2015, the BRICS checkmate Western finance?

Greetings,

2015, the BRICS checkmate Western finance?

 

Pierre Lescaudron
Sott.net

“Permit me to issue and control the money of a nation, and I care not who makes its laws.”

Ex-Judenrat and Nazi collaborator, Georges Soros. He busies himself with the destruction of currencies and people. His financial worth is $23 billion. His moral worth is somewhat lower.
Credit Defaut Swap (CDS), mortgage backed security (MDS), bottom-up investment, high frequency trading, naked short sale… these are the kind of complicated terminology you encounter when you start exploring the financial jungle.

But don’t be mislead. This overuse of jargon is designed to confuse and destroy any motivation to explore further. Clearly ‘they’ don’t want you to understand because they are hiding some rather dirty secrets wrapped up in apparently complicated jargon.

Scratch beyond this seemingly complex veneer however, and the reality of finance is surprisingly simple… and disgusting. The objective of this article is to explain, in layman terms, finance principles and the slavery most individuals and states are subjected to. I will also show why things might soon change dramatically and offer some sound advice for such times of financial turmoil.

Finance, a brief overview

Who are the actors?

In world finance duality prevails. You are either a master or a slave. The masters are a small clique of excessively wealthy individuals devoid of conscience. They have various names: international cabal, banksters, elites, ultra-wealthy, 0.1%, oligarchs, global banking elite, etc.

Their only goals are money, power and control. They will never have enough and they are ready to do anything to get more. Their geographic and ideological core is the anglo-American empire but they know no borders, have no country, no notion of nationalism or patriotism. For them nations are like hotels, there to be used, abused and when no longer useful, destroyed. They feel a deep contempt for people who they see as little more than slaves to be exploited, abused and deceived.

What is money?

Now that we know a bit more about the cast of this drama, let’s deal with money. Have a look at a 20 dollar bank note. What do you see? Well, it’s basically a piece of paper with images and text printed on it. Despite all the BS about currency as the reflection of the nation’s economy, the backing of reserve assets, this bank note you are looking at is nothing more than that: a piece of paper with ink on it.

A pre-1971 $20 note. Notice the mentions “gold certificate” and “twenty dollars in gold coins payable to the bearer on demand”
Think about it. For the banksters to print a 20 dollar bill, all they need is paper and ink. How much do you think it costs to print a 20 dollar bill, considering that millions are printed at a time? About 10 cents. But when this note is presented to you, it has magically become worth 20 dollars of very real work, goods or services. The same goes for 50, 100, 500 etc. bills.

That’s the most important thing to understand: money is created out of nothing. But the lie is so big, so repellant to the mind that we have much difficulties accepting this fact.

Of course it hasn’t always been this way. For most of modern history banknotes were backed against a tangible asset, usually gold. So you could go to a bank and exchange your note for real physical gold (see picture on the right). But since 1971 the dollar is not convertible into gold anymore. It is backed by nothing.

So its only value is the one we ascribe to it. Collective belief is a prime factor in the kind of magical economics we’re talking about here. Market sentiment is a powerful factor for the best and for the worse. I will develop this point later.

Who creates money?

Money creation can be a good thing. In the past, nations could directly create money as a fair reflection of their economical states, interest free, in order to stimulate their development. But the time of sagacity in economics is long gone. Today, nations borrow insane amounts of money, with a positive interest rate. This money is created by a few private banks, also known as central banks and does not even reach the citizens pockets. Yes you read it right, this bank note you are holding was created by a member of the financial ‘elite’ out of thin air. But the sweat, the energy, the work you spent to earn it is very real.

The fallacy used to justify the printing of money by private banks is that governments are unwise and if they were allowed to print money, they would create far too much and destabilize the market. That is a lie, the record for the most money ever created at one time occurred in the aftermath of 2008 crisis (see “quantitative easing”, another jargon term that simply means “print like crazy”) and it was private bankers, not governments, that created it.

How much money is created

Growth of M1 (red) and M2 (Green) monetary mass indicators (1981-2013)
The short answer is: “We don’t exactly know but it sure is a lot”. The quantity of money is called “monetary mass”. Depending on the kind of money (coin, note, travelers check, credit card, saving, etc.), monetary mass is divided in sub-groups labeled M1, M2, M3, etc.

The problem is that the US Federal Reserve, (which is not American, federal or a reserve, but a private bank serving exclusively the interest of its owners) stopped publishing the figures relative to the total amount of money it creates. Only partial figures (M1 and M2) are disclosed and they show a dramatic unsustainable increase. But M3, the most extensive indicator, has not been released since 2006.Why not publishing M3 if its level was reasonable?

What is debt?

Money can be given (in exchange of goods and services) but it can also be lent in expectation of a future repayment. For centuries, interests were deemed illegal and amoral but this time too is long gone.

Today loans come with interest. When you borrow $100, you’ll end up repaying $120, $150 or $200. Interest rates are justified as a compensation for risk. Again that is total BS. When you borrow money the bank takes your house (for example) as collateral. So if you fail to repay the money they created out of nothing (without even borrowing fiat money from central banks), they will take your very tangible house. In this sense you are the one who is taking risks and you should be compensated for it, not them!

The fallacy of positive interest rates was exposed further when central banks started proposing negative interest rates to other banks. This is a desperate attempt to inject money into the corrupt and therefore vulnerable banking system. Of course, negative interest rates are only proposed to the banks while we, the people, keep on paying positive interest rates.

Notice that in the very principle of debt lies one of the most destructive aspects of modern finance: the rich have a lot of money so they’re able to lend. The poor have no money so they have to borrow. At the end of the loan, the rich cash in the capital they lent + interest (they’re richer), the poor pay for the capital + interests (they’re poorer). In this sense, debt is one of the the main causes of growing inequality.

Today the world’s 225 richest (of whom 60 are Americans) have a combined wealth of over $1 trillion. That’s the annual income of the poorest 3.5 billion human beings. …more here

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