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The Roots of the Current Economic Global Crisis

28.04.2009 -- Little does the common man know the tales and travails that go on behind the scenes as the world lurches towards another Great Depression and a World War - see Sharp Increase in Global Tension since the G-20.

Half past 6 on the Morning after the Mad Orgy of Funny Money

The Uranus-Saturn clock chimes 6am; and
Pluto doth herald its morning in Capricorn;
Whilst the drunken vision of wealth without creation
Woven by black magic during the orgy of the night
Lingers on in the minds of little men
Who have pushed the snooze button.

The global credit crisis has the attention of the mainstream media which has so far has done its best to not examine the fraudulent roots of the entire monetary system. Even the lads on bubble vision know that something is amiss as does Warren Buffett. What Rick Santenelli needs to discuss on the floor of the exchange are the roots of the global financial crisis - Fraudulent Finance - and how The Law can be upheld once again.

Humanity is at a crossroads, mostly due to its failure to distinguish between a liability for a good and the good itself; as well as its failure to distinguish between what is lawful and what is legal. 

What follows is a chain of deductive reasoning based on observable events in the markets and other information and disinformation that leaks out.

Physics Drives Finance, Finance Drives Politics

Physics is a little tease
who puts his lover finance ill at ease

Deductive reasoning says, that the current chapter in falling asset values began, when some unknown prime banker woke up and discovered (perhaps with a heart attack!) that his minions had moved from the officially sanctioned banking process to unmitigated fraudulent abuse that involves the circulation of bank liabilities created by fraudulent conversion of promissory notes.

Some investigation must have shown Mr. Prime that this would not and does not stand in court and he must have pulled the plug on any further purchase of derived instruments by banks he had influence on. If those contracts were no good for Mr. Prime, then no one would touch them - the snowball turned into an uncontrollable avalanche. We commend Mr. Prime, if there be such a mensch, for he has taken a bold step.

Physics drives finance and finance drives politics. Never has there been a clearer example that illustrates the failure of the American Public Education System by design than 911. It is crystal clear that Americans (and most of the rest of the world "leaders" and common people) do not understand Physics [1a> 1c 2 2c 3 3c].]. How can one expect them to grasp the finer points of finance or The Law? Had these issues been discussed and understood in the 1920's the planet could have been saved from the horrors of WWII that was foisted upon an unsuspecting world to rob it of its gold.

This today is what we face - we believe that the objectives of the fraud perpetrated upon this planet was the theft of the American Treasury Gold - which in the opinion of these experts is mostly gone . What remains as the bone of contention is the Japanese war gold that lies in and around the Philippines.

Practical Physics and Financeestrong>

Our first lesson in physics and finance is this thought experiment - consider that "all the gold in the world" was yours, and you landed with it in the middle of a pre-historic tribe - could you buy that nice Japanese car, that Swiss watch or a fine bottle of Scotch or any of the marks of wealth? Answer is no - wealth must be created in order to be enjoyed.

Our second lesson in physics and finance is to consider a cow - What would happen to her if the revenues for the sale of her milk, manure and calves did not cover the costs of her feed and care? She would be dead beef. In other words every being on this planet has to produce more than they consume. Those that do not are parasites.

These are the basic lessons in physics and finance. Clearly those who create wealth must trade it for other wealth, not tokens of fraud, or they are doomed to encounter the perfect storm (or earthquake).

The physics of the world economic system is that it is governed by parasites - for, by definition, a government consumes more than it produces. Bank guarantees from the parasite-in-charge will not work for the long term as the market will inevitably discover.

There is a chorus of cries for more regulation... Regulation can only restrict, hinder growth, prevent production, bar workers from working, prevent goods and men from moving, prohibit trade, forbid sales, destroy, coerce or inhibit. Regulation cannot create or produce wealth nor can it make legions of parasites into productive citizens as the USSR sadly discovered.

The physics of the world economic crisis is that producers have exchanged their goods produced for fraudulently created tokens. That system of fraudulently inflated tokens is dead. The governing parasites and their symbiotic bankers wish it were not (hence the bailouts and bank guarantees for the lesser banks). Anyone in charge of a sizable sum can honestly declare that the source of their funds comes from their participation in the world casino of fraudulent finance.

No mainstream commentator has cottoned on to the fact that neither the Federal Reserve Banks themselves nor the US Treasury have created the retail bank liabilities that pass for dollars. The retail banks will fail, as that era is over. The dollar itself will perversely get stronger as the banks fail, as masses of tokens that are the retail bank liabilities are wiped out.

TThe key word, which people in positions of power who wish to return society under their watch to the rule of The Law such as perhaps, the newly inaugurated President Barack Obama, is accountability.

Accountability/strong> - A-Count-Ability - arises when the underlying good can be counted - measured, weighed, its purity and uniformity assessed. This kind of accountability is the duty of an accountant. You cannot have accountability in government without a-countable finance.

WWhen society is based on a unit of account that can be thus counted and private property is voluntarily traded, loaned, exchanged and settled according to The Law, then wealth can be generated and passed from one generation to the next.

Life, Liberty and the Pursuit of Happiness /strong>

When society is comprised of individuals who are sovereign over their selves, their persons, their property and are free to create without fear, live and move with their property to where creativity blossoms then they can be said to live their lives in peace, enjoy their liberties, and engage in the pursuit of happiness.

The Physics and Finance of the USD Token Systems

In the following discourse, the word "token" will be used to refer to a unit that is on a particular balance sheet (liabilities of the Federal Reserve or your local credit union) or is a physical unit already in token form, such as "cash".

CClearly, the Federal Reserve Account Unit known as the Dollar, is comprised of several token systems. There are the Federal Reserve Notes - the green cash that one is so used to - which forms a token system in its own right. Next, there are Fedwire balances in the Fedwire system - tokens that are distinct from the liabilities of any member banks - which need to be distinguished from each other - for example, the tokens represented by the USD checking account liabilities of say a USA retail bank are clearly distinct from USD checking account liabilities of say a Panama retail bank. Each set of tokens are "backed", as it were, by the "loans" made by that bank. All these retail liabilities are distinct from T-bill dollars which represent the liability of the UNITED STATES OF AMERICA to pay one mystical Federal Reserve "Accounting" Unit known as the Dollar.

How Interest Rates are Really Set - and why a low "interest rate" is a vote of no-confidence by the market/strong>

Let us look at interest rates - which, contrary to popular opinion, are set by the market, not at the Federal Reserve board room. The swathes of retail bank tokens chase US T-bill tokens and drive up its price - reducing its yield, and thus the "benchmark interest rate" on such a note - the Federal Reserve meetings merely acknowledge the demand by "setting" the discount rate. The recent surge in demand for short term T-bill tokens has required the Fed to double its availability to prevent the "interest rate" from going negative and to shore up the "reserves" that the member banks hold. This in effect, is a vote of no-confidence by the money markets in the stability of the banks who circulate the retail USD tokens. In other words, the market is betting that the retail banks will fail before the boys with the guns do.

The Strong Dollar Policy

TThe quantity of retail banking tokens is falling at an unprecedented rate as "loan" writing falls as the BIS has warned - at a rate we estimate of roughly 4 Trillion a year. Thus assets priced in retail bank tokens - such as real estate, have had their "values" fall and the purchasing power of the Federal Reserve "Accounting" Unit known as the Dollar goes up! (the "strong dollar" policy... it now buys more houses, barrels of oil, copper, etc.)

As banks refuse to accept the retail dollar tokens of other banks, world trade came to a standstill with the evidence clearly seen in the Baltic Dry Index... which now shows that hidden stashes of "cash" have begun to move.

Balti Dry Index

The Baltic Dry Index (BDI) of World Shipping/p>

Questions we get asked about the Baltic Dry Index and our simple minded FAQ answers:

  1. What does the Baltic Dry Index measure?
    The Baltic Dry Index measures the spot rate for international dry bulk shipping - it is a barometer of international trade.
  2. Why did the Baltic Dry Index rise to around 12,000?
    The BDI rose as a result of the tide of new USD bank liabilities created by promissory notes falsely fueled the global economy.
  3. Why did the BDI drop so sharply and so far?
    The inter-bank markets discovered the difference between a USD liability of a bank, and legal tender FRN cash and this caused letters of "credit" to cease to be a means of trade.
  4. What caused the rebound?
    A return to "cash".
  5. What is a prognosis for, say the Dow Jones Industrials?
    TThe DOW will inevitably tend much lower as companies that produce goods sell out of their inventories and then cannot replace them. The DOW and gold shall meet, as we have long predicted. Gold and the DOW at 600 would not be unexpected.

On the street, US Federal Reserve Notes are growing in purchasing power as the effective worth of "one dollar" increases as every successful "loan" payment sends bank USD tokens back into the vacuum they came from. It also reduces the pool of such tokens from which the remaining loan payments must be made. It is thus mathematically guaranteed that there will be bankrupt people, corporations and states./p>

IIn the meantime, as accountants apply arbitrary rules spiced with basil to retail bank liability tokens, banks go bust, need "bailouts" and bankers get their wrists slashed. A set of desperate politicians in Washington DC are silly putty in the hands of the financiers who get them to create approximately the number of tokens that are vanishing - transferring the purchasing power represented by the dollar into US government hands at an unprecedented rate. The physics of this will lead to a centralized command economy, and the inevitable disasters as is evidenced by every such experiment by humans in the past. 

The entire charade of schemes ranging from Social Security and 401K plans for the lower and middle classes to anti-money laundering compliance to exotic bankers ramp ponzi schemes for the Bobos are just ruses to remove USD (or EUR for the European Bobos) retail bank tokens from circulation and/or to lock them up in never ending red tape to prevent these tokens chasing real goods.

So much for Finance, what about Politics and The Law?/strong>

II must be laconic for brevity is the soul of wit:

Politicians in their arrogant ignorance believebr /> that the Acts they pass become Laws
The Law is immutable and flows from Nature or God
No politician can alter the Laws of Nature, thank God!

The Law must be discovered by the Common Man
and this in practice becomes the Common Law
and builds the jurisprudence
that is the bulwark against tyranny.

The tainted jurisprudence of the last 100 years,
must be abandoned by those who wish to restore The Law;
for you cannot have The Law and officially license fraud.

The Law does not allow one to *lend* that which they do not have;
The Law does not forbid one from *issuing a promissory note* in real money;
The Law forbids fraudulent representation of a promissory note as a loan note;
The Law forbids fraudulent inducement and fraudulent conversion.

Recognize, my friend, in English speaking countries The Common Law
is The Law of the Land; and the Constitution and all Acts of Legislatures
can at best be called Statutes that attempt to make The Law crystal clear
Be not misguided by those that cry for you to ask for your rights
for then you will be presented with a BILL! [this is why its called a BILL of rights]

Thou shalt not cause harm or loss to another is the essence of The Law
And defending it is your duty - which may involve the use of non-initiatory force
To protect Life, Liberty and Property acquired by voluntary trade or lawful claim.

Know also that the Sovereign or the State is equal in all respects under The Law
and whoever forces you to fulfill an order is liable for a BILL!

And why are mortgages (lit. bound unto death) suddenly toxic, thou asks?
'Tis better to ask who has funded the loan - in court - and ask for the books of the bank as evidence -
for you will discover that the borrower is the funder of the "loan".
This then, is the root of the global crisis -
The people have been swindled and keep their purchasing power "i.e. money" stored with the criminals. 

The Consequence of Mass Ignorance of Legal Fraud

There are, he says, two consequences in history; an immediate one, which is instantly recognized, and one in the distance, which is not at first perceived. These consequences often contradict each other; the former are the results of our own limited wisdom, the latter, those of that wisdom which endures. The providential event appears after the human event. God rises up behind men. Deny, if you will, the supreme counsel; disown its action; dispute about words; designate, by the term, force of circumstances, or reason, what the vulgar call Providence; but look to the end of an accomplished fact, and you will see that it has always produced the contrary of what was expected from it, if it was not established at first upon morality and justice.

Chateaubriand's Posthumous Memoirs.

The era of political parasitism is over, for either the host dies with the burden of the parasite, or the parasites quit being a burden to their conscience and begin to work to earn money. The audacity of some of these pests, is that they believe that theirs is the right to choose who shall live and who shall die, who shall work and who shall starve, but finance their fickle former friend has departed, chasing Physics, the handsome son of The Law.
Those that control Force in society are faced with the "use it or lose it" proposition, and compliments and heartfelt adoration must go to those brave ones who have not allowed unlawful provocations to escalate into genocide and have successfully tracked down and thwarted nuclear provocateurs. These men live on a slippery slope as the ability of finance to support their fleets and armies dries up. 

The clock is ticking, and time is running out; Signals and threats are being sent via bumping nuclear submarines and earthquakes or manufactured hurricanes; There are rumors flying about corrupt world stage courts and payments retrieved in the dark of the night on blinking grey screens; There are rumors of battalions guarding empty forts; There are legions waiting for handouts, politely called "refinancing" or "settlements". With or without such refinancing, the era of living on other people's money is over as the world of producers confront a mass of parasites in power who cannot trade value for value as they produce nothing.

The world is capable of supporting 10 times its current population with more than enough for all, with clean and abundant energy, yet the politicians and now the bankers seem to wish to destroy the possibility of a wealthy life for their grandchildren as Malthusian Satanists set public policy. The worst thing for the world and the environment would be a global nuclear war amongst the parasites, some of whom will crawl like cockroaches into their now resplendent underground cities... but any society is faced with the certain fact that physics drives finance and finance drives politics. Lest those who have engineered these underground marvels imagine that they are John Galt's brothers - consider this - any such project is doomed with a great infestation of parasites who are too good to produce and the creators and engineers are but bond slaves to the most masterful of these parasites.