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Tuesday, 18 February 2014

Jersey's Liberty Movement Starts to Roll

The Liberty Movement has arrived in Jersey, with the assistance of Molly Wong, a member of the Advocates for Self Government we are hoping to use the tools and techniques of the US Liberty movement to spread the message here.

Visit and like us now at https://www.facebook.com/JerseyLiberty for updates on your facebook timeline.

Sunday, 16 February 2014

Fascism, the Slow Return to Feudalism and Revolution

It is nothing at all new for a nation to defy the only basic economic principle that allows for ever increasing wealth benefiting all layers of society. That economic principle is Liberty.

Many observers of the US economy have come to the realization there are now few truly free markets left within 21st Century Western capitalism.

It seems all investments today are controlled to unfair advantage in some large way by the governments and financial firms operating the markets, especially the market in money itself. The newly-invented powers of the central banks to buy anything, to fund any bailout, can reach into any area of the economy, either to grant large favors or to inflict great pain, typically with the cooperation of the too-big-to-jail banks that own the Federal Reserve and its policies.

The precious metals market is a good example of the Fed and its henchmen inflicting pain. The Western paper gold market has been the long-used tool of Leviathan to bludgeon the world’s only true money.

In one of the Fed’s generous ways the second US housing bubble has been inflated from a river of counterfeit money and a wet-blanket of negative interest rates. The QE Forever giveaway to the Fed’s banker friends through buying toxic mortgages at full price charges on.

A Swinging Pendulum

The underlying concepts of capitalism were best set out by British author Adam Smith. Smith postulated it is the magic of the invisible hand of a free market that best distributes economic resources and best energizes the people and industry and innovation. Smith’s signature work The Wealth of Nations was written well over two hundred years ago.

The magic of Smith’s free market proved to be the model for the first sustained, rapid economic growth in global history, since at least the early Roman Empire. It seems, whatever its academic merit in Ivy League halls, general economic liberty has clearly proven to be the best way to serve all society, given how humans themselves are created, as individuals each seeking a good life and secure family.

European medieval economics between the Romans and the 18th Century Industrial Revolution showed how the vulture practices of monarchs and nobility eliminated even the hope for economic growth or of ever fostering a middle-class, while stifling innovation at every turn. The private institutions empowered by law in that time were the lesser nobility and the Catholic Church.

With the Enlightenment period led by writers like Adam Smith, John Locke and Edmund Burke, the grip of elitism in commerce in Britain and France and beyond began to be replaced by private enterprise and capital quite completely. Individual rewards for productivity and innovation and risk-taking became the driving force for economic decision-making, no longer centered on the whim of the lord or his knights as things have largely returned to in today’s fascist economy. It was the belief in bottom-up capitalism in its rawest form.

The Europeans had suddenly become a juggernaut of innovation and growth after many centuries of stagnation. The United States later in the cycle became the signal success of free-market capitalism.

In the wake of this revolution in society, the 19th Century saw the fastest economic growth in human history, all fueled by economic liberty. For the first time a large prosperous middle-class of workers came into existence in many countries, no longer just the rulers lording over the peasants.

The same economic revolution is happening across most of Asia during our 20th and 21st Centuries. Just one example, tiny city-state Singapore has proven once again the amazing achievements for all citizens from unbridled capitalism. Singapore has risen from post-WWII devastation to the top of the world economic ladder without ever asking for or accepting foreign aid from any nation. Singapore is the heir of Ancient Athens, the first free city, the founder of monetary silver.

Adam Smith’s Lassie Faire capitalism has become though the ancient, barbaric relic in our modern fiat money Western world economy, especially in America. No living American has experienced an economic system that can be fairly described as general capitalism.

We now have what is called a “mixed economy” involving many “public-private partnerships” and “professional self-regulation” and “social programs”. These are modern phrases that explain the slow return to feudal ways.

Monopolies of political power or of markets yield huge profits for the few over generations without much having to change a thing. Monopoly power is a distant mirror of feudal nobility. It operates in both the public and the private sector and so often in direct combination with each other. Power not only corrupts: power wins, power stagnates, power destroys.

The Money-Changers Above the Law

Then there are the market traders in a fiat, debt-fueled world.

Whenever free markets can be conned, fixed or disrupted there is a lot of money to be made in the process. There always has been short-term gain for those insiders who manage to fleece the public by harming the secure, uninterrupted flow of goods and services and finance and information.

Most economic transactions, at their base, rely on a large element of trust. Deceit punishes trust to self-advantage. Deceit harms the economic market itself, beyond the impact of the con-jobs in play. A marketplace chocked with deceit is a fraud itself, the absence of the rule of law. Only the law can fully deal with deceit in order to allow a free marketplace to even exist.

The more hidden processes used by modern bankers and traders to obtain unearned wealth is little different in its societal effects than robbing a convenience store is, or robbing hundreds of thousands of convenience stores actually, given the numbers typically involved in white collar crime at the highest levels.

The counterfeiting of the private-public central banks, that strangles the middle class to further enrich the wealthy, is daily theft on the grandest scale. Counterfeiting by central banks now affects almost every investment decision.

In the end, it is little different than the peasants always giving a one-third share of their crops to the royal duke just because the King says so.

The Rule of the Cartels on Main Street

This collectivist syndrome in the United States is far from limited to the Congress-buying Wall Street cartel and the subject of finance. The same general form of corruption permeates an increasing number of professions and businesses. Even tattoo artists and legal process servers have earned their guild status by law in many states, hoping to, like others do, choke off low-price competition in their field.

The national health-care industry seems to have become almost a single cartel empowered by federal spending. The Obamacare spending bonanza is designed to pay off every big healthcare interest in sight and the health-insurance industry to boot.

The provision of education in the United States has long been the fiefdom of rigged markets and systems.

The socialism model rules primary and secondary education almost alone. Even 40-years of abject failure in effectively educating students has failed to dent the nationwide taxpayer spending spree for this state-imposed monopoly rule in the most crucial work there is for society. Alaskans today pay over $18,000 per student for K-12 education. Test scores are well below those of students from some third-world countries.

A mix of public and private institutions rule US higher education as a single-minded oligarchy. This cartel is primarily empowered by federal spending in the form of student loans. The younger generations are saddled now with a trillion dollar in debt to repay college tuition and fees that no longer deliver a good job.

The lawyer guild has controlled its market for professional services in every state in the union for generations. Market-fixing remains one of the central goals of bar association rules: ditto for the physician guild.

Part private business organization, part government institution, part professional guild, part bank regulator, entirely self-interested, the creature from Jekyll Island, the Federal Reserve, has become the go to mechanism for replacing free markets with aristocratic privilege. He who issues the money controls the nation the phrase goes.

The Unifying Force

But the ultimate overarching rigged system in the US is the effective monopoly by two private political cartels sharing the same basic agenda, the Democratic Party and the Republican Party. As a consequence of these two faces of modern fascism, the nation and its liberty has been for sale for more than two generations now.

This welfare-warfare party, one bent on ever expanding centralized power, has owned the Congress and most of the Presidents going back to WWI and the founding of the Federal Reserve. The success in keeping the “two-party system” in place has had far more to do with the special privileges granted by law to Democratic and Republican candidates than to any good reason for a lack of meaningful political competition.

What is the fundamental error of governance made in all of this modern injustice?

It is the practice of the government surrendering open elections and free markets to officially anointed regulatory systems that then form an unchallengeable oligopoly within their bailiwick.

In the case of public regulation rather than a guild system, the regulated industry invariably become the effective master of the industry regulators, like Democrats and Republicans have for instance in US politics. Within any regulated business, the temptation of well-heeled collegiality from industry always wins over government regulators eventually or, more often, the people that appoint the regulators.

With professional guilds in power its officials take over entirely for the government in controlling the business and its participants. Professional guilds as a rule disconnect their own disciplinary code and market-rigging from the courts as much as possible, the place where everyone else is required to go for such matters.

Self-regulation for a profession invariably becomes mostly a program for less competition for guild members. It freezes the present elite in their power and position, a never ending goal of humanity it seems.

In a wider sense, the officially anointed protector of the public safety, whether it is the state bureaucrat or a private guild official, over time becomes an enabler of reduced accountability for wrongdoing, a way to keep standards low for the industry or service by locking out competition and even the law, to the extent possible.

The US economy has regressed to feudal ways like these in such force that a variety of private guilds, cartels, unions and oligopolies exercise, officially or in practice, many of the powers of government itself, especially those powers assumed by but never granted by a constitution to the government. It has all become a part of the “the law”.

The Revolution Looms Anew

Today’s economic model was best summed up by dictator Benito Mussolini in one short sentence: “Fascism … is the perfect merger of power between the corporations and the state”.

But tyranny also has its life-cycle within the balance between the past and the future. Once the past becomes far too much of a millstone for the future generations to carry any longer, governments fall and debt and servitude recede.

Empires can fall largely without violence and allow a new, freer system to emerge, as most of the satellite states of the Soviet Union achieved. Or the legacy of fallen empire becomes violent chaos followed by renewed oppression, like the French Revolution. This bottom-up style revolution is happening to nations across our 21st Century. The future lies in the balance. The bell tolls for all Western nations, too.

So it seems, liberty will have its chance again before too long.

The need for an impartial method of dealing with complaints from the Public about their Servants

A better logo for the Social Security Department?
1) I personally have refused to pay Social Security for many years now. Assuming for one moment that it is in fact a savings scheme and not a tax, I am 42 years old and they have told me that the pot will be empty by 2030 when I will be 58. So why pay in when you will get nothing out? It seems much more sensible to make your own provisions for old age rather than pay in to an investment which will see no return on. I can hardly claim I was an innocent victim of a Ponzi Fraud which social security has all but one of the elements of, when they have advised me in advance that I am unlikely to see a return on my investment.

2) I refuse to employ people as 'employment' is defined under the social security and employment laws - any contractual relationship I have is a contract for services where I am the customer rather than a contract of service where anyone is compelled to do as I say or pay anything to the government. This is a much more beneficial arrangement for all concerned as they may choose to have their own private insurance which is both cheaper and pays out better than social security in the unlikely event of illness or not as they prefer as individuals accepting responsibilty for themselves. Only a fool would enter into a contract of employment as an employer, such is the state of the regulatory environment facing us these days.

(I understand that many looking for work will not feel comfortable with this, but it is the truth of the matter and it seems likely it is only going to get worse if you keep electing the same people to make the decisions).

My concern is that this week an officer of the Social Security department entered my premises, I asked her to leave as she had no right to be on my premises, but she claimed she had a right under Article 35 of the Social Security Law (this right depends on her having a reasonable suspicion that it is a place of employment and so is not valid in my case as it is a matter of Public Record that I do not enter into employment contracts as an employer). The accusation therefore is that I had lied to the department on the phone 30 mins earlier when they had phoned to ask if I was employing anyone.

After refusing to leave several times she finally did although she left with a 'we are going to prosecute you'. Such an action is not within the powers of the Social Security department, that power is reserved solely for the Attorney General. The only reason I can adduce for her making this statement was to attempt to intimidate me.

So having been threatened (albeit an empty threat) and called a liar, and by one of my own Servants, I made my complaint to the Minister who advised he would have her line manager look into the matter. Does it strike anyone else that this is hardly likely to lead to a fair and impartial hearing of the matter? Can this really be consistent with Article 6 of the European Convention on Human Rights?

Dissatisfied I wrote to the States Greffier and the Attorney General to discover what mechanism was in place for dealing with complaints from Members of the General Public about misconduct by Servants of the Public in the course of their duties. I was surprised to discover that there is none that does not involve a manager of the person (the ultimate responsibility lying with the head of the departments) who thus shares in the culpability for not having properly ensured that the person knew the limits of their authority and that their overriding responsibilty is at all times to treat Members of the Public, who after all are their employers, with due respect.

Until there is some way of removing these officers from active duty, at least until they receive the proper training in their responsibilities, powers and duties, I am gravely concerned that nothing will ever improve and that the department will continue to use threats, half-truths. These may not work on people such as myself but I am concerned that others may be intimidated and threatened into accepting offers from the Social Security department which lead to them either receiving less than the law stipulates or paying more than they need pay over to the government, who in all likelihood will simply waste it.

I am now left with the option to bring a Civil claim against the indvidual, on the grounds that as she was not acting within her statutory authority she cannot enjoy the vicarious liability of the Minister, or waste my time whilst the department makes excuses for its failures.

Is it right that we should accept sub-standard service from our servants when we are compelled under threat of imprisonment or financial penalty to use these sub-standard services?

We need to find a way of readily identifying and removing from Service those Servants who are not serving the Public as they should.

Friday, 14 February 2014

Golden Jackass: "In the aftermath, no nation on earth will trust the Americans and British"

The United States is fast racking up characteristics of a Third World nation. Its finances are Third World. Its president is Third World. Its banking integrity is Third World. Its absent industry is Third World. Its decaying cities are Third World. It urgently begs for a Third World currency, but that is soon to be remedied. The nation has been a freeloader on the global reserve currency for too long. That is about to end. For the last three years, the United States has been living in a fairy tale with bailouts from the vast bond monetization.

The Quantitative Easing with its amplified bond purchases and hidden channels to disguise higher volumes has been operating as an historically unprecedented Wall Street bailout and Fannie Mae fraud recycle room. Pressures are building. The USDollar held in foreign jurisdictions is beyond the legal authority of the USGovt, which cannot continue covering its debts with inflation spew in the grandest heretic experiment in history. The solution within the global currency reset is the launch of the new American Dollar, for its own usage, no longer a global reserve currency.

Given its wretched fundamentals, it earns the name of Scheiss Dollar. Those familiar with the German language recognize it as the Shit Dollar. It will be stowed high in transit, true to the colonial application of shipping manure that gave off gas. S.H.I.T. was a warning to beware of gas explosions from lanterns on ships transporting the fertilizer agent. The current USDollar is not just giving off excess gas for global banking system flatulence. Its gas has produced vast insolvency in the banking systems of many nations. The air pockets in circulatory systems have caused widespread cardiac arrest.

The higher cost structure, primarily felt in food prices and energy prices, but also in material prices, has resulted in diminished profitability and a ruinous retirement of capital. The capital destruction must be halted, going hand in hand with global recession. Foreign nations demand a new solution and quickly. Thus the Global Currency Reset, within which the new Scheiss Dollar will be launched.

INSURMOUNTABLE PRESSURES BUILD

As the world moves away from the USDollar, it will avoid the USTreasury Bond in banking reserve function. The world will settle trade outside the USDollar on a rapidly growing basis. The result will be a shock to the USeconomy with fast rising prices. Alternative systems will move toward other currencies in trade settlement, like the Chinese Yuan and Gold bullion. The USFed will compensate by printing money to cover the USTBond selloff, dumping, divestiture, and indirect exchange. Only when the foreign suppliers do not want USDollars will the problem hit the United States like a financial hurricane.

The USFed response will trigger two events: a separate dollar from a split, and the ravage of price inflation. Not monetary inflation but rather a currency crisis will slam the United States. Powerful dynamics inside the United States and outside the United States will result in split birth of a new Scheiss Dollar for domestic usage, but also a flood of foreign USDollars converted to Gold bullion. The Scheiss Dollar will suffer from a sequence of devaluations. The conversion of USTBonds and other sovereign bonds to gold will gain momentum to change the face of the world. The Gold Standard lies directly ahead. In fact, the Global Currency Reset has a more appropriate name in the Return to the Gold Standard.

The pressures internal and external to the United States will force drastic action. The USGovt must defend against a growing tide of USTreasury Bond dumping and absent demand for USTreasury Bonds, both hitting simultaneously. The USFed cannot solve the imbalance and fill the gaps, by means of endless monetary hyper inflation. The USGovt must make a new Domestic Dollar, and devalue it in order to assure supply to the import dependent USEconomy. Neither the financial so-called experts nor the US maestros will not anticipate how deeply they will have to devalue the New Scheiss Dollar. The Jackass estimates between 50% and 60% in at least two steps, probably more. The result will be well over 100% price inflation. See Venezuela for an example that made up for two decades of abuse. Also, the US maestros have misjudged the oil supply from the Bakken region, misjudged the natural gas supply from Shale projects, while contaminating the US-based water supply table.

The USFed must halt its hyper monetary inflation, since it is wrecking the global financial markets and ruining capital on a grand scale. No more can the central bank cover the sold and dumped USTreasury Bonds with newly printed money. So they lie about tapering, after a failed experiment last year. The QE volume is increasing, not decreasing. Monetary inflation is a cancer, always has been, always will be. To call it the New Normal is national suicide. The three years of QE bond monetization have created the high pressure factor in the massive vortex. As the global trade is settled more outside the USDollar, far fewer USTreasury Bonds will be accumulated by foreign trade players. In fact, a whirlwind of USTBonds will be sold off during a grand divestiture, often called diversification. As the USDollar goes out of favor in trade, the United States will have a tremendous new challenge.

Being a massive importer, the USEconomy must find a means of paying for the huge volume of incoming supply. This is precisely how the USDollar will undergo its crisis. Events will go out of control. The USGovt must find a way to devalue its USDollar currency, and stop printing new USDollars. During the next chapter, foreigners will begin refusing USD in trade while selling its USTBond shelves from their banking systems. The sales dump will form the low pressure factor of the massive vortex. The hurricane is gathering force from the high pressure of central bank monetary growth, combined simultaneously with the low pressure of foreign dumping. Add to the intense pressures the economic damage from capital destruction, which raises sovereign government deficits that must be financed.

VICIOUS CYCLE & DOWNWARD SPIRAL

The USFed response will be to print money to cover the sales of USTBonds, but done with a discount which has already begun in force. The debasement of the USD from rampant money supply growth will exacerbate the situation. Foreign USTBond holders will rush to sell more, thus fueling the downward spiral. The USFed will print even more money to compensate in the bond monetization, probably done in hidden fashion to hide the monstrous QE volume increase. Then comes the full blown currency crisis, which in my view will result in a currency split. The USGovt with its USFed masters will decide to split the currency. They will tell the foreigners that the external USDollars retain value, but a new Scheiss Dollar (aka Shit Dollar) will be distributed in order to pay for imports from foreign suppliers. It will be devaluated, in order to encourage its acceptance and to assure incoming supply. The foreign USTBond selling will slow down, and even halt, only when the USFed promises to redeem with original USTBonds in cash. The foreigners will use the cash to buy other major currencies and Gold Bullion, and certainly not swap into the new Republic Shit Dollar.

The Chinese will take control of the Federal Reserve, and assume responsibility for management of foreign held USDollars, with some assistance by the Intl Monetary Fund. The IMF already has a Chinese dominance. The USDept Treasury late last year took back control of certain USDollar responsibility. Doing so set the stage for launch of the Scheiss Dollar, while the Chinese had been busy with acquisition of the JPMorgan headquarters in South Manhattan. The split oversight has already taken root.

As the perception spreads like a virus that the new Scheiss Dollar will see deep devaluation on a repetitive basis, the torrent will be directed toward conversion of major nation sovereign bonds into Gold bullion. From 2009 to 2012 the PIGS took the headlines. Next the US, UK, and Japan will make headlines for trouble in sovereign bonds. As the perception spreads like a virus that the major currencies all suffer from the central bank debasement problem, the conversion of Euros, British Pounds, and Japanese Yen will all be directed toward Gold Bullion. Their sovereign bonds will undergo separate simultaneous crises, all perceived as toxic paper. The recognition of Gold Trade Settlement will be common, its practice born in a simultaneous stroke. The momentum into Gold Bullion will be staggering, secret, and robust, led by the BRICS Bank (aka Gold Trade Central Bank).

On the domestic front, the new split Scheiss Dollar will face a huge problem of its own. The USGovt deficits must be covered, and the foreigners will continue not to purchase the USTBonds. They already do not bid at USTreasury auctions. They already are shedding them en masse, as their divestitute continues like a rampaging storm. Marginal factors will dominate.The enormous new supply and absent demand within the US walls will result in severe devaluation. The USTreasury Bonds will offer a higher yield with a lower currency value, in order to attract foreign buyers again for its toxic Third World debt. Expect probably a devaluation of the Scheiss Dollar with a first sudden quantum step like 30% down. When it finally trades more freely like in the FOREX open market introduction, it should suffer another quantum step down. Such launch will be traumatic, loaded with shock, and begin the sweeping perception of Third World America in an outbreak of reality.

The loss of US industry will become a major point of discussion and debate, the focus on attracting it back. Harsh blame will be given for decisions to move industry to the Pacific Rim, then to China. More likely the open trading could result in 10% decline per month for a while, with ugly quantum jumps. In the end, the internal domestic newly split Scheiss Dollar could be devaluated by up to 70%. That is exactly what it deserves, in response to annual 1 $trillion government deficits, annual $400 to $500 billion trade deficits, a newly arrived higher Current Account Deficit from the global USTBond selloff, a grossly inadequate industrial base, wrecked financial markets, and deep corruption broadly across the top echelons, with a clear double standard in legal prosecution for $trillion crime. The symptoms are recognized as Third World. Commercial colonization will hit the US shores, a process also already begun.

INDIRECT EXCHANGE DUMPING OF USTBONDS

The indirect exchange concept will continue to accelerate. A quick review around the world can identify a wide range of locations for the discharge. The USTreasury Bonds are being used as currency by third parties (mostly China & Russia) to pay for large assets sales and energy purchases. The USGovt bonds are being dumped. A race will develop to convert the USTBonds before a final restructure writedown. In past Hat Trick Letter reports, some major Indirect Exchange routes had been identified. The biggest two were the Rosneft buyout of the British Petroleum stake in the TBK-BP huge Russian energy firm for $55 billion. The deal will see the Russians unloading those $billions in USTBonds, sent to London banks where they cannot be refused. The other large deal is to be the payment by China for Russian crude oil delivered via the vast network of Asian pipelines. The Chinese will pay the huge annual energy bill in USTBonds, a steady discharge.

The Indirect Exchange usage of USTBonds will contribute to the external pressure on the USDollar, from which the USGovt will be forced to ramp up the QE volume in bond monetization, and then split the USDollar for a domestic currency that is heavily devalued. The radical action will take place as the USD is dropped from global reserve status. Several creditor nations will follow suit in the Indirect Exchange movement, including Brazil, Japan, Hong Kong, Taiwan, Thailand, Singapore, South Korea, Luxembourg, Norway, and Ireland. The exchange of bonds will grow and become a global stampede, then a race to extract value before the USTreasury Bonds default and convert to 65 cents on the dollar during a Global Restructure Conference, with the USMilitary having a seat to ensure cooperation and compliance (with a smile). The Jackass forecast of a USGovt debt default made in late 2008 is slowly taking shape.

NO MORE USTREASURY BOND DEMAND

The overriding global message is that Russia & China are leading a movement across the entire East to dump the USTBond, to work toward alternative trade settlement, and to replace the USDollar in its key role as trade settlement medium and global reserve currency. A Global Paradigm Shift is in progress. Downward pressure in the USTreasury 10-year bond yield (TNX) will be seen in the poor economic results and application of the interest rate derivative machinery. 

Upward pressure in the TNX will be seen from the global USD/USTBond rejection and recognition of the USFed Taper Talk falsehood deception. The USFed is on course to lose all remaining credibility. Their prestige vanished with the introduction of the Quantitative Easing against the ZIRP zero bound rates. Five key important points dominate the global landscape like a gigantic billboard.
  1. QE to Infinity is being recognized, the Taper Talk widely seen as a ruse and propaganda to defend the broken USDollar, another turn in the road
  2. The Geneva Iran Talks can be better described as the Petro-Dollar Surrender Talks, another turn in the road
  3. The Boyz might misjudge that the derivatives can prevent a powerful breakout above the critical 3.0% and toward the 3.7% target, as the London Whale incident was a turn in the road
  4. The Indirect Exchange seen in broad USTBond dumping is a new dangerous disruptive trend, yet another turn in the road
  5. The pension and bond funds as well as insurance sector demand higher bond yields for carry income, a breakdown coming
PETRO-DOLLAR DEMISE & PETRO-GOLD RISE

The JPMorgan metal futures unit is actually included in a commodities sale, despite bank denials. The ploys continue to keep the ongoing gold price suppression active. One side attempts to comply with regulatory requirements, while the other side attempts to maintain gold inventory management scheme tied to deep gold market fraud. The JPM folks are liars to the end. The big bank is under siege by regulators who slowly grow teeth. Being revealed is the inter-relations with the brokerage business, like in providing credit.

Shadow warehouses are hoarding industrial metals, as the world's metal is slipping into the shadows of a convenient system beyond regulation. The power centers slip away from the light as they attempt to retain control. Banks, hedge funds, commodity merchants, and other seamy firms (like offshore subsidiaries) are hiding tens of millions of tons of aluminum, copper, nickel, and zinc in a vast system of private warehouses. The network spans the globe. These facilities are known to some in the industry as shadow warehouses, since unregulated and not subject to disclosure. Their purpose is to operate outside the London Metal Exchange system of warehouses, their traditional home.

London and Frankfurt are way ahead in the Renminbi hub game. The Chinese Yuan currency trade will solidify the non-USDollar alternative movement. Great irony comes, since the final nail in the USDollar coffin will come from London, Frankfurt, and Switzerland, with their hands on the hammer. The Swiss business community is not enthusiastic at all about Yuan-based bond trading, as extreme competition has been sensed.

The Turkish Govt might be the casualty of a $119 billion Petro-Dollar loophole. The Great Silk Road is making a return, with gilded center stripes. An incredibly powerful reaction to the Iran sanctions has occurred, which should astonish analysts. Iran has biult a Petro-Gold highway out of necessity and expedience. Iran has brought the King Dollar to its knees. The Iran talks are about USDollar surrender, to assure no nuclear proliferation in its wake. The Geneva Iran Nuclear Talks should instead be called the Petro-Dollar Surrender Summit, as the Iran crime of selling energy outside the USD sphere has come full circle. The 21st century equivalent of the Great Silk Road is beginning to emerge. It has been constructed in the last year. The Iran workaround of the Iran sanctions has constructed the prototype of the Petro-Gold machinery. The rat has escaped the maze built by the USGovt and has wandered off the table.

The Petro-Dollar is being carted to the global cemetery, where war usually is triggered. Amazingly, the feisty maverick Iran has constructed the embryonic lanes for trade settlement in gold. The gold trade has long been at the center of controversial financial ties between Halkbank of Turkey and the oil ministry in Iran. Research conducted in May 2013 by the Foundation for Defense of Democracies and Roubini Global Economics revealed the Halkbank exploited a golden loophole in the punitive extensive sanctions by the USGovt against the Iran regime. The ruse was the public declaration of design to curb Iran's nuclear program. The reality was to halt energy sales outside the USDollar. Its detailed workings are as simple and elegant as they are powerful.

IRAN, TURKEY, INDIA HOLD THE CROWBAR

India has a long history of tremendous gold demand. The private citizens own between 20,000 and 30,000 tons, apart from the banking system. Together with China, the pedal is held to the metal on gold demand, which works to break the paper gold price suppression schemes. Turkey after all is a key pivot ally in the region, as will be seen in the Eurasian Trade Zone as well. At the same time, Turkey was playing a key role in US policy in Syria. Possibly, the USGovt wished to appease its own allies, who regarded the Iran sanctions as far too punitive not only to Iran, but also to Western European nations. 

It appears the US under the clumsy Obama hand lost on all fronts, a regular occurrence on the geopolitical stage. The man has the anti-Midas touch. Possibly, the compromise had more to do with coaxing Iran into signing a nuclear deal. There might have been an American olive branch extended to Iran via Turkey, done to persuade its leaders to continue back-channel negotiations with the United States, under other hidden agendas. 

Again though, the US is not on any winning side, since the Iran Talks are not about nuclear disarmament or dismantled weapons programs. The main nuclear topic in discussion at the Geneva-based Iran Talks is the usage of nuclear weapons by the United States in retaliation for abandoning the USDollar, a highly secretive table topic. The gain for the USGovt is the appearance of taking the high ground of diplomacy, while guilty of genocide in civilian killings in several war zones and of earth crimes in HAARP usage on earthquakes, hurricanes, and rainfall. The USGovt is playing an absurd end game strategy to save face as it falls into the Third World.

BIRTH OF PETRO-GOLD

The birth of the Petro-Gold trade will coincide with the birth of the Petro-Yuan, and later usher in the Gold Trade Settlement in full glory. It remains to be seen what the new gold-backed currencies will be, but they will arrive in a powerful stream, probably in direct response to a unmistakable systemic collapse that cannot be painted over in the financial press. The Saudis will find themselves scrambling to retain their plundered wealth, even to save their skins. They will return as very wealthy bedouins on the move, if they fail to make significant reforms at home.

What comes in the year 2014 will be amplified global USDollar rejection and widespread USTreasury Bond divestiture. It will cause fireworks aplenty. Russia will pull some strings in Saudi Arabia and the Persian Gulf. Expect Putin to use Dubai and China together with Iran to weaken the House of Saud, and possibly to knock them off their exploitative throne. Russian vengeance is coming very soon. 

Notice Putin and the Chinese president meeting numerous times during the Sochi Winter Olympics, taking advantage of the venue without Western leaders in the room. Russian tactics will likely force the Saudis to adopt certain financial devices on oil pricing. Their adoption will wreck the US relations, like massive lobs of grenades into the USTBond and Big Bank Stock windows. In 12 to 18 months, expect the House of Saud Royals will be on the run in Southern Europe, as in running for their lives from both Russian and HezBollah hit squads. The attack on the Saudis does not necessarily mean the fall of the House of Saud, only tremendous changes, concessions, maybe even public payouts.

EASTERN LINCHPIN NATIONS

Greece, Turkey, and Ukraine are critical linchpins, each with a critical pivotal role to plan in the global Paradigm Shift and in the development of the Eurasian Trade Zone. Many are the deceptions in the last couple years. To be sure, Cyprus might stay in the European Union, but it will keep a big window open to Russia with the GazpromBank. Then Greece will be a battleground for its energy pipeline access to Europe, perhaps the main reason why the EU continues to throw good money after bad in Athens. 

Then Turkey and Ukraine are critically important to tip the entire table East for the Eurasian Trade Zone. The Turkish gold routes will be extraordinarily important. The Ukraine energy pipeline routes will be extraordinarily important. The East can afford to lose Cyprus. The West is on the verge of losing Greece, which could be bought over the weekend by Russia with pocket change. But the East must have Turkey (for gold) and must have Ukraine (for energy) in the skeletal structure, as the paradigm shift continues to move and the trade zone takes form. It is interesting that the Bosporus Straits were crucial in ancient times, where fees were paid. Nowadays Turkey commands the NATO airbase and the gold trade routes.

WASHINGTON TOSSES SAUDIS UNDER THE BUS

China has begun to support the Arab states, making promises toward regional development and political stature. They must shmooze in order to create a fertile seedbed for the Petro-Yuan defacto standard to be born. Large projects and oil client relations over the last decade have helped. The new Persian Gulf protectorate role is being reshaped, slowly but surely. Arab monarchies eye stronger ties with China, and have conducted high level meetings. The Persian Gulf nations prepare for the Petro-Yuan. The Gulf Coop Council will serve as the platform for wider Chinese protectorate role. It will eventually usher in the Petro-Yuan Standard more formally, but only after more wine, more lamb, more deals, and more head nodding. Any strategic partnership between the Saudis and China means dumping WashingtonDC, simply put. The fallout will be tremendous.

As the United States embarks on a new path, with the Saudis perceived and painted at the extremists who discard the USDollar in favor of Asian devices, watch relations between the US and Iran warm slowly. The process has already begun. This point has been made by the Jackass in past analysis and interviews. Look for growing evidence that the USGovt will see Iran as a stability rock in the Persian Gulf after the Saudis piss on the US Embassy gates, after the Saudis discard the Petro-Dollar in favor of a tighter deal with Russian oil pricing and Chinese Yuan oil payments. 

Meanwhile, the Saudis are being painted with a nasty ugly new brush by the USGovt and its dutiful press like the New York Times. The Saudis will be forced to apply the crowbar that collapses the very Petro-Dollar that the kingdom has depended upon for 40 years to plunder their nation. The great divestiture of the Saudi USTreasury Bonds will take place while London and New York bankers continue to rehypothecate (steal) Saudi gold. All the Saudi gold outside their nation will disappear. 

Most Saudi gold has already been stolen. 

In the aftermath, no nation on earth will trust the Americans and British, who will have tossed the Saudis under the bus and stolen their gold. As WashingtonDC paints the Saudis as terrorists, watch the royals reveal who really took the lead role on 911.

Saturday, 8 February 2014

If you can't work with the State then you work without it

"Phantom economies tend to give rise to grey and black markets in proportion to the deviance of the phantom economy from reality."

College graduates around the world are discovering that getting a university diploma no longer guarantees the conventional success story of a secure job and a life of ever-rising consumption. Doing all the things that the Status Quo said would lead to success no longer yields success, for the simple reason that the Status Quo is failing on a structural/systemic level.

The system is rigged to protect the Status Quo mafia from competition. As noted in The Mafia State of Mind (February 6, 2014), the Status Quo is a set of overlapping monopolies/extortion rackets. The system needs a trickle of new technocrats and apparatchiks to manage the rackets, but there is no place for the tens of millions of college graduates who are flooding into the job market every year around the world.

New conventional enterprises face essentially impossible barriers: sky-high rents, absurdly lengthy and costly permitting processes, onerous fees and reporting requirements, and a host of other barriers reputedly imposed to "protect the public" but whose real purpose is to eliminate small-enterprise competition to corporate dominance.

Which organizations have the cash flow, financing, legal expertise and political influence to meet all the requirements and pay the insanely overpriced leases? Global corporations and the state--two sides of the same kleptocratic coin.

The high costs of launching and operating a legitimate Status Quo business serves two other primary purposes: maintaining high returns on capital for crony-capitalist financiers and funding the state's enormous cadre of functionaries at above-market-rate salaries, benefits and pensions. Recall that median personal income in the U.S. is about $40,000 for full-time workers, and compensation above $82,500 annually puts one in the top 10% of all wage earners.

The California Public Policy Center has just posted its own searchable site of state and local employee wages and pension benefits, TransparentCalifornia.com. Some of the results were rather revealing – and should be shocking to taxpayers: There are 31,527 retired public workers in the "$100,000 pension club" and 582 who are receiving pensions of at least $200,000 a year. Including wages and benefits, there are 227,059 state and local workers earning total compensation of at least $100,000 a year.

Some may argue that these large figures apply to a relatively small portion of public employees, and that the average public employee receives modest compensation. However, a CPPC analysis revealed that even average compensation is startlingly high. Average compensation for full-time state employees was $93,851 for public safety employees and $68,282 for all other employees. Adding benefits boosted these totals to $129,388 and $90,402, respectively. The figures for city and county employees were even higher.
Source: Public sector's growing $100K club

Two forces are disrupting this cozy interlocking mafia of financiers, corporate cartels and state functionaries: the End of (Middle-Class) Work and the rise of the peer-to-peer, self-organizing business models such as AirBnB, car-sharing, ride-sharing, farmers markets, etc.

The high costs of legitimate business (needed to keep rentier/financial profits and state functionary pay/pensions high) are effectively destroying middle-class jobs and pay scales: the only organization that can afford to pay high salaries and benefits, regardless of costs or the business climate, is the state.

Even the financial sector and global corporations can only pay middle-class salaries for technocrats and managers in what are effectively quasi-state agencies (sickcare, workers compensation insurance, the defense industry, etc.)

So what are the tens of millions of college graduates supposed to do for a livelihood if there are only a few slots open in the moated mafias of financiers, corporate cartels and the state? To answer, let's start with this obvious statement: that which cannot be paid will not be paid.

All the infrastructure of consumption depends on tens of millions of college graduates making enough money to pay high taxes, service their student loans, buy homes, autos, particle-board furniture, electronic gadgets, dozens of pairs of shoes, etc. etc. etc. If they can't make enough money to buy and own all that stuff, then they won't be buying and owning all that stuff.

And if they can't earn a living within the Status Quo mafia, they will do so outside the mafia in the gray and black markets.

This destruction of consumption is supposed to be a disaster, but it's only a disaster for the moated mafias of financiers, corporate cartels and the state that depend on tens of millions of workers voluntarily becoming debt serfs and tax donkeys. If young workers cannot make their student loan payments, those loans become worthless. As the old saying has it, You can't get blood from a stone.(Alternatively: You can't get blood from a turnip.)

If young workers can't make enough to buy autos, homes, etc., the market for those goods and services implodes. And if all the financial/debt churn generated by consumption goes away, so do the fees and taxes the state depends on to pay its armies of functionaries.

Rather than a disaster, this wholesale loss of middle-class incomes and aspirations is enormously liberating. Instead of the yoke of debt-based ownership, young people are finding sharing to be better than owning: one shared car can provide transport for 10 people. Ten people no longer need to own 10 cars to get around.

One way to grasp how deeply the mafia state of mind has taken hold is to ask: how many middlemen have to be paid to produce/buy a good or service? In Greece, liberation starts by eliminating the middleman, which of course includes the voraciously corrupt state: After Crisis, Greeks Work to Promote ‘Social’ Economy.

The state is naturally in full freakout mode, as self-organizing sharing/no-middleman enterprises are outside the debt-serf/tax donkey system that funds the state. In response, the state is frantically trying to impose the same fee structure that has crushed conventional small businesses on the sharing/no-middleman organizations.

The problem for the state is that its success in imposing exorbitant fees and taxes will simply drive low-income people scratching out a minimal living in the gray market to other networks that do not even have a corporate structure to tax. To wit: "The more you tighten your grip, the more systems will slip through your fingers."

If making a living in the grey market becomes untenable, then people will be forced into the black market, which is whatever trade can be done outside the reach of the state. As noted previously, that which cannot be paid will not be paid.

As recently observed: "Phantom economies tend to give rise to grey and black markets in proportion to the deviance of the phantom economy from reality." If we believe that phantom economies of moated fiefdoms, mafias and cartels are "reality," then the rise of liberating degrowth networks is distressing and confusing.

But if we look past the propaganda and see the debt-serf/tax donkey system for what it really is, a predatory system of oppression and exploitation, then we can see how de-growth, de-consumption, de-debt, etc. is liberating.

Thursday, 6 February 2014

The Mafia State of Mind


Once the mafia state of mind has seeped into every nook and cranny of the society and economy, it's not even recognized as corruption: it's simply the way the system works.

We recently spent a few days with a friend who was born and raised in Sicily who now lives elsewhere in Europe with his wife (also Italian, from Naples). Though we talked of many things, one of his comments struck me like a bolt of lightning.

The Mafia isn't about shoot-outs, he said; the mafia is a state of mind.

He then pointed to a city trash collection truck driving by. Those guys are mafia.

I should stipulate that our friends are left-liberal in their views, and deeply concerned about the direction of free enterprise, democracy and social equality in Europe. He did not make these comments as a joke but with the utmost seriousness.

Why are the union sanitation workers a mafia? Because they have the leverage (via strikes) to extract and extort what they want from a populace who earns less than they do in wages, benefits and salaries--a population with no other choice. Is there some other option to giving the striking municipal workers what they demand? Is there another choice to clear the streets of garbage? Is there another train system to get to work when the train operators are on strike? No.

The mafia state of mind is all about establishing a monopoly that leaves the populace no other choice, and that creates sufficient leverage to enable systemic extortion. In the mafia state of mind, the government is a partner in the racket. When thugs arrive in a peasant village in China to drive the residents off their land so a corrupt developer can build hundreds of highrise flats, where are the corrupt officials of the government? In line to collect their "fees", which will fund their purchase of homes in Vancouver, B.C. or Sydney, Australia.

Where were the government officials when BART employees held the San Francisco Bay Area hostage? Quietly collecting their usual bribes (politely called "contributions") from the union mafia.

The mafia state of mind is all about extracting wealth that could not be extracted without state enforcement, monopoly and covert systems of control and extortion. When the "too big to fail" banks received $16 trillion in direct subsidies and loans to keep from imploding (i.e. what would have happened in a truly free enterprise system), that was the mafia state of mind in action: the central state extorted whatever was necessary from the populace to aid and protect its banker cronies.

What is the shadow banking system other than a shadow financial mafia? The "too big to fail" banking sector is a mafia of the cartel-crony capitalist sort, and the shadow banking system is a cloaked version of the same extortionist system that depends on the government for protection. In the shadow banking mafia, the

government protects the racket by acting as if it doesn't exist.

When there is no other choice but submission, when voting for either party yields the same results, the mafia state of mind reigns supreme. The mafia state of mind exists in all ideological flavors--socialist, capitalist, communist. The mafia state of mind is simple: leave the populace no choice but submission, enforce monopolies of control and power, and then extract and extort to your heart's content.

Once the mafia state of mind has seeped into every nook and cranny of the society and economy, it's not even recognized as corruption: it's simply the way the system works. And so the residents of nominal democracies in Asia, Europe and the Americas do not even realize how thoroughly corrupted their societies and economies really are; they cling to the illusions of choice even as their incomes, wealth and political influence are funneled into the hands of various elites by overlapping extortion rackets.

Once you realize that the mafia is a state of mind, you recognize just how thoroughly it has corrupted and criminalized our entire society and economy.