Friday, July 14, 2017

A Pikkety Situation

Many of us lament the exponential income disparities between the little people and generational wealth. This has been thoroughly examined by Thomas Pikkety in his thesis regarding the advantages of generational wealth "compounding". But it can just as easily be summed up in the words of N. M. Rothschild from over a century ago regarding that "great body of people, mentally incapable of comprehending the tremendous advantage that capital derives from the system."

Indeed, if debt-based "capital" is the "unit of account" for global wealth, power and influence score-keeping, than the Roth dynasty would be in a tremendous position indeed. They do not control 500 trillion USD in tangible or liquid assets as some accounts suggest. But it is far more than the 1.5 billion reported by certain reputable sources. If they were worth 100 million by 1800 (which seems highly likely) and were able to modestly compound this wealth by an average of 7% every year (a ridiculous underestimation to say the least). They would be worth 75 trillion. To be exact, $75,293,162,165,447.66. That would be 17 years ago. This assumes that not a single dime of new revenue is added to this principle amount for over 200 years.

I believe the family's combined holdings are worth much more than 75 trillion, but denominated in what? Of what value and in what marketplace? The market has varied immensely over the past 217 years, and this capital, if protected and grown, not squandered or lost, does indeed take advantage of systemic design as old as the capital itself. Roths own title to more wealth (on or off balance sheet) than the combined balance sheet assets of the TOP 5 Fed primary dealers, the infamous Bailout Queens of our current millennium. How much of this is in the form of gold bars? Probably more than any estimate you will find.

As you think about the "continuation holdings" of generational wealth over the centuries, consider how acquired assets like Rembrandt's, castles, islands, wineries and gold have been denominated over time. Some items have been denominated in currencies that are worthless, or do not even exist today. Perhaps their price in gold, over time, is the best proxy for current (as in "currency") values.

But I digress, for it is the great disparity of the rich getting richer, and the poor getting poorer which defines this Pikkety situation.And the little people are restless these days about it - even though they appear clueless as to how to address it.

Wall Street occupations have failed, political activism through the elections of populist and protectionist leaders alike are failing (and will continue to). Hackers have had little real impact (Anonymous) and tell-all insiders who live in excommunication have played a small part. Collectively, all activity aimed at taking down "the system" has, at most, raised the level of awareness that the system exists. Yet still, that great body of people, mentally incapable of comprehending the tremendous advantage that capital derives from the system, have yet to comprehend that the system's Achilles heel is the fundamental instability of debt.

It is stability and consistency which after all plays so large a role in the "preferred usage" of a debt based fiat currency (the great transactional deficiency of the cryptos). You will see greater volatility in the currencies as debt begins to fail and cryptos and fiat begin to act alike - differently  than what their "value on our computer monitors" says it is.

And so the solution is a simple one. Follow in the footsteps of giants and stack a little yellow every time you want to convert the excess "labor value" of your neighbor's great, great, great, great grandchildren into "payment in full today".

The system to the East of us, with it's little people doing this (by tradition through many generations) with the blessing of their governments (who are doing the same) will be the "big domino" to fall.

All the little people of the West need to do, is stop investing in debt, and start investing in real equity (not bubble-paper) and you will see many happy Giants who hold many tons of gold, redefine their wealth as never before in present day lifetimes.

You see, you can never beat the system at its own game, you can only be in the right assets when it fails - the same assets that the system's authors through the years have held generation after generation.

Wealth will be repriced in gold.

1 comment:

  1. I remain unconvinced. I see no evidence for anything that you or FOFOA post, and see no evidence that the elite are planning anything other than the continuation of this system until the entire world burns.

    Which is not to say that gold isn't valuable, or that it won't play a role. But even if you set up another system, the imbalances begin to accrue once people figure out how to manipulate gold.

    It's actually inherent to us as a species. We are due for a big, big crash in everything, the biggest in human history. There's nothing you can do but ride the tiger.