« Driving Global Banking Of The Cliff | Main | When Magical Piggy Banks Fly »

Comments

GK

Anyone who believes these money games are anything new is an idiot.

This book confirms that the two extremes of unlimited fiat currency and the crushing restrictions of a gold-backed currency are the road to ruin.

If you have a different opinion, you may want to take a piece of paper and write down where you got your opinion, and how much monetary history you know.

Most people's paper will look like this:
WHERE:
1. gold web sites.
HOW MUCH:
2. US history since 1971.

Try going back to France in the 1700's, Italy in the 1600's or back to ancient Babylonian Egypt.

Same $h1t, super-sized with computers.

http://www.bandung2.co.uk/books/Files/Economics/THE%20BABYLONIAN%20WOE.pdf

"David Astle, who died this year in Canada, was a seaman from the age of sixteen. He retired a captain of the British navy after WW2. Once retired he came to realize that all the things he thought he fought to preserve in WW2 were "melting away" anyway. This knowledge perplexed him until 1961 when he met people who informed him of the truth of how the world is actually run, and has been run, at least from the first known recordings of history. Astle took the knowledge beyond their information, studying all reasonably reliable recorded monetary history he could find, juxtaposing it against known political history. The insights he thus gained he wove into a new look at ancient to modern history in this book.

His basic theme throughout is simply that nothing political happens without monetary backing, which makes the knowledge of an era's money creation, ownership and use all important to understanding real history. He discovered that throughout recorded history, but never mentioned in connection with it, money and banking have followed the same script as that used by today's bankers.

Astle came to realize that that script is an unequaled power path for the few but is a patently dishonest, criminal scam on the people of the world whose losses are the gains of these criminal bankers. Moreover, Astle never ceases to hammer home the fact that this scam is always based on private banker manipulation of precious metals, both real and pretended. Pretended as in "monetary reserves," i.e., fractional reserve banking wherein the precious metal "reserve" may or may not actually exist.

Astle makes an excellent case for precious metals-based private banking scams being behind all wars, all economic booms and busts, all worldly movements in whatever direction through recorded time, just as he (and more and more inquiring people) realized that is still so today. He also notes a few instances wherein precious metal money was outlawed and the resulting national success, peace and tranquility using base metal or other "worthless" money instead.

This is not a book which von Mises Libertarians will want to digest but they, above all monetary reformers, should be the first to do so, as the "solution" they offer for existing monetary exploitation of all the world is just the same old scam repackaged for the hoi poli to accept as the antidote for the ancient sickness when in reality it is the same poison without the skull and cross bones label warning.

Not an easy study; Astle was truly educated as people no longer are, making the work difficult for modern "Sesame Street" minds which have trouble contemplating a compound sentence.

"Scholarly" is the usual, and correct, definition for his work. If all would-be monetary reformers having the time would acquire and study as many of the works listed in Astle's bibliography as possible, there would be a real chance of meaningful monetary reform in the near future. Especially should the present meltdown continue in its present frightening direction.

Everyone interested in real life, real events, and how they occur, should make the mental effort this book demands for the rewards of true understanding it will bring."

Elaine Meinel Supkis

Looking at money without looking at LABOR is a DISASTER. Wealth comes from PEOPLE DOING STUFF. All else is latched onto this fact.

Sigh. So many people want to understand finances while refusing to read one of the better books on this topic: Das Kapital by Herr Karl Marx.

This is why communists are beating us in the capitalist games.

Don

Boeing Stock 52 week high 107.00, today's close 63.00! Leverage is with the unions:
787, Tanker orders, 747 Fuelers, 737's etc.
787 initial cost, 146 million for one. You
wont see that on your grocery list. Boeing is 14 months behind schedule for roll out.
Most of the parts are out-sourced. Azerbaijan Airlines has cancelled their previous order. Another leverage for
the unions: Boeing is projected 3.2 trillion in orders for the next 20 years !!!
One draw back, Dan Rather did a piece last
year on the Plastic Composite of the 787
fuselage. The Engineer was fired and was
a "46 year" veteran of Boeing..............
HHHHHHMMMMMMMM.............................
Maybe its time to out-source our Financial
commuinty to the Chinese and hire their
CPA's. Elaine, you were right all along.


WG

Great article Elaine.

A question about the yen carry trade, this has been in my head for the longest time. I understand that bank of Japan wanted no interest loans for their major corporates to feed their expansion. What I do not know is why the bank of Japan would give these loans to western investors, and why the amount would be allowed to grow so huge. What does bank of Japan gain from this?

Michael

Elaine,

"The main cure for inflation which the Bank of Japan and the Federal Reserve have chosen is a very cruel tool: to drain wealth from the working class. To hammer them with commodity inflation and then depress wages and prices fall but workers have less to spend so commerce falls. The cure for the downside of doing this has been to lend to the working class in the US so they would buy foreign trade goods. Now that the US trade deficit is nearly a trillion dollars a year, this is failing due to the US public unable to take on more debt during declining wage cycles."

Almost absolutely correct. The American worker/consumer long ago voluntarily agreed to forego wage increases in exchange for the opportunity to use debt as a substitute for earned money. As long as debts were allowed to increase without visible limit, the worker/consumer felt "wealthier," and now that borrowing is being restricted, the worker/consumer is starting to feel pain.

But, it's not the inability of the U.S. worker/consumer to "take on more debt" that is limiting lending to the worker/consumer. The worker/consumer has amply proven that he/she will take on AS MUCH DEBT AS THEIR LENDERS WILL PROVIDE(exactly the same as U.S. businesses and the U.S. government have amply proven that they will take on AS MUCH DEBT AS THEIR LENDERS WILL PROVIDE).

The current limiting factor in the borrowing/spending power of the worker/consumer (and source of the current credit contraction) is that THOSE WHO LEND to workers/consumers HAVE CUT BACK ON THEIR WILLINGNESS TO LEND (this has also happened to business borrowers, but not - yet - to the government borrowers).

So, we have a scenario where foreigners lend freely to the U.S. government, the government lends freely to banks (and investment houses, hedge funds, and other cronies), but this money (credit) being funneled into the system then mysteriously disappears, while workers/consumers and businesses are starving for credit to maintain their debt-fueled "prosperity".

Since we have permanently put our society on a Minsky type Ponzi-finance basis (wherein borrowing is not for specific development projects with the intention to rapidly pay off the debt, but rather debt is considered a form of regular "income," used to increase, roll over and/or pay interest coming due on existing debt), we are undergoing the inevitable credit contraction in the household and business sectors that cannot continue to get EASY CREDIT.

Credit is still rediculously cheap - 6.5% mortgages and car loans do NOT represent elevated interest rates - it's just being rationed out in smaller doses. In a serious societal liquidity crunch, mortgages and car loans would be well north of 12% (as you and I remember well).

And the greedy financiers that leveraged their own debt to astronomical levels - to get obscenely rich off the Ponzi game while it lasted - are now de-leveraging (because THEIR lenders are demanding it).

But, we the taxpayers are balancing this so-far-rather-mild credit contraction by the sizeable expansion of government debt and borrowing from foreigners (which subsidizes the debt of our government and very biggest businesses).

In this so-far-mild credit contraction we might even drop from an aggregate-debt-to-aggregate-GDP ratio of 350% to something like 250% (which would feel like a catastrophe consumer spending-wise, but would still be astronomical by historical standards). And we would still have a society wallowing in debt, and inflation would still keep increasing (with or without specific asset bubbles going up or down at any given time).

We might even get a repeat of the 1930-1933 episode where GDP dropped even faster than debt creation, so that the aggregate-debt-to-aggregate-GDP ratio went UP even as credit severely contracted.

Many outcomes are possible, but as long as them furriners keep writing blank checks for the U.S. government, the rich will keep getting richer and the worker/consumer will have to swim for it.

roger

(monetary system has a doozy of a flaw.

It is this: our monetary system must continually expand, forever).
The positive & the negative a unity of the contradictory process,it is the struggle of these two antagonistic elements that constitute the dialectical movement of change.Capitalism must grow if not it dies,but in order to grow it must destroy (consume) that witch gives if life therefore committing suicide

calvino

Here's the real story, since you are more concerned with Clotho and Lachesis than things like boring financial details. Bill Gross is retired as CEO of PIMCO, and Mohammed el Arian is now CEO, running the day to day. He had a few brilliant years at Harvard, making a tremendous return from S. American timber and farmland. You do not understand that Bill Gross kept buying agency debt all spring and summer at distressed prices with the express rationale that the Treasury would back the debt once he bought it. I emphasize the pronoun, he, in that sentence. Now he is using extortion to get the taxpayers to cover his bad investments, by threatening to withdraw from future debt and equity offerings by American financial institutions. He explicitly stated that he withheld support from the Wells Fargo preferred equity auction and that the auction was a failure because it was subscribed by individual investors. Of course this is a lie, since individual investors never participate in these auctions, the tranche size exceeding all but the wealthiest investors portfolios. And people with that sort of financial wherewithal will always use a large broker to participate, since they will get a better offer at the auction. However Wells rose to the bait and sent Howard Atkins the Illetarate CFO to contest the claims on Jim Cramer's Mad Baboon call in show. Stupid. All Gross was saying was that PIMCO was done, and if PIMCO is done, you just watch the bid shrink and the coupon baloon. And Gross was obviously lying to underscore his point that the auction went at credit card sort of rates. In fact all these preffereds, from Shittybank to da Bruddaz went at ten plus. But who is not lying, let me ask you. Since you do not know I will tell you who is lying, whom I did not expect. Fox Pitt Kelton. That's correct, the last ratings house with integrity just gave the thumbs out, 'outperform' to Zions, which pays 12 plus on its preffered, when it can get a bid. Are you kidding me? Better still was Jimmy Jimbo, the magic talking monkey ranting yesterday about the market being in a classic early cycle 'retailers and real estate' buy mode. Tell that to the people who bought Hovnanian you bald headed moron, and then tell that to people who bought Abercrombie.

anthony

Asian market is crashing right now.

I think bank and investors are simply liquidating their stock holding to pay for loan. (and to prevent further lost of price) All that leads to collapse.

Michael

Calvino,

When enough big U.S. fixed income investors experience their "Gross Moment" (whatever their case-by-case motivation) we'll have a general interest rate adjustment up to proper (double digit) equilibrium levels. The Treasury rate will have to rise as well (domestic investors owning close to half the total), and the U.S. government will no longer be able to get away with balooning debts that it pays for with borrowing at 2.5%-4% rates. Then the Baby Boomer Medicare/Social Security bomb can go off. It's a Beautiful Life!

anthony

anybody knows what happen if this holds true all over?

http://www.globalresearch.ca/index.php?context=va&aid=7413

The Ohio ruling that dismissed DB’s claim to foreclose and take back the 14 homes for non-payment, is far more than bad luck for the bank of Josef Ackermann. It is an earth-shaking precedent for all banks holding what they had thought were collateral in form of real estate property.

How this? Because of the complex structure of asset-backed securities and the widely dispersed ownership of mortgage securities (not actual mortgages but the securities based on same) no one is yet able to identify who precisely holds the physical mortgage document. Oops! A tiny legal detail our Wall Street Rocket Scientist derivatives experts ignored when they were bundling and issuing hundreds of billions of dollars worth of CMO’s in the past six or seven years. As of January 2007 some $6.5 trillion of securitized mortgage debt was outstanding in the United States. That’s a lot by any measure!

In the Ohio case Deutsche Bank is acting as “Trustee” for “securitization pools” or groups of disparate investors who may reside anywhere. But the Trustee never got the legal document known as the mortgage. Judge Boyko ordered DB to prove they were the owners of the mortgages or notes and they could not. DB could only argue that the banks had foreclosed on such cases for years without challenge. The Judge then declared that the banks “seem to adopt the attitude that since they have been doing this for so long, unchallenged, this practice equates with legal compliance. Finally put to the test,” the Judge concluded, “their weak legal arguments compel the court to stop them at the gate.” Deutsche Bank has refused comment.

anthony

nevermind. that article is dated last year...

calvino

Bill Gross will not be allowed to crash any more auctions. He stepped way over the line on this one, surprisingly - he is well know as a Chardonnay sipping unctuous asshole. He will have a talking with and be reminded that he serves at the pleasure of the government, not the other way. The people sent on the junket will be stern and not at all impressed with Bill's money. Bill will shit his pants, since he has never dealt with that reality before.

Karmaisking

Karma loves you.

carli

Remember, remember the approaching 30th September, the Bankruptcy and Treason plot, may the Bankruptcy Treason plot never be forgot... 25 days and counting...

What do you think will happen?

What usually happens when people without guns stand up to people "with" guns.

geoffery battams

can i have a baseball bat now ?because i dont think any one will be able to afford one by xmas.i dont want to play baseball with it.they can be very handy when you are fighting to get to the last bag of rice on the costco shelf and they are excellent for pushing in glass supermarket doors or for beating back the neighbors with. no i wont be needing the ball .still at least in the uk the population are not armed to the teeth and it means it wont be the 4th of july every day.but i cant help thinking that a m16 and a magnum handgun would be handy

don

Mangerial decision making process or
stupidity.......Dell this morning announced its going to sell its factories, globally.
Isnt that the same thing that got them into
trouble the first time..Poor customer service when corresponding to someone in
India who couldnt speak English? Cutting
cost, meanwhile they showed a proft for
the previous quarter. Out-sourcing again.
Meanwhile back in MSP, the same old song,
"when I was a Pow story" No solutions for
fixing this economy, no plans. Meanwhile, all of the TV networks were commenting how
good McCains speech was. Did I mess something??????????????????????????????????

Oops

Elaine, your comment about Marx was absolutely correct. Nothing is of any value until mental and/or physical labor has been induced upon it. Das Kapital is a masterpiece and still taught at the highest levels of economic academia. Sadly, though Marx's analysis of capitalism was correct, his solutions have been unattainable. Dictators like Stalin and Mao have bastardized his ideas. I'm curious, are you familar with Daniel Deleon or his work?

Ralph

Sarah Palin is a zionist warmonger!!!!! "Pray for our military. Pray for our military men and women who are striving to do what is right for this country - that our leaders, our national leaders are sending them out on a task that is from God," the Alaska governor said in her address posted on the website of the Wasilla Assembly of God. This woman is a sick demented freak!!! Obama, beleive it or not, is the lesser of 2 evils, by a landslide. He wouldnt make such an insane comment. Imagine Palin when they attack Iran? She would not hesitate for a second to Nuke Iran, in a pre-emptive 1 st strike. May God save us from the evils of Mccinsane,Palin,and Big Oil!!!

G.

Mr Calvino.........

Maybe Mr Bill Gross will face the same
"Jackals" that the 3rd world faces when
they dont want to carry out the wishes
of our economic hit men.

In his book, "Confessions of an Economic
Hit Man" , Mr Perkins details these scenarios over and over again in the
"developing" world [read "exploitable" instead of "developing"

Wouldnt this be delicious irony, eh ?

Lin

Elaine, fantastic post. Quick question, what is the real unemployment rate? I cannot believe 6.1% is true due to so much manipulated gov't reporting.

Elaine Meinel Supkis

All government stats are now cooked by operatives. The actual people who accumulate this data are fine, honest patriotic citizens. The people at the top that filter and publish the results are all lying, traitorous pigs.

CK

Anyone who knowingly and willingly takes stolen coin is not a "fine, honest,...,citizen".
All governmental spending is theft, theft either at the implicit or explicit point of a thug's weapon, or by the incremental theft of the magical printing press.

Royal Dutch Paper

Elaine, I owe you an apology!

After McCain picked Palin he will win handily over Obama.

Did anyone notice how Clinton, and McCain were all wearing orange, during their conventions?

On the subject of money......

Just out of curiosity, how does the system pull money out of circulation?

Looks to me like its through crude oil. And that is not going to change. Presidential candidates are really not goin to change much of anything.

Royal Dutch Paper

Excellent link GK.

The comments to this entry are closed.

Blog powered by Typepad