow Airport, and is now being held pending extradition to Germany. Dr. Toben is an Australian citizen, although he is of German birth. Dr. Toben's crime is to have made his research into many of the claims surrounding the events at Auschwitz concentration camp public knowledge. He also drew some conclusions that are deemed offensive, although inescapably logical, once one has seen his findings. He has a (rather poor quality) video on Google/YouTube about this. Googling "Judea declares war" should bring it up, for anyone interested. I will not post a link as this may also constitute an offence in EU/German law, although it is not illegal in the UK to do so. This is the exact same situation as Dr. Toben finds himself in, for "Holocaust denial" is not illegal in the UK, yet he is being extradited under EU law to be prosecuted/persecuted in Germany. This has wider, more complicated implications throughout Europe, especially in the internet age.

Whatever the pros and cons of Dr. Toben's research, this is a severe attack on the principles of free speech which, in my younger days, we were so proud of and separated us from the mindsets of those statist Continentals (those who live on mainland Europe, not the defunct currency!).

Incensed by this, I e-mailed my Member of Parliament, a Mr. Peter Bottomley, who had the courtesy to call me the same evening. However, he told me that it would not be an issue that he would be pursuing. Well, he's had a long career - long enough not to be alarmed by one more erosion of liberty.

I also rang Liberty, the civil rights organisation over here. I have read the comments of others about Liberty, saying they were sceptical of their anti-establishment credentials, but thought it worth pursuing. The person on the switchboard was unable to put me through to the person covering Dr. Toben's case. Actually, he had never heard of him, in spite of his case being widely reported in the press here. They were going to ring me back. They haven't. I'll try again tomorrow.

This may sound melodramatic but, if Dr. Toben is extradited for this thought crime, it will be the final nail in the coffin of me considering myself any longer British in a fundamental sense. However hypocritical British government actions have been, we were indoctrinated at school with those ideas of fair play, justice, personal liberty, and free speech (oddly, democracy was less emphasised, although the idea of 'robust' politics and debate was there).

As I say, info on Dr. toben's research is available to those who choose to pursue it.

Elaine Meinel Supkis

Many would dearly love to eliminate free speech in America. Our constitution forbids this but it has been done in the past and will be done again and again. Only way to stop this is to fight it, not self-censor.

Europe is committing grave social crimes in order to please AIPAC. Just as AIPAC is pushing hard to censor Americans here. But it is back firing as I warned them.

Namely, the very effort to silence critics has ENNOBLED them! This is called 'making martyrs' of them and history is very stern about this: it will fail.

I happen to love open debate. Even outrageous or stupid views must be debated, not tasered or shot or put in prison. That is wrong, wrong, wrong.

OC

Elaine,

Based on your chart, I estimated that Singapore have 1.3 -1.4 trillion USD in total reserves (hidden as usual). That is amazing for a nation of 3 million people living on such an tiny island that have no resources at all - not even manpower!!

If you compare the amount of money earned by this group of Chinese per person and extrapolate that to China's population of 1.4 billion, that China have the potential to take on the G7's debt and more!!

Elaine Meinel Supkis

Yes, Singapore is a funnel for money offshore exactly like the Cayman Islands. Which have similar per capita stats.

CEO Nutcracker

DrKrbyLuv,

Thank you! I can't wait until Americans read this. If they are allowed.

I had previously posted this very information on the TRUE Origins of the Ashkenazi Jews.
and their illegitimate claim on the Palestinians land.

Here it is again. I would hope it is not ignored a second time.

http://198.62.75.1/www2/koestler/

Also from a former Zionist who denounced the cause in 1961. It was ignored then too.


http://www.sweetliberty.org/issues/israel/freedman.htm

Paul S

Maybe off topic here, but what is everyone's take on the polling data for this year's election? One poll (Gallup) has Obama with a mere 2 point lead and another has Obama with a 14 point lead. I realize data collection methods vary poll to poll, but they also are supposed to be scientific. The poll results for this years campaign strike me as odd; I don't recall wide gaps like this--so close to the election--before. Any input would be welcomed.

CEO Nutcracker


Here is the article on Dr Shlomo Sands bestseller, "When and How Was the Jewish People Invented?"

http://www.newsvine.com/_news/2008/10/09/1977883-israeli-academic-dr-sands-best-sellerwhen-and-how-was-the-jewish-people-invented-

http://www.middle-east-online.com/ENGLISH/?id=28268

GK

Dear God, $437.5 billion per day...

http://www.reuters.com/article/newsOne/idUSTRE49F97920081016

Banks borrow record $437.5 billion per day from Fed

"EW YORK (Reuters) - Financial institutions ran to their lender of last resort for record amounts of cash in the latest week, under extreme pressure from the worst global financial crisis in a generation, Federal Reserve data showed on Thursday.

Banks and dealers' overall direct borrowings from the Fed averaged a record $437.53 billion per day in the week ended October 15, topping the previous week's $420.16 billion per day.

Some analysts are concerned that banks' dependence on Fed lending might become long term and difficult to change.

"The banking system is going to become addicted to this very cheap money. Unwinding it will be very difficult," said Howard Simons, strategist with Bianco Research in Chicago.

"We have effectively allowed the central banks to disintermediate the banking system. Why would I want to borrow from you if I could do it with the central bank, because they can always print it up and say 'here'...and they are in the business now of making sure I stay in business," Simons said."

DrKrbyLuv

CEO Nutcracker -

I knew I had seen something about the Khazar Empire on this blog - thanks!
________________________________

Bear of Little Brain -

Freedom of speech is being eliminated everywhere, for example:

- "Australia Australians will be unable to opt-out of the government's pending Internet content filtering scheme, and will instead be placed on a watered-down blacklist, experts say."

"Under the government's $125.8 million Plan for Cyber-Safety, users can switch between two blacklists which block content inappropriate for children, and a separate list which blocks illegal material."

"Pundits say consumers have been lulled into believing the opt-out proviso would remove content filtering altogether."

http://tinyurl.com/6kx5d9

OC

Elaine,

I remembered when I was in Singapore during '97, there was comments by Muslim countries nearby Singapore comparing the similarities of Singapore to Israel.

If you were to compare the result of different political, social and economic approach by Singapore to Israel, you would realize how much the people of Israel have lost in these three aspects over the last 4 decades as Singapore became independent about the same time Israel came into existence.

CEO Nutcracker


DrKrbyLuv,

the people who deserve thanks will be ignored.

Dr. Shlomo Sands and Koestler, deserve the Nobel Peace Prize for exposing this preposterous lie.

CEO Nutcracker

Good read. Good night.


The Thirteenth Tribe

The Khazar Empire and its Heritage

Arthur Koestler

This book traces the history of the ancient Khazar Empire, a major but almost forgotten power in Eastern Europe, which in A.D. 740 converted to Judaism. Khazaria, a conglomerate of Aryan Turkish tribes, was finally wiped out by the forces of Genghis Han, but evidence indicates that the Khazars themselves migrated to Poland and formed the craddle of Western (Ashkenazim) Jewry...
The Khazars' sway extended from the Black sea to the Caspian, from the Caucasus to the Volga, and they were instrumental in stopping the Muslim onslaught against Byzantium, the eastern jaw of the gigantic pincer movement that in the West swept across northern Africa and into Spain.
Thereafter the Khazars found themselves in a precarious position between the two major world powers: the Eastern Roman Empire in Byzantium and the triumphant followers of Mohammed. As Arthur Koestler points out, the Khazars were the Third World of their day, and they chose a surprising method of resisting both the Western pressure to become Christian and the Eastern to adopt Islam. Rejecting both, they converted to Judaism.
The second part of Mr. Koestler's book deals with the Khazar migration to Polish and Lithuanian territories, caused by the Mongol onslaught, and their impact on the racial composition and social heritage of modern Jewry. He produces a large body of meticulously detailed research in support of a theory that sounds all the more convincing for the restraint with which it is advanced.
Mr. Koestler concludes: "The evidence presented in the previous chapters adds up to a strong case in favour of those modern historians - whether Austrian, Israeli or Polish - who, independently from each other, have argued that the bulk of modern Jewry is not of Palestinian, but of Caucasian origin. The mainstream of Jewish migrations did not flow from the Mediterranean across France and Germany to the east and then back again. The stream moved in a consistently westerly direction, from the Caucasus through the Ukraine into Poland and thence into Central Europe. When that unprecedented mass settlement in Poland came into being, there were simply not enough Jews around in the west to account for it, while in the east a whole nation was on the move to new frontiers" ( page 179, page 180).
"The Jews of our times fall into two main divisions: Sephardim and Ashkenazim.
The Sephardim are descendants of the Jews who since antiquity had lived in Spain (in Hebrew Sepharad) until they were expelled at the end of the fifteenth century and settled in the countries bordering the Mediterranean, the Balkans, and to a lesser extent in Western Europe. They spoke a Spanish-Hebrew dialect, Ladino, and preserved their own traditions and religious rites. In the 1960s, the number of Sephardim was estimated at 500000.
The Ashkenazim, at the same period, numbered about eleven million. Thus, in common parlance, Jew is practically synonymous with Ashkenazi Jew." ( page 181).
In Mr. Koestler's own words, "The story of the Khazar Empire, as it slowly emerges from the past, begins to look like the most cruel hoax which history has ever perpetrated."

Mr. Koestler was an Ashkenazi Jew and took pride in his Khazar ancestry. He was also a very talented and successful writer who published over 25 novels and essays. His most successful book, Darkness at Noon, was translated in thirty-three languages.
As expected, The Thirteenth Tribe caused a stir when published in 1976, since it demolishes ancient racial and ethnic dogmas...At the height of the controversy in 1983, the lifeless bodies of Arthur Koestler and his wife were found in their London home. Despite significant inconsistencies, the police ruled their death a suicide...

Dutch Democrat

I have been looking for a decent democrat and I have found one!

http://www.traficant.com/1999speecharchive.htm#nov1799

OMG And they threw this guy in jail!

I want this man to be the next president!

David

Singapore is similar to Israel?

Singapore is just a pirate cove?

These comments make me laugh. Those of you who said this clearly have no perspective of international economics, trade and finance.

Dutch Democrat

Beam me up!

David

I wonder how many readers here know what ASEAN is. Or what NAM is.

Any of you know where Malaysia is?

OC

David,

Do u actually read?? I told u I was in Singapore for a while ....do U know what ASEAN is ??? Do u know SAF is set up and trained by Isreal army??? Do u know what SAF is???

OC

Elaine,

The latest from LEAP2020:

http://tinyurl.com/6juujd

US to default in summer 2009

Zulu

"The only question is, when? And this is where the 50 year plan comes in: we will be living in the new gold-based world order when I am 78 years old. Thanks. I can't wait....gah."

I second that emotion. For some strange reason I have been finding myself feeling up when the market is down and vice versa. I have pondered why. Is it because I feel justified in my views that things are falling apart? And then it occurred to me that the anxiety of uncertainty is what is most troubling. Wouldn't it be nice to wake up tomorrow morning and everything was suddenly all Ozzie and Harriet like? Gollum forgets about his ring and the Sphinx suddenly finds a soul, and Bush announces he's backing Ron Paul for President.

But one way or the other, whether gloom, doom, and bust, or a return to the Golden Age of America, can't we just find some stability? All this volatility is unsettling. But then I had a feeling that somehow it was going to be all right. Am I justified in feeling this way? Wouldn't it be wonderful to see 3000 pound solid steel, gas guzzling, chrome laden behemoths tooling down the highways again? That's when America was something special.

ziff house

Freedom of speech it may be, but none of us here benefit from the company of neo-nazis.

David

Dear OC,

I happen to be from ASEAN.

Are you aware that Singapore also conducts joint military exercises with Indonesia, Malaysia, Thailand, and other ASEAN countries?

Are you aware that when Singapore was considering setting up its army, Israel was not its first choice as a consultant?

Please get more than a passing knowledge of a subject before you comment on it. Superficial knowledge is dangerous, especially in the hands of those who spread it like a disease.

JB

Paul S, from prev.post you said:

"I think the gnomes think they are invincible. These guys have engineered such a corrupt system that they will come out on top no matter what happens. Finding land in another country would be admitting the game is over and these guys' egos are WAY too huge for that."
--------------------------------------

Seems that's been checked off the list >>

October 15, 2006.....and the Bush Family, the purchase of nearly 100,000 acres of land in the South American Nation of Paraguay, and which is also confirmed by the Latin American News Service

http://www.thepowerhour.com/news2/bush_paraguay.htm

As I recall, this parcel is adjacent to an even larger one bought by the Rev.Sun Myung Moon...

http://dir.salon.com/story/news/feature/2003/09/24/moon/index.html

both parcels being over one of one of the largest underground water reserves in South America.

carli

OC, I believe David is speaking from the perspective of CNN, Fox, Bloomberg et al. And while he can see the forest, he has difficulty seeing the trees. Understandable. All people are limited by the comfort level of their belief system. We are no different, inspite having expanded beyond our original mindsets.

Singapore is a miracle State by international standards. It has nothing, even their water is pumped in from Malaysia. It never got a free ride, nor was it spoon fed by a nanny to the tune of hundreds of billions of dollars. In fact, maybe even Trillions, let's consider how much of the $2.7 Trillion unaccounted for by the Pentagon may be in Israel?

While Israel and Singapore have some similarities in size, birth date, etc., there the similarity ends. Singapore was and to this day has very strong Japanese ties. They trust the Singaporeans more than the Swiss, and current events have proven this to be the right decision considering the current pickle the Swiss bankers are in after their irresponsible foray into "gambling" with OPM (other people's money).

You are right OC, while each country was established a about the same time, etc., they took divergent paths. That's because the agenda for which they were created had very different goals. Even opposite goals.

A good amount of the Trillions you speak off are Japanese. And Indian. And Asian. And yes, Singapore is a tax haven, how else could it have become what it is today? Yet they have expanded into manufacturing, service, tourism, banking, to their credit. And it is here that I have to agree with David, to compare Singapore to the Queen's pirate coves would not be fair, in my opinion.

Singapore has always carried its own weight. It is built on the blood, sweat, tears, and resiliency of the Singaporean people. And much credit to Lee Kuan Yew, without whom this would not have been possible. Very far from Bermuda, BVI and the like. No comparison.

Perhaps the only real similarity Singapore has with Israel is the training of its Armed Forces which used Israeli Defense Force organic units for this purpose. But then so did many other Asian countries, and even British SAS, for that matter. Military arms sales and training is one of Israels biggest export industries.


OC

Carli,

I agree with many of the points u raised but u are not current with the Singapore's latest agenda. The PM (I refer to as Puppet Master) has set the new direction 2-3 years ago. Singapore is to be a financial center with manufacturing delegated to the sidelines i.e. farmed out to Batam (nearby Indonesian island) Vietnam and China. It aspires to be the equivalent of Switzerland in Asia and will get its wish soon. The latest move to allow casinos in Singapore is a step towards possible money laundering especially from regimes from ASEAN.

However, like any good Chinese, he set aside funds to turn Singapore into high end manufacturing and research center in areas such as pharmaceuticals, IT and green building technologies which is very different from Israel's export strengths. As I said, from the beginning, some circumstances between the two nations are similar but both end up in very different paths after 4 decades.

OC

Carli,

On a lighter note, Singapore is a real pirate cove back in 18th Century before the British turn up and turn it into its Colony. I think it was called Temasek (that's how Temasek Holdings get its name).

Now it is the preferred social, economic and political model for China.

OC

For those of us in the Land of Oz,

We might get cut off from this website:

http://tinyurl.com/5xturq

Big Brother is coming!!

carli

OC, no disagreement with anything you have said. And no, I was not aware of Singapore's pirate cove beginnings (more like Hongkong), although I quite up-to-date the Minister Mentor's plan for Singapore.

I would add that India is a very big part of Singapore's future. More so than China, I believe. Their population has in possession an estimated amount of gold that matches the total amount held by all the Central banks of the world (talk about hidden wealth), approximately 29,000 tons. India has been importing over 700 tons of gold a year for over 20 years.

Further, the "black money" held by the Swiss for RI's and NRI's is said to be in the range of $1.5 Trillion, the highest of any nation, with Russia a poor second. I expect that will very quickly find its way to Singapore considering how the Swiss banking systems starting to look like Swiss cheese.


Neon Vincent

Elaine and fellow readers:

The following is an excerpt of an article I stumbled across on The Oil Drum about how the infinite growth dreams of classical economists are utterly incompatible with the reality of living on a finite planet, and how that incompatibility has contributed to the current crisis.

Herman Daly on the Credit Crisis, Financial Assets, and Real Wealth

The current financial debacle is really not a “liquidity” crisis as it is often euphemistically called. It is a crisis of overgrowth of financial assets relative to growth of real wealth—pretty much the opposite of too little liquidity. Financial assets have grown by a large multiple of the real economy—paper exchanging for paper is now 20 times greater than exchanges of paper for real commodities. It should be no surprise that the relative value of the vastly more abundant financial assets has fallen in terms of real assets. Real wealth is concrete; financial assets are abstractions—existing real wealth carries a lien on it in the amount of future debt. The value of present real wealth is no longer sufficient to serve as a lien to guarantee the exploding debt. Consequently the debt is being devalued in terms of existing wealth. No one any longer is eager to trade real present wealth for debt even at high interest rates. This is because the debt is worth much less, not because there is not enough money or credit, or because “banks are not lending to each other” as commentators often say.

Can the economy grow fast enough in real terms to redeem the massive increase in debt? In a word, no. As Frederick Soddy (1926 Nobel Laureate chemist and underground economist) pointed out long ago, “you cannot permanently pit an absurd human convention, such as the spontaneous increment of debt [compound interest] against the natural law of the spontaneous decrement of wealth [entropy]”. The population of “negative pigs” (debt) can grow without limit since it is merely a number; the population of “positive pigs” (real wealth) faces severe physical constraints. The dawning realization that Soddy’s common sense was right, even though no one publicly admits it, is what underlies the crisis. The problem is not too little liquidity, but too many negative pigs growing too fast relative to the limited number of positive pigs whose growth is constrained by their digestive tracts, their gestation period, and places to put pigpens. Also there are too many two‐legged Wall Street pigs, but that is another matter.

Growth in US real wealth is restrained by increasing scarcity of natural resources, both at the source end (oil depletion), and the sink end (absorptive capacity of the atmosphere for CO2). Further, spatial displacement of old stuff to make room for new stuff is increasingly costly as the world becomes more full, and increasing inequality of distribution of income prevents most people from buying much of the new stuff—except on credit (more debt). Marginal costs of growth now likely exceed marginal benefits, so that real physical growth makes us poorer, not richer (the cost of feeding and caring for the extra pigs is greater than the extra benefit). To keep up the illusion that growth is making us richer we deferred costs by issuing financial assets almost without limit, conveniently forgetting that these so‐called assets are, for society as a whole, debts to be paid back out of future real growth. That future real growth is very doubtful and consequently claims on it are devalued, regardless of liquidity.

What allowed symbolic financial assets to become so disconnected from underlying real assets? First, there is the fact that we have fiat money, not commodity money. For all its disadvantages, commodity money (gold) was at least tethered to reality by a real cost of production. Second, our fractional reserve banking system allows pyramiding of bank money (demand deposits) on top of the fiat government‐issued currency. Third, buying stocks and “derivatives” on margin allows a further pyramiding of financial assets on top the already multiplied money supply. In addition, credit card debt expands the supply of quasi‐money as do other financial “innovations” that were designed to circumvent the public‐interest regulation of commercial banks and the money supply. I would not advocate a return to commodity money, but would certainly advocate 100% reserve requirements for banks (approached gradually), as well as an end to the practice of buying stocks on the margin. All banks should be financial intermediaries that lend depositors’ money, not engines for creating money out of nothing and lending it at interest. If every dollar invested represented a dollar previously saved we would restore the classical economists’ balance between investment and abstinence. Fewer stupid or crooked investments would be tolerated if abstinence had to precede investment. Of course the growth economists will howl that this would slow the growth of GDP. So be it—growth has become uneconomic at the present margin as we currently measure it.

Bear of Little Brain

This Australian net filtering is the thin end of a very long wedge.
I intend to start a small library of downloaded YouTube vids (I use the app, "Miro") that may become 'undesirable'. There is now a full-scale attempt to shut down the internet as a medium for debate and enquiry, all under the ruse of paedophilia and terrorism. Somehow we may still be able to get information out, but I have no idea how. Maybe encoded bit torrent streams. I have no idea what I'm talking about but will start trying to find out.
Expect all "conspiracies" (Kennedy, Waco, Elders of Zion, 911, etc.) to become non-history. Winston Smith lives!
I hope everyone has read "1984" and "Brave New World" before they are banned.
Ignorance is strength! Love Big Brother!

Clever that 'Big Brother' is now a TV programme, nicely defusing its original subversiveness.

Apologies for being off-topic. The speed of economic events and the volatility has reduced me to observer status only. Ordo ab chao.
At least I still have my Canadian Maples...

Rowan

well, OC,

It`s "God`s own Country" time in Oz again!
Next they`ll be bringing back the 6 O`clock Swill.

(for non Oz`s that`s a reference to the 18-00 closing time for Pubs introduced during WW1 and rescinded around 1966 - an Australian form of prohibition and late-night public urination control).

OC

Carli,

Ha!Ha!Ha! Goddammit, U an I disagree on minor stuff but always wind up agreeing on the big ones!! Hope u have plan a bolt hole for yourself in Singapore.

If things go BOOM here in Oz, that will be my option C. If u are there, I'll buy u a drink, mate!!

That PM as I call him or MM to u has laid long term plans too and it is all going along his way. Singapore will survive for a while even after he is gone from the scene. For all his personal faults, he is a good man to have as a leader and Singaporeans have chosen wisely for 40 years. They now have a very good chance of survival. Wish the same had happen here in US. Too late now. Once this baby blows, we are in for the ride of our life.

OC

Rowan,

I suspect Kevin is a closet Buddhist or PM like Lee in Singapore. Man is sharp as a whistle and control freak. Malcolm is going to have a tough fight for years if he wants that top dog position.

For those not from Oz, Malcolm Turnbull is the current opposition leader. He is just as sharp as Kevin Rudd so it will be a interesting death match for the seat of PM.

carli

Neon Vincent, I suspect that the sole purpose of derivatives as envisioned by the JP Morgan guys in 1997 was subverted and used to control the politics, power and growth of the rest of the world outside of the US & EU system. These instruments were tremendously abused, and greed gave them a life of their own.

You are right, it is really about perception, digits versus "real assets" or commodities. And while the coming collapse of the US$ may be a great burden on the American people, think of the hundreds of countries under the crushing debt regime imposed by the IMF and WB, in the very same dollars. The collapse of the US dollar to say 10% of its current value will allow these countries to liquidate their obligations (which btw have been paid many times over through interest).

The real losers in this game are the very same guys who are running around scaring everyone crying we have to bailout the banks! It is their money, the huge amounts they have stolen through deception that is going to be lost. Let them eat cake for a change, I say.

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