Topic: Economic Devastation - page 134. (Read 504811 times)

Having walked this road myself I may be able to help. Anonymint's overall thesis is not something that is easy to instantly grasp and it is scattered in various places making it difficult to approach in a piecemeal fashion.

It is best to start with a secure understanding of our financial system as it truly is. The three links on finance below were inspired by Anonymint's overall insight and are less deep than Anonymint's writing making them a good starting point. Part I covers fractional reserve banking what it is and how it works in a modern economy, Part II covers the business cycle how fractional reserve leads to recurrent and cyclical booms and busts impoverishing the masses. Part III covers how fractional reserve banking leads to government capture and the eventual economic strangulation of the economy.  

Finance Part I: Understanding the Parasite
Finance Part II: The Parasitic Cycle
Finance Part III: Divide, Conquer, Enslave

Once you understand the basics of the modern financial system you are ready to move on to Anonymint's more complex writings and ideas. I would start with

Understand Everything Fundamentally

Understand everything fundamentally covers the broader principle of collectivism and its dangers including the tragic consequences of our current economic trajectory. It also covers the principles of centralization and degrees-of-freedom in the economy. Next up is

The Rise of Knowledge

The rise of knowledge is in my opinion the very best of Anonymint's writing. In it he covers finance and why the role of finance and debt will progressively decline in the future. It is a compelling argument that describes how and why humanity will eventually and inevitability break free of the chains of finance and unrestrained collectivism and enter an age of knowledge.  
    
Anonymint's writings above are missing a discussion of the proper role of socialism in society. For this I would refer you to the Mad Max thread specifically posts 125-128 where we discussed the proper and gradually declining role of socialism in a future knowledge age.
 
Finally for extra credit you can read Information is Alive Here Anonymint defines knowledge and explains why knowledge and thought are not fungible.

Any body of knowledge needs a name if it is sufficiently complex and different from existing schools of thought. In this case that name is Contentionism

I posted in October about that in detail with his slideshow charts.

I've studied him in detail in interviews (such as with James Turk, etc) so I caution you that he doesn't even understand gold and doesn't appear to have the level of understanding Armstrong has. The Fed doesn't even apparently have the understanding Armstrong has (at least not publicly and central bankers do attend his seminars and concur with him in private).


Listen to the Hunter interviews with Armstrong and you can readily see Hunter is rather clueless compared to Armstrong.

I caution you that you will waste an enormous amount of time and make many HUGE mistakes (you already made one) by dwelving into this "gold-bug" world of ANALysts. They blow of a lot of nonsense out their arses. Do you know how many gold-bugs and Bitcoiners have lost their life savings on the pernicious declines from recent nose bleed peaks?

I been there, done that. I have a much deeper understanding that you are just starting to dig into, and Armstrong understands all the economic concepts correctly (although his exposition is often lacking and not sufficiently comprehensible to most readers).

There is a reason that institutional managers and their ilk pay $1000s to attend Armstrong's seminars. It is not for the booze and women.

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Unfortunately I don't have enough free time. I need to be focused on more important priorities. Wish I could, but don't think it would make as big of an impact as other things I can do. So I have to prioritize because after all I am just one man with only 24 hours in each day. Thank you. And good luck in your journey.

Thanks, I checked it out. There is definitely a ton there to go through.
I watched the James Rickards interview.

https://www.youtube.com/watch?v=3vwxGxmDOZk

The first 10 minutes was about ISIS and not all that interesting. However, towards the end Rickards  made several very interesting arguments

Rickards argued that China is acquiring gold not in an attempt to eventually back the yuan with gold but as a simple hedge against their multi trillion dollar US debt holdings. With this hedge if the US ever goes crazy with the printing presses then gold would do very well. If US is more conservative gold will do less well but the Chinese dollar reserves will maintain their value.
Rickards also argues that the next major crisis will involve the IMF bailing out the various world central banks via the issuance of SDR (Special Drawing Rights) a type of IMF fiat currency. The IMF have the right to issue these in their charter.
http://www.imf.org/external/np/exr/facts/sdr.htm   (Facts about SDR)
http://www.imf.org/external/np/fin/data/rms_sdrv.aspx  (SDR's value calculation)

It was a very interesting point. There is a real potential in a financial crisis for the IMF to use SDR's as a worldwide bailout. Will SDR's be the fiat world reserve currency of the future? It is certainly seems possible making it happen would require a Bretton Woods type agreement between the major world powers. It would also be the equivalent of simply kicking the can down the road one more time without solving any of the structural problems in the world economy. As that has been the approach used to date a future IMF SDR bailout seems quite possible.
I was impressed enough by the video that I have decided to buy Mr. Rickards book. Hopefully it is equally interesting.

i highly recommend subscribing onto greg hunter youtube channel. he got really interesting guests on every now and again: paul craig roberts, peter schiff, james rickards, david morgan, john perkins etc..

https://www.youtube.com/user/usawatchdog/videos

Hi allegedly anonymint,

You write a lot of interesting things but I really have to ask for some sort of roadmap to your universe.  I’m not asking for a summary*¹ but a sitemap, a directory where the main ideas and concepts*² are mentioned. Catching up with a linear approach*³  isn’t really doable especially if one wants to reach actionable status before the projected*⁴  economic meltdown/madmax.

I know that spoon feeding doesn’t seem to be your style but every little bit off accessibility helps someone over the threshold.

Thanks for any reply

*1 because you said you can’t provide one, still want one
*2 and sources/entry points, btw please stop switching names
*3 not only to you but a lot of other smart persons like Martin Armstrong
*4 by martin Armstrongs model and other predictions

James G. Rickards the principal negotiator in the 1998 bailout of Long-Term Capital Management by the Federal Reserve is also predicting a major downturn in 2015 with QE 4 by the USA in the first quarter of 2016.

http://www.bloomberg.com/video/fed-will-implement-qe4-in-early-2016-rickards-tvlUobS9Se~k2oS~o6nsEQ.html

As someone who sucessfully got the FED to cough up the first major corporate bailout his prediction about QE 4 carries some weight.

---------------------------- Original Message ----------------------------
Subject: ONLY SOLUTION is bifurcation frontier;  fractional reserves will always exist; masses are always wrong
From:    me
Date:    Tue, December 16, 2014 10:45 pm
To:      "Armstrong Economics"
--------------------------------------------------------------------------

Much easier to read this post online so you can see the intended layout:

https://bitcointalksearch.org/topic/m.9862898


-------------------
Readers be reminded that I am the author of the essays linked in the OP.


That is false when you consider all the externalities. It is only true isolated in vitro (in theory), not in vivo (in reality).

Not only do you not consider the opportunity cost of being eaten by larger fish when not being the one who captures the power vacuum of the Realpolitik (by creating fractional reserves, etc.), but you also don't consider the fact that when all money is loaned, then the money supply must increase at the aggregate level of interest in the economy, else the debt can't be paid. So mathematically those are two reasons that fractional reserves must exist and will always exist.

This is not theory, the mega-banks have captured the Realpolitik.

Even crypto-currency can't change that. Banks will loan fractional reserve units of Bitcoin, once they get most users onto the off chain services such as Paypal and Coinbase, so that the fractional reserves can be traded off chain. Gresham's Law insures that fractional reserve debt money drives non-fractional reserve money out-of-circulation.

I had already explained my only hope on a solution to this dilemma, which is based on the concept that the masses will always be wrong and must be sacrificed by creating new frontiers for those who sit higher on the bell curve of evolutionary IQ. The banksters think they sit higher on the evolutionary IQ, but I think they would perish in a terminal spiral Dark Age without the knowledge creators who create the technological frontiers that renew humanity.

This is considered incredible material in a newspaper? I know it's the Guardian, but this just further confirms my opinion of the public- if a reporter can only half understand the mechanism of money as debt, how will the general public fare? Only took them a century to catch on.


Answer- absolutely nothing. Those that cared to investigate the nature of the system would have done so already. As long as they have their TV, frozen food and booze or whatever. I would love to be wrong though, let the whole rotten thing disintegrate.

Thank you for your endorsement and encouragement. But, there is nothing magical we did to understand the coming problems in America. Due to the nature of our online ministry we try to keep abreast of what's going on in the world. Many of the questions our readers ask have to do with news items and how world events fit into biblical prophecy. This keeps us "on our toes" researching and reading the scholarship essay writing help to  several news sources.

In fact, we recommend our readers do the same. Here is some helpful advice:

Who cares about fractional reserves?! Did you guys forget about this?

http://www.theguardian.com/commentisfree/2014/mar/18/truth-money-iou-bank-of-england-austerity

Untrue nothing prevents banks from making a conservative living via time deposits. Banks could make an acceptable return by matching capital from lenders to appropriate borrowers or lending out their own capital. Obviously there is no problem with time deposits having a 0% reserve requirement as said funds would be returned to the depositor only when the loan was paid back.

In any honest system, demand deposits would be subject to 100% reserve requirements. Anything other then a 100% reserve allows the banking institution to artificially inflate the monetary supply to its own benefit and to the detriment of all other holders of the currency.


Banks want minimize the reserve ratio. This allows them to maximize the extent of their theft. Of course the real trick is to make reserve requirements effectively meaningless so banks can operate unrestrained by such petty concerns. Fortunately for the banks this is something that they have already accomplished.

Knowledge can't be financed (which was the entire point of the linked essays in the OP which I wrote in 2010 or 2012) so good riddance.


Regulation always means the regulated capture the regulators. Top-down collectivization is the problem. How many more times is humanity going to fall for that nonsense? Answer: forever.

The only solution I see are to continue to make frontiers.

Fractional reserve banking is not without its advantages. If high reserves on deposits were made mandatory, banks would need to charge a huge spread on their loans to ensure that the return on capital is acceptable.

The problem is when the reserve ratio was unregulated, banks tried to make it as low as possible because that would result in higher return on capital. The reserve ratio is being increased to acceptable levels through the various Basel standards. The objective seems to be to keep the RR high enough to minimize risk of the bank going bust, but sufficiently low to generate acceptable returns on capital.

FDIC arose from public demands for protection due to bank runs that destroyed life savings and cratered the economy. These bank runs were a direct consequence of fractional reserve lending. FDIC was simply the wrong solution to the problem.

The 1930s was probably the last chance to avert a major economic collapse that is now probably unstoppable. Had we as a nation instituted the Chicago plan our economic situation today would be very different.


Of course even if the Chicago plan been implemented vested interests would likely have overturned it eventually. Sometimes people and societies have to learn lessons the hard way.

So when a large majority of the people are more inclined to believe in God and pursue faux biblical explanations rather than delve into economic and scientific reasoning we should expect that consumers would naturally police banks?  Especially when those banks spend ~$50 million dollars a year lobbying for political favor so that they can pass legislation under the radar and through direct (albeit muted) threat of government shutdown?

I am wondering where this confidence in the consumer comes from...it's not like there is a reason why Citizens United was passed and allows an unprecedented amount of money to be spent on misleading advertisements for politicians who want to look family friendly but in fact are very much bought and paid for.  

I would argue that ideology is interfering with a relevant sociological objectivity...

The real failure is allowing FDIC insurance when consumers would naturally police bank activities to favour the most conservative institutions.  You can tell me banks would just deceive and misled perhaps but this is already covered by various laws on false accounting.   Over governance is generally a negative to business and does not protect people as we see excessive risk continues to be within banking anyway

Cross posting from the Politics & Society forum as it is relevant to the topic at hand

Yeah and realize the system is a cancer eating itself. Nobody is in control. The corruption will expropriate (tax, confiscate, etc) and squander all private wealth that can't be hidden or secured out-of-reach of the system.

This is highly deflationary. QE was a transfer of wealth from producers to the corrupt. It wasn't inflationary. Thus velocity and marginal utility have collapsed.

We will soon enter a radically accelerated phase with much more extreme volatility, because the disequilibrium has been building since 2008.

The stock market boom is due to capital having no other place to go. Emerging markets have topped. Sovereign bonds are paying negative rates and can't go much lower (the marginal utility has gone negative on QE and additional debt), thus capital appreciation for sovereign bond investment is a poor risk versus reward. Europe and Japan are in big trouble. Municipal bonds are a huge default risk, since they can't print money to buy their debt. The USA stock market and corporate bonds are the only options available.

More of the same coming soon. Up next is probably a raid on government insured FDIC bank deposits.
There was a massive push this week to ram through the cromnibus spending bill. This bill effectively scraps the most significant portions of the Dodd-Frank requirements.

Dodd-Frank may be a pale imitation of Glass-Steagall but it did prohibit prevent banks from securing their most risky derivative plays with taxpayer insured FDIC funds. The law was passed in 2008, however 6+ years later this prohibition has not been enforced. As of December 1, 2014, a total of 104 Dodd-Frank rule making requirement deadlines have passed without coming into effect (37.1% of the total). This stall tactic bought banks enough time lobby bribe congress to revoke these requirements altogether. One can only imaging the favors promised/given to get this done.

Targeting FDIC funds has been the major play for a few years now. Back in 2011 Bank of America successfully dumped 75 trillion of derivative exposure on the U.S.
http://seekingalpha.com/article/301260-bank-of-america-dumps-75-trillion-in-derivatives-on-u-s-taxpayers-with-federal-approval
 
This latest round of shifting risk to the taxpayer was just more public and obvious. Perhaps an indication that that time is short? After all these derivatives have to be cleanly foisted onto the taxpayer before the next major downturn.