As the old world of manufacturing, I.T, Services and financial markets evolve, the internet has been quietly (and not so quietly) changing the way things get done, to make improvements in output, and capability possible, and this cooupled wiith demographics, is at the root of the world’s current economic woes. This is 1928 in market cycle terms, when the abundant supply, and low oil price justified Henry Ford in building his Model T, and the same technology was used to build tractors, which allowed farmers to buy a tool, that freed up thousands of labourers used to manage farms and produce crops. Back then, the typical farmer had lots of debt, and the bumper crops of those years led ultimately to lower agricultural prices and thus food costs, which helped cause deflation, and made thousands of farm hands unemployed. It also allowed large crop outputs to be transported to cities nationwide, on the new trucks that were just emerging, opening up new markets.
In the early millennium, the ubiquitous smart-phone changed the PC and I.T. infrastructure market, when it put essentially a PC in our pockets, with the processing power, and storage capacity of an office PC of fifteen-twenty years ago, all in a form factor that sits nicely in the palm of the hand. Yes, the screen size wasn’t as big, but the pixel size was certainly an improvement, allowing the clarity of contrast, line width, colour rendition, resolution, saturation and hue all improved to the point that watching a movie on our portable handset was possible, and now a major step forward over the 640-480 screen images of the early PC days (so-called VGA – Video Graphics Array) of circa 1992. The next major standard after VGA, gave us 800px by 600px, – SVGA – Super VGA. Then came improvements in rapid succession – XGA, and then CDs, and DVDs, with resolutions upto 1600 x 1200, these standards and Blue-Ray upto 1920px by 1080px, got the viewing public used to step-wise improvements, for larger screens viewed at several metres distance across a typical front room, drawing room or Family room, depending on your social milieu.
But every improvement gets us closer to the limits of what most people’s eyes can resolve. So now Graphics Processor Companies, such as nVidia are using the mathematical capabilities of the GPU (Graphics Processing unit) for Quantum Computing.
A few years ago, Google purchased a company called DeepMind out of London, and DeepMind is an artificial intelligence (AI) Corporation. Now if you think back to 2011, IBM was able to beat the world champion of chess with its super-computer – Deep Blue. Steps forward in certain areas of computing have now gone exponential, and as a former software engineer, I know about the already fast pace of change in the industry.
So Deep Blue knew every possible outcome of every move. But what happened just a few weeks ago in South Korea is light-years beyond that.
DeepMind used an algorithm it developed called AlphaGo to play the Chinese game Go in South Korea with the world champion.
DeepMind’s AlphaGo artificial intelligence (A.I.) already beat the European champion last year. He was ranked 275th worldwide. The score was 5 to 0.
Now, what’s really interesting about this, is that A.I. experts did not think this was possible. They estimated that AI could not beat a human Go master for another 10 years.
These are the experts. These are the people in the industry who focus on nothing but AI. And even they did not think this could happen.
The main reason is that there are 361 opening moves in Go, compared to chess, which has 20. That puts the number of possible patterns and possible outcomes of the game into the hundreds of billions. In fact, it’s such a large number, we don’t even have the computer processing power to count all the possible outcomes, but this system beat the world champion 4-1. Everybody is completely shocked that AI basically destroyed the world champion in the most complex game on Earth… more than a decade sooner than any expert thought possible.
Cars and Trucks using these technologies are in development to make driverless vehicles a reality within 5 years for cars, and within 10 years for most heavy goods vehicles. The technology already has been tested, But like super-computers, we all haven’t got one in our pockets – YET…
The vast Internet, with fibre-optics enabling communication at light-speed is changing everything. Think of all the industries being affected… TV is now almost entirely digital, Netflix is destroying the business model of cable companies. Uber, is likely going to destroy TAXI companies, Air BnB, will impact the small hotel business, Tesla is changing the automotive industry and in the process changing the energy market. Solar, Wind, Wave and Geo-Thermal are pressuring carbon-based energy.
So, couple AI, Robotics, the Internet of Things (IoT) and the next depression which should happen anytime soon, we will emerge in five or so year’s time into the sunlight of a brave new world. But those without high-tech skills, able to add value to these industries, will suffer, will not be employed, as AI replaces almost every menial job, and many that are currently professional level including middle-management positions, accountants and lawyers. But we will also need a stable economy, and that means price discovery, and a world without wars and unrest.
Is this emerging trend the reason for the surge in IS membership in the middle-east?
Robotics, Military and Civilian Drones, Artificial Intelligence (A.I.) Quantum Computing, Virtual Reality, Augmented Reality and IoT Companies, will all require hardware engineers, software engineers, chip designers, and scene designers able to transform a series of images, or video into data in computer memories.
General Dynamics Corp.
Lockheed Martin Corp.
Northrop Grumman Corp.
BAE Systems (Part of ESA and producer of parts for the Airbus)
Israel Aerospace Industries Ltd.
Turkish Aerospace Industries
Google who bought – Oculus Rift
HTC and Sony
These are the hardware companies, but there are also software corporations, who will produce Augmented Reality, and Virtual Reality experiences – Hollywood Studios for example… That will produce Millionaires, and Billionaires.
And the experience of users in these VR worlds, is going to be enhanced as long as those users can touch and feel their environment.
Imagine climbing to the top of a virtual Everest, and picking up a handful of soft powdery snow, pressing it into a ball, using the VR gloves you’re wearing, that allows you to feel the snow, to make a VR snowball…and looking down from 28,000 feet to the valley below, launching that snowball to some climbers coming up behind you, 1,000 feet below…
Or visiting a virtual, Val d’Isere, France, in January, and skiing down slopes you wouldn’t normally dare risk, so that you can hone your technique – in August… Or going back in time to a virtual Bastille Day, to take part in a virtual peasants revolt, and watching Robespierre take his revenge on those who had gone before in power or who threatened the new republic.
That will be VR content, or Augmented Reality, where you’re on your sofa, but using your augmented reality set, you’re at the controls in an aeroplane at 4,000 feet, feeling the plane bouncing around, in 1917, in an old Sopwith Camel, or the Fokker Tri-plane, holding a joy-stick, and flying these ancient machines, in a WWI aerial battle. And when you land, you lift the VR hood, and go inside the engine bay to fix that subtle misfire that scared the hell out of you as you were coming into land…
Sports, Training, Exercise and Games will be quantum leaps ahead of the Nintendo Wii, that got us off the sofa in our front rooms ten years ago, to play tennis against our other half.
These experiences, will be driven by the hidden technologies that will go into the devices that Samsung, Apple, Microsoft, Nintendo, Sony and Google, will supply.
Those sensors and chipsets, will make other millionaires too… Mobile sensors, (MEMS – Micro-electronic Mechanical systems) which know which way up they are in any of 10 different directions, and 3D stacked sensors will be part of them.
ST Microelectronics NV
IPG Photonics Corp
Vishay Intertechnology Inc
Universal Display Corp
and others of these will supply the sensors or manufacturing machinery fabrication technology and fibre-optics and laser equipment to produce elements of these new technologies.
But Blockchain technology will also change the world. In the financial world, crypto-currencies may replace fiat currencies, this will likely eliminate the need for Central Banks and the control that they exert over the rest of us. But you can bet your bottom dollar, that they will fight it tooth and nail to maintain that control, or influence what comes afterwards to ensure they’re still in charge. In fact they may have already started the fight back. I recently learned of the Open-Ledger Project, set up by the Linux foundation, which attracted, financial institutions, technology firms, as well as two blockchain startups based in New York, Digital Asset Holdings and R3CEV, the consortium that has attracted 40 major banks, including: JP Morgan, Goldman Sachs and others. The name given to this project is the name Hyperledger.
And as I’m sure you know, Crypto-currencies use the blockchain to ensure that any currency transferred between nodes is valid. Peer reviewed. Even Law Firms might use blockchain technology to ensure contract performance, and enforce agreements. Already, Ethereum Foundation has a two year head-start almost, in building a platform for such infrastructure.
But at this juncture, BitCoin, and the other crypto-currencies perhaps offer the best opportunities… (See my previous piece -Why we could see Bitcoin = $1,000,000)
But here are also a couple of companies to watch.
Cuvva is a startup that is using the blockchain, to buy insurance to allow someone to buy insurance on an as needed basis, rather then an annual agreement.
Helm is a financial technology firm using a database of legal compliance requirements, that allows small firms to do away with an army of lawyers.
As I learn of other companies involved, I will bring them to your attention.
Note: Any mention of the above companies is not a solicitation to buy nor financial advice. I am not an investment or financial adviser, and any mention of such companies is for general information and education purposes only.
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– And what you can do to prevent it.
Over the last 15 years, we have seen wars in the Middle-East and North Africa (MENA) and many here in the U.K. and in the wider Europe, have been suspicious of the motives of both American, and European political classes, to destabilize the middle-east for their own ends.
Of course, when Tony Blair, supported George Dubya Bush, in his efforts to rid the Iraqis of their so-called WMD, he incurred the wrath of a huge percentage of British people opposed to his so-called “imperialism”.
Of course Dr Kelly, whose death triggered a plethora of accusations regarding these operations, in the aftermath of the adventures in Afghanistan, and Iraq, as it emerged that WMD were not there (at least we never found any) caused a media storm briefly, but to my knowledge no-one was held responsible, or culpable, but at least we got rid of Saddam Hussein – didn’t we?
I hope you sense my cynicism there, but you didn’t come here for cynicism.
Over the last 15 years, I’ve become seriously interested in world affairs, because what happens overseas, can have a major impact on what happens here at home and what happens in economics terms. I read extensively, I watch programmes that force me to critically think about global issues. I seek out those whose views are not mainstream, and ask the questions – if it is not obvious – WHY? Events in Europe, in Austria, Greece, Cyprus, Germany, the Balkans, Belgium and France, as well as Spain, and Portugal suggest we are heading towards a tumultuous time, that may lead us back to 1939, all over again.
I’ve watched Vladimir Putin, host a live question and answer session with huge numbers of Russians, and people in the broader Russian republics. And in my research for this piece, I came across an interview that really made me wake up, to how WE THE PEOPLE, can effect change – turn back this tide.
It’s an interview that makes some serious allegations, about political and corporate life, that many will not want widely shared, but I hope, you take the time to listen to it, and draw attention to how this internet thing, can make those who sit in ivory towers, dance to our tune…
Mike Dillard, the interviewer, is a man, who has come from waiting tables at 21, to becoming a hugely successful internet businessman over those same 15 years, and on this page – http://mikedillard.com/confessions-economic-hitman/ you will find the link to his interview.
The page name should provide enough of a clue, but for those who just want to go straight to the audio, click HERE.
Here’s where you come in. Listen to the above audio, and consider doing some of what John Perkins, a former economics hit-man, outlines in this marvellous thought provoking 48 minute slice of life.
Politicians everywhere, as in London, in the U.K, are apt to deal with the problems that sit under their noses. As senior figures, from the governmental departments bring to the cabinet, issues of the day, and the media, who are there to serve the interests of their advertisers, and corporations who are there to serve the interests of their shareholders bring issues to the fore, as do the lobbyists.
Outside this small circle of influencers, it is easy for politicians to forget the issues further afield, and so local democracy gets short shrift, and yet, when we give the people the information, and ask them to do the right thing, we can start revolutions in thinking.
It’s not enough to have industrial control north of the M25, we need Political and Financial control too…
Too many governments, have relied on the largesse that emanates from the City of London, rather than realise, that the city, is part of the problem.
Financialization, distorts the economy, raises property prices in an already over-crowded city, which spread out like ripples on a pond, to all points – N. S. E. and W. Land and property costs, increase fixed costs for businesses making us in the U.K., uncompetitive with countries less densely populated – and as a nation, where four or five large landholders keep land out of access for the other 59+million we keep land prices high… Add in Health &Safety obsession, and to that, too little research into industrial machinery and equipment, and in ensuring that those who live outside the guilded cage of the M25, have sufficient skills and mathematical abilities, and are sufficiently motivated, by having a benefits system, that is more strictly controlled, and for their benefits, people have to prove daily in a benefit office, that:
A) They are getting up every day;
B) Attending a place to do job searches;
C) Are given help and advice to do a better search;
D) and Are given the resources (PC/Printer/email access etc) to do a proper search.
That should instill discipline in those looking for work, but we also need more support for start-ups particularly with incubators.
Those people made redundant from large employers, with redundancy sums in 5-figures, may hold the future for those who lack capital. They should be encouraged to form business networks, and help one another to provide services – as needed supported by local needs. Governments both local and central can hold statistics on which industries hold promise for the future, and thus direct start-up help and limited financial assistance.
We do not want to go back to the days of De Lorean, when huge sums are spent on ideas that yield short-term gain, with little long term promise. We need a broad based economy, with little domination from one industry or sector, a flexible economy, able to adapt to consumer and national needs, whether local , regional, or national.
Politics here and overseas can and is influenced by shadowy figures, who pull the strings because of financial outcomes. As in the film “All the President’s Men” in which a young Robert Redford plays one of the two journalists who brought down the Nixon Presidency, we have to follow the dictum of the shadowy figure who advised Woodward and Bernstein in the basement car-park to: “follow the money”. Macedonia as we speak is suffering political unrest, which many feel is because of that nation’s willingness to do business with people, others wish to ostracise, for financial gain… The middle eastern unrest as I have said is a pawn in a huge mega-corporate game.(See my previous post )
But we also need to understand we live in an inter-connected world, where the aspirations of all both inside the EU, and in the wider world are considered. Suspicion of the motives of others only breeds distrust, and our media could and should do more to help us understand wider issues, rather than pandering to to the lowest common denominator with “fluff” items to titillate and excite, rather than educate, inform, and make us think critically about the issues. In the meantime, it helps to broaden your information sources.
I hope this is my few penny’th towards that.
After writing this piece, I came across another interview with Dr Paul Craig Roberts, who was a former Assistant Treasury Secretary to Ronald Reagan, and who became editor, journalist, writer, author, and more recently political commentator. The interview makes concerning viewing/listening.
In the lunatic asylums of the 18th and 19th centuries, those who went there, were disallowed from making contracts – anyone who studies law, will sooner or later learn about contract law, and the maxim that anyone entering into a contract must be of sound mind – in legal jargon, they must have “Capacity” – it is one of the basic tenets.
Capacity is granted to any person over the age of majority – 18 in the UK, ( and which varies from country to country) but must be of “sound mind” and not under the influence of any substance that reduces that capacity – alcohol and drugs being cases in point.
Since the whole of the capitalist world is based on this premise, economics is therefore based on these principles. Contracts entered into by people of sound mind. Free to enter into them, and free to choose at what price. The so-called “Price discovery mechanism”. This therefore is by reason of logic, and of course they must have the wherewithal to exchange for the service or product rendered – a “Quid Pro Quo” – something of value, for something of value.
Central Bankers, who create currency out of NOTHING BUT INK AND PAPER or worse, KEYSTROKES ON A COMPUTER, can use that currency to buy bonds, or other assets that yield an income, and can use that ink and paper (or digits) to indebt the rest of us (taxpayers) and the government. Politicians can borrow that currency, to indebt our children, and grandchildren. There are times – usually of war – when having that capability is a necessary evil, but when certain people create a situation, that ensures we are in a perpetual state of war – a war of religious idealism set against another religion then we need to undo this capability.
How did they create such a situation? Well anyone who has heard the name Jess Ventura, may have an inkling. Jesse Ventura, stage name of James George Janos, is an investigative journalist, but he is also a former U.S. Navy Seal, former wrestler, actor, political commentator and 38th Governor of the State of Minnesota. He now investigates conspiracy theories for a major TV Network. In one recent episode, he looked into the so-called 9/11 conspiracy, and reached the conclusion, that the puppet-masters who pull the strings in U.S. politics – those behind the scenes, actually wanted to cover up who was really behind the events of 9/11… Structural engineers, fire-fighters, survivors, rescue workers and FBI agents all made contributions that the commission report into the 9/11 events were false. The flight data-recorders which were supposedly not found, actually were. One eye witness reported seeing one, and others reported to him, that the others were seen. The steel structure which was designed to withstand 1100° Celsius, melted, and both towers, and building 7, adjacent to the towers, all collapsed vertically, as would be normal in a controlled demolition. A scientific study found evidence of explosives, which were likely to have been painted onto the steelwork. In another report on BBC, which reported that building 7 had fallen, the building was actually shown in the background of the reporter, in a supposedly live video link.
This and other facts convinced him and I, that 9/11 was a “False Flag” event, to ensure that those who pull the strings – think Bankers, Military figures, Oil men, and Political figures, all colluding to bring the U.S. public to such a pitch, that the constitution and its amendments, could be overturned. In other words, two planes were flown into the towers, and the adjacent building, were demolished to provide the precept to bring in The SOPA, Act, and other Acts that meant that the republic is now not what was intended. A coup d’état has been carried out, so that the real directors of U.S. foreign policy could get their way. The ends justify the means, seems to be the policy.
And the ends? To allow unrestricted spending on military, to fund the wars that were now in train to create the surge in oil prices, that would allow fracking back home, and make it profitable for those same oil barons, but also, it would destabilize the middle-east for decades leading to unlimited spending for America’s military industrial complex. Eisenhower warned of the potential corruption of the military-industrial complex, in his final farewell speech, and is credited with coining the expression, and it’s what JFK tried to fight, before he was eliminated. Ronald Reagan had an attempt on his life, almost 35years ago this week, for similar reasons, because of his attempts to rein in the Bankers and their cronies in the shadows.
According to one source, GHWB, father of George Dubya, an ex-CIA man, was at the centre of these events including the death of JFK. Of course, Bush snr., was Vice President, at the time of Reagan, and like LBJ was ready to take power in the event of the President’s demise.
But we have a problem. Savings in Banks are a liability for the Bank. When Central Banks print currency, and essentially give it to the Big Banks – JPM, GS et-al, at zero per-cent, those Banks (who are also the owners of the Fed) get to make a six per-cent return on their ownership of that Central Bank. And the population and their children, get to pay.
Capital is essentially savings, and those savings are loaned out to others – bearing interest, but savings have been going down for the last thirty years along with interest rates. Except in Pensions companies, where they have been accumulating, and now those stocks are being put up for sale.
The Poem below, explains why Central Bankers, and the Bankers, and Politicians that feed off them, should go…And in its place, we need a sound money system, where Gold and Silver are money, freely exchanged – value for value. And interest should neither be compounded, nor above nominal rates. Interest paid is the price of forgone consumption. Savings form the capital, that we use to build new businesses, not the output of some central banker’s printing press, that they then charge interest to the government on, who then tax us to pay for their spending plans, and bribes to an ill informed electorate.
Hang them all, perhaps we should be shouting from the rooftops, squares, and courtyards. The revolutions of France and the New Republic, were to slough off the coats of politicians, monarchs and Bankers feeding at the trough, with their noses in the deepest, and the politicians behind.
If you don’t understand it, you have my sympathies. If we don’t undo this wrong, the future will not be as you hoped for.
The Gods of the Copybook Heading
As I pass through my incarnations in every age and race,
I make my proper prostrations to the Gods of the Market Place.
Peering through reverent fingers I watch them flourish and fall,
And the Gods of the Copybook Headings, I notice, outlast them all.
We were living in trees when they met us. They showed us each in turn
That water would certainly wet us, as fire would certainly burn:
But we found them lacking in uplift, vision and breadth of mind,
So we left them to teach the gorillas while we followed the march of mankind.
We moved as the spirit listed. They never altered their pace,
Being neither cloud nor wind-borne like the Gods of the Market Place;
But they always caught up with our progress, and presently word would come
That a tribe had been wiped off its icefield, or the lights had gone out in Rome.
With the hopes that our world is built on they were utterly out of touch,
They denied that the moon was stilton; they denied she was even dutch;
They denied that wishes were horses; they denied that a pig had wings;
So we worshipped the Gods of the Market who promised these beautiful things.
When the cambrian measures were forming, they promised perpetual peace.
They swore, if we gave them our weapons, that the wars of the tribes would cease.
But when we disarmed they sold us, and delivered us bound to our foe,
And the Gods of the Copybook Headings said: “Stick to the Devil you know.”
On the first feminian sandstones we were promised the fuller Life
(Which started by loving our neighbour and ended by loving his wife)
Till our women had no more children and the men lost reason and faith,
And the Gods of the Copybook Headings said: “The Wages of Sin is Death.”
In the carboniferous epoch we were promised abundance for all,
By robbing selected Peter to pay for collective Paul;
But, though we had plenty of money, there was nothing our money could buy,
And the Gods of the Copybook Headings said: “If you don’t work you die.”
Then the Gods of the Market tumbled, and their smooth-tongued wizards withdrew
And the hearts of the meanest were humbled and began to believe it was true
That all is not gold that glitters, and two and two make four —
And the Gods of the Copybook Headings limped up to explain it once more.
. . . . . . . . . . . . . . . . . .
As it will be in the future, as it was at the birth of man —
There are only four things certain, since social progress began: —
That the dog returns to his vomit and the sow returns to her mire,
And the burnt fool’s bandaged finger, goes wabbling back to the fire;
And that after this is accomplished, and the brave new world begins
When all men are paid for existing and no man must pay for his sins,
As surely as water will wet us, as surely as fire will burn,
The Gods of the Copybook Headings with terror and slaughter return!
And if you want to know, why the Bankers need you, but you don’t need Bankers, then watch this video.
As long as Energy (which is a substitute for YOUR labour and time) can be metered and charged to you, then you need money, but if you can create FREE, or almost FREE energy, then your labour and time can be used to produce wealth for yourself and others…
Read up on Serbian technologist, and maverick scientist – Nikola Tesla (you know the name, but perhaps in another context) competed with Guglielmo Marconi, who made many revolutionary ideas in the field of Electricity and Energy, but died a pauper due to those who control the purse strings who now control the world. John Pierpont Morgan, of JP Morgan-Chase fame who with others, set up the Federal Reserve, and created the monster it has become. The behemoth that has its tentacles in every other Central Bank: ECB, BoJ, BoE, the IMF, the World Bank, the U.N., the Trilateral Commission, the Bilderberg Group, the World Economic Forum, The Council on Foreign Relations of America and who through its political hirelings, is about to introduce financial totalitarianism.
WHAT? I hear you ask… When EVERY transaction you make is on a computer somewhere, and the government knows how much money – sorry currency – you have they can introduce taxes on every purchase to pay back the debt on the currency conjured up out of thin air these last 100 years, and you will be economic slaves. When the government can decide who can purchase what, deny you access to your bank account, force you to pay by card, and not by any other means, all supposedly to fight the terrorism, that 9/11 ensured, and impose negative interest rates, then we have Soviet or Fascist style Totalitarianism, leading to war like WWII, in which up to 70 million people in total died.
And the EU, controlled as it is by Bankers, is on the point of disintegrating – Yanis Varoufakis in an interview on BBC on 31th March, laid out what will happen if the EU is not democratised.
He speculated that an area centred around North Eastern Europe – will head into a recession as their currency strengthens, and the latin countries together with Greece and Ireland, will lapse into an inflationary depression as their currency depreciates. Britain, whether in, or out will fall into this abyss.
If we fail to address these issues, we will head inexorably towards a third world war.
There are always three stages to war. First we have currency wars – such as happened since 2000 with a fight to devalue.
Next we have Trade wars – such as with China Steel dumping, and cries of foul.
Then we have hot wars, when finger-pointing gives way to forcible admonitions.
You have been warned.
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Since the start of the year, the stock markets around the world have begun their slow grind into Japanese style retrenchments.
And yet, there has been precious little commentary in the MSM, about this, who prefer to discuss train derailments, Russia’s involvement in Syria and the middle-east or current and former celebrities’ antics or the machinations of Brexit, or the refugees walking their way across Europe, from the middle-east to new lives throughout northern Europe and Britain.
However, to return to the title of the piece, it appears that cracks are once again appearing in the Banking edifice, that legislators and those who fund them have built, and sometime in the not too distant future, a minor tremor, will bring this edifice down around our ears.
Indications that this was going to happen became evident, and were laid down over a four decades ago, with the end of the Bretton Woods Agreement, in August 1971, but in recent months, evidence that we are peering over the precipice has emerged, in some wonderfully inciteful interviews. Hugo Salinas-Price – a Mexican National, who grew up in the U.S. and made his money in Mexican Retail. In recent days and months has been involved in a number of interviews. At 82, he owes no allegiance to anyone including the U.S. where he was born. He does however, show support to the people from where he came – the poor Mexican community. For those who don’t know him, Hugo Salinas Price, built a chain of stores – Electra – in Mexico, which made him a billionaire. In the first interview I saw with Greg Hunter, he talked about the reintroduction of money (not currency) made from silver, which had a fineness and a weight stamped on it, not a value – once upon a time, a British Pound Sterling was exactly that… a pound weight of sterling  silver, which closely equated to a one ounce gold coin, which for many years was called a Golden Guinea, and was valued at 21/- (i.e. 21 shillings, i.e. £1.05). He talked about a price “Quote” that could be announced by the Treasury…
Of course human nature could mean that the price would be quoted to perhaps 5 digits, and over time an unimaginably small amount could be taken from those 5 digits to devalue the money over time, because that is what Governments and Treasuries and Bankers do. Steal from the people stealthily. Did you notice the two words Steal and Stealthily? They have the same root. But he is right, Precious metals will need to be revalued upwards to eliminate the world debt of some $200TRILLION, or the debt will never be repaid. So anyone who holds this wondrous substance, will have it revalued up against other things of value.
In a later interview, he talked about China’s devaluation, to keep the Chinese export market humming. Salinas-Price felt that the devaluations were insufficient to keep Chinese factories at full tilt, and that perhaps 40% might be needed. However he also talked about the Banking System, being so out of kilter, that impossibilities were being expected. For example Greece had a population of 11,000,000 people, but the bank bailout, to Greece, amounted to some €400 BILLION which was impossible to pay – because it means that every man, woman and child, owes €36,363.63, and Greg reminded us, that Puerto-Rica, which had a population of 3,500,000 people, owed $71,000,000,000. and the state of North Carolina, has about 10 million people, and close to $1 billion of debt.
In a more recent interview Salinas-Price showed a chart of the World’s Central Banks assets (physical reserves + interest bearing instruments etc) over time. Since the 1940s, this showed the asset base rising, gently at first, but increasing during the 1950s, 60s and 70s, as Gold was revalued over a ten year time frame, to its 1980 high, then as bonds became the preferred method of financing deficit spending governments, to the point where the chart line went almost vertical peaking in August 2014. Since that time however, there has been a gradual decline of Central Bank Assets in a slow arc, which levelled off then began to turn down in recent weeks. The fall went from 12.032 trillion, to 11.025 trillion over 18 months (to Feb 2016) His interviewer – Greg Hunter, made a reference to the “Hockey Stick”, moment, of which I have mentioned in one of my earlier posts (the J Curve). Salinas Price, then talked about the revaluation of Gold to some figure, which various commentators have suggested would range from $8,000 to $50,000 per ounce for Gold. (I myself suggested some years ago, that we might see $8,500/oz Gold) With Gold amounting to 183,000 tonnes worldwide, which will need to be all be revalued. (no matter in what form that takes whether that be in vaults or around someone’s neck, or finger)
Greg then went on to ask the question, “Could this pick up, and go down as fast as it went up?” and I think Salinas-Price recognising the seriousness of the question said “I think it will go down faster than it went up.” I suspect he didn’t want to state outright, that when it did, it would be the end of the western hegemony in world affairs, as the Central Banks funding governments through deficit spending, have allowed governments to buy arms, and munitions for the last 5 decades – since the start of the Vietnam war – to punish those with which it disagreed. And on that fateful day in August 1971, the die was cast.
Paper Currency – no going back?
Beginning in late 1997, we saw the far east undergoing financial problems as small national currencies collapsed. The beginnings of the crisis were caused by overheated economies, primarily as I see it because these countries were manufacturing electronic components going into PC systems, that western nations were replacing on a wholesale basis as the Y2K issue grew ever closer. The U.S. economy too was selling huge amounts of consultancy services, hardware and software to replace non-compliant systems that required all applications, operating platforms, and device drivers to be rebuilt on 32bit hardware to ensure compliance. This surge in income led to overheating of their respective economies, and led investors to over-estimate the underlying strength in particular of the far-eastern economies, until events turned south as that surge receded. As hardware needed to be replaced first, the surge should have been anticipated upto circa 1997/8, to allow time for programmers, to rewrite applications ready for that fateful day, when some believed the hype, that some in the media who were ignorant of events in the I.T. world had created. The IMF came to the rescue of those 3 countries, but all they did was postpone the inevitable.
The problems began starting with the Thai Baht, causing ripples throughout the international financial system spreading throughout Vietnam, China, and moving on to Russia causing the collapse of the rouble.
The decline in these eastern economies, led to a decline in oil demand, and this impacted the Russian economy, already stretched due to the war in Chechnya, and a strike by Russian coal-miners on 12th May as their wages had gone unpaid. The inability to meet government expenses, lowered investor confidence, and this put additional pressure on an already falling rouble.
The Russians learned a valuable lesson, and have since been raising their Gold reserves levels using dollars, that were gained by selling oil and gas to Europe and the world, and converting them into Gold. Their debt to GDP level on the last figure I saw was just 11% of GDP compared with Britain’s 97% and America’s over 105%.
However, a return to a gold backed currency in the 1970s, would seriously have curtailed U.S. military spending, in Vietnam, just as the Soviet Empire was brought to heel by undermining its financial strength, by driving down the price of its main export – oil, which has also happened in recent years by oil from fracked wells, to undermine Vladimir Putin’s regime. Of course we can never be absolutely sure when the precipice fall moment will arrive, but one possibility, appeared on the Max Keiser show recently. Max talked with Stacy Herbert, about the current financial strength of Deutsche Bank. Had the board of Directors expressed their full support for the strength of the business, just like a Premier League Football team board,who announce support for the Team Manager just days before he is ousted, and fired?
In Germany, the German Finance Minister said that the Bank was sound. In reality, in Max Keiser’s words – “It’s a dead man walking”. Deutsche Bank has a derivatives book, which is leveraged just like the Federal Reserve beyond its capabilities, and will likely come unstuck if events unfold as can be reasonably expected. The trigger? Probably Greece, which has a population of 11 million, but owes over €400 billion. Can this small south European nation, who historically made their money from shipping, with the Baltic Dry Index at all time lows, and with an increasing number of migrants turning up on its shores, in boats, in dinghies, with over 100,000 so far this year and all in desperate need. Can it pay back this huge sum? And if or rather when, it says NO – We can’t. What then?
Many believe this will be the straw that breaks the camel’s back, and crashes the Euro, the ECB, and the European dream. It was Goldman Sachs, who of course cooked the books, by hiding a 12% deficit, and making it look like they were meeting their Euro obligations, when in reality they should have limited debt to 3% of GDP.
In recent weeks, from a technical analysis perspective, Gold has risen through several major Moving Averages – all the way up to, and through, the 600 day Moving Average (SMA- Simple Moving Average) Of course it has to remain there, above that threshold, to hold the thesis that the upturn has started. Silver meanwhile has still to confirm such a move, but usually, the silver price is like it is tied with elastic, to the gold price, so that the move is delayed, but accelerates far faster as those who have chased the price of gold higher, switch to silver because the price of gold is out of reach of many, and silver catches up.
And silver which had huge stockpiles that have been sold off over the last 70 years, is now just off its most recent lows, and likely to go higher… much higher.
See the Hockey Stick Moment turn south…
— Hugo Salinas Price…
…and Bo Polny – says —– THIS YEAR is the year that PMs re-value —–
And if you want an intellectual education on the monetary systems of the world, then this is probably one of the better ones I’ve seen…
Mike Maloney has a series of You-tube videos (Episodes 1-5) on the history of money, and currency (currency is not money as he explains) Of the 5 episodes, number 4 is perhaps the most informative for those without the motivation to sit through them all, though, the others certainly inform as to the extent of control and manipulation by Bankers. Knowledge of money and how the Central Banks, have gained control of the monetary system, and used it to feather the Banker’s nest and control politicians will perhaps enrage you, but it will show you how you have been deceived and what you can do about it.
And whilst researching this piece, I came across a piece from August 2005, written by Marc Faber, for the Daily Reckoning.
This should serve as a reminder that we have been here before, and it didn’t end well…
THE RISE TO RUIN
by Marc Faber
“Everything in the world may be endured except continued prosperity.”
In the late 1970s, investors became increasingly concerned about accelerating consumer price inflation. Since consumer prices were rising at more than 10% per annum, the prevailing view was that cash was depreciating by approximately 10% per annum.
People rushed into precious metals and drove the price of gold and silver to $850 and $50 respectively in January 1980. At the same time, investors were dumping bonds, which became known as “certificates of confiscation”. US long-term government bond yields soared to more than 15% in September 1981. I would argue that there was at the time a real panic about the role of paper money as a store of value.
Today, we have a similar situation. However, people are not concerned about paper money losing its purchasing power as a result of consumer prices rising, but as a result of paper money losing its value because of rising asset prices.
If real estate prices rise for an extended period of time at a faster rate than incomes and interest rates on cash deposits, it is only natural that people become concerned that they won’t be able to afford to purchase their own home in future. Their concern about future affordability, which is nothing else than the fear of their income and savings losing their purchasing power, then induces them to purchase their homes now rather than later.
This incremental demand drives prices even higher and attracts speculators who want to capitalise on the rise in prices, which is driven first by the genuine buyers and later by themselves as well.
As a result, prices then overshoot and lead to even deeper apprehension about the loss of purchasing power of paper money on the side of the household sector. A general rush from liquid assets to “illiquid assets” inevitably follows and creates a bubble.
This is nothing new. The first well-documented instance of such a loss in the purchasing power of paper money was John Law’s Mississippi Scheme. In 1716, John Law had opened, under the patronage of the French regent, a bank (Banque Generale), which issued paper money backed by gold. With the help of the regent, the bank became an immediate success. Its banknotes were very convenient, since the government accepted them for tax payments.
Based on this first success, in 1717 Law managed to convince the regent to grant his new venture, the Mississippi Company, a monopoly on all commerce between France and its French territories in North America, which included the present states of Louisiana, Mississippi, Arkansas, Missouri, Illinois, Iowa, Wisconsin and Minnesota, in return for accepting outstanding notes of the French government in payment for the Mississippi shares.
This arrangement basically amounted to nothing other than a partial conversion of France’s government debt into shares of the Mississippi Company.
The operations of the company didn’t prove to be profitable, partly because when it issued shares it hadn’t received cash, but debts of the French government, which had been converted into shares of the Mississippi Company, and partly because very few French wanted to emigrate to the territories in America.
Still, the shares of the Mississippi Company performed well after the regent took over Law’s bank and began to run its money printing press around the clock. (Presumably, Law gave him the bank in exchange for having obtained so many privileges.)
But, whereas John Law had always maintained a small balance of gold reserves to back up the paper money the bank issued, he now advised the regent that the public had gained sufficient confidence in paper money and, therefore, gold reserves in the bank’s vault were no longer necessary.
As a result, in 1719, the government increased the money supply dramatically and lowered interest rates by lending money for as little as 1-2%. The vast increase in the supply of paper money, combined with the ability to purchase shares in the Mississippi Company on margin, led not only to the shares rocketing towards the end of 1719 to over 20,000 livres (from 300 at the beginning of the year), but also to rapid price increases across France.
The cost of bread, milk, and meat had risen six-fold, while cloth was up by 300%. The horrendous inflation made the holders of Mississippi Company shares and of paper money nervous.
In January 1720, just two weeks after John Law had been appointed as comptroller general of finance (minister of finance), a number of large speculators decided to cash out and switch their funds into “real assets” such as property, commodities, and gold. This drove down the price of the Mississippi Company shares since the speculators could only pay for real assets with banknotes.
As confidence in paper money was waning, the price of land and gold soared. This forced Law, who still enjoyed the backing of the regent, to take extraordinary measures. He prevented people from turning back to gold by proclaiming that henceforth only banknotes were legal tender. By then the Banque Generale had practically no gold left. Thus, payments in gold and silver above 100 francs were prohibited; in addition, the ownership of gold exceeding 500 livres in value was declared illegal. Severe penalties were imposed on people who hoarded gold. To enforce this most blatant expropriation, Law encouraged the public to turn informer by handing out large rewards to those who assisted in the discovery of gold, which was then confiscated. At the same time, he stabilised the price of the shares of the Mississippi Company by merging the Bank Generale and the Mississippi Company, and by fixing the price of the Mississippi stock at 9,000 livres.
With this measure, Law hoped that speculators would hold on to their shares and that in future the development of the American continent would prove to be so profitable as to make a large profit for the company’s shareholders.
However, by then, the speculators had completely lost faith in the company’s shares and selling pressure continued. In fact, instead of putting a stop to the selling, the fixed price acted as an inducement to sell, which led the bank once again to increase the money supply by an enormous quantity.
The result was another round of sharply escalating prices. In four years, the supply of circulating medium had been trebled. John Law suddenly realised that his main problem was no longer his battle against gold, which he had sought to debase, but inflation. He issued an edict by which banknotes and the shares of the Mississippi Company stock would gradually be devalued by 50%.
The public reacted to this edict with fury, and shortly after Law was asked to leave the country. In the meantime, gold was again accepted as the basis of the currency, and individuals could own as much of it as they desired.
Alas, as a contemporary of Law’s noted, the permission came at a time when no one had any gold left. The Mississippi Scheme, which took place at about the same time as the South Sea Bubble, led to a wave of speculation in the period from 1717 to 1720 and spread across the entire European continent. When both bubbles burst, the subsequent economic crisis was international in scope.
Today, I am a firm believer that Mr Greenspan, Mr Bernanke, and their colleagues in other central banks around the world are modern-day John Laws. They, like him, will not only manipulate and intervene in markets but, over time, will also totally destroy the value of paper money. In fact, I believe that, given the very high levels of debt we have in the US and other industrialised countries compared to the size of their economies, the central banks have no other option now but to print an ever-increasing quantity of money.
Whereas John Law tried to fix the price of the Mississippi Company by printing money, the Fed chairman has tried – and managed, at least so far – to inflate asset prices through an extraordinary money and credit expansion. But in the same way that asset price inflation replaced consumer price inflation in the early 1980s – unexpectedly, I might add – in the near future CPI inflation and rising commodity prices could begin to exceed asset inflation rates, and in particular home price inflation.
This would likely depress long-term bond prices and lead to a very unappealing global economic and financial environment. It would eventually discredit central bankers and bring about the end of central banking as we know it today.
for The Daily Reckoning
Rob Kirkby – The ESF is behind the mess…
This financial problem, is expanding into the surveillance state – 1984, just got ugly…
This is how they do it…
And The Financial Elite, will use WAR to cover up their mess…
And the antidote to all this is?
GOLD and SILVER, because when the people have that, Government has to raise taxes, and justify every penny spent.
But what about food, water and having people around you who are self-reliant, and will help each other… Where’s the best place to live in the U.S. when the SHTF?
This audio, discusses the expected timeline for the coming financial reset…
Senator Ron Paul, is a medical doctor, who spent almost 40 years in politics. A man, who stood for free markets, and against the Federal Reserve, and stood for the Presidency first as a Libertarian, and latterly as a Republican, but his greatest achievement, was together with Lewis Lehrman, they wrote a comprehensive 245 page report advising the government of the day back in 1982, on the monetary system, and how they could get the U.S. back on track. The report – “The Case For Gold”, was buried for years, in congressional records office, but now you can download a copy of the Ron-Paul-Case-For-Gold-Report for free.
And you can listen to him on his 80th Birthday, in fine voice, when perhaps he gave his best speech ever.
You have been warned!
In my last post, I reposted Alan Greenspan’s now famous 1969 piece, in which he clearly lays out for all to see, the tactics that the International Bankers have used to wrest control of this planet for their own ends.
The methods and tactics used over two centuries to move the people of the world into a giant supra-national state, owned by this banking Cabal, for the benefit of the bankers have been stealthy, and protracted. Each world citizen, will be essentially a slave, and those that can’t or won’t work will be used to wrack up debt, which the rest of society will be obliged to pay for, in ever higher taxation. The increasingly controlled health systems will be controlled by Mega Pharmaceutical, and Bio-Technical Corporations. Taking care of your own health via use of natural remedies, and food supplements to prevent ailments, will be increasingly not only frowned upon but illegal. (CODEX ALIMENTARIUS – 2001 in Europe, began this process)
As to claims regarding silver supply/demand fundamentals, worldwide demand has been at best steady, and supply has been robust, though longer term, demand is set to rise, as more and more electronic devices will use increasing amounts – Think: Munitions, Aircraft, Cars/Electric Vehicles, Solar Panels, Wind Turbines, Medicine, and Personal care products for silver’s Anti-viral/fungal/bactericidal properties, as well as Wearable Devices, and Silver Nano-fibres in clothing, Catalysts in chemical processes, and in plastics and paints – And the list goes on.
Whilst the high price in 2011 did indeed encourage higher production, as has been stated, some specialist pure silver mines and mostly silver mines (i.e. silver is the predominant ore in the body) with lead, zinc, plus other trace metals ( Gold, Uranium, etc et-al) increased production. BUT, If 70% of production is secondary (as a result of demand for industrial metals) and industrial metals demand is in a collapse, then this will therefore affect supply, and will over the next 2-3 years lead to a serious supply shortage especially IF the silver stackers continue their stacking, and the Apples and Googles of this world continue their technical developments, which should underpin price above the $12.50/oz level and more likely circa $13.50(ish) because production costs for all but the cheapest miners are in the $15-18 range.
Price has levelled out over the last six months after falling briefly to the $13.60 area (under £10) and leaving aside the price fix the other day, that took the silver fix price 84 cents lower than the spot price, leaving many commentators aghast, as it began rising to the current $14.20-$14.50 range, and is set to rise modestly until circa 2018/19 (IMHO), when I believe it WILL then begin to rise exponentially, as the supply glut diminishes, and the demand rises, working its way through the market. But also because of policies discussed below.
In the 1970s, the same thing happened over a shorter time frame… What was driving the markets then? DEMOGRAPHICS – just as today. The only thing then was most retirees only lived on average circa 3-5 years post-retirement. Those who worked in nice well-paid office jobs might have lived 20 years post-retirement, but your average factory worker didn’t. Those retirees, were born during the Edwardian period, i.e. 1901, to 1910.
These days, WE baby-boomers will last 30+years post-retirement (money & health care costs willing) That means any retirement monies, will need to fight inflation for at least that length of time.
Think back 30years, and try to remember what prices were like then… In Britain, an average week’s wage for a low level worker was about £60. ($150ish at exchange rates then) Today, even with average wages falling, the low wage workers are earning circa £300-£400 per week for a full week’s work of circa 35-40 hours. ($650ish)
So in 30 or so years, time your money will need to have 5-6x its current value to maintain purchasing power parity assuming similar inflation rates – Like YEAH, that’s gonna happen with $4trillion printed in the U.S. alone.. With negative interest rates in Japan introduced this week, and several Euro-land Central Banks doing the same over the last year, how long will your cash-pile last? It’s like Electronic Coin-clipping, which ultimately led to the decline and fall of the Roman Empire, as the Roman Guard, were paid in debased coinage as silver was removed little by little, making the coins less valuable over time.
And today, I heard of the final insanity. Central Bankers in Switzerland, are now considering the ultimate ignominy of paying everyone in the economy a monthly sum of money, as a supposed antidote to deflation. The Swiss are discussing paying $2,500 to every adult, and $750 to every child direct into their bank account. Keynes thought this might be the ultimate solution to the problem, of deflation. In fact, Ben Bernanke who reputedly said that in the final analysis…
…the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation…
and that is how he got his nickname – “Helicopter Ben” for his allusion to dropping money from helicopters. This madness will not end well.
As Prime Minister and subsequently – Lady – Thatcher so eloquently put it – “Eventually, you run out of other people’s money”, but the plan as mad as it sounds, echoes what Mike Maloney has said in several videos available on You-tube, when he said that the Central Banks, would do a “Helicopter drop” to attempt to kick-start the economy, when all it does is create ever bigger debt loads, which have to keep growing – until they don’t – and then the sky falls in. You can read a piece that explains it in more detail HERE.
So the answer is easy… Keep Stacking…