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The Loan: An exchange of wealth for income

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by Keith Warner
Posted Jan 25, 2012

AS THE TITLE OF THIS ESSAY SUGGESTS, A LOAN IS AN EXCHANGE OF WEALTH FOR INCOME. Like everything else in a free market (imagine happier days of yore), it is a voluntary trade.  Contrary to the endemic language of victimization, both parties regard themselves as gaining thereby, or else they would not enter into the transaction.

In a loan, one party is the borrower and the other is the lender. Mechanically, it is very simple. The lender gives the borrower money and the borrower agrees to pay interest on the outstanding balance and to repay the principle. As with many principles in economics, one can shed light on a trade by looking back in history to a time before the trade existed and considering how the trade developed.

It is part of the nature of being a human that one is born unable to work, living on the surplus produced by one’s parents. One grows up and then one can work for a time. And then one becomes old and infirm, living but not able to work. If one wishes not to starve to death in old age, one can have lots of children and hope that they will care for their parents in their old age. Or, one can produce more than one consumes and hoard the difference.

One discovers that certain goods are better for hoarding than others.  Beyond a little food for the next winter season, one cannot hoard very much.  One of the uses of the monetary commodity is to carry value over time.  So one uses a part of one’s weekly income to buy, for example, silver.  And over the years, one accumulates a pile of silver.  Then, when one is no longer able to work, one can sell the silver a little at a time to buy food, clothing, fuel, etc.

Like direct barter trade, this is inefficient. And there is the risk of outliving one’s hoard.  So at some point, a long time ago, they discovered lending.  Lending makes possible the concept of saving, as distinct from hoarding.  It is as significant a change as when people discovered money and solved the problem of “coincidence of wants”.  This is for the same reason: direct exchange is replaced by indirect exchange and thereby made much more efficient.

With this new innovation, one can lend one’s silver hoard in old age and get an income from the interest payments.  One can budget to live on the interest, with no risk of running out of money.  That is, one can exchange one’s wealth for income.

If there is a lender, there must also be a borrower or there is no trade. Who is the borrower? He is typically someone young, who has an income and an opportunity to grow his income. But the opportunity—for example, to build his own shop—requires capital that he does not have and does not want to spend half his working years accumulating. The trade is therefore mutually beneficial.  Neither is “exploiting” the other, and neither is a victim. Both gain from the deal, or else they would not agree to it. The lender needs the income and the borrower needs the wealth.  They agree on an interest rate, a term, and an amortization schedule and the deal is consummated.

I want to emphasize that we are still contemplating the world long before the advent of the bank. There is still the problem of “coincidence of wants” with regard to lending; the old man with the hoard must somehow come across the young man with the income and the opportunity.  The young man must have a need for an amount equal to what the old man wants to lend (or an amount much smaller so that the old man can lend the remainder to another young man). The old man cannot diversify easily, and therefore his credit risk is unduly concentrated in the one young man’s business. And bid-ask spreads on interest rates are very wide, and thus whichever party needs the other more urgently (typically the borrower) is at a large disadvantage.

Of course the very next innovation that they discovered is that one need not hoard silver one’s whole career and offer to lend it only when one retires. One can lend even while one is working to earn interest and let it compound. This innovation lead to the creation of banks.

But before we get to the bank, I want to drill a little more deeply into the structure of money and credit that develops.

Before the loan, we had only money (i.e. specie). After the loan, we have a more complex structure. The lender has a paper asset; he is the creditor of the young man and his business who must pay him specie in the future. But the lender does not have the money any more. The borrower has the money, but only temporarily. He will typically spend the money. In our example, he will hire the various laborers to clear a plot of land, build a building and he will buy tools and inventory.

What will those laborers and vendors do with the money? Likely they will keep some of it, spend some of it… and lend some of it. That’s right. The proceeds that come from what began as a loan from someone’s hoard have been disbursed into the economy and eventually land in the hands of someone who lends them again! The “same” money is being lent again!

And what will the next borrower do with it? Spend it. And what will those who earn it do? Spend some, keep some, and lend some. Again.

There is an expansion of credit! There is no particular limit to how far it can expand. In fact, it will develop iteratively into the same topology (mathematical structure) as one observes with fractional reserve banking under a proper, unadulterated gold standard!

Without banks, there are two concepts that are not applicable yet. First is “reserve ratio”. Each person is free to lend up to 100% of his money if he wishes, though most people would not do that in most circumstances.

And second is duration mismatch. Since each lender is lending his own money, by definition and by nature he is lending it for precisely as long as he means to. And if he makes a mistake, only he will bear the consequences. If one lends for 10 years duration, and a year later one realizes that one needs the money, one must go to the market to try to find someone who will buy the loan. And then discover the other side of that large bid-ask spread, as one may take a loss doing this.

Now, let’s fast forward to the advent of the investment bank. Like everyone else in the free market, the bank must do something to add value or else it will not find willing trading partners. What does the bank do?

As I hinted above, the bank is the market maker. The market maker narrows the bid-ask spread, which benefits everyone. The bank does this by standardizing loans into bonds, and the bank stands ready to buy or sell such bonds. The bank also aggregates bonds across multiple lenders and across multiple borrowers. This solves the problem of excessive credit risk concentration, coincidence of wants (i.e. size matching), and saves both lenders and borrowers enormous amounts of time. And of course if either needs to get out of a deal when circumstances change, the bank makes a liquid market.

The bank must be careful to protect its own solvency in case of credit risk greater than it assumed. This is the reason for keeping some of its capital in reserve! If the bank lent 100% of its funds, then it would be bankrupt if any loan ever defaulted.

What the bank must not do, what it has no right to do, is lend its depositors’ funds for longer than they expressly intended. If a depositor wants to lend for 5 years, it is not the right of the bank to lend that depositor’s money for ten! The bank has no right to declare, “well, we have a reserve ratio greater than our estimated credit risk and therefore we are safe to borrow short from our depositors to lend long”

Not only has the bank no way to know what reserve ratio will be proof against a run on the bank, but it is inevitable that a run will occur. This is because the depositors think they will be getting their money back, but the bank is concealing the fact that they won’t behind an opaque balance sheet and a large operation. So, sooner or later, depositors need their money for something and the bank cannot honor its obligations. So the bank must sell bonds in quantity. If other banks are in the same situation, the bond market suddenly goes “no bid”.

The bank has no legal right and no moral right to lend a demand deposit or to lend a time deposit for one day longer than its duration. And even then, the bank has no mathematical expectation that it can get away with it forever.

Like every other actor in the market (and more broadly, in civilization) the bank adds enormous value to everyone it transacts with, provided it acts honestly. If a bank chooses to act dishonestly (or there is a central bank that centrally plans money, credit, interest, and discount and forces all banks to play dirty) then it can destroy value rather than creating it.

Unfortunately, in 2012 the world is in this sorry state. It is not the nature of banks or banking per se, it is not the nature of borrowing and lending per se, it is not the nature of fractional reserves per se. It is duration mismatch, central planning, counterfeit credit, buyers of last/only resort, falling interest rates, and a lack of any extinguisher of debt that are the causes of our monetary ills.

Written by aurick

25/01/2012 at 5:12 pm

Central Bankers race toward global currency solution

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from The Daily Bell
Posted Thursday, August 11, 2011

CENTRAL BANKERS ARE RACING to shield their economies from fiscal tightening and lopsided currency swings that threaten a new global recession. In the 72 hours after a Group of Seven conference call on Aug. 7, the Federal Reserve pledged to keep interest rates near zero through at least mid-2013, the European Central Bank intervened in bond markets and the Bank of England indicated it’s ready to add more stimulus if needed. Japan signaled renewed concern about the yen and Switzerland yesterday stepped up its fight to curb an “overvalued” franc. … While the actions aren’t as directly coordinated, the push is one of the broadest since the Fed, ECB and four other central banks cut interest rates together in October 2008 to limit fallout from Lehman Brothers Holdings Inc.‘s collapse. – Bloomberg

Dominant Social Theme:
The experts at the world’s central banks are on the job.

Free-Market Analysis:
This Bloomberg article is just another in a long line of disappointing mainstream financial reports that does nothing to address the real issues causing the crisis and, in fact, does everything to try to misinform the public into believing that the “experts” have all under control.

Well, we do not think more jaw-jaw is what people want to hear right now, or that the money magicians are capable of doing anything to stop the rapid erosion of public confidence. And based on the recent upward move in Honest Money, it is quite obvious the markets don’t want to hear it either.

Regardless of what Bloomberg wants people to believe, the world’s central banks are NOT independent banks led by teams of “experts” dedicated to establishing prudent national monetary policy. No, they are nothing of the sort and never were intended to be. They are simply a cartel-like crime syndicate that operates under the direction of the Swiss-based “super central bank,” the Bank for International Settlements. And the BIS is just one more tool in the arsenal of elite monetary control of the world.

The BIS sits like a great spider at the heart of the corrupt and ruinous central banking mechanism that the Anglo-American elite has successfully foisted upon the world. It coordinates the policies of these ruinous entities – not to any great effect – but to ensure that the Anglosphere maintains control of what it has built.

The Western elite’s banking scheme is a central part of how the Anglosphere has managed to dominate the world behind the scenes. Through central banking and the BIS, the Anglo elites have a stranglehold over economies worldwide. Even though most of the world was aligned against a presumed to be corrupt BIS after World War II, it somehow managed to escape dissolution. This is because it is a prime asset of the City of London, that mysterious one-square mile patch of real estate at the heart of London where the Bank of England itself is located.

However, today all of the elite’s poisonous machinations face an unprecedented decline in public confidence. And nowhere is the threat of total collapse more intense than on that most important elite edifice of all – the central banking system itself.

It is only the confidence of the public that enables the continuous printing of unrestrained fiat currencies – which combine to provide the base of an international Ponzi scheme. But something’s happening around the world that the money masters didn’t plan on. People are waking up.

But you wouldn’t know it by reading articles like this one, excerpted above. No, Bloomberg, a mainstream media outlet to be sure, would rather you believe that there are sweaty-browed experts working around the clock to fix the situation. So what magic tools do they have? What are the experts doing about this financial mess? Here’s more from the article:

Finance ministers and central bankers from the G-7 nations, which include the U.S., U.K. and Germany, said in a statement Aug. 7 that they will “take all necessary measures to support financial stability and growth in a spirit of close cooperation and confidence.” …

The next day, the Frankfurt-based ECB, which last week restarted its bond-purchase program after an 18-week hiatus, extended its focus to include debt of Italy and Spain, the region’s third- and fourth-largest economies.

The Fed’s decision Aug. 9 to hold its key interest rate at a record low through mid-2013 and signal it’s ready to use additional tools comes as U.S. politicians are tightening the nation’s fiscal belt and the economic stimulus enacted by President Barack Obama in 2009 comes to an end.

Bank of England Governor Mervyn King told reporters in London yesterday that headwinds buffeting the nation’s economy are intensifying “by the day” and officials can expand stimulus if the outlook for growth deteriorates further.

Bank of Japan Governor Masaaki Shirakawa said Aug. 9 that volatile exchange rates could have a “negative impact” on the economy, after the central bank last week added 10 trillion yen ($130 billion) of stimulus and the country unilaterally intervened in the currency market to weaken the yen.

Switzerland’s central bank said yesterday it will increase the supply of francs to fight the currency’s “massive overvaluation.”

That’s it? The central banksters have decided to do MORE OF THE SAME. They’re all going to work to make sure they “print-in sync” as much new money as “necessary” so that none of them face total collapse and threaten to take down the entire game? That’s the plan? And they will directly intervene in the market to create the illusion of demand/strength by buying the garbage debt from countries like Spain and Italy? This is the plan? Isn’t that called market manipulation?

Wow. Well, here’s a better plan. Stop the insanity! You cannot fix a dysfunctional monetary system that is built on a fraudulent premise by simply increasing the degree of the crime. The impossibly wealthy families who desire one-world governance will stop at nothing – including the use of force – to complete their centuries-long mission. But arrogantly, they will refuse to cease their devious efforts and instead will try to use these crises to bind the masses into accepting a fear-based international monetary solution. Out of chaos… order.

In fact, just the other day one of China’s faceless mouthpieces, the Xinhua News Agency, came out in an editorial to the world and stated, “International supervision over the issue of U.S. dollars should be introduced and a new, stable and secured global reserve currency may also be an option to avert a catastrophe caused by any single country.”

And then there is this statement from Fed Chair Ben Bernanke, “Policy makers must respond forcefully, creatively and decisively … crises that are international in scope require an international response.”

Can’t you just see the smile on Christine Lagarde’s face as she gleefully embraces her new position as Head of the International Monetary Fund? For surely there is an IMF logo engraved on the international boot readying itself to slam down on the faces of current and future generations. But hold on a minute… will the puppets/experts running the world’s central banks – and Money Power standing behind them – be able to pull off this global manipulation?

We’re not so sure they will. And we certainly don’t wish them luck.

All across the world, the modern Internet Reformation is beginning to reshape the way people relate to power in the modern age. While it is not as obvious as during the era of the Gutenberg Press, there is formal doctrine accepted by Western societies that is beginning to shatter. That formal doctrine may be termed regulatory democracy and it has been leavened with numerous assumptions that on closer inspection turn out not to be true. Like what money is and what it is not. And it is the Internet itself that allows for information to spread that undermines the various precepts of regulatory democracy.

It is this hierarchy that promulgates regulatory democracy and its various dominant social themes – the fear-based promotions that the Western power elite uses to control the conversation and to further centralize power and authority worldwide.

And one of those fear-based promotions that the masses have been bombarded with is the “expert” theme. The public is constantly being promoted into accepting a passive position with respect to how the financial world operates. They are meant to be overwhelmed with facts and complicated economic formulas so they feel helpless, confused and generally incapable of mastering their own financial destinies. After all, how could anyone understand such a complex subject as money?

Well, all around the world people are starting to understand that the system is rigged and money really isn’t complicated at all. The Internet Reformation reveals the cartel’s synchronized efforts to manipulate public confidence so they can continue their fraudulent and manipulative wealth redistribution game.

Conclusion:
The reality of the situation is this: there are no magic monetary tools that can fix the global monetary crises hidden in the basement of the Federal Reserve, the Bank of England, or any of the others. The fiat money instruments themselves – dollars, euros, yen, etc. – ARE THE PROBLEM.

And in this alternative media-led ‘Net era, the old men hiding behind the central banking curtains are starting to look rather pathetic. The illusion is fading and people are waking up. In fact, the European Union is failing, various serial wars of conquest are not going well, and the fear-based memes of the elite are continually being debunked by an Internet that adds more to humankind’s real knowledge base every day. It will take decades if not centuries to control the damage that has already been done (from an elite standpoint), and what has been done cannot be undone.

Will the international power elite lose their destructive ability to create money out of nothing and their control over legislative power that currently prohibits private money competition? Will the elite be forced to take a step back in the face of a massive public awakening? Or will an Orwellian-style society be forcibly foisted upon us all with the UN, IMF, World Bank, BIS, NATO, WHO, ICC and all the other edifices of world government eventually control every aspect of our lives? Only time will tell, but the Internet Reformation gives one great hope that the “best laid plans will be laid to rest.”

Flight to Treasurys has little to do with ‘Quality’

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by Rick Ackerman
Posted August 19, 2011

THE NEWS MEDIA WILL EVENTUALLY FIGURE OUT THE TRUTH — that stocks got pulped yesterday simply because they are in a bear market. The Mother of All Bears, quite possibly. The Dow finished the day down 419 points after trading more than a hundred points lower than that intraday. The selloff was attributed to the usual suspects: “fears” over Europe’s shaky financial condition, and America’s apparent relapse into recession. Although both concerns have been with us in spades for more than a little while, they seem, suddenly, to have become overwhelming and unmanageable now that the world’s stock markets are imploding.

Of course, there will be equally spectacular rallies in the days, weeks and months ahead, and, as was the case during the 1930s, they will be interpreted as signaling a glimmer of hope for the economy. The press will do the interpreting, but most Americans will know better. The Great Recession has returned with a vengeance, and predictions of 2% GDP growth are about to be trimmed to sub-zero by the same morons who were so optimistic just a few weeks ago.

With Dow stocks down 500 points in the opening hour yesterday, Reuters and some other news sources initially theorized that “investors” – a euphemism these days for algorithm-driven machines — were despondent over a Philly Fed report that factory activity in the Middle Atlantic region had “unexpectedly” fallen to its lowest level since March 2009. Reuters tactfully refrained from identifying by name the experts who had been looking for better numbers, but they would have to have emerged from a sarcophagus to have been surprised by the bad news. Meanwhile, although the eggheads who compile economic statistics may be deaf, dumb and blind to the real world, Joe Sixpack, unemployed for the last 36 months and no longer looking for work, could tell them a thing or two about it – could tell them that there are no jobs:  not for experienced workers who have been laid off; not for spouses desperate to create second household incomes; not for their sons and daughters who have recently graduated from college with worthless degrees and $100k of student loans to pay off.

A seeming anomaly in yesterday’s rout was the spectacular rally in Treasury paper that pushed yields on the 10-Year Note below 2% for the first time since the early 1960s. Not to be outdone, futures contracts for the 30-Year Bond rocketed toward a Hidden Pivot target of ours at 143 that we had expected would take months to reach. At the rate prices were climbing yesterday, however, the target could be hit before September.

So why were bond prices in a vertical parabola?  Although we are usually scornful toward the flight-to-safety argument, there may be something to it this time, although not for any reason that the news media appear to have discerned so far.

Our take is that Big Money is growing increasingly panicky about the prospect of all-out war in the Middle East. Terrorists have begun to step up attacks on Israel in advance of a U.N. vote on statehood for the Palestinians. One might think the Palestinians would be on their best behavior. Instead, a squadron of jihadists attacked an Israeli passenger bus and some other vehicles near the Egyptian border yesterday with enough firepower to take on the IDF, at least for a short while.

The world hasn’t seemed this “interesting” since the summer of 1914. The prospect of war in the Mideast aside, there is one other reason money has been flowing into Treasurys: Where else (besides bullion) can one put it? It’s not as though the money managers regard Treasury Bonds, Notes and Bills as the ultimate safe haven, though. To the contrary, they can see just as easily as you and I that the U.S. is headed for financial disaster. Even so, Treasury debt still looks like a good bet to be the last major asset class to collapse. Perhaps. But by how many days?

[This article has been slightly shortened, apologies to Rick Ackerman.]

It’s time to be very concerned about what’s going on behind the scenes

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by Simon Black
of Sovereign Man
Posted August 8, 2011

ANCIENT GREEK MYTHOLOGY TELLS THE TALE OF ODYSSEUS, the heroic king of Ithaca whose 10-year journey home after the Trojan War became one of the world’s most famous epics. At one point in the journey, his ship was heading straight for two deadly hazards– on one side was Scylla, a six-headed monster disguised as a giant rock, and on the other side was Charybdis, a sinister whirlpool born from the sea god Poseidon.

The perils were close enough to pose an inescapable threat to ships passing through, forcing the captain to choose between the two evils. A Latin proverb from this story, “incidit in scyllam cupiens vitare charybdim” (he runs on Scylla, wishing to avoid Charybdis), is now “between a rock and a hard place” in modern English.

This is exactly where the entire world finds itself right now. With confidence vanishing, markets panicking, and entire nations going bankrupt, ultimately there are no good solutions… and thinking people need to understand some simple truths about the situation:

1) America’s credit rating was punished by S&P because US politicians failed to reach an adequate solution to the country’s massive debt woes which are nearing 100% of GDP. Investors reacted by buying the Japanese yen– a country whose sovereign debt rating is two steps below the US, and at 220% of GDP, over twice as indebted!

Not to mention, Japan has burned through 4 prime ministers and 8 finance ministers just in the last four years. This is not exactly a country whose government has a successful track record of dealing with its problems.

How does this make any sense? That’s like firing an employee who gets drunk on the job and replacing him with a gun-toting heroin addict. Yet faced with a universe of bad choices, investors will pick the one which appears to be the ‘least worse’. This approach is sure to create even more gross misallocations of capital down the road.

2) World governments have gone on the offensive against S&P, slamming the rating agency and trying to discredit the firm’s financial calculations without acknowledging the underlying premise– that America lacks a credible plan to deal with its crisis.

Leaders from countries as diverse as France, South Korea, and even Russia have all shrugged off the downgrade and publicly reiterated their confidence in the United States. (They even rolled out Warren Buffet who said that the US deserves “a quadruple-A” credit rating.)

You know that old adage– how do you know that a politician is lying? Because his lips are moving. When so many world leaders are expressing nearly unanimous support for the dollar and the US government, it’s time to be very concerned about what’s going on behind the scenes.

3) G7 finance ministers have pledged to take any steps necessary to calm markets and “avert collapse in world confidence.”

Here’s the thing: All governments can do is print, borrow, or steal from taxpayers. These are exactly the policies that created a loss of confidence to begin with, and now they are pledging to restore confidence by doing the exact same things.

If they take action, the situation will only get worse. If they don’t take action, the markets will panic and the situation will only get worse. Rock. Hard place.

4) Trillions of dollars are sloshing around in the financial system right now desperately seeking some modicum of safety. With the wave of downgrades and money creation that’s coming, few asset classes look stable… so that little hunk of yellow metal is starting to look awfully attractive to a lot of investors.

5) Governments will do whatever it takes to keep the party going and maintain the status quo, whether it’s printing money into oblivion and sticking consumers with massive inflation, or sending police out into the streets to beat everyone into submission.

I really want to urge you to think rationally about your situation and ask yourself a simple question–  do you feel secure having the entirety of your assets and livelihood under the control of a single bankrupt nation in the midst of a financial collapse?

If not, it’s time to let go of the excuses and take action.

Important Debt Ceiling Update

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From The National Inflation Association
Posted July 30, 2011

PRESIDENT OBAMA JUST ANNOUNCED LATE THIS EVENING THAT A DEAL has been reached to cut government spending and raise the debt ceiling in order to avoid a debt default. If the deal is approved on Monday, it will raise the debt ceiling by between $2.1 and $2.4 trillion in three installments: $400 billion immediately, $500 billion this fall subject to a disapproval vote by Congress, and $1.2 to $1.5 trillion more after a special committee agrees on a matching amount of spending cuts that will be in addition to $900 billion in spending cuts proposed in the bill. With no tax increases included in this plan, all of this additional debt will eventually be monetized and paid for through monetary inflation.

Although the deal is supposed to cut as much as $2.4 trillion in spending over the next decade, Obama said that none of the spending cuts will occur anytime soon so that not to derail the phony economic recovery. That’s right, none of the cuts will come until early 2013 and by then we will need to once again raise the debt ceiling to north of $20 trillion. If our elected representatives were serious about cutting spending, they would have the bulk of the spending cuts now and not in the future when many of them will be out of office.

This deal is a complete and total sham, and will do nothing to prevent hyperinflation. In no way will these spending cuts be mandated and nothing will force future Congresses to abide by them. Even with these cuts, government spending is going to increase every single year for the next decade. As price inflation spirals out of control in the years ahead causing the purchasing power of the dollar to plummet, all government employees will demand higher salaries and it will cost more to run all parts of the government. Future Congresses will raise spending and make the spending cuts proposed in this deal meaningless.

NIA believes that all of the events that took place in Washington this weekend were scripted in advance. It is likely that both parties knew from the beginning what deal they would ultimately agree to, but came out with these other proposed bills in order to satisfy tea party supporters and make them think that their efforts are making a difference. The reality is, although the tea party movement helped Republicans take over the House of Representatives so that Democrats didn’t have free rein in Washington, most of the new Republicans elected to Congress haven’t followed through with their promises and have failed to make any kind of a positive difference.

Everybody in Washington assumes that interest rates will remain at artificially low levels for the rest of this decade. The interest rate that the U.S. paid on its total marketable debt in the month of June was only 2.38%. Exactly one decade earlier, in June of 2001, we paid 6.162% interest on our total marketable debt or 159% higher than current average interest rates. On August 15th we owe our next interest payment of approximately $30 billion. Imagine if that payment rises 159% higher to $77.7 billion or $932.4 billion annualized. Later this decade, interest rates will not only rise back to normal levels like we had in 2001, but will likely rise to artificially high levels to balance out the damage being created today from artificially low interest rates.

If this bill is approved by Congress and the President on Monday, it will avoid a short-term honest debt default but just about guarantee a default by inflation later this decade. There is about a 1 in 1,000 chance that future Congresses will stick with the spending cuts in this bill, but even if they do, rising interest payments will not only wipe out the $2.4 trillion in spending cuts, but they will add trillions more to future deficits and the national debt. A new Gallup Poll shows that 53% of Americans oppose raising the debt ceiling compared to only 37% who favor an increase. We pray that millions of Americans march to Washington tomorrow in protest of this bill and that millions more call, email, and fax their elected representatives in the morning demanding that they vote no.

It is important to spread the word about NIA to as many people as possible, as quickly as possible, if you want America to survive hyperinflation. Please tell everybody you know to become members of NIA for free immediately at: http://inflation.us

A thousand pictures is worth one word

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by Jeff Clark, Big Gold
Posted July 15, 2011

IN SPITE OF CONSTANT HEADLINES ABOUT DEBTS AND DEFICITS, most Americans don’t really believe the U.S. dollar will collapse. From knowledgeable investors who study the markets to those seemingly too busy to worry about such things, most dismiss the idea of the dollar actually going to zero.

History has a message for us: No fiat currency has lasted forever. Eventually, they all fail.

BMG BullionBars recently published a poster featuring pictures of numerous currencies that have gone bust. Some got there quickly, while others took a century or more. Regardless of how long it took, though, the seductive temptations allowed under a fiat monetary system eventually caught up with these governments, and their currencies went poof!

As you scroll through the 23 banknotes (fiat currencies) below, you’ll see some long-ago casualties. What’s shocking, though, is how many have occurred in our lifetime. You might count how many currencies have failed since you’ve been born. You might suspect this happened only to third world countries. You’d be wrong. There was no discrimination as to the size or perceived stability of a nation’s economy; if the leaders abused their currency, the country paid the price.

So what’s the one word for the “thousand pictures” below? Worthless.

Yugoslavia – 10 billion dinar, 1993

Zaire – 5 million zaires, 1992

Venezuela – 10,000 bolívares, 2002

Ukraine – 10,000 karbovantsiv, 1995

Read the rest of this entry »

500 Million debt-serfs: the European Union is a neo-feudal Kleptocracy

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by Charles Hugh Smith
Posted July 22, 2011 on Of Two Minds

The banks of Europe are the new Feudal Manors and Masters. All Europeans now serve them as debt-serfs in one way or another.

IF WE KNOCK DOWN ALL THE FLIMSY SCREENS OF ARTIFICE AND OBSCURING COMPLEXITY, what we see in Europe is a continent of debt-serfs, indentured to the banks under the whip of the European Union and its secular religion, the euro. I know this isn’t the pretty picture presented by the EU Overlords, of a prosperity built not just on debt, but on resolving the problem of debt with more debt, but it is the reality behind the eurozone’s phony facade of economic “freedom.”

What else can we call the stark domination of the big banks other than Neo-Feudalism? In one way or another, every one of the 27-member nations’ citizens are indentured to the big international banks at risk in Europe, most of which are based in Europe.

Amidst the confusing overlay of voices and agendas, there is really only one agenda item: save the big European banks. Everything else is just mechanics. The banks are the new feudal manor houses, the bankers are the new feudal lords, and the politicians of the EU and its influential member nations are the servile vassals who enforce the “rule of law” on the serfs.

Here is the fundamental fact: there are trillions of euros of debt which can never be paid back. In a non-feudal system, one in which the banks were not the Masters, then this fact would be recognized and acted upon: something like 50% of the debt would be written off in one fell swoop, all the banks whose assets had just been wiped out would be declared insolvent and liquidated, the remaining debt would be sized to the economic surplus of each debtor nation, and a new, decentralized banking sector of dozens of strictly limited, smaller banks would be established.

To the degree that is “impossible,” Europe is nothing but a Neo-Feudal Kleptocracy serving its Banker Lords.

The Greek worker whose pay has been slashed in the “austerity” demanded by the banks serves the Banker Lords, as does the German worker who will be paying higher taxes to bail out Germany and France’s Banker Lords. Though the German is constantly told he is bailing out Greece, the truth is Greece is just the conduit: he’s actually bailing out the EU’s Banker Lords.

We can clear up much of the purposeful obfuscation by asking: exactly what tragedy befalls Europe if all the sovereign debt in the EU was wiped off the books? The one and only “tragedy” would be the destruction of the “too big to fail” banks, not just in Europe but around the world. As the big European banks imploded, then their inability to service their counterparty obligations on various derivatives to other big banks would topple those lenders.

While the political vassals call that possibility a catastrophe, it would actually spell freedom for Europe’s 500 million debt serfs. From the lofty heights of the Manor House, then the loss of enormously concentrated power and wealth is indeed a catastrophe for the Lords and their political lackeys. But for the debt-serfs facing generations of servitude for nothing, then the destruction of the banks would be the glorious lifting of tyranny.

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The top five places NOT to be when the dollar collapses

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by Silver Shield
Posted June 23rd,2011

http://dont-tread-on.me/top-5-places-not-to-be-when-the-dollar-collapses/

THE DOLLAR COLLAPSE WILL BE THE SINGLE LARGEST EVENT IN HUMAN HISTORY. This will be the first event that will touch every single living person in the world. All human activity is controlled by money. Our wealth, our work, our food, our government, even our relationships are affected by money. No money in human history has had as much reach in both breadth and depth as the dollar. It is the de facto world currency. All other currency collapses will pale in comparison to this big one. All other currency crises have been regional and there were other currencies for people to grasp on to. This collapse will be global and it will bring down not only the dollar but all other fiat currencies,as they are fundamentally no different. The collapse of currencies will lead to the collapse of ALL paper assets. The repercussions to this will have incredible results worldwide. (Read the Silver Bullet and the Silver Shield to protect yourself from this collapse.)

Thanks to the globalization and the giant vampire squids of the Anglo-American Empire, the dollar is the world’s reserve currency. It supports the global economy in settling foreign trade, most importantly the Petro Dollar trade. This money is recycled through the City of London (not to be confused with London) and New York. This fuels our corporate vampires that acquires and harvests the wealth of the world. The corporate powers suppress REAL assets like natural resources and labor to provide themselves massive profits. This Fascist, Statist, Collectivist model provides the money into the economy to fund an ever increasing federal government. That government then grows larger and larger enriching its minions with jobs to control their fellow citizens. Finally, to come full circle, the government then controls other nations through the Military Industrial Complex.

This cycle will be cut when the mathematically and inevitable collapse of the dollar occurs. In order for our debt based money to function we MUST increase the debt every year in excess of the debt AND interest accrued the year before or we will enter a deflationary death spiral. When debt is created, money is created. When debt is paid off, money is destroyed. There is never enough to pay off the debt, because there would be not one dollar in existence.

We are at a point where we either default on the debt, willingly or unwillingly, or create more money/debt to keep the cycle moving. The problem is if you understand anything about compounding interest, we are reaching the hockey stick moment where the more debt that is incurred, the less effective it is and this leads us to hyperinflation. There are only two actors needed for this hyper inflation, the Lender of Last Resort, the Fed,and the Spender of Last Resort, the government. These two can, and will, blow up the system. I believe they will wait until the next crisis and the whiff of deflationary depression before they fire up the printing presses. That crisis is coming very soon at the end of this summer or fall. The money and emergency measures are worn out. The fact is that NONE of the underlying problems that caused the 2008 crisis have been resolved. The only thing that has happened is that instead of corporate problems, we now have nation problems. In this movie Greece will play the role of Lehman Brothers and the United States will play the role of AIG. The problem is there is nowhere to kick the can down the road and there is no world government to absorb the debt, yet…(Problem,Reaction,Solution.)

So this leads me to the top five places not to be when the dollar collapses:

1. Israel- This Anglo-American beach head into the Middle East was first conceived by the most powerful family in the world,the Rothschilds, in 1917. The Balfour Declaration said that there will be a Zionist Israel years before World War Two and the eventual establishment of Israel. Israel has not been a good neighbor to its Muslim nations and has always had the two biggest bullies on the block at its back. When the dollar collapses, the United States will have much too much on its plate both domestically and internationally to worry about such a non-strategic piece of land. This will leave Israel very weak at a time when tensions will be high. This very thin strip of desert land will not be able to withstand the economic reality of importing its food and fuel or the political reality of being surrounded by Muslims.

2. Southern California- The land of Fruits and Nuts turns into Battlefield Los Angeles. Twenty million people packed into an area that has no water and thus food is not good to say the least. Throw on top of the huge wealth disparities and the proximity to a narco state and this does not bode well. We have seen riots for Rodney King, what will happen when the dollar is destroyed and food and fuel stop coming into this area? People will get desperate and do crazy things, especially when a huge proportion of its citizens are on anti-depressants. If food and fuel cannot get in, what about Zolfot? At a time when the world is falling apart, they lack the ability to deal with this new paradigm. If people come off of these drugs too fast they suffer psychotic breaks and you will have thousands of shootings or suicides.

3. England- The Land of the Big Brother and former Empire of world wide slave and drug trade will suffer heavily. The stiff upper lip that their the British Elite ingrained into their sheeple will not work any more as the British population explodes. The human character will sacrifice and unite for a foreign enemy, but not if the enemy has always been the Elite. The Anglo-American Empire may pull off another false flag to distract its population on another Emmanuel Goldstein like in 1984, but I feel this collapse will happen before they pull it off. This will make all eyes point at the British Elite as solely responsible for this catastrophe. We have seen massive riots for soccer matches with hooligans. What will happen when this island with very little food and fuel gets cut off?

4. New York City- Another large urban area living too high on the dollar hog. NYC is the area I moved out of in 2008. There is little doubt that all of the wealth in New York, New Jersey and Connecticut is derived from Wall Street wealth. The savings and investments of the whole nation and much of the world flows through this financial capital. As the world wakes up to the massive financial fraud, this will lead to the destruction of capital like we have never seen before. This will have tremendous effects on the regional economy as people (perhaps owning very expensive cars) suddenly wonder where their next meal is coming from.

5. Washington D.C.- The political collapse of the Federal Government will wreak havoc on the hugely inflated local economy. As more and more states find it necessary to assert their natural control, the Federal Government will suddenly lose power and importance as the whole world suffers from a Global Hurricane Katrina. The money that they create and spend will become worthless and the government minions’ pensions will evaporate. Millions that once relied on the ability to force others to send their money to them will learn that the real power has always been at the most local level. Massive decentralization will be the answer to globalization gone mad. Local families and communities will forgo sending money and power out of their community as they will care about their next meal and keeping warm.

“You can ignore reality,but you can’t ignore the consequences of ignoring reality.” -Ayn Rand

To sum up,those areas that have lived highest on the hog in the dollar paradigm will most likely be the worst places to live when the dollar collapses. Many of you will find this article of passing interest, but rest assured this dollar collapse is coming. It is a mathematical inevitability. We will not be as fortunate to muddle through this collapse like we did in 2008 when it was a corporate problem. This time around, it is a national and global problem. The global Ponzi scheme has run out of gas as the demographics decline, as cheap abundant oil declines, as hegemonic power declines. This comes at a time when we reach the exponential or collapse phase of our money. The Irresistible Force Paradox says, ”What happens when an unstoppable force meets an immovable object?” We are about to find out,when infinite money hits a very finite world.

If you want to become aware and prepared for this collapse, please join the free Sons of Liberty Academy.

Gold and silver: We were right – they were wrong

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by Brandon Smith of Alt Market
Posted July 25, 2011

ONLY NOW, AFTER THREE YEARS OF ROLLER COASTER MARKETS, EPIC DEBATES, and gnashing of teeth, are mainstream financial pundits finally starting to get it. At least some of them, anyway.

Precious metals have continued to perform relentlessly since 2008, crushing all naysayer predictions and defying all the musings of so called “experts”, while at the same time maintaining and protecting the investment savings of those people smart enough to jump on the train while prices were at historic lows (historic as in ‘the past 5000 years’).

Alternative analysts have pleaded with the public to take measures to secure their hard earned wealth by apportioning at least a small amount into physical gold and silver. Some economists, though, were silly enough to overlook this obvious strategy. Who can forget, for instance, Paul Krugman’s hilarious assertion back in 2009 that gold values reflect nothing of the overall market, and that rising gold prices were caused in large part by the devious plans of Glen Beck, and not legitimate demand resulting from oncoming economic collapse.

To this day, with gold at $1600 an ounce, Krugman refuses to apologize for his nonsense. To be fair to Krugman, though, his lack of insight on precious metals markets is most likely deliberate, and not due to stupidity, being that he has long been a lapdog of central banks and a rabid supporter of the great Keynesian con. [And he a Nobel Prize winner!] Some MSM economists are simply ignorant, while others are quite aware of the battle between fiat and gold, and have chosen to support the banking elites in their endeavors to dissuade the masses from ever seeking out an alternative to their fraudulent paper. The establishment controlled Washington Post made this clear with its vapid insinuation in 2010 that Ron Paul’s support of a new gold standard is purely motivated by his desire to increase the value of his personal gold holdings, and not because of his concern over the Federal Reserve’s destructive devaluing of the dollar!

So, if a public figure owns gold and supports the adaptation of precious metals to stave off dollar implosion, he is just trying to “artificially drive up his own profits”. If he supports precious metals but doesn’t own any, then he is “afraid to put his money where his mouth is”. The argument is an erroneous trap, not to mention, completely illogical.

Numerous MSM pundits have continued to call a top for gold and silver markets only to be jolted over and over by further rapid spikes. Frankly, it’s getting a little embarrassing for them. All analysts are wrong sometimes, but these analysts are wrong ALL the time. And, Americans are starting to notice. Who beyond a thin readership of mindless yuppies actually takes Krugman seriously anymore? It’s getting harder and harder to find fans of his brand of snake oil.

Those who instead listened to the alternative media from 2007 on have now tripled the value of their investments, and are likely to double them yet again in the coming months as PM’s and other commodities continue to outperform paper securities and stocks. After enduring so much hardship, criticism, and grief over our positions on gold and silver, it’s about time for us to say “we told you so”. Not to gloat (ok, maybe a little), but to solidify the necessity of metals investment for every American today. Yes, we were right, the skeptics were wrong, and they continue to be wrong. Even now, with gold surpassing the $1600 an ounce mark, and silver edging back towards its $50 per ounce highs, there is still time for those who missed the boat to shield their nest eggs from expanding economic insanity. The fact is, precious metals values are nowhere near their peak. Here are some reasons why…

Debt ceiling debate a final warning sign

If average Americans weren’t feeling the heat at the beginning of this year in terms of the economy, they certainly are now. Not long ago, the very idea of a U.S. debt default or credit downgrade was considered by many to be absurd. Today, every financial radio and television show in the country is obsessed with the possibility. Not surprisingly, unprepared subsections of the public (even conservatives) are crying out for a debt ceiling increase, while simultaneously turning up their noses at tax increases, hoping that we can kick the can just a little further down the road of fiscal Armageddon. The delusion that we can coast through this crisis unscathed is still pervasive.

Some common phrases I’ve heard lately: “I just don’t get it! They’re crazy for not compromising! Their political games are going to ruin the country! Why not just raise the ceiling?!”

What these people are lacking is a basic understanding of the bigger picture. Ultimately, this debate is not about raising or freezing the debt ceiling. This debate is not about saving our economy or our global credit standing. This debate is about choosing our method of poison, and nothing more. That is to say, the outcome of the current “political clash” is irrelevant. Our economy was set on the final leg of total destabilization back in 2008, and no amount of spending reform, higher taxes, or austerity measures, are going to change that eventuality.

We have two paths left as far as the mainstream economy is concerned; default leading to dollar devaluation, or, dollar devaluation leading to default. That’s it folks! Smoke em’ if you got em’! This train went careening off a cliff a long time ago.

If the U.S. defaults after August 2, a couple of things will happen. First, our Treasury Bonds will immediately come into question. We may, like Greece, drag out the situation and fool some international investors into thinking the risk will lead to a considerable payout when “everything goes back to normal”. However, those who continued to hold Greek bonds up until that country’s official announcement of default know that holding the debt of a country with disintegrating credit standing is for suckers. Private creditors in Greek debt stand to lose at minimum 21% of their original holdings because of default. What some of us call a “21% haircut”.

With the pervasiveness of U.S. bonds around the globe, a similar default deal could lead to trillions of dollars in losses for holders. This threat will result in the immediate push towards an international treasury dump.

Next, austerity measures WILL be instituted, while taxes WILL be raised considerably, and quickly. The federal government is not going to shut down. They will instead bleed the American people dry of all remaining savings in order to continue functioning, whether through higher charges on licensing and other government controlled paperwork, or through confiscation of pension funds, or by cutting entitlement programs like social security completely.

Finally, the dollar’s world reserve status is most assuredly going to be placed in jeopardy. If a country is unable to sustain its own liabilities, then its currency is going to lose favor. Period. The loss of reserve status carries with it a plethora of very disturbing consequences, foremost being devaluation leading to extreme inflation.

If the debt ceiling is raised yet again, we may prolong the above mentioned problems for a short time, but, there are no guarantees. Ratings agency S&P in a recent statement warned of a U.S. credit downgrade REGARDLESS of whether the ceiling was raised or not, if America’s overall economic situation did not soon improve. The Obama Administration has resorted to harassing (or pretending to harass) S&P over its accurate assessment of the situation, rather than working to solve the dilemma. Ratings company Egan-Jones has already cut America’s credit rating from AAA to AA+.

Many countries are moving to distance themselves from the U.S. dollar. China’s bilateral trade agreement with Russia last year completely cuts out the use of the greenback, and China is also exploring a “barter deal” with Iran, completely removing the need for dollars in the purchase of Iranian oil (which also helps in bypassing U.S. sanctions).

So, even with increased spending room, we will still see effects similar to default, not to mention, even more fiat printing by the Fed, higher probability of another QE announcement, and higher inflation all around.

This period of debate over the debt ceiling is liable to be the last clear warning we will receive from government before the collapse moves towards endgame. All of the sordid conundrums listed above are triggers for skyrocketing gold and silver prices, and anyone not holding precious metals now should make changes over the course of the next month.

What has been the reaction of markets to the threat of default? Increased purchasing of precious metals! What has been the reaction of markets to greater spending and Fed inflation? Increased purchasing of precious metals! The advantages of gold and silver are clear…

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A Phony EU Crisis

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from The Daily Bell
Posted July 22, 2011

Europe’s leaders have grasped the nettle. Faced with a spiraling bond crisis in Italy and Spain and the greatest threat to the EU project for 50 years, they have ripped up their bail-out strategy and taken a large stride towards a “liability union.” – UK Telegraph

Dominant Social Theme:
Oh, it is the end of the world. The EU is dead. Oh, it is not the end. Long live the EU and the great men and women who saved it … History is being made … etc. … etc. …

Free-Market Analysis:
We have watched the unraveling of Europe for over a year now and can say with some shock and dismay, as the final act grows near, that what we have been treated to is probably nothing more than an elaborately scripted farce. Or call it a dominant social theme (the EU is in trouble and needs rescue by the great statesmen of Brussels).

Now a deal has been struck to “save” Greece (though it is the banks that are being saved yet again, not Greece). The Germans won’t like it as Merkel seems now to have committed them to guarantee, at least informally, hundreds of billions of euros in PIGS assets. But apparently whether the “little people” like something or not doesn’t matter now in this “new” world.

The only danger is over-reach. The crisis, long expected, may still spin out of control or prove insoluble. But there is no doubt the Eurocrats expected this crisis and planned for it. The idea was to use its chaos to create a closer European federation and that is just what they’re trying to do. Out of chaos, order …

The elites that stand behind the EU are trying to build a one-world order, and they will stop at nothing to get it. The same thing is going on in the US with the debt crisis. An orchestrated agenda. The Americans will eventually get European-style austerity. They simply don’t understand the ramifications yet.

These economic crises cannot be pure happenstance. We’ve suggested they can spin out of control, and perhaps they will; but they are all manmade events, the direct outcome of economic constructs and policies of enormous wealth and control. Somebody set up the 100 central banks around the world that report directly to the Bank for International Settlements in Switzerland. These are quasi-private entities, many of them. Are we supposed to believe that no one takes a profit on them? That there is no way they compensate their creators?

The money and power is unimaginable. The BIS controls the central banks that in turn control the big banks around the world. The stock exchanges with their endless mergers are controlled as well; and the bond markets, it seems. If the elites control the banking industry – and they do – then they must also control currency markets – at least to some extent. And we are supposed to believe that Greece, little Greece, caused such havoc with this financial system that Merkel and Sarkozy had to meet to save it in the nick of time?

Increasingly, we don’t believe it. The entire amount of the Greek default is in the low hundreds of billions. That’s pocket change for these trillionaire, globalist banking families and their corporate, religious and military enablers. It’s walking-around money. They can spend more than that in a day, an hour even.

The whole thing is a set up. It must be. A shadow play. A crisis created to build further global governance. The only question is whether they can control the resultant fallout in the long term, for the damage far exceeds Greece now.

The Internet has certainly made that more questionable, for it has informed Europeans of what’s really going on and helped organize them. Still, the EU grinds on. Dominant social themes of the elite are rarely if ever cancelled. They tend to continue until they meet immovable resistance, either from the marketplace or people.

Constitutions mean nothing. Promises are made to be broken. Treaties are talk for children, merely incremental markers trailing in the wake of global governance. By their actions ye shall know them. As with sharks, their momentum must be never stilled. Here’s more from the Telegraph article:

The three rescued countries of Greece, Ireland and Portugal have in turn been offered a lifeline out of crippling debt-deflation. The tetchy negotiations dragged on for hours, with an irascible Finland at one point demanding that Greece offer the Parthenon, the Acropolis and its islands as collateral for the second €110bn (£97bn) rescue package. France and its allies abandoned their long struggle to prevent a Greek default, opening the way for the first sovereign insolvency in Western Europe since the Second World War. Objections from the European Central Bank were swept aside. Germany has obtained its fig leaf concession: burden-sharing for bankers.

As a quid pro quo, Germany has dropped its vehement opposition to debt sharing and crossed the line in the sand towards fiscal federalism. It has agreed to turn the eurozone’s €440bn bail-out fund (EFSF) into what amounts to a European Monetary Fund, and arguably into an EU Treasury in embryo … Global markets surged as the details of the EU statement leaked. Credit default swaps measuring bond risk on Ireland and Portugal saw the biggest one-day fall on record. Commission chief Jose Manuel Barroso said politicians and markets had finally “come together” for the first time since the crisis began.

Chancellor Angela Merkel said the goal was to “go to the root of the problems”, but she may not find it easy to secure political assent for such sweeping concessions from her own parliament. The accord is a spectacular volte-face. Her mantra until now has always been that “collectivisation of risks” would be a grave error … EU officials hope that a debt rollover plan for Greece can be limited to a short technical default. The ECB has backed down on its threat to reject Greek bonds as collateral. The formula will not be extended to Portugal and Ireland. It is understood that rating agencies will hold fire for the sake of global stability.

How neat is this? Like watching a play where all the problems are resolved in the third act. We even learn that the markets rallied in relief (at least to begin with) after the deal was announced! Yes, the EU has moved one step further (a big one) toward federal consolidation. The question is only whether the Germans, in aggregate, will resist, and what will be the results if they do. The Zero Hedge website claims today that this new deal places Germany in the position of underwriting the whole of the failing PIGS universe. The Germans may wake up in open revolt.

It doesn’t seem bothersome, anymore, than Greek unrest. The shadow play continues. The ECB was immoveable in its rigor up until the last minute. But somehow the ECB backed down. The rating agencies that were so horrible have suddenly retreated. Everyone has “compromised.” Problems have magically evaporated. Frau Merkel had threatened not to attend the meeting, but somehow in a single evening she was able to come to yet another “historic” breakthrough with Nicolas Sarkozy.

Perhaps the Eurocrats are merely desperate. Or perhaps they are following a script. We’ve seen it before. US Congressional Democrats sacrificed their careers to pass the leveling health care Act. Now Merkel is sacrificing her career to prop up the EU. Maybe she has been promised something.

Will the Germans riot in the streets? There is already a German Tea Party movement. How about Greece and Spain? Summer is not over yet. And yet … perhaps not. Perhaps, somehow, the elites can impose a federation on nation-states that have been independent for 2,000 years or longer. We don’t see how, (the EU with its debts seems unworkable) but one thing we’re convinced of now is that the elites are arrogant enough to try. The whole mechanism reeks of arrogance.

There is no end to their mischief and scheming. We’ve been privileged to watch how history operates for the past several years and we’ve paid close attention. We’ve come to the conclusion, as Henry Ford once said, that history is bunk. It’s directed. This EU “grand compromise” has been in the works for months, for years – perhaps for decades.

What a farce! It began with the mysterious leaked argument between Sarkozy and Merkel – like the first shot of a war. The EU then was said to be on the edge of a breakup. Sarkozy had threatened to withdraw France. The union teetered – and the crisis was on! And on … and on … and on …

Endless meetings, constant market movements, the mainstream media bewailing every moment. The EU is on the brink. The euro is on the brink. The Greeks are rioting (that was real); the Spanish are protesting (that was real, too). But it was just an act. It’s all too neat, too well orchestrated.

And now we are starting to see the liniments of what is REALLY planned. “The communiqué called for a “Marshall Plan” to bring the Greek economy back to life. “To be credible, the EFSF needs to be proportional to the scale of contagion: we think €2 trillion is needed,” one top Eurocrat is quoted as saying.

The “transfer” that the Germans were assured would never happen is now starting to take place. Others will pay, too. But in Germany there is the constitutional question, as well. We are told German judges are to evaluate the legality. Yet what judge on earth would pull down the union at this point? If the German people want to stop what’s going on, they will have to do so themselves, non-violently if possible in the streets. Of course that hasn’t yet helped the Greeks.

Step by step, promotions are implemented and international structures are built. The politicians and generals in the modern era are literally actors on the stage. Some stand athwart history and others position themselves “progressively.” Miraculously, accommodations are reached in the nick of the time. Alternatively, war is declared. The narrative is provided. History is “written.”

Even in war, the elites apparently control both sides of the conflict. The goals are achieved via the Hegelian Dialectic that allows the powers-that-be to push the larger social conversation in whatever direction they choose. Of course, that’s always towards a greater global union these days.

Conclusion:
Thank goodness the extraordinary Brussels bureaucrats have once more performed a miracle, salvaging the EU yet again, at least for now. Was there ever any doubt?