Sunday, August 12, 2018

Back That A$$et Up ...

From the first sentence of Michael Sproul's There’s No Such Thing as Fiat Money (2007):
I make the claim that fiat money does not exist, and that the money that is commonly called fiat money is actually backed by the assets of its issuer. 
Who would argue against the premise that modern currencies are backed by the issuer's assets? The questions that remain are: How broad a definition of "assets" is being considered? And does "asset backing" justifiably negate the meaning of "fiat", or is this mere semantics?

In any event, I would counter argue that the meaning of "fiat" is possibly in need of clarification. And such clarification would then allow for the sensible conclusion that fiat money does indeed exist. Sproul's premise is a good launch pad for clarifying just what it is that backs the US Dollar.

Many have said that the US military "backs" the dollar. And indeed, the US Deep State and its Military Industrial Corporatist alliance represents a huge investment in strategic worldwide military deployment. That investment is an asset, and it does in part back the dollar. There are other factors, that are considered in the foreign exchange marketplace, and there are varying opinions as to which factors bear such weight upon the prime factor: relative changes in purchasing power.

As we have discussed before, usage is a considerable factor in determining a currency's relative purchasing power, which in turn supports further usage, in a circular fashion. In times past, there were set fundamentals that established relative fiat currency exchange value: the country's stability, its industrial base, trade practices and metrics, population demographics and economic condition, debt to GDP, and so on.

As our real world has progressed into a world of derivative statistic and valuation, through the rise of financialization, those fundamental factors have evolved to include other factors that are brought to bear upon a modern digital currency's backing.

Does the depth of a currency in global derivative positions act as a form of backing? This is a factor which did not exist prior to the existence of derivatives. Does that depth not guarantee further usage, and that further usage not create greater depth? Does the currency function successfully as a systemic weapon against other currency issuers? Again, relatively recent dollar era phenomena.

But there is an incredibly powerful, hugely overlooked factor which begins only around 2008, which backs the US dollar. I will tell you now that it is the US Government's control over its people which gives the US dollar the largest share of "asset backing" of any other factor under consideration - in the FX market and otherwise.

When the US Government publicly bailed out the global banking system and made the American people the guarantor of that bailout, an incredible precedent was set. It proved to the families that the issuer of the US Dollar could obligate its tax base to an unrepayable debt, and that tax base would neither understand, nor care enough about the consequences of that precedent ... to stand up and fight against the fraud and thievery that keeps the 99% in perpetual bondage, and the 1% in a risk free position to do as they please.

The issuer has proven to generational wealth that it can divert the attention of the tax base from the world's most egregious robbery, and do it again every so often, including to other middle classes who hold wealth, as it moves from country to country. And they will do so in equally powerful police states, combined with well developed welfare states, as the fiat wealth concept manages the debt slaves of any culture, keeping them pacified under the doctrine of "debt as wealth".

You will watch in amazement as China eventually "becomes" the USA in this regard. To the North, there is one proud people, who thrive on the adversity which shapes their strong cultural identity - who will be a thorn in the dollar's side - but they will be dealt with, as opportunity allows.

This modern state of affairs is an incredible asset which the global corporatist banking cartel (the BIS led global central banking system) has endowed upon the US Dollar - and it's rival issuers are part and parcel to that system. Until China, India and Russia's central banks (along with their strategic but smaller allied CBs) achieve a true Coup d'etat (either publicly - or more likely privately) and begin to act independently from BIS mandate, the world's middle classes will never have any enduring prosperity - only the fleeting type that comes with targeted booms, busts and the fraud and bailouts they enable.

Much more importantly ... that Coup will NEVER HAPPEN as long as the American people agree to the dollar contract they are so deeply sworn to. Americans have been taught to accept the double standard they now live by. They can default on debt and lose everything they own, but their lenders can never default - they will be bailed out by whatever wealth remains. There is no other society on earth who have been so culturally conditioned to accept slavery and socialism as the generation of Americans whose OBEDIENCE backs the dollar today. That compliance, coupled with contempt for the wealth of their fellow man, and the social justice herd mentality, makes the family's smile with exceeding confidence ... that this dollar empire can milk much more middle class wealth across the globe as it spreads its "debt as wealth" religion even further into systemic entrenchment.

And this Trump fellow. He and Wilbur are doing well to earn the trust of generational wealth.

An unexpected wildcard can always be drawn, including an international war. But the Roacheforque's will profit from war as well - nonetheless, and just the same. Generational wealth aways profits from the spread of global corporatism, as they are both the authors and benefactors of it.

This we learn ... from the flower of understanding.

Thursday, August 2, 2018

Engdahl's Lesson

This excellent article by William Engdahl is well worth the short read, as it encapsulates an important concept treated in recent posts. I would draw your attention, in particular, to the following:
The US economy since 1971 has been turned into a financial revenue source, in effect turning the United States from a nation primarily producing industrial goods to one in which the sole aim of all investment is to make money from money. Companies such as General Motors which at the end of the 1960’s was the largest maker of cars and trucks in the world, the heart of the American economy, got lured into speculation using its GMAC auto loan financial arm to make bets in the world economic casino ... By 2000, Wall Street banks and investment funds essentially dominated the entirety of the US economy. Manufacturing jobs had been pushed offshore, “outsourced,” not by Chinese or German or other “greedy thieves” as charged, but by pressure from those same Wall Street banks that since the 1980’s had driven corporations to focus only on the value of their stock shares and not on the soundness of their products.
In the parlance of these annals, basically what William is saying is that the focus of the US economy changed significantly in the 20th century. We gradually replaced the global reserve asset - gold - with a gold derivative - the US dollar. Then we began to change the focus of economic output - products and services - into output derivatives - finance and speculation profits. Finally, we gradually transformed sound business practices - product quality and competitive value - into business practice derivatives - stock share price imperatives supported by corporate buybacks.

The rest of the article explains how "trade wars" are in fact a strategic lever upon exchange rate management and, essentially, currency use blackmail. The same tactics are used whenever dollar dominance is challenged. I fully agree with this, and it is a useful reminder. Trump's tactics are really no different than those of Nixon's trade restrictions in the 70's. His enduring nostalgia from the bygone era of America's past is a useful tool today, and it helped get him vetted for the position of a president whose inclinations serve a useful purpose. Indeed, it is not Russia that got Trump elected, but rather it was the Anglo American dollar faction, an arm of the international banking cartel.

Basically the plan is to create more artificial demand for US dollars through trade intervention. American made products may not be "great again" yet, but if you are forced to buy them they will regain their greatness in time. And if not, who cares - the products are merely the underlying asset - it is dependency upon dollars (their output derivative) which is the prime objective.

And so we can see how Mr. Engdahl does understand the dominant forces of our modern era, even though he does not bore deeper into the philosophical, spiritual and social consequence of the exaltation of the derivative. As we forensically trace our way back in time through the transformation of global economics from a natural, physical world economy into an artificial, speculative world economy, it is the dollar derivative phenomenon (making money from money) which empowers and enables banking class world rule. While generational wealth knows that the dollar's death is inevitable, financialization through derivative economics (Keynesianism) must be preserved if they are to retain their indentureship of the productive middle classes.

As the dollar of today gradually transitions to "something else" (which the world can begrudgingly agree upon without blowing itself up) gold is likely to "back the transition" as in times past.

But Roacheforque does not advocate the "holding of gold" as yet another way to "make money from money". You have your stock market "buyback support" and "Fed support", your real estate flip market (supported by the dollar system) and bitcoin speculation (among other such games of chance) for that purpose.

The holding of Gold serves a much different purpose than our newfound religion of "making money from money". The holding of gold is a philosophical, political and civic exercise in protest of the rise of banking class privilege, easy money wealth and the debt peonage which enslaves the productive class of people who make, grow, fix and care for the real things needed by the real world.

The plantation owners owe their wealth and the vast inequality they hold over their slaves to the hard work and desperation of their slaves. Some slaves will devote their lives to becoming slave owners one day, while others will endeavor to overtake the slave owners and become something much more honorable.

Debtbugs are the slaves who nibble at the crumbs of their masters in the hope that they will gradually ascend the ladder of "debt as wealth" so as to own a few slaves of their own. I am sorry to say that, in reading the comments at Zero Hedge and similar sites, these are the Apostles of the debt as wealth religion, railing against their masters - yet subscribing to their own slavery as a form of redemption. Goldbugs are the slaves who wish to rid the world of slavery to debt, and to bring back the world that Trump promises, but will find impossible to deliver. A world where a great country of idealistic adventurers set up a great Republic in a new land, with a very well constructed Constitution and Bill of Rights. Between these Debtbugs and Goldbugs are the many and various shades of gray dividing the two extremes.

The United States of the pre-derivative era had a prosperous middle class, with traditional morals and values (including the nuclear family concept) and a sound money backed economic engine, based upon quality production and real world supply and demand - second to none. That great country had a government with a civic duty to its people, and respect for the rule of law. Like it or not, that country no longer exists. The US of today is a derivative of that country.

Physical Gold advocacy is a repudiation of the dollar - the gold derivative which attempts to right the course of world affairs with more artificiality, more bloated and corrupt government, aggressive interventionism, wealth inequality, private sector moral corruption, cultural re-engineering, economic warfare and unprecedented global fascism through exponential debt. This is why the world's dollar vassals are stockpiling their reserves of physical gold. God help the current American generation that they have never known the greatness before their time, and must begin their race of life so far back from the starting line of past generations.

As we trace back so many of the world's problems of today to the corruption of our value system through the global banking syndicate's government sanctioned counterfeiting of real money, gold sits in the vaults of the ruling class central banks to confirm their understanding of it's true value. Gold is the lifeline to a world gone mad and set upon self-destruction through the corruption of it's ruling classes. You will never sense the importance of it by reading a single article by William Engdahl, or a single post at these archives.

But it's a start.

Tuesday, July 31, 2018


There's a huge "mystery" whale throwing billions at a trade that has market watchers mystified. Clarity? That trade has been monetized.

Mark Zuckerberg's net worth declined by 20% overnight. Incredible? Mark has been monetized.

Short of a systemically apocalyptic crash, the FED will raise rates again in the fall. Arguable? The cost of dollars/time is monetized.

Among many other magical powers, the magic numbers that systemic banks are able to "make appear" have a very powerful impact on the reality of a financial market, an individual's personal wealth and the cost of certain numbers over time. Even the capability to move the magic numbers from one account to another is the focus of wild speculation which confuses the mere capability of moving the magic numbers with being the magic numbers themselves.

Anything goes if enough magic numbers back the concept (or enable it).

The systemic banks have guarded this magical power for centuries. They've gotten a little carried away lately, because the power of the magical numbers in our purely fiat, technetronic era has surprised even their wildest expectations.

A systemically apocalyptic crash at this point would be a situation where the magic numbers no longer work to preserve the magic of the numbers.

In other words, if it takes 6 quadrillion units to hold the system of accounting units together, the units lose their magic. The magic of confidence.

Your confidence has been monetized, but ... are you truly confident in monetization?

Dollars/time prove all.

Wednesday, July 25, 2018

Virtual Cultural Lobotomy

It really should surprise no one that as we glorify transgenderism to the heights of hero worship, the acceptance of pedophilia is now ripe for "normalization". As Hollywood pushes its extreme left decadence onto the minds of youthful viewers and adults alike, I have no doubt that many parents tomorrow will simply accept a pedophile superhero in much the same way they accept a transgender superhero today--as merely representing an alternate lifestyle, deserving of not just accommodation, but praise and honor (to compensate for so many years of horrid discrimination). After all, if smiling supermodels like Nora O'donnell introduce the concept with a beaming smile amidst group approval at the round table of talking heads, it must be normal, acceptable and even "good".

The argument that any activity which "hurts no one" should be tolerated (and even celebrated) has grown in its appeal, as Western values continue to crumble and "progressive" society moves closer and closer to complete nihilism. That being said, certain rational thinking 2-legged lab rats might object to these thoughts on the grounds of "direct vs indirect harm".

True, it does not directly harm children to portray transgenderism as an acceptable lifestyle. Likewise, one may successfully argue that it does not directly harm children to portray pedophilia as an acceptable lifestyle. Frankly, it does not directly harm anyone to portray serial ax murderers as living a socially acceptable and peaceful coexistence within mainstream society - but Hollywood has not gone there yet. It does capitalize upon our fascination with the macabre, and with violence and gore in general - but we do not yet have an ax-murdering sociopath on Hollywood's upcoming superhero lineup as yet.

Following this line of reasoning, let us try to understand where cultural or social lines today are drawn, as we follow how they are gradually moved. In many regions, a person who downloads child pornography onto his or her PC is subject to criminal offense today. That will change, but for today this statement is true. That person may have never physically touched a child inappropriately. But the argument stands that the material he or she downloaded portrays a real act of sexual impropriety involving a minor - so to merely possess and view a visual representation of the act is considered a crime.

Whether or not you agree with the criminality involved, laws today consider the possession of child pornography a crime when the possessor views material which caused harm to a child. We could view material like the Rodney King video and that would be OK, but at least there is a disclaimer warning that you might find the material disturbing.

There has been much discussion over the years regarding violence on TV (and other forms of media) and how it can be harmful. Snuff films depicting actual extreme violence culminating in death are probably considered illegal where you live. Since we see death and murder in the entertainment industry all the time, we must conclude that the defining difference is whether we are viewing an actual execution, or a fictitious portrayal of the same.

Such distinctions open up a can of worms that leads to much further discussion, but hopefully, you can see where these thoughts are headed.

Traditional Western values of the type which Roacheforque and his generation (and family) take for granted are being completely erased by the purveyors of the new cultural norm experiment in nihilistic inclusivity. If you doubt this, just choose your video.

Our "Avatar generation" is a generation which is really headed toward the "Ready Player One" future of a virtual existence over that of a physical existence. Even the aging Japanese culture is joining in with the alarming trend of sex doll relationships. This is a step up from virtual porn, and child dolls are very popular, though still not readily accepted by the mainstream.

As we continue to embrace the derivative world over the physical world, all is fantasy. And of course in a fantasy world anything goes. No law is broken because no act is real. And yet, the derivative world actually defines our physical world, therefore we see the correlation as follows:

Think upon this as time unfolds the truth.The "hopes and dreams" of transgenders and pedophiles are becoming legitimized, the actions of same being legalized and normalized by a small group of elite decadents who are managing your culture, your social fabric and your economic viability under the primacy of the "derivative reality". The next imposition into the "real world" will be the highly controversial acts of public sodomy and public pedophilia. If you live for another decade, you will live to see such acts making headlines and will be shocked by the outcome of public outcry. You will live to see much more.

This is the virtual cultural lobotomy of our "advanced" elitists. Western values are being removed, not by the scalpel, but by the daily exposure to liberal agenda media and propaganda. We long ago accepted the derivative as being the primary driver of our economic reality. We are gradually being taught to accept the derived (virtual) as the template for our socio-cultural reality.

Our values are not real, therefore they can be anything we choose. Nihilism is truly the new religion of the extreme left. And they are voraciously spreading their gospel of intolerance toward tradition.

Sadly, we learn this ... from the flower of understanding.

Monday, July 16, 2018

The Paper Rule

We hear of hedge funds and SWFs taking a bath on currency positions and related trades, yet in one of the most perplexing moments of calm before any sign of the slightest storm ... our Bailout Queens continue to perform marvelously on their 175+ trillion notional exposure to interest rate derivatives.

While many claimed 5 years ago that interest rates could NEVER rise, our Federal Reserve primary dealers had 5 to 1 year dated interest rate forward, futures, options and swap deals executed back then which are performing today with just uncanny prescience following the slow and inexorable rise of interest rates conducted by the FED beginning in 2017. Or if not ... where are the headlines about the financial losses on their books?

We do not see everything, but we will never see JP Morgan settle a real interest rate derivative loss (the LIBOR distraction was a pittance). For those who still believe in free markets of some sort, operating at some level of market fundamental somewhere, certain questions should hopefully come to bear.

Are our derivative markets really subject to physical market shock, or do they in fact create the physical markets they predict by virtue of the sheer size of their positions? Are no losses taken because no loss can occur? Do these massive positions not respond to cause or effect? Or perhaps is it such that they ARE cause and effect? So in essence, do the parties create the cause and pay themselves out on the effect? The perfect scam for all to see, yet none to believe?

If you have truly followed these annals since 2013 (5 years ago this September) you will know that there runs a constant undercurrent regarding how our derivative world actually creates our physical world through the sheer volume of "socially cohesive" betting chips we call currencies (mostly dollars) and the positions the worlds largest concentration of these chips take. This social cohesion is a combination of awe, confidence, credibility and confirmation bias regarding the role and function of our global accounting unit and the major currencies intrinsically connected to it.

Senior capital (of the highest order) has wagered about 14 years of real global GDP in "market predictions" of mostly 3 to 5 year duration, with contracts expiring daily. People watch in amazement as Powell raises rates into market mayhem which the Fed describes as "improving economic health". Many will say this is the worst time to tighten, but the Fed argues it is the "best of times". Why? These predictions of our world economy were made years ago and they are simply being carried forth according to plan. The big question for generational wealth is:
Can the real world survive our prescription, or will we have to change the rules?
It was a loss of confidence in counter-parties that caused this question to be asked in 2008. That problem was shored up and confidence restored. So senior capital believes that a similar crisis of confidence can be averted today through systemic bail-outs, bail-ins and cover-ups.

Yet the real world has a way of surprising our currency derivative destiny ... human nature is the unpredictable element that causes us to "change the rules". Or should we say, "bring back the rules"?

One particular rule comes to mind.

Wednesday, July 11, 2018

NATO ... Interests?

Why does Germany need protection from Russia when Russia is one of its leading energy suppliers?Why would Russia "attack" (?!?!) EU countries when they are some of Russia's best energy customers?

Economic cooperation serves the best interest of nations in a multi-polar world. What kind of business or organization seeks to attack it's own customers (other than the psychotically inexplicable US G)?

Artificial barriers for artificial markets serve our artificial world. In reality, trade war is war. War feeds the global Deep State economic complex .

Sorry that common sense is so drastic these days. The little people are being trained to think like their psychotic keepers.

You can rattle your cages against one another as programmed, or create little pockets of "activism" against the Deep State and if you get enough notice you'll be rewarded with dark money (a.k.a. "bought off").

The problem is much bigger than the little (We the) people can ever hope to solve. But fear not. The power of out of control fiat money (obscene global debt levels) is being challenged by economic blocs whose economies are not solely backed by (Treasury or FX) debt.

Equity flows East. Change is assured.

Monday, July 9, 2018

The Inward Journey

As we learn more about China, there is much potential to ponder. And as we ponder that potential, another lesson is taught about the morality (or lack thereof) of our financial markets and the money to be made through the activities of financialization.

As we consider the BRI project, and its goals, what do we make of it? Well, there is a huge poverty class in China that is just beginning to ascend into lower middle class status. As high speed trade, technology and mobility, energy flow routes and other real world physical economic activity create jobs for these people, we can see a positive social impact on the populace. If this same infrastructure creates trade economies that reward the new middle class with a better lifestyle, this can also be seen as economic activity that has a positive social value.

Conversely, in the West, we see the flip side of economic activity as we look at the money which is made through the activities of financialization. Credit default swaps and hostile takeovers, complete with asset stripping and the like, are a prime example of economic activity that does very little to uplift one's fellow man. But the Gordon Gekko's of the world and their real life sociopathic Wall Street character models (who created mayhem earlier in this century) will always be enabled as long as the system that enriches them exists.

In the East (China, Russia, India, etc.) there are vast populations which would have the means to repay huge sums of debt over time. This is very profitable for the banking class, as is the repayment of loans for heavy equipment and raw materials.

But in the West, while there are many unemployed (who could work to replace crumbling U.S. infrastructure for example) there is also a huge population of opioid addicts - at crisis levels among the working classes. There is discussion taking place vigorously today about importing appropriate working classes (or not) while leaving the opioid addicted to the care of the system (or the streets).

Be that as it may, we are shown that the "real money to be made" after all (at least in these "progressive" economies) is in the financial markets, which represent an ever-increasing share of US GDP. Some sources will say 20%. But when one considers the impact of financialization on traditional brick and mortar businesses, we find a financial arm of nearly all large corporations driving a leading profit center for business activity.

There is probably no accurate way to measure the impact of financialization upon a stated GDP, but it could easily represent 40% of profit (in GDP calculations) among 60% of large corporations. Let's not even broach the subject of stock buybacks and the economic impact (or social value) of this activity at its recently elevated scale.

Two things of note above. Notice that Roacheforque has not called the "money made" through financialization "wealth". We may wish to consider (or reconsider) our definition of true wealth in terms of its positive social value, when so much money is made through financial activities which have such a devastating societal impact - as in the bailouts of 2008. Likewise this calls into question the basic moral value of economic activity with highly sociopathic consequence.

But please do not blame capitalism for the brand of greed, corruption, fraud and exploitation which enabled the crisis of confidence that nearly collapsed the system in 2008. Do blame financialization and the deregulation which gave it sociopathic teeth.

Note also that China is not without its similar breed of fraud and corruption within it's banking class, but if and where it may be state sponsored, at least there is the counter balance of positive economic activity which may at some point overtake the "social profitability" of it's national economy.

Secondly, we must - after acknowledging the widespread global growth of particularly "anti-social" financialization activities - ask ourselves: what is the root cause of this widespread growth?.

Two things really. Both the "human nature" of our debt based money, and our own "human nature" that begets it. Culturally, especially in the West, we have glorified our darker nature to exploit and defraud our fellow man. We both love and hate the Gordon Gekko archetype. We hate his lack of empathy, but we love his street smarts and resourcefulness, and we crave the lure of "get rich quick".

Such is the human nature that creates "easy money" by basing it upon that which places one man in bondage to another - debt. Yes my friends, it's been said many times and many ways in these annals, but debt based money is the root of much evil in the world today - and our insatiable lust after it covers the rest.

Gold stands as a defiant challenge to the dark side of our human nature. It enables the light - our freedom, liberty and love for one another. Gold celebrates freedom from bondage to one another. To possess it enslaves no one. It represents the equity of debt-free men and women living a good life today (with some savings put aside for tomorrow). The duality of our human nature and it's impact on our lives is the great paradox of our humanity.

The dark side of human nature has nearly vanquished the memory of a time when Western values were admired across the world as being the hallmark of a prosperous nation with a thriving and virtuous working class.

Now we look to the East to see where the true wealth of moral value has gone, and what comes next of it. We may never see the age of America that was born of its exceptional leaders, its revolution, it's Constitution and its United States. But something good always comes of gold when it re-enters the global economy as "money". The CBs always held it as such, for when the need to cleanse the system arises.

Have another take on this and journey inward to where both the dark side and the light dwell. There you will find the two archetypes of social value and self preservation. How do we account for them? We use two very different types of accounting units for each. A time comes when the need arises ... for when one type chases out the other. Increasingly, that time seems upon us - the moment waits for a single domino to drop.