Wednesday, April 3, 2019

The Dollar Paradigm

Many people seem confused about the inexplicable and unpredictable "financial markets". This includes the recent action of cryptos. Most of this confusion stems from the problem of using an "old paradigm" framework in a "new paradigm" environment.

Most market watchers, at least the vocal ones, operate from a pre-1990's framework of how financial markets "worked" before the advent of financial derivatives.

It was not that long ago that the many hundreds of trillions in forwards, swaps and other financial instruments shown below simply did not exist:


But today they are the very foundation of the global dollar system. How long does it take for a medium sized country to spend 2 trillion dollars on various commodities for its population? Hard to say, but five banks have positions of 2 trillion in the commodities derivative marketplace today. You see, soybeans and pork bellies are irrelevant, it is the movement of their price in dollars which is the item traded.

Likewise, so called "dark money" in the form of lira, ruble, peso or riyal are irrelevant. But dark money issued in yen, euro, pound or yuan - and especially the US Dollar - these are relevant.

The financial markets are no longer mechanisms of supply and demand economics for goods and services. They are a derivatives casino for the currency trade. In most cases the item traded is truly the dollar. Another noted this explicitly in terms of the gold derivatives market, but all markets operate in this manner - the gold market being different because the underlying asset of physical gold is the only true form of real (not derivative - not debt-based) money.

But gold is not the point of this post. It's separation from paper currencies is. The issuing authority of a paper currency not pegged to gold has the absolute power which the derivatives casino affords. Is that currency relatively stable? Is it widely used in global trade? Is it widely held in sovereign reserves and the global bond market? Is it deeply embedded in its own self-referencing financial market? And finally, is it the preferred denominator as a betting chip in the worldwide derivatives casino? If yes to all, then you can rest assured that it is the item traded world-wide in every type of market known to man.

These concepts are taken for granted without their implications being fully recognized. Articles and posts are written everyday which support the core concept that it is the paper currencies which are the item traded in every marketplace where massive derivative positions exist - the bond market (interest rate derivatives) the equities market (stocks), the commodities markets and the currency markets themselves (FX derivatives). You see these four markets above and you see the handful of too-big-to-fail mega-banks which hold the lions share over nearly a quadrillion USDs in futures market positions. 

And these are just the publicly visible positions from call reports. OTC mostly, secondary insurers like AIG and Generali are not generally visible here.

And then we have the dark money continuum of the US Treasury and ESF (the financial arms of the Dollar System Military Weaponization Construct), the Federal Reserve System and it's primary dealers (the largest of which are shown above, a.k.a. the dollar system's Bailout Queens) whose main shareholders are the generational wealth dynasties who own the FED by virtue of voting rights and sit on the board of directors of the BIS.

This is the dollar paradigm which has turned the global financial markets into a massive confidence scheme ... not a PONZI scheme as some have likened it to. A Ponzi scheme is a qualitative level below the dollar system CONfidence scheme. It requires a flow of investors in a pyramid scheme structure who are willing to offer currency units for profit. The Dollar System requires no investors - it only requires an unlimited flow of the units of denomination and because those units control the price of everything (including gold) the issuer of those fiat units has ultimate control of the price of ALL underlying assets.

This is why the assets themselves are irrelevant (including gold). It is the denominator, the currency unit, that is prized above all. Who would rather have a thing that money buys when money buys everything? Ask yourself truly, do you really prize a stock, or the company it represents, or do you prize the profit, in currency terms, which that stocks future performance promises. Today, the issuers of the world's betting chips have guaranteed future performance, as only they can - and must - to keep the dollar paradigm in place.

Truly, nearly everyone lives in a dollar paradigm which they accept wholeheartedly without understanding it's implications.

Nearly everyone. Think about it ... and allow the flower of understanding to grow.

24 comments:

  1. In its most primitive form , we are talking about a casino chip in an open air or open globe casino. The issuer is our overlord. We play by the rules. The rules work for a good deal of time. We then structure our lives and habit patterns around these rules.

    But these rules are an unnatural state outside of the confines of slavery. And surprisingly, they are also an unnatural state inside the confines of slavery when the slaves start to adapt to this unnatural state.

    The slave can only produce so much before the gig is up.Bringing forward their rewards for future production the slave is now under producing for his overlords.

    What's a slave master/overlord to do but reset the terms of slavery.

    Gold is simply a temporal intermediary in this bondage.

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    1. Gold, I feel, is more than just a temporal intermediary. Unless or until the Dollar System Masters can produce it with the stroke of a pen or the click of a mouse, it represents a challenge to them, such that other Masters of other fiat currency systems can find a more level playing field, each being masters over their over set of slaves instead of one Master over all.
      And the Challengers hold this gold in reserve as they await said reset of the terms of slavery .. from unipolar to multipolar. Gold brings back a more natural state as the history of human nature proves.

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  2. From a Friend😎

    "What supports the dollar is what will trigger its collapse when it is removed. That support comes from the dollar’s foreign exchange reserve use in the foreign public sector, and its store of value use in the foreign private sector, not its transactional use."

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    1. Sounds like a well placed and well informed friend. And Foreign reserves are filling with gold for some odd reason...

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  3. When foreign support for the dollar truly ends, the dollar paradigm ends with it. For ten years we have witnessed a slow and gradual movement in that direction. Perhaps the question here is, who benefits from an acceleration of the dumping of that support. US policy has proven that the dollar paradigm controls events in Iran, Turkey, Venezuela, etc... It's managers openly challenge any wayward vassal with economic destruction on many fronts - so as to speed its own demise. The dollar paradigm perpetuates itself quite well before it expires.

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  4. Fofoa, Another called the new system "Meritocracy"
    22/11 years later I came to the most plausible explanation. Its name is "technocracy". And when it comes to fruition it's a fallacy to believe that what little dogs have in their belly still has any value. The lions will swallow the little dogs.That value you won't be able to use, you will not be allowed.

    Read Patrick Wood's work and you will all see A/FOA were a joke.For US.

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  5. I read Patrick Wood's articles on Technocracy years ago ... a name I have not heard in quite some time. I think it is a forgone conclusion that we will find elements of his predictions as they unfold.

    As for A, FOA and FOFOA much of what is hoped for is wishful thinking. The biggest joke is that the little people will ever comprehend the power they truly have ... which they so happily surrender.

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    1. Yes. Exactly.We all ende up in a GULAG. I see it everywhere.
      Wood has a site:Technocracy News.Unfortunately ppl are too stupid to understand the whole, dismiss history and spirituality. It has been a very long war for centuries.I needed years to connect the dots.
      I remember when I once told Fofoa, maybe 8 years ago about an article from CFR's Brad Setser about integrating gold with some kind of coinage.
      The very intelligentsia there laughed me off. I think we are trapped.
      I see the evolution:
      CBs nationalise the world economy
      We work like slaves paid in energy digits after compplying with social crédit system.
      Sharing economy instead of private property.
      H.G.Wells, that gigantic sick criminal mastermind explained it all to us (The Shape of Things to Come, just one piece of puzzle).

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  6. https://twitter.com/Halsrethink/status/1116182252042375168

    I fear this might be the plan. I find articles all the time about the Chinese tokenizing gold aka "Stable Gold CryptoCoin".

    They are going to lock us down if they have their way. THX 1138 here we come.

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    1. Right. That caught my attention too.Xi said we'll habe a one in a century systemic change.
      Ehen you reflect who constructed China,USSR you und er stand it.
      What I still don't geht is Russia's role.Will they ALL geht along vor just a faction?
      Is all we see as turmoil only circus for us,distraction before DEAGEL comes out?

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  7. @Simpleminded and RF,

    Thanks for sharing info on Patrick Wood. How can we fight technocracy if freegold is only a potential part of it (technocracy)? Wood says that once established, we cannot raise our pitchforks because there is no seen enemy. How then do we prevent this, and if it takes a firm hold, how would we resist or remain independent? I refuse to despair. In "A Brave New World" there were still those outside the system scraping by but "free".

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  8. Interesting comments. I offer this:
    Want to know why something is the way it is? Ask yourself, "who is being rewarded?"
    What gets rewarded gets done.
    Cheers
    -R

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    1. I know the answer but it is too awful.It's Bern ging in for centuries.Rewarded are the eternal psychopaths.Do you read psalmistice?A very good and profund site.

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  9. Negative interest rates are possible with a Blockchain based currency system.Human Energy and Capital is then controlled via stealth devaluations. BTC is a beta test and simply cannot function at a high velocity to buy a cup of coffee since rounding errors would reduce supply of that 21 million over time. 4 billion pennies were lost in seat cushions over the last 5 years, imagine how many 0.000001 btc's will get abandoned. Yes we will have a permissioned system like the one Stellar is working on with IBM (Hyperledger). Full AML and accountability.

    The answer to Technocracy is Orthodoxy. look to the Amish, look to the Hasidic Jew. Everyone else is just an individual floating in this open air prison

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    1. Yes, Christianity I would say, not only orthodoxy.There is a movement in DE and F, und er the radar.Not the Catholic church which has been anihilated at least since Vatican 2 Council.
      The West has no church, no morality,no real education, nothing.That's one of the reasons for their incapacity to understand.the Eastern Europeans are not informed,their experince with totalitarismus fades away so I think that won't be helpful.Russians still don't understand why they've lost millions,regret the "secure" life they had in communism so I don't know. The Chinese are gamblers,also a destroyed nation already living in a continous totalitarian system.South America is a mess of socialism, neocons, subjugated corrupt leaders,Africa is a neutron bomb.AI is in Overdrive and ppl habe no ethics to stop it.In the ERA of scienticism, financial is Aktion, we are isolated minds, singularities with murmuration... No, short term I have no hope.

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    2. Negative interest rates can applies to regional currencies only. Hence, gold will be the global reserve currency post reset.

      The SDR or the Chinese tokenized gold aka "Stable Gold CryptoCoin" can be used to settle international trades short term but final settlements will be settled in gold.

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    3. P.S. Negative interest rates cannot apply to gold because gold gets no interest, positive or negative.

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    4. Not True, we've created a physical gold backed token. It has a smart contract on 1 gram of gold. Nothing too novel until you attach a DAO to it, then it's something special. Think micro payments and content monetization. Having said that, the token economy is likely to be "Permissioned" and not "Permissionless" as are ERC Based Tokens like Etherium derivatives. So in any value exchange business, the authorities still have the ability to "Tax" any given activity, which includes but is not limited to sitting stationary. Call it a tax instead of a negative interest rate if you want, the result is the same.

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  10. I truly don't know.Maybe it depends in how "they" implement it. I think it'a matter of short term and the biggest roadblocks they need to care for are 2nd Amendment, www regulation, and some infernal fights. Unfortunately I don't trust Putin either, he is a technocrat per se.
    My hope was 10 years ago US, now vanished...Germany will go with it full steam.Global governance is SchÀuble's favorite lingo.Merkel is a globalist, communist technocrat.
    The new alluance Iran, Turkey etc ...I don't know how much they buy into it.
    What I can say is as soon as they have Germany in Europe, which is not far away, we are finished. I know nobody in real life even a little interested in this matters.The young generation is incredible stupid and manupulated. One can't imagine how bad it is.

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    1. @Simplem and Unknown
      Thank you for your replies. It makes sense to have small, local economies with people who would rather live simply and free. Unfortunately, even Orthodox Jews are not left alone entirely, as evidenced by the forced measles vaccines in NY.

      I agree that all major world leaders are technocrats. We are alone in that respect and cannot count on any country standing up against technocracy. Have you read: "Resistance to Tyranny" by Joseph Martino? I have, and it gives me hope if/when it comes to defending our basic, God given rights. It does not answer all my questions, but it is a start.

      While it is true that most people today, especially our youth, are cell-phone zombies, I know and talk to (in person) several who know the beauty of life than can only come from real relationships.

      I know we can't go long without major suffering, but I am willing to embrace that for truth, goodness and beauty. And in that, I know I am not alone.

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  11. Normally I pass over the articles on the slobbering goldbug sites, but this one odes have merit.
    https://www.silverdoctors.com/headlines/world-news/dollar-dominance-may-end-sooner-than-expected-with-gold-backed-digital-currency/

    BRICS Pay is one of the names for it. Ultimately it will be a platform for this crypto gold token.

    Here's a demo:
    https://www.youtube.com/watch?v=n40w8NCqlFQ

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    1. I am completely in agreement with distributed ledger or blockchain technology being used as a global replacement for the SWIFT system. That has nothing to do with the idiocy of crypto speculation, but rather a practical means by which to avoid SWIFT-based Dollar System sanctions and attacks.
      Gold makes any currency "good as dollars" but as long as gold is "cheap in dollars" the USD has teeth.

      The next time you see gold able to reach for $2000 USD it will be all over. In that time you will be hastily retiring dollar debt before said debt is "reset".

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