interesting rates 1 of 2

INTERESTING RATES

Back when I was far more interested in economics, 70’s to 90’s ( yes, part of my junior nerdness was geeking out on politics and economics, not just D&D ), essentially you were reading about forces from the Great Depression as if Keynesian policy was still battling with Austrian theory.  It was more philosophical than practical.  And everything I ran across in my reading also contained zero practical discussion on the new reality of the financial sector taking over the economy, to make matters even worse.  That is why I stopped studying the field.  It was chasing windmills.

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As such, I’m a bit out of practice on matters economic.  The essentials are easy enough.  Since Reagan, the markets are rigged in the favor of the banks.  Any time one talks of investors moving the markets by their actions, you would do well to assume that the muffled indecipherable noises are simply that voice emanating from ones anal orifice.  And at about that same time, derivatives became the tool that the bankers use for control.  A derivative is the same as a futures contract, a bet on the outcome of prices to be.  Derivatives are just different in that they have no oversight.

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If you are a banker and want to control the economy of the world empire, and hence also controlling the government that is in theory charged with regulating your sector, you make sure that they cannot thwart your profit taking.  You don’t want them to tell you that you cannot have too many bets on too few assets as securities.  So derivatives are beyond the control of the governments that the bankers essentially own ( he who controls the treasury… ).  That isn’t a surprise.  That has been the case for centuries.

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And please don’t go off on a tangent about evil Jews controlling the world because, you know, Rothschild’s.  They happened to be Jews, who were first greedy asswhores.  They didn’t turn into central bankers just because of their religion.  And if I’m not mistaken the Dutch pioneered central bank funded empire, prior to the Bank Of England.  Anyway, Jews As One World Government is too much of a distraction and not very helpful.  Just take away that since the first surpluses allowing the reintroduction of empires, there have been central banks running the show for profit. 

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What is new is the scope and scale of the created credit and fiat currency because of one thing.  Not computers, which is just a management tool for creating those derivatives.  No, it is oil.  Since wealth went from slaves and grains and precious metals to the much more compact store of wealth petroleum, the economy has been far removed from classic economics that are still to this day taught and studied.  Yeah, you should have known I was going to go there, once again blaming everything on oil or its lack thereof.  You’d think you’d have my pattern down pat by now.

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But seriously, wealth is backed by surplus.  Gold is merely a universal trade chit unable to be counterfeited or diluted ( which is why it is universal ), but it in itself is worthless.  The fact it can always be used to buy surplus energy is what makes it valuable.  To create wealth without inflation you need some kind of surplus energy, even if it isn’t gold.  It can be gold from a colony, or it can be food from a colony ( grain from Canada to England, or sugar from the Caribbean ), or far more recently it can be a universal energy form that can create food or anything else.

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If you simply create paper currency, it fast becomes useless.  If you create paper backed by oil, you are just creating more money that matches the extra products now being made by that oil.  In effect, while there will always be an inflation rate which is the bankers vig, you aren’t creating the kind of currency collapsing inflation one needs to worry about.  It is merely a small rent on money, almost a benign inflation all things considered, big picture.  Yet, the fact that oil has stopped growing in supply is where nearly all the economic problems stem from today.

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Remember your simple lesson from the Peak Prosperity folks?  Interest can only be paid by growing the money supply.  Oil underpins our money creation.  Peak Net Energy was 2005 globally.  Yes, thank you Fracking Oil And Gas for saving our asses.  Without it we would have seen our oil supply alone decrease almost 30% ( I’m not sure how much of the natural gas supply fracking supplies but I’d wager even more.  And gas is our electrical generation ) which I’m sure is Economic Collapse territory.

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But fracking oil isn’t energy growth.  It is energy collapsing net rather than volume.  Which really means the supply is shrinking except propaganda wise.  Which means the economy is contracting.  And derivatives which are a large part of the control and profit of the bankers have had to make up for the shrinkage.  It is wealth illusion.  It is just kicking the can down the road, just as fracking oil has done.  Since the global oil net energy supply has started to contract, the evil twins of fracking and derivatives have been our savior.

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Insofar as keeping the rotted edifice from collapsing too quick.  It has allowed you a longer period of preparation.  And that is all good and fine.  I merely worry that this grace period is quickly ending.  As I said, it is easy to see the basics.  Without real growth backed by energy extraction, the economy shrinks.  So the bankers needed to finance the fracking industry at all costs despite losing money even at $100 a barrel.  And they had to stretch out the amount of leverage they used in their derivatives bets.  That was what caused the housing bubble collapse, that 1 to 200 leveraging. 

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But now, that leveraging, those assets to bets, are even larger than they were ten years ago ( and so is the energy deficit ).  JP Morgan is at times leveraging up to a thousand times in their manipulation of the silver market.  And the problem with leverage is that when your bet goes bad, you need to cover the losses.  If you are leveraged 1 to 100, a loss of 2% bankrupts you.  1 to 300 and a one half percent loss bankrupts you.  I’ll continue tomorrow, eventually getting around to interest rate hikes.

( .Y. )

( today's related link https://amzn.to/2RAKR8h )

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note: for you lucky bastards that subscribe to my newsletter, here is an update on the sling ammunition.  A reader commented about stones as described being unsuitable.  True, so I did a bit of research.  Ancient dudes at first used water smoothed stones, but as far back as 7,000BC ( because we are some smart bastards when it comes to killing ) there were baked clay projectiles ( or carved stones ).  At times, slingers were even more efficient than archers in certain aspects, so this wasn’t just shepherds chasing off wolves or whatever.  It was a military specialty.  Also, an ovoid shape ( an egg ) is superior in accuracy to a ball.  Just Stone Age primitive ammo for reference.

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note: free book.  Alien invasion https://amzn.to/2Ch4HjM .  
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