Thursday, February 20, 2014

The Circle (part 2) -Ponzi Schemes/ Pyramid Schemes in the Banking Industry and the Stock Markets

Brothers and Sisters,

One honestly need to look into the monetary system, especially how markets, economies, and banks truly work.  When they understand this information, people will start to understand the reality that they are presently living in.  Majority of people do not understand that banks themselves are run on a Pyramid scheme and exist completely around a Ponzi scheme.  That is how much of the bank's profit are made by those in the banking industry.  There exists CENTRAL BANKSBULLION BANKS, and  COMMERCIAL BANKS 

Presently, most people are familiar with the Commercial Bank since it is where you put your money on a regular basis.  However, majority of people probably have never heard of Central Banks or Bullion Banks.  In simplicity, a Central Bank is "a national bank that provides financial and banking services for its country's government and commercial banking system, as well as implementing the government's monetary policy and issuing currency". A Bullion Bank is a bank that handles "transactions in gold and silver and protects the actual bullion.  When a Central bank loans or sells gold, the physical location of the bullion does not have to change. The bullion banks (clearing banks) conduct the financial transactions and ownership transfer takes place in the records of the depository".  A Commercial bank which most people are familiar with "is a type of retail bank that provides services, such as accepting deposits, giving business loans and basic investment products".  

Now that the definitions are cleared up.  Let's understand this more.  The Central and Bullion Banks are privately owned by the Elite and it is the Elite who set the terms of interest on their products when lending money to National Governments and Commercial Banks all over the world. The commercial banks then lend money to the citizens of the nation who pay back interest to Commercial Banks who in return pay back interest to Commercial Banks and Bullion Banks. What has just occurred is threefold.  A debtor is now paying an exorbitant amount of interest on money owned.  However, the money owned was based on products that do not exist and a currency that has no real value.  Due to the fact that our World Economy runs on Fiat moneyFiat money is a "Currency that a government has declared to be legal tender, despite the fact that it has no intrinsic value and is not backed by reserves. Historically, most currencies were based on physical commodities such as gold or silver, but fiat money is based solely on faith.  Because fiat money is not linked to physical reserves, it risks becoming worthless due to hyperinflation. If people lose faith in a nation's paper currency, the money will no longer hold any value".  Fear and speculation cause people to drop a currency therefore starting a massive sell off in the stock markets.  Since fear and speculation maintain the value of anything in the stock market, losing faith in a currency for whatever reason will bring the value of that currency to nothing and will cause that nation's market to be weakened overnight 'causing that nation's economy to implode.

The way the banking system and monetary system works presently is no different than a Ponzi scheme ("a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organization running the operation. Perpetuation of the high returns requires an ever-increasing flow of money from new investors to keep the scheme going").  However, this is where the problem arises between the BANKS and REALITY.  Speculators are creating investors to invest in products that do not exist and have no intrinsic value.  In fact, "Gold owned is just 1% of what is physically deliverable". Compounding this issues is the fact, the American dollar and the Euro are the world's reserve currency and since both are in trouble currently -this looms large on the world market.

Interwoven intrinsically into all of these above mentioned issues are the terms listed below and how they play a huge role into all of this:

(a) PETRO DOLLAR - All petroleum exporting countries (OPEC) trade oil in exchange for the American Dollar.  When the American dollar gets devalued however in the next upcoming monetary crisis, all countries will dump the dollar and trade in either Gold or another strong currency in circulation.  Presently, "most countries rely on oil imports, and due to that fact, they are forced to maintain large stockpiles of dollars in order to continue imports. This creates a consistent demand for USDs (United States Dollars)and upwards pressure on the USD's value, regardless of economic conditions in the United States. This in turn allegedly allows the US government to gain revenues through seigniorage and by issuing bonds at lower interest rates than they otherwise would be able to. As a result the U.S. government can run higher budget deficits at a more sustainable level than can most other countries. A stronger USD also means that goods imported into the United States are relatively cheap.  Since the price of oil is more stable in the U.S. than anywhere else mainly because  importers do not need to worry about exchange rate fluctuations, the U.S. imports a great deal of oil and its markets are heavily reliant on oil and its derivative products (jet fuel, diesel fuel, gasoline, etc.) for their energy needs. This in turn makes the price of oil an important political factor when determining geo-political strategies for the U.S.  In fact, the U.S. administrations are quite sensitive to the price of oil and have gone to war in the past for trading against the Petrodollar.  For example, In 2000, Iraq converted all its oil transactions under the Oil for Food program to euros. When U.S. invaded Iraq in 2003, it returned oil sales from the euro to the USD".  Presently, since 2001, there has been much geo-political manoeuvres made by the U.S. and it's allies to prevent the Petrodollar from being dumped.  Part of this geo-political strategy of circling Russia and China and retaining the Petro dollar in place has also led to the current Currency Wars that are taking place presently.

(b) CURRENCY WAR - Since 2010, "the United States and China have competed in a Currency War in order to have the lowest valued currency on the markets. Low currency values aid exports by making them cheaper in comparison to other currencies. The U.S. is allowing its currency, the dollar, to devalue by expansionary fiscal and monetary policy. It's doing this through increasing spending, thereby increasing the debt, and by keeping the Fed funds rate at virtually zero, increasing credit and the money supply.  China is keeping its currency low by pegging it to the dollar, along with a basket of other currencies. It keeps the peg by buying U.S. Treasuries, which limits the supply of dollars, thereby strengthening it. This keeps the Yuan low by comparison.  Meanwhile, Brazil and other emerging market countries are concerned because the current currency war is driving their currencies higher by comparison which in turn raises the prices of commodities, such as oil, copper and iron, which are their primary exports. Emerging market countries are now less competitive and have also slowed in economic growth" What further exacerbates this issue is the fact that a Currency Wars can easily turn into a Trade War, "whereby losing countries start slapping tariffs on imports and exports to punish countries deemed to be 'manipulating' their currencies. Trade wars, of course, make stuff more expensive for everyone" which again damages the national and global economy and also lowers the standard of living for the masses.  Presently, "the American policy of using the military to contain China's growing economic influence, and the U.S. considering economic rivalry to be a basis for war, has created a tinderbox waiting to explode".

(c) GOLD BARS- In 2013, Germany ("the second-largest gold holder in the world"), wanted all their Gold reserves returned to them from France and the U.S.A.  This means "moving 54,000 bars of the shiny metal back to Germany".  During this timeline however, it also coincidences with France's decision to intervene in Mali who happen to be the third largest gold producer in the world.  What further compounds this issue is that other countries such as Netherlands are also asking for their gold returned.  All of this is due to the inevitability of the Euro zone collapsing.  The problem however is that "most of the Western world's gold, which is supposed to be in central bank vaults, has been leased out. Much of it is now in private hands in India, and what remains continues going East to China and other Asian vaults. So most of the Western gold has vanished from the vaults and it's now just a book entry. These various Western countries and bullion banks simply roll these leases over when they come due, and the gold never gets returned back to the countries".  This is very problematic because now, there is nothing to protect the Western nation-states when their currency start collapsing since the real wealth, Gold, is in private hands who have no loyalty to any nation-state in place

(d) TUNGSTENMany Gold Bars and Gold Jewelry are now turning up filled with Tungsten.  Many people who think they presently have gold in their possession or are buying gold in stores in order to protect themselves and their families from the dollar collapse are in fact buying Tungsten (a gold substitute which is very similar to gold but very hard to detect by the naked eye).  Therefore, buyers beware for all of those running out in hordes trying to buy gold in order to avoid the inevitable dollar collapse.  Do not put all your faith in gold:  (A) you cannot eat gold when hyperinflation occurs and prices sky-rocket  (b) gold is hard to store at home without the threat of robbery being present and if you do decide to place it in the bank, do remember than when bank runs do occur worldwide, the banks will freeze your assets making gold theirs and not yours, AND (c) make sure you own real gold if you do so choose to invest in it and buy it.

In conclusion, many things that people do not understand or know about make the world the way it is today.  What you must understand in all of this is the fact that there are forces at work who do  not have your best interest in mind.  Forget about "human rights", "democracy", and entitlements you were conditioned and indoctrinated to believe in.  Look at the reality at which you live in and ensure you are not going into debt to maintain a lifestyle you cannot compete with.  Ensure you understand the world around you before blindly jumping behind a "moral cause" and supporting it.  For in truth, it's money that makes the world go around and real money is in the hands of the ELITE, not the investors and the masses.  All wars are essentially wars of the elite with the masses caught in the middle and living through recessions, inflations, depressions, and eventually war.  Realize all of this before you fervently jump behind a national cause or an ideology.

"The market is crashing big time and there is no soft landing. There has never been a soft landing ever in history".

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