The current crisis is the result of the reaching of maximum potential of inflation greater than previous inflation. No technology will ever exist that will overcome this. It's a wave and there is no way to sustain inflation greater than previous inflation forever.
Once maximum potential is reached...Inflation greater than previous inflation to maximum potential becomes inflation less than previous inflation to maximum potential.
Attachment of interest to the medium of excange is the cause of fractional reserve banking. The Goldsmith receipt fairytale...Was created to escape having to explain the effect of attaching interest to money.
The Secrets of the Federal Reserve and The Creature from Jekyll Island...expose effects of the compounding interest equation...but not the equation itself as the cause.
And the top has caused you all to fall deeply in love with the equation and you all will defend it to the death.
So reguardless of what you all do...If you don't stop taking more than you give...you will not accomplish anything at all...
Millions and ultimately billions of you will destroy each other attempting to reacquire what you never had to begin with or obtain what you never will.
People are free to choose...Tyrants are all trying to save the world. And Interest attached to the medium of exchange is the cause of the current implosion.
In 1944 the US money supply was 355 Billion Dollars...attach interest to that of lets say an average of 8.09% per year for 64 years and the money supply would have to grow to 51.5 Trillion dollars to support the compound interest equation.
Which is what the US money supply is currently.
Attaching interest to the medium of exchange is taking more than you give...which is the same as chopping down trees faster than the regrow.
It keep the smiles on retards faces...until you run out of trees to chop down...then those that think that interest attached to money or taking more than you give or chopping down trees faster that they regrow is not an evil monster...are forced to think differently...
ALLOW ME TO TAKE MORE OF ANOTHERS POWER THAN I GIVE (Eg. Attach interest to money) AND I CARE NOT WHO MAKES OR BREAKS THE RULES OF THE GAME YOU ARE ALL PLAYING.
BECAUSE I WILL EVENTUALLY SUCK ALL THE POWER FROM THE HANDS OF THE MANY INTO THE HANDS OF THE FEW OR ONE.
AND THEN THEY WHO HAVE THE POWER WILL MAKE AND BREAK THE RULES OF THE GAME YOU ARE ALL PLAYING.
The top own all the money in circulation...they have for centuries...they just keep relending in back to the bottom who rents it.
That's why the bottom or drones have been programed to utilize the just think positive ignore the negative equation at the core of their reasoning algorithm...
It's impossible to have a 100% reserve and have lending...the very instant you lend...the reserve drops. I lend out 1000 Dollars for 1 year at 5%...after a year I get back 1050 Dollars. The next year I lend out 1050 dollars at 5%.
All interest is compounding.
The only way to prevent it from compounding is to not lend out the yields derived from the attached interest. So if you did that after 60 years your $1000 would inflate into $4000 if all you did was lend the principal but not the interest every year.
But if you lent out the principal and interest every year for 60 years you would have $18,679
Wow thats some serious monetary inflation...now imagine if millions of people tried to get rich by attaching interest to the medium of exchange...
Lets say 100 million people thought they were clever and tried the above.
Lets say 100,000,000,000 their combined savings amounted to 100,000,000,000 silver 1 Dollar coins...or 1000 silver dollars apiece...
That would work out to 1,867,918,000,000 or 1.8 Trillion silver dollars.
That if all they did was save up 1000 silver dollars and kept lending and relending it out.
Wow that some really serious monetary inflation.
The Government you say? What is the Government going to do...Create a rule making it illegal to attach interest to the medium of exchange?
Nope you all have been trained to think that interest attached to the medium of exchange is what capitalism is all about and you all will fight to the death defending Capitalism...lol
YOU ARE ALL JUST KIDDING YOURSELVES DAY IN AND DAY OUT AND HAVE BEEN FOR YOUR ENTIRE LIVES.
Really...There is no escape or freedom from Truth...Lies and delusions only provide a temporary prosperity.
Attachment of interest to the medium of exchange is the cause of fractional reserve banking and the Federal reserve.
Fractional reserve conpounding interest commercial banking has been in operation for over 600 years...
It financed the entire history of the USA.
Get rid of it and you have to figure out another way to finance the last 600 years of Human history.
Oh but Hyper I read in a book something different and you just have to be wrong...
Yes I read all the same books...and more.
I'm just pointing out some things to others...You are not the only one reading this.
You can choose to accept or reject any and all the information I post...there is no requirement or obligation to choose one over the other.
It's like this...If it were possible to simplify it down...I'm telling you that 1+1=2
While you are trying to tell me that 1+1= Any other number except 2
Reguardless...1+1=2
truth is not decided my majority vote or on a battlefield.
So it doesn't matter...I don't know how to simplify it all down to the point where it would be almost impossible for you to choose to keep rejecting it.
Don't stop paying on your mortage...and you will be fine...stop...and you will lose...
Nothing strange is going to happen...you have bills?...pay them...fail to pay them...suffer the consequences.
I really don't see where all this inflation is going to come from...
So far there is social engineeing out there promoting the belief that interest rates are low enough now that all the refinancings will save the day.
But they worked in 2001 because of cash out refinancings...where people pulled out equity at the same time as refinancing...Alot of equity that was built up from 1991 to 2001.
The "cashout refinance trick" does not work with Real Estate that is under water or worth less than is owed.
This time around there is little to no equity to pull out and unless there is massive sustained volume...the yields will be smaller than current yields which will lead to continued inflation less than previous inflation...as opposed to a return to inflation greater than previous inflation.
Other than a temporary slowing of the implosion to oblivion...I see nothing to stop it at this point other than the reaching of maximum potential which is far lower than we are now.
US consumers request commercial banks to manufacture new money...
It's called credit...
The FED keeps track of it...The total credit market debt...Is of course also the total credit market assets of the USA.
It's the money supply.
Now the total public debt or the debt the US owes is from issuing bonds.
Congress authorizes the US Treasury to issue bonds and those bonds are sold into the market and exchanged for money from the money supply of the USA.
In 1944 the total credit market debt was 355 Billion dollars.
The money supply of the USA was 355 Billion Dollars.
The total public debt was 201 Billion Dollars
Congress had up to that point authorized the Treasury to issue 201 billion dollars of bonds to be sold into the market and exchanged for dollars from the money supply...
So in 1944 the US Government had "borrowed" 56% of the money supply.
But the money supply is now 51 Trillion...well 355 Billion is debt...it's basically money that consumers have requested commercial banks to manufacture with interet attached.
So 355 Billion dollars compounded for 64 years at an average rate of 8.09% per year equals 51.5 Trillion Dollars...
Which is what the current total credit market debt is...now People are not requesting commercial banks to just manufacture more money to pay the interest...but the attachment of interest creates a shortfall that is a contributing factor...I don't know what average interest rates have been the past 64 years...but they are lower than 8.09%...most likely closer to 5% with the other 3% just consumers asking for more than is needed.
Basically if I demand more from one person in a system...It causes an increase in demand that spreads throughout the entire system.
Any ways back to the total public debt...
Since 1944 Congress has authorized the treasury to issue another 10.3 trillion dollars of bonds and has borrowed a total of 10.58 trillion dollars from the money supply of the USA of 51.5 Trillion dollars.
Of course in the same period of time the US consumer has requested the commercial banking system to manufacture another 51.2 Trillion dollars of new money.
Or about 20% of the money supply.
The US Government is in less debt now than it was in 1944.
You know what the FED is talking about doing to prop up the economy?
Well the Japanese have been doing that for close to 15 years...dumping subsidized cars into the USA...
If the Japanese had not continually kept the yen weak the past 15 years...Their exports would have become too expensive and their auto sector along with their export to the USA based economy would have imploded to oblivion...
But the Japanese trick won't work for the USA because the Japanese needed the US consumer to sustain their life support...there is no one to support the USA...
New leader expected at Toyota next year
By Micheline Maynard
Published: December 24, 2008
"DETROIT: Facing its worst year in decades, and with no sign of a global recovery in sight, Toyota Motor is set to make a change in top management next year, people with knowledge of the plans said Tuesday."
"Katsuaki Watanabe, the company's president, is expected to be named chairman next June, clearing the way for new day-to-day leadership at a time when Toyota expects to report its first operating loss in 70 years."
Toyota is going down...they all will...
You may think you are sitting pretty...
It will get worse by the month.
The only thing keeping this mess up now is mass delusion.
THERE IS NO WAY TO SUSTAIN INFLATION GREATER THAN PREVIOUS INFLATION FOREVER.
Once inflation greater than previous inflation to maximum potential is reached...inflation less than previous inflation to maximum potential begins.
I guess because no official or authority figure told you this...You are all oblivious of this fact.
And Honda is just the best...Once the flight to quality runs out of steam...they will follow the rest.
Imagine if everyone was given a new Honda tomorrow...there would be no reason to keep the factories open...they would have to be shut down for years...and what do you do with all those employees?
The first light bulbs Edison made in the lab...still work today...but modern ones don't last long...
Because if they did there would be no way to earn a living...Once the majority had a lightbulb that lasted years or decades...Your company would be unable to sustain growth and rapidly go out of business.
Duh.
It's shocking but I basically see billions of people perplexed as to what is going on...Because they must be brainwashed drones that believe inflation greater than previous inflation lasts forever.
IT DOES NOT, CAN NOT, AND NEVER WILL.
No matter how much positive thinking you all do...no matter how much praying... worshiping... dreaming... wishing... begging... pleading... planning... etc.
Once the maximum potential of inflation greater than previous inflation is reached...Inflation less than previous inflation to maximum potential begins.
Period end of story.
It's a wave.
The entire global economic system was based on inflation greater than previous inflation lasting forever...
It's impossible to sustain inflation greater than previous inflation forever...
After 64 years of the greatest temporary prosperity in human history...the fact that it's impossible has been discovered again.
Well not discovered again...arrived at again...they see the effects but are still totally oblivious of the cause.
The entire Global auto industry is going to implode...
The whole world...Not just the USA...Which will of course take the fall for it all...
Japan screwed you all and on top of it...You are loving it. Cheering the collapse of the domestic auto sector in the country you supposedly live in and care about...
And your elected representatives allowed it.
There you have it folks...Americans spitting in the face of their countrymen while at the same time licking foreigner boots/humping their legs like dogs.
Destroyed from the inside...Just like what was predicted/planned.
And this is just the beginning of the nightmare...
38 comments:
It's funny you think there is such a thing as America, by which there are "Americans".
Sounds like some Truth has not worked it's way into your comprehension yet. A little touch of the drone virus afflicts HT.
.
Thanks for another great post which I continue to look forward to reading.
Is that 100 million or 100 billion.
You have too many zero's for it to be 100 million.
Excellent post HT.
- TruthFromAbove
I agree, excellent post. This blog has been extremely helpful in not only furthering my understanding of the wizards behind the curtain, but reconciling their strategy and tactics with current events and near-term developments. I trade the markets and most savvy market participants are playing checkers on a chess board, unfortunately for them.
It looks like the fuse has been lit in pakistan/india and the middle east, but I have this lurking suspicion that these conflagerations, along with the Us backed somali pirates are smokescreens for more sinister and shocking operations currently being undertaken. The onion has many many layers and we're just starting to peel.
I wonder how the free flow of information concerning global powers' proxy use of narcotraffickers/terrorists/financial warfare will influence the public, since even the most ignorant of them are now being confronted with news and events irreconcilable with the canned world perspective they've been fed all their lies.
First quarter 09 is when the world awakens to the true depth and severity of the current economic collapse. Summer 09 is when the US gov defaults on their debt obligations. From there it will be interesting to see which population liquidation method the top utilizes as its primary weapon.
There is alot of well-respected and factually steeped chatter that this final cleansing process is necessary to finally awaken human beings to their true nature, which will allow us to better connect with our higher selves and break away from the bonds of our human instrument/animal instincts and emotions.
It's no wonder we all chose to be alive during these times...
-Andrew
Anonymous:
I deleted your comment and am reposting in its entirety sans the opening sentence - for obvious reasons. Please refrain in the future?
"Hyper, why don't you reference all of your sources?! Just because you change a few words in a paragraph doesn't make it your own thought!
Why bother writing "blog" after "blog" about the same drivel. Stop wasting bandwidth.
1+1 = 2
God is indestructible
God is truth
Truth is indestructible
1+1 = Truth
Critical thinking 101.....Let me know when you make it to the big leagues.
Please don't hand out any koolaid to these "drones" who are starting to worship you as their truth.
Although big changes are coming, we'll all still be here (well most of us).
We don't need greater inflation, when we have mind control. Fighting flair up in the middle east? Drive oil prices up. "Droughts" and "pestilence" will drive food prices up. "forest fires" and tariffs, will drive lumber up.
Currency problems? New currencies will be formed. Unrest? More social programs.
Inflation or deflation, happiness, or sadness, royalty, or street rat, you'll be dead regardless.
Enjoy your life of comfort while you can, try to prepare for the worse, and when the time comes meet your maker, just like everyone else will.
Remember, financial system or not, you will be dead one day.
1+1 = 2
2 = truth
You = 1
death = 1
You + death = truth"
See HT? Now you're getting all the rednecks to commend you "Great post! America! F**k yeah!! Eat your imports!"
As if there is such a thing as America. Or Americans. The drones think there is.
I'll be a leg-humper for imports.
Guess what? the first and last "Americans" were the founding fathers....I think even they knew that.
How come you think the economy is related to some redneck idea that buying fur'in imports was a source for decline?? Or even if it was, that you should show outrage...haha... wave that flag!
Drone BS.
Kind of surprising.
So I am to take it that that crap is really in your model of economic comprehension?? Some kind of glowering bitterness at "Americans" who bought imports???
I guess you are trying to attract more sheep to your site, so you are going for the easy BS.
And look, here they are: "Atta boy HT! Great post!"
Cue music from "Deliverance".
good lord
Everyone is entitled to an opinion, however when the opinion is built on faulty logic you get a sad display of false confidence.
Why is it that everyone who disagrees with Hyper's views doesn't even seem to understand his argument in the least? You "Anonymous" guys truly are morons. Or it could just be the same guy posting multiple types. Whichever the case, it's quite disturbing since it's a small example of the illness that's plaguing our entire society. Intelligent people who don't know how to think. Or maybe it's that they don't know how to read carefully and compehend an argument? I shared some of Hyper's writings with friends over email (referred them to the website too, of course) and many responded with arguments that clearly indicated that they had no clue what HT was saying. Just like some of the people posting comments here...
I'm not a sycophant blindlly following HT, but I do agree with the majority of his logic and conclusions. I think opposing arguments are healthy, but you can't offer a credible argument if you don't even understand what it is HT is trying to say. Pathetic!
- Andrew
Is that poker Andrew? If so, I see you decided to come to the bottom of the rabbit hole.
Truth is infinite and indestructible...
Without beginning or end...
IT WILL NEVER DIE.
Sure my physical body which is the anchor for my perspective will cease to function at some point...I'm not Truth...I just point it out.
Sorry that Truth offends you so much that you look forward to my death in the hopes that will allow you to escape from it's tyrany.
As for Americans.
There are millions of nationalists that when questioned...Claim to be American...Or US citizens...that live in the economic zone they claim is the USA or America.
I'm just pointing out what 100's of millions of people believe.
I comprehend those facts
The Internet gives people courage to express themselves.
I have found that my biggest followers are the ones following me crying about all my so called called followers.
The problem with Hyper is that he lacks imagination:
"Toyota is going down"
Yeah, right. They'll get the biodiesel mass work program going along with the enviroreligion and farmland will be the new bubble. Legislated out of existence any car that can't stop its engine at idle and voila all is fixed. The peasants will be busting down all the strip malls and working in the fields so to speak.
It doesn't matter if it makes any sense, look at the gross stupidity of putting up all those windmills (oops mean turbines).
Save the ponzi...save the ponzi...but you're right, the envirowackos won't even know whats behind their religion.
So invent a new racket. The existing one (attaching interest) doesn't work too well for a knowledge economy (aka biology) because its non-transactional in nature. Take a loan to get educated??? Ha, in biology learning is a lifetime proposition.
I learned today about a new protein. Does that mean I can create a product or service? NOPE.
The current hilarious nature of drug discovery in fact illustrates my point. They torch 100's of millions on some molecule with a lottery chance of success.
The envirowackoism relgion is funny too. Take LESS than you GIVE. I'm more productive than ever but I have to drive a telephone booth equipped with a motorcyle engine. I'll call it a Porsche and the chicks will be humping me in no time.
'Americans' are kind of like my 'sons'. Meet my 3 sons named 'Screwed', 'Hosed', and my 1st borne 'Facked'.
German Marks required to
buy one ounce of Gold
Jan 1919 170.00
Sept 1919 499.00
Jan 1920 1,340.00
brief period of deflation
Sept 1920 1,201.00
USA is here
Jan 1921 1,349.00
hyper-inflation begins
Sept 1921 2,175.00
Jan 1922 3,976.00
Sept 1922 30,381.00
Jan 1923 372,477.00
Sept 1923 269,439,000.00
Oct 2, 1923 6,631,749,000.00
Oct 9, 1923 24,868,950,000.00
Oct 16, 1923 84,969,072,000.00
Oct 23, 1923 1,160,552,882,000.00
Oct 30, 1923 1,347,070,000,000.00
Nov 5, 1923 8,700,000,000,000.00
Nov 30, 1923 87,000,000,000,000.00
nuff said
HT, you wrote
"As for Americans.
There are millions of nationalists that when questioned...Claim to be American...Or US citizens...that live in the economic zone they claim is the USA or America."
what's imports got to do with it this zone that is based on compounding interest? Do you equate car-selling as some integral component to The System?
That "we" hurt ourselves by buying "imports" ...and yes, you do sound hurt - personally hurt, just like those who used to slap "Eat your imports" bumperstickers onto their shit-metal on wheels and cry in their beers about it.
So my question is, is this truly part and parcel of your take on why we are where we are???
This is it here:
"Japan screwed you all and on top of it...You are loving it. Cheering the collapse of the domestic auto sector in the country you supposedly live in and care about...
And your elected representatives allowed it.
There you have it folks...Americans spitting in the face of their countrymen while at the same time licking foreigner boots/humping their legs like dogs.
Destroyed from the inside...Just like what was predicted/planned."
WHAT???
So the crux of this developing collapse...after all said and done, is that you are basically saying the message of the drones with their "Eat Your Imports!" bumperstickers driving around in the 80's were our last best hope...and when we rejected these prophets, we rejected their enlightened insight, and rejected their beer-gut unionized spirit of americanism to our demise.
The 600 year old banking system or 1300 year old cycle of implosion or whatever, depending on which post I dig up, it was waiting on Detroit, then subsequent rejection of Detroit products by "americans", to first come around and happen before the cycle could cycle thru?
And "we" did it to ourselves?
The Top made us buy imports?
And oh yes, stupid Japan...
this is goofy.
And if "you" do not include yourself in "we", then why act so personally embittered towards "Japan" and buyers of imports?
Happy "new" year.
American Job Advertisement
Great Communication Skills (conman)
Microsoft Office Skills (accounting fraud)
American Consumer
Whatever is the lowest cost
Add the two and you get slavery + fraud.
Look at this guy, he thinks its all over like Hyper. Ha, wait, the American idiots will be handing over every dime they make to the "innnovators" of Wall St.
-----------------------------------
The ramifications of the events of last year are in my opinion seminal moments which will dictate the direction of economic planning for at least the next generation.
The collapse of all asset bubbles and the certainty of the immutable forces of reversion to mean, ensure continued asset deflation for at least a generation, attributable to the following three 2008 milestones:
Peak Credit a Historical Footnote
Total Credit (bubble lifeblood) contraction for the first time in 70 years. And as housing, commercial real estate, automobiles, etc. collateral continue to deflate so will the viciously negatively reinforcing continued diminishment of lending.
Service Economy Imploded
Service industry (last bastion of employment) is ready for vaporization phase as the retail industry readies for massive consolidation and with it the cycle of unemployment and wholesale retrenchment of consumerism.
Finance Industry/Treasury Emperor Has No Clothes
WallStreet, the finance industry, buy and hold mantra, 401Ks, central banks, the US Treasury, and with all the aforementioned - the notion of free market capitalism all discredited; not in cabal bear forums with one dozen tinfoil participants but in the mainstream media and sheeple water coolers. The magnitude of this is immeasurable, for it is only confidence which supports a fiat-based central banking based economic system.
Who is "poker Andrew" ???
Give the sheep what they want: they want Ponzi, look around do you see any farking serious investors? Put some servers on a boat and program the scheme to auto-implode at random intervals. Better deal than those jokes called lotteries. You'll have a trillion transactions in one year.
I mean really, what is the friggin point of investing anways? So the maggots with the suits on can dilute your shares to kingdom come?
Charles Ponzi, my hero, lets get it on. Screw the authorities, just more parasites.
And the "nation"??? Hahahahahahahaha...the dopes who watch Oprah can't see the global oligarchies i guess.
Gee, look, the markets are up today. Wasn't this pile of dung called the dow supposed to be collapsing into the abyss?
Seriously, if consensus reality continues to thwart and shoo-away the fringe's "knowing" of imminent collapse, and consensus reality keeps this putt-putting along, I am fucking going with consensus reality and just live my life....I don't have the fucking years to go at the pace of preparing for The Shit like I have been for the last two and a half years. By this summer, there will be more articles saying in 6 months...OH NOEZ!! and will get my hackles up and then I will spend another year preparing, and then it will be like it is now....just putt-putting along...and I just spent another year doing way more than I care to look back on, and once again it will just be more of the same shit... but then there will be articles and posts AGAIN saying "six more months" or "a year for sure" or whatever, it will "have to" collapse....ya know what?? Fuck it. "Have to"???? WHY?? Cause you are a god of ecomomic philosophy?? Might as well say you are a weatherman and I MUST believe that it will HAVE TO snow eight inches in three days.
I will buy a can of beef stew each week, put it away, an ounce of silver each week, put it away, and that is about all I will do anymore.....I just say fuck it.
I don't have the time for this shit. I already lost 2 years of my life listening to this shit.
The Top they own me....got it.
No matter how woke up I get...and HT never explains JUST HOW woke up one must be in order to be smug and secure at long long last...as IF, anyway...
Death is what happens. To the Top to the bottom...
So it is this:
Concensus reality of the masses - the "oversoul" of mass reality - will win out over the fringe's "knowing" and logic of imminent doom.
THERE IS NO LOGIC THAT CASTS IN STONE IMMINENT DOOM.
Seriously, it looks "right" on paper. But that is all. ON PAPER.
Logic states Israel should not be real...Logic dictates several major things should never have happened...but did. Logic tells me that my belief in logic on paper translating into "real" events is a flawed logic.
Reality is simply what won't go away after I stop believing in it.
That PKD quote cuts both ways and all ways, always.
Oh yes...I WANT collapse.....but I can't force shit...and a thousand HT's can't force shit either.
A thousand Peter Schiff's can't manipulate reality to conform to the formulas on their papers of economic formulas.
They'll just convert as un-traumatically as they can to the Amero or whatever, and make this shit keep putt-putting along in the same nightmare reality as always. And there will be "societal evolution" backdrop to it all...and that is where people live, doing shit that people do....rather than fucking buying beans and rice and cans of beef stew day after fucking day.
You think I am "giving up" or perhaps "evil" cuz I have decided to take the colored pill that you think represents "bad"??
This is not some fucking matrix movie. This is what it is: you popped into existence, and you can either be uncomfortable in your own skin, or be comfortable in it. Same goes for the several decades that you get to play around in...be uncomfortable with what a shitty reality the shit-reality is, and fight and die, or do something else with the tokens of ENERGY you get to spend.
The planet? It will do what it will do. Nukes...well whatever...
ain't any formula to that shit.
The markets are collapsing upwards I guess.
Is there some measure of global credit inflation that tells the insiders that its over? That its time to liquidate or is just impossible to know in principle?
This fucking WORLDPONZI "society" will go on forever it seems.
Sit on your ass, do nothing, wait for the GOONS at the central banks to send the checks. Why fucking pay the mortgage when a better deal is just around the fucking corner?
Hyper can piss his life away with the "Its collapsing" shit for all I care.
The top do all the buying an selling...
The bottom just speculate.
The top know because they are buying when the bottom is selling and selling when the bottom is buying.
It's a wave...Inflation greater than previous inflation to maximum potential is followed by inflation less than previous inflation to maximum potential...
The market crased in 1929...it didn't reach the bottom until 1932.
There's years of slow torture as far as I can tell...
Just think positive babble from officials...Some signs of recovery touted as the next bull run...then failing and the markets crashing some more...rinse an repeat down to oblivion.
Or due to cuts in production...A hyperinflationary doomsday spike straight up then down to oblivion.
One way or the other...the logical conclusion will be reached...slow or fast.
There is no logical conclusion to anything based in reality.
Logical conclusions work out on paper. If it is not real science, then logical conclusions on paper DO NOT have to translate to REAL WORLD vindications. They can just work out on paper, and that is the extent of it. Unless it is real science. Which economics is not.
Economics is a philosophy, not a science. Money, in fact, is Magick. It is talsimanic.
It is not science, and has no logical parameters.
If you want to call economics science, then I will then say that you should call weather anchors "scientists". And all their predictions should be called science.
Sorry.
You are going to have to figure it out: reality is that which continues to defy "logical conclusion" formulas....to paraphrase PKD.
Hyper, get with the program...look at the Zimbabweans...they're geniuses
-----------------------------
The bubble has finally burst! Zimbabwe's stock exchange, a marvel the world over for its continued upward trajectory amidst the ruins of a devastated economic landscape, reacted to threats and measures put in place by Gideon Gono, the Central Bank Governor, by nosediving 50% in one day. That was the day before yesterday, on Tuesday.
The downward spiral continues still. Some counters fell more than 50% in a single day. Old Mutual shares, for example, which were trading at 500 quadrillion dollars a share on Monday, fell to 100 quadrillion dollars a share by Wednesday.
What the Central Bank governor discovered, and which the whole country knew all along, was that these fantastic figures were being generated to a massive extent by people and companies who had not a single penny in their bank accounts to buy these shares. What they did was this: most had connections within the increasingly rotten banking system. They would talk to their branch manager (who would be promised a cut in the proceeds), and get them to vouch for the fact that they had, say, a hundred sexitillion dollars in their bank account. With this, they would go to another bank, say a merchant bank, and ask for a bank cheque to the value of 10 sexitillion dollars. With this, they would go to the stock market and purchase shares in any counter.
The beauty of this was that most counters, especially the heavyweight ones with solid fundamentals, like Bindura, Old Mutual and RioZim, were rising by as much as 500 to 1000 percent per day. So Mr sexitillionaire would see his money rise five or ten fold very, very quickly. His 10 sexitillion dollars would be 50 or 100 sexitillion dollars by the close of business the day after he bought his shares. The day after that, he could sell half of those shares, realising 25 or 50 sexitillion dollars (because more suckers were coming onto the market daily) and deposit the money into his account.
So, as you can see, within two days, Mr sexitillionaire, with the connivance of his bank manager, would have made a profit of between 40 and 90 sexitillion dollars and could pay back his "loan" of ten sexitillion bucks without breaking a sweat. After that, his remaining shares continued to rise everyday and he could sell bit by bit and buy US dollars. Because he never worked for the money, he could bid any ridiculous amount for the US dollar without feeling any pain. This is how the US dollar has got to its current "transfer rate" level of about Z$50 quadrillion per US dollar. This is the rate used if you are buying US dollars used wire transfers as opposed to hard Zim dollar cash.
But, Gono has put a stop to this (temporary though this is), by making the CEOs of banks, and not branch managers, accountable for cheques and guarantees written against unfunded bank accounts. He threatens to take away the bank's licence and throw the CEO into jail. In addition, the Stock Brokers themselves, some of whom were buying shares without a cent to their names and then bumping up the prices within a day to make massive profits, have now been barred from doing this and also threatened with fire and brimstone from the Governator.
The Central Bank has additionally put measures in place to supervise the Stock market and made its management liable for any shenanigans on the Bourse.
But this is all in vain. There is absolutely nothing the government can do to the stock market to stop the speculation. The problem is that it is the only investment vehicle left in the country and, for a country in which business is accustomed to super profits, , the tendency to drive up share prices without regard to business fundamentals is all but unconquerable. The punters will be back. All that has happened now is people are temporarily staying their hands. In the last two days, trading has been very thin. Almost ALL the counters have people trying to sell and not a single buyer is in sight. The share prices will fall rapidly in the next week or so and the US dollar with it. And that will be the time to buy like crazy if you have the money.
Thing is, the market will rise again in a couple of days, a week on the outside, once the jitters have gone. There is a lot of idle money out there, which quickly loses value, and that money will keep pouring into the market, sending the prices of stocks and the US dollar soaring as usual. A lot of the dirty players will be weeded out through this latest round of Gonomics, but those who have money in their accounts will run to the stock market. There is simply nothing else to do with your quintillions, since Gono only allows less than a US dollar's worth to be withdrawn from your account in a single day.
Added to this, the collapse of the national payment system has also ensured that the money in your bank account is useless. No supplier accepts cheques or bank transfers anymore because that money is losing value by the day. All of them ask for US dollars.
The shops where most of us buy groceries now also accept only US dollars or hard cash, Zim dollars. The electronic payment system (visa and mastercard debit and credit cards) is now dead. You can not use them at even a single shop in ALL of Zimbabwe. The shops just pretend that the machines are dead or that "we have run out of paper for the thing." Another excuse is that there are, once again, so many zeroes in the prices that the machines are no longer able to cope. Bottom line: the money in your account can only go to the Stock Market, where cheques and electronic transfer systems are still accepted.
The only other entities accepting Zimdollar cheques and transfers are ZESA, the power utility, Zinwa (the Cholera Promotion Agency, which is supposed to be the Water Authority), ZIMRA, the revenue Authority and government departments.
While Gono is busy cleaning up other people's homes, his own house stinks to high heaven. There is a scam that has been going on for some time now, promoted by his own employees and his own policy of allowing a pitiful amount of cash to be withdrawn per day from the banks. This scam involves people connected to Central Bank employees applying for cash "to buy Aids drugs" or any other thing excepted by the Governor. They apply to withdraw their own money, say, 500 million dollars. Now, the cash rate for the US dollar is "only" around 1 million dollars per US dollar. The application is quickly approved. Still, when the approval comes through, the applicant is allowed to go back to the "pharmacy" and get an "updated" quote for the medication, since the Central Bank also "recognises" that prices are going up every day. The new quote would be for a billion Zim dollars, say. This money is withdrawn on the very day and used to buy, say, a thousand US dollars. Needless to say, most of the excuses given for the applications are utter rubbish, but they are still approved by insiders at the Central Bank.
This process is repeated several times and I personally know of people who have bought 2 cars from Japan through exploiting this loophole with relatives at the Reserve Bank. And that is just last week. Does the Central Bank governor do anything about this? Of course not. He turns a blind eye. And it is this double standard that promotes the avarice in Zimbabwe. People are not going to die of hunger or see their life's work reduced to nothing. They find means to beat the system, and they feel no guilt about it at all, since even the Central Bank is doing it and they can see them do it.
Another issue that also promotes corruption is the Reserve Bank habit of using its own cash to buy foreign currency on the black market. This has been denied by Gono, but he fails to answer the following simple question: How is it that, whenever new notes are printed, on the day that they come out, before even the banks have opened to dish out the new notes, these can be found at Roadport, the illicit market for US dollars in Harare. I have seen this with my own eyes twice. The first time was when the new Z$20 000 dollar note came out. The second time was with the introduction of the new Z$1 million note. The interesting thing is that there were bundles of the new million dollar note at Roadport by 7 a.m. Ordinary people only started getting the new money at 11 a.m. And, also consider that the individual account holder is allowed to withdraw $500 000 per day, only companies can access the 1 million dollars a day.
How does the Governor explain this? He has failed to do this. It is sad, because this man was highly acclaimed when he first came in and his measures even resulted in a drop in inflation to double figures from three figures.
Now, however, he is universally reviled by the population and his unpopularity is now even higher than Mugabe's own.
The advice then is that if you have the money, get into the stock market. It will rise again, and stupendously so. There is NOTHING Gono can do to stop this for the reasons explained above, short of closing down the bourse. And he would never dare do that.
If you can't grow the money supply anymore, you need to destroy supply. The US government may very well "borrow" (print) more money to buy these depreciating assets and dump them into the river. Yes, 1+1=2, the truth is inevitable, but the top will keep this game going as long as they can.
This is one scenario where both you and the inflationists may both be right. It will be fabricated inflation, really just deflation with a complete destruction of the currency. Squeezed at both ends.
Regardless, when they can't grow the money supply any longer, when they can't destroy the supply, there is always a third way. Complete restructuring, at the human level. Think H5N1 or world war...
I thout of Hypertiger's axiom about "taking more than you give" when I read this:
"Today when we think of the world's teeming billions of humans, we tend to think: overpopulation, poverty, disease, instability, environmental destruction. They are the cause of most of the planet's problems.
What if that were to change? What if the average human were able to contribute more than consume? To add more than subtract? Think of the world as if each person drives a balance sheet. On the negative side are the resources they consume without replacing, on the positive side are the contributions they make to the planet in the form of the resources they produce, the lasting artifacts-of-value they build, and the ideas and technologies that might create a better future for their family, their community and for the planet as a whole. Our whole future hangs on whether the sum of those balance sheets can turn positive.
What might make that possible? One key reason for hope is that so far we have barely scraped the surface of human potential. Throughout history, the vast majority of humans have not been the people they could have been."
http://www.edge.org/q2009/q09_2.html
see Chris Anderson essay
LOL. All this crap from Hyper about 'truth'. Here's the truth: THE SCAMS MUST GO ON!
PETS.COM? Meh, small time stuff.
Mortgage backed securities? Weak, very very weak.
GOOGLE? That was a bit boring.
Ponzi Finance needs unlimited cheap energy to match the braindead unlimited growth economics from the Chicago school.
Wall St. needs NUCLEAR FUSION NOW! And so it shall be. Of course the miraculous new Bussard NUCLEAR FUSION DEVICE backed by Google will be the FRAUD of choice. A gazillion worthless startups will be created and
THE CATTLE will be in paradise once again.
Well that should buy another few years of fake wealth and disastrous population growth.
After that the gig will be up and the H5N1 will be released.
Looks like some members of "The Top" would rather commit suicide than head to the bottom.
Hypertiger: thank you for educating people on exponents!
2x% debt growth with x% GDP "growth"... mmhmm.
where the heck did you get this 51 trillion$ for the US money supply? it is more around 15 trillion$ I believe
The BIS has a pyramid providing a "hierachy" of the money in the world.
And yes, commercial credit and derivatives thereof are such a huge component that, as Friedman said, "In a fiat money system, debt is money."
The FEDERAL RESERVE keeps track of the money supply of the USA...it's called total credit market debt...
It's currently around 51.5 Trillion Dollars.
and all money in a system that allows the rental of the medium of exchamge will always transform into debt.
top sucks from the bottom...so the circulation is from the bottom to the top...If the top keeps lending their cut of what the ytake from teh bottom to the bottom they will eventually convert the entire money supply into debt...Basically the top will own all the money in circulation an the bottom will rent.
The current system is the result of reaching the maximum potnetial compounding of the hard currency systems.
Eventually it becomes impossible for the top to be paid in hard currency since the interest rate causes the money supply needed to sustain the payments to grow beyond what all the mines in a system can supply to a mint to construct the required amount of money.
the current systam is the solution to that problem to keep the game going...unfortunately once consumers max out and can no longer request the comemrcial banking system to manufacture more and more new money...the jig is up and there is no way to continue paying the rent...
The bottom pays the top and then the top pays the bottom..so all that the top has comes from the bottom...but when the bottom can no longer pay the top what they require...the top can no longer pay the bottom what the bottom demands...
The top is then forced reduce the numbers of those below demanding.
You see an increase of layoffs when this happens.
Ok Hypertiger I understand what is the moneysupply, and I understand the official stats are biased... but even shadow stats and worst estimates don't speak about more than 15 Trillion $ so where does this figure 51.5 T comes from? do you have any link or a method to estimate it? 51.5 T is huge IMO. BTW I appreciate very much your thoughts.
It is only buying and selling.
Merry
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