1. As Bill Clinton basically said when asked why his administration had been so favorable toward China after beating up Bush in the campaign about it, sometimes we don’t know what we think we know until we’ve jumped into the ring.

2. One reason I did jump into the ring was to run my own direct test to determine (a) whether change is possible, and (b) what people really want. I planned a 1-year test from the point I initially started publishing, but it took less than 9 months to conclude:

a. Change is not possible through journalism, the media, or online debates. Plus, as Chris Hedges says in Empire of Illusion, at this point it is impossible to bridge the divide between “a literate, marginalized minority and those who have been consumed by an illiterate mass culture.”

b. As I said in previous articles, IF we participate in the system, I’m not opposed to it at all. How could I be? I’d be a tyrant if I wanted to force hundreds of millions of people to change their behavior. And the fact is, that “IF” was answered long ago. We Americans have chosen the material benefits of being managed by the financial system for generations. We like demand-side freedom, i.e. choosing between Coke and Pepsi, but don’t want supply-side freedom. We like the supply-side to be taken care of for us. We love the benefits that come from it being imperially run—the credit card always works, the gas station is always open, our water faucets and light switches do what they’re supposed to do, the markets keep going up (oops…maybe not). All of our economic needs are outsourced to others, so we have the luxury of spending our time pursuing wants. And if these types of benefits are good for us, they’re good for the rest of the world. We have no moral authority to stand opposed just because we’re now going to lose our privileged position—a rather childlike perspective.

3. Given #2, my only wish is that the system would be transparent. Like Carroll Quigley, I see no rational reason not to inform people so there are fewer caught on the wrong side of the tragedy and hope dialectic. That was the purpose of my last video—to simply explain what’s happening with a slightly different twist than the others who have described the same basic system.

4. Putting all blame on the top of the system is biased and psychologically immature. Labeling a group “all bad” is an example of splitting—a primitive defense mechanism we tend to use to maintain an illusion of “all good” for ourselves, our country, our political party, etc. Some of my articles and videos intentionally played the splitting game because the media is designed to exacerbate splits, so if I wanted to pursue media work, I needed to play the game. But splitting is very harmful to society, so I will no longer do it. Moreover, as stated in #2, almost everyone contributes to the system so blaming only the top would be disingenuous.

5. Given human nature and the inherent requirement for empires to grow (or die in defeat to another empire), we will have one type of imperial system or another as long as humans are in charge. All such systems are narcissistic in form, so it’s futile in my view to argue between different forms of narcissism.

So I will not be publishing anymore, at least with the narrow focus on the financial system. It’s an illusion to think arguing about finance, economics, and markets will fix anything. But for those who want to continue learning about the system, I recommend Catherine Austin Fitts. I’ve said nothing more than her. In fact, I learned it from her—she was an insider, I was not. I borrowed the phrases “multi-generational wealth” and huge “pools of capital” at the top of the system from her. Noam Chomsky’s phrase is “coalitions of investors.” Same thing…I’ve revealed nothing new.

I also recommend Hedges’ Empire of Illusion for those who want to dig more into the spiritual and psychological dimensions of the situation in which we find ourselves. I agree with him, “The world that awaits us will be painful and difficult.” It’s useful to accept and adjust to this inevitability rather than wishing it away or being angry about it. There is no way around it because the ruleset we’ve lived within for decades was not sustainable. It depended upon exponential growth, exponential debt, exponential resource consumption, and exponential environmental impact.

As the world goes through a necessary reset of the rules, we will experience significant upheaval. I recommend Chris Martenson’s material at www.chrismartenson.com to understand the exponential ruleset and to dialogue with an enlightened community taking steps to minimize the upheaval for their local communities. That is the only prudent option at this point.

#4

#5

After a short intro about the need to restore the authentic real world vs. the fake corporate PR world, this lesson digs into financial power in more detail, explains how you might think of it in terms of the power parents have over children, and then evaluates some of the popular solutions being discussed in the political realm:

- ending the fed
- cutting back on government in the interest of a “free market”
- putting the banks through bankruptcy.

Intro:

Main lesson:

The intent of lesson 1 was only to make a couple key points necessary to understand what is described here in lesson 2.

I’m launching a new video series to dig into the details of the monetary system. There is WAY too much disinformation out there that’s going to have us going down the wrong path as we try to reform the system.

The issue is WHO controls the system, not WHAT backs it.

excerpt…

The “War on Terror” has become the most successful military diversion in history, having lasted twice as long as WWII so far. While the US and other countries are under severe attack by financial powers through the corporate system and the currency and bond markets, the US military is convinced that people living in remote deserts are the threat. So they’re busy killing some of the poorest people in the world while the country is being attacked by the richest.

And how does Economics compare?

Well let me take a moment to congratulate the few Harvard, LSE, Princeton, Chicago, MIT grads serving Wall Street, the Fed primary dealer cartel, the IMF, and the World Bank (and Larry Summers deserves extra credit). These economists drive the field, and they’ve brought it to a point that has taken us back to the days of medieval feudalism. The field is now more primitive than flat-earth Geology and Ptolemaic Astronomy. Congratulations economists!

Of course it’s not entirely the economists’ fault. They were taught from day one in Economics 101 that they will undergo a moral lobotomy. Neoclassical Economics goes to great lengths to indoctrinate new recruits that it’s a positive vs. normative “science.” Other sciences don’t bother to do that because the fact is there should be no conflict between the positive and the normative. Why is Economics the only field that does this? Because it wants to avoid the questions that good students interested in true progress would otherwise ask. It knows it’s hiding something in its content that conflicts with the normative and it doesn’t want students to search for and find the truth. Just remember this helpful indicator in your next life–anything that goes to such lengths to admit upfront that it’s morally bankrupt might be something around which you should NOT build your life!

The truth is that modern Economics has been designed to completely hide the monetary system that hovers above the economy. It assumes money is just a medium of exchange floating through the economy to facilitate a free market and generate wealth. At times that has been true, but today it’s probably the biggest lie of modern history. The current system does not generate wealth and freedom for most people. It generates debt and servitude. And it is not a free market. Today’s money flows from a top-down imperial power system expanding globally. It creates a master-servant relationship because all money comes from privately held debt.

Let me say that again. ALL MONEY COMES FROM DEBT (for those of us who suffered the most indoctrination by attending schools like Harvard, let’s pause here for a moment so we can catch up to the rest of the class). This means in order for governments, businesses, and people to have the liquidity necessary to live, they must agree to sign over a claim on their assets to banks. As the banking system inflates over time passing out credit, which makes everyone feel good with more digits in their accounts, it gathers claims on all the assets in the system for its private capital holders. Admittedly, this is one way of facilitating development (good students would’ve figured out a better way had they not been stifled). But it’s also the method for transferring everyone else’s assets to the balance sheets of the capital holders behind the banks once deflation sets in.

This is what we’re facing today. The global banking system has a claim on most assets in the world (except those in places like Iran, so it’s no surprise the military is gearing up to conquer the region for Wall Street and its Harvard employees…like JP Morgan Chase moving in on the mineral assets seized in Afghanistan because it’s a primary bank that pays the military-industrial complex to conquer territory for it).

Once the system has gathered all the claims it wants, senior capital will be removed, kicking off the next phase of deflation and a transfer of assets from the people to the banks. At that point we’ll probably see JPM Chase CEO Jamie Dimon, another Harvard lobotomy victim (there’s a high correlation between Ivy League lobotomies and billionaires), on CNBC threatening Americans to pay up as his firm jacks up their rates and takes their homes like he did in early 2009.

In this transfer process, the people’s equity will be eliminated. And this means, they will be returned to the life of a feudal servant to the capital holders behind the banks. This is not rhetoric, but the unarguable math and accounting of the banking system. It’s very simply a mechanism to transfer assets/equity from the balance sheets of the many to the balance sheets of the few.

So a final word for all the top economists out there:

Congrats again! It didn’t take much to buy you off. Today’s financial elite who control the global debt machine have rewarded you with paychecks and the status of the high priests of old. Sad. Do you have any pride, or is it really that easy to co-opt you with retreats in Jackson Hole, hobnobbing in Davos, and membership in the CFR?

Come on. Rise above it. You are obligated to fix this immediately:

1) Develop an interim solution in concert with the old time-tested bondage/jubilee, growth/rest cycles which gave the people, communities, land a breath of fresh air in the midst of empire growth. (if you’re writing that off as religious romanticism, ask yourself what top athlete doesn’t live by training/rest cycles…over-training results in deterioration, not progress)

2) Then develop and advocate a humane money system that facilitates the rebuilding of real community as opposed to one based on debt servitude that parasitically sucks the life OUT of communities.

We know the debt holders have a lock on Harvard and LSE (my days at Harvard were marked by professors preaching the greatness of Enron finance and Wall Street derivatives, so most Harvard grads are probably beyond recovery). But what about the rest of you? It’s time to step up and work toward progress like your colleagues in other fields. It’s time to move beyond the dark ages.

The 2-tier Economy

Embedded in the article is an unspoken assumption that the lower classes need to take pay cuts and layoffs so global bondholders and Chase bankers can be paid in full. That’s so…uh…20th century. If astute bloggers don’t start educating politicians by injecting into the political debate what they clearly know when they engage in market debate, the coming downward mobility for everyone but the bondholders is going to be galactic.

Mish agrees with NJ Governor Christie that the reason teachers are facing layoffs is because of teacher unions. Of course that’s true within the constraints of our current monetary system where lower class pay cuts are “good for the economy” while at the same time increased rent extraction by the financial class is “good for the economy.” One is the flip-side of the other. Manufacturing workers have learned this in spades, especially since their communities and way of life have been completely destroyed and moved to China. It’s a predator-prey economic relationship, precisely the reason unions exist in the first place. So what’s the real problem: the unions or the nature of the monetary system itself?

In a system where 100% of all money is sourced by going into debt to private capital holders who demand exponential returns, employees in fields like education which are managed on the balance sheet as “cost centers” must live within the austerity of cost reduction metrics. In real life terms, this means in order for the bondholders at the top to maintain their ever-increasing quality of life, millions of employees in cost centers must be happy with continually declining quality of life. During inflationary periods when capital holders are injecting more liquidity, this translates into cost center employees receiving raises that stay below the inflation rate (these teachers stayed ahead, but systemically across the entire economy, cost centers are managed below inflation–again just look at the offshoring). During deflationary periods when capital holders are removing liquidity, cost center AND revenue center employees take pay cuts and get fired so the capital holders can keep making more money.

Questioning the Status Quo

Unlike politicians, Mish is smart enough to step out of the existing monetary framework and ask himself what might be a better solution given the extreme situation we’re facing. Why doesn’t he? Why don’t most people? Perhaps they haven’t been faced with the type of austerity that forces a person to question the sanity of a system where all money is controlled by private capital. Or perhaps they’re “survival of the fittest” fundamentalists like Larry Summers, i.e. private sector bondholders deserve to win all the poker chips while everyone else is left with nothing. Or maybe they’ve just been enjoying a comfortable inflationary ride for so long that they can’t fathom the fatal flaw that’s been embedded in the monetary system from the very beginning.

That is…until now. The exponential game is reaching its end as the debt load approaches the point of saturation. If we don’t change the system before that inflection point, we’ll see the biggest austerity program ever as millions of people enter a tomorrow most people can’t dare to ponder today. In market terms, that inflection point is when global capital holders run on Treasuries and the Fed is forced to jack up its short rate to defend its balance sheet. That point may be next year or 10 years from now, but it’s coming if the status quo is not changed. And look out when it does.

This is not populist rhetoric, but the basic mathematical fact of our system.

Rather than justifying it, this should make us reevaluate the monetary system we’ve been living under for 100 years. We’ve experienced a lot of development. We’ve already built the brave new world. Does a never-ending stream of new gadgets from Apple, reality shows from Fox, and dead bodies from wars really justify milking more return on capital (ROC) from the lower classes forever? Of course we know that’s impossible. The system is reaching not only its human velocity limits but its mathematical limits. A systemic sabbatical has never been more necessary, so an alternative form of liquidity to supplement our current system is necessary.

Anything Else Has Zero Moral Authority

A structural adjustment in the global monetary system in the spirit of jubilee is clearly the only moral solution at this point. Every major religion and every sane philosophy demands it and compels us to implement it. Anything else is morally deranged and will result in a class-based world war where the capital holders turn violent governments against the masses.

Academic institutions and economists – you are obligated to develop and implement such solutions.

Bloggers – focus solely on this issue to educate the politicians

Wall Street and Silicon Valley employees – take a vacation and walk through the midwestern and mid-atlantic towns your work is destroying.

Top capital holders – this is your crossroads. Making the right decision will do everyone much good. Making the wrong decision will result in your spiritual and psychological death while many in the lower classes around the world experience premature physical death.

Regarding the first question, I purposely focused on the cartel because so many people still don’t believe it exists due to false free market propaganda. If people don’t realize that a cartel of predatory usury institutions operationally controls the US, then why would they care about the regulatory framework over those institutions?

But the point is well-taken. The article might have implied those 18 dealer banks have ultimate power. Not at all. The key word in the above paragraphs is “operationally.” The dealers operate within a larger framework. They do not strategically rule over the framework itself. The ultimate rulers are the most senior private capital pools in the world who use the dealers as capital laundering machines and who create their desired framework through the central banks, IMF, BIS, and political institutions like the European Union and G20.

Since WWII, their desired framework has been to fuel global empire by milking the US population through the debt-dollar system centered around the Fed. Now that the US has been milked dry, things are shifting to a new milking center for the 21st century–China. Behind the scenes will be the senior capital pools currently in London and New York and the banking establishment in Switzerland, but on the surface Asia will emerge with profound power as China becomes the operational center of a new global empire based on a new global currency. At that point, the key dealers will simply plug into that new system. The world will think this represents the end of the US empire. But a US empire never really existed. More accurately the US was simply the latest host of the parasitic international banking empire that leeches off countries and plays them against each other. The parasite will quietly slither into Asia while using its media to blame the US host for the damage it has done.

Now a few points of clarity for those who want to better understand the cartel dealers:

- They are not equal. Some play long-term strategic chess as they’re aligned with the senior capital pools mentioned above. Others play the short-term profit game as the chess players allow them. Of the US firms, JP Morgan Chase and Goldman Sachs are on top. While Goldman may appear to be #1 since its people have literally run key government agencies for about 20 years, I’d suggest that JPM Chase is preeminent. Not only does it have the most power due to its derivatives position, which gives it the highest claim on capital in the US, but also it’s the merger of the old aristocratic interests behind JP Morgan and the Rockefeller interests behind Chase Manhattan. So let’s just say it wouldn’t be in your financial interest to bet against this bank. Its power was demonstrated after the crash of 2008. The media suggested JPM emerged unscathed because it was the honest, good bank whereas bad, greedy banks failed. Yeah, and I live with Puff the Magic Dragon. Ask yourself, after the Corleone family killed the leaders of competitive families in The Godfather, did Congress investigate the losing families, or did they investigate Corleone? So why did Congress investigate the losing banks!? You don’t blame the firms that were driven out of business. You look to the firm that benefited most. The fact is, the crash of 2008 was the trigger for a restructuring M&A transaction of the US economy, and had there been a tombstone printed in the WSJ, just speculating here, the lead bank would have likely been JPM.

- Some members change over time. These are the short-term profit players. For example, Countrywide was a dealer while it helped inflate the real estate bubble and BT Alex Brown was a dealer while it helped inflate the first tech bubble. Both of them were leaders of their short-term niche markets because of their privileged risk/cost position as dealers, and both of them were acquired by senior dealers for a deep discount once senior capital was pulled, bursting their respective bubbles and leaving the losses in the hands of junior capital.

- The cartel is international, so we no longer live in a world of independent countries. It would be more appropriate to view countries as administrative districts of the banking system so the financial elite class can extract value from the lower and middle classes. One of the key insights from the movie Braveheart was how the royal elite from different countries cooperated with each other against the masses. Today it’s more sophisticated. The mathematical, formulaic banking system aligns the financial elite in different countries together against their populations by managing them as digits on a balance sheet. It’s a simple matter of math, accounting, and system management, not conspiracy.

- Both political parties serve the cartel. It controls and profits from the private sector corporate system (typically championed by the political right) and the government welfare system (typically championed by the political left). Choosing between Democrats and Republicans changes nothing.

- Finally, it means conventional wisdom about money is false. The problem isn’t that our money isn’t gold-backed. The problem isn’t fiat money. The problem is that all money is hierarchically controlled as an asset to private sector institutions and elite capital holders who have the ability to call-in their chips, i.e. your bank digits, whereas it’s an interest-bearing debt to governments and the people. This has immense ramifications I don’t have room to address here. Government neither prints money nor causes inflation in this system (if it would like the original colonies did to escape British banker austerity and usury, some of the current unemployed would have jobs and those losing their homes in foreclosure might find some relief). Rather, the cartel controls all money and drives inflation/deflation cycles. It has driven consistent inflation for 60+ years. So we are now facing painful deflation, or hyperinflation if the government makes a key mistake, as the senior capital pools attempt to bring about the new banking/currency framework. If the money system isn’t changed, the emergence of the 21st century global empire mentioned above is only a matter of time.