Saturday, 15 September 2012

The End of the Financial Engineering Era

For my first post on here, I wanted to speak briefly about central banks and how they are destroying the currencies - through financial engineering. I wanted to discuss how financial engineering is not the solution; indeed, it is making the problem exponentially worse, and leading us down a road towards economic and social collapse. I also want to discuss how financial engineering is a bad thing, but the end result (societal collapse) may not be as bad as one would think.

Firstly, financial engineering has brought us to where we are today. It has happened throughout all of the 20th and 21st centuries, and dates much further back even than that. I don't want to go too in depth into what exactly it consists of - at least not today. I'll leave you to follow your own curiosity on that.

Instead, I want to discuss not what we have, but what we need. Instead of financial engineering and meddling from central planners, what we need is to adhere to the basic principle that if you make a bad bet or a bad loan, you should live with the consequences - whether simply losing a portion of your money (or your investors' money), or losing so much money that you are forced into bankruptcy. This is what is supposed to happen in free, open markets. Unfortunately, what we have now is financial engineering to attempt to tinker with the system and the way economics works, and as such we are seeing negative effects in the form of currency devaluation (through ceaseless money printing) as well as decreased profits for large corporations traded on the money markets (which means less tax revenue), among a myriad of countless other economic woes. Add to this rising inflation and food prices and plummeting buying-power, and we've got a recipe for financial disaster, economic ruin, and subsequent social revolution.

If you make a bad bet you need to live with the consequences. If you make a good bet then you get to reap the rewards. This is just and fair. This is logical. This, however, isn't the world that we live in. In this world, if you make a bad bet you go to the government to get bailed out - that is, of course, as long as you are in the multi-billion- or multi-trillion-dollar money management tier. If you're a "little guy" you take what you earned - positive or negative. If you're a big player, you can do no wrong, and you will be given free money at the expense of the taxpaying public. And people wonder why bankers are so often attacked and despised by the "awake and conscious" population of the world - here's a clue: its because of the constant attacks on our rights, freedoms, and livelihood, and their impunity from the consequences that should accompany such acts.

In order to get rid of this, we need accountability for those who are making the decisions. We need the Tim Geithners and the Ben Bernankes to be exposed by the mainstream media and, indeed, by the very administrations that are supposed to be keeping them in check. The same goes for Europe with Mario Draghi and the Troika, although they've got bigger problems in that there is no one administration to hold the ECB accountable for its irresponsible and hostile actions against the population of Europe. Rather, they have a mish-mosh of governments, some with more sway than others due to perceivedly stronger economies. 

Sadly, the accountability is nowhere to be seen, mostly because those very same people who are big players in the financial markets - indeed, self-proclaimed "market makers" - also happen to fund the election campaigns of the politicians that are tasked with their regulation and oversight. The corporate media relies on these money markets and benefits enormously from the measures taken to protect bankers and indebt, enslave, and impoverish the general public and the middle- and lower-class. As such, the media that is supposed to be the ultimate watchdog ends up playing directly into the hands of the bankers and corrupt politicians, and begin to participate in the collusion through manipulation of information - also more widely known as propaganda.

Fiscally, Europe's situation is far more complex than that of the US because it involves multiple member states; yet, we are seeing the dollar take a downturn far worse than the Euro's (and, consequently, the price of the ever-devalued Euro rising versus the ever-devalued dollar). Perhaps this is because while the Euro zone has systemic issues just like the United States, the affiliated countries do have the ability to simply leave the Eurozone and take a few years of difficult times in exchange for long-term growth and recovery. In the United States this isn't the case, as all of their eggs are in one $2.8 trillion annually-lined (soon to be $4 trillion annually) basket - that, of course, being the Federal Reserve. The US doesn't have the ability to go against what it's central authority dictates. Although they aren't doing it, the Eurozone countries do. Perpetuating fraud and austerity on the people is a lot more difficult when you've got 17 nations that must individually agree to be a part of said fraud - obviously not impossible, because it is being done as you're reading this, but definitely a lot more difficult if the citizenry would wake up to the options they have, and demand change through peaceful revolution (a la Iceland)

It truly is a race to the bottom to see which currency will implode faster - the US Dollar with its multitude of issues and variables, or the Euro with their own set of daunting obstacles. Who will win this race is yet to be seen. Who knows, we may even see other currencies (the Japanese Yen, for example, has flown under the radar in terms its problems, but they may even be worse than those of the US and the Euro combined - especially in the wake of the 2009 earthquake and subsequent Fukushima disaster) beat out both the Euro and the Dollar in the race to financial and monetary turmoil - and, consequently, the accompanying revolts and revolutions that are inevitable with such situations, as history has so masterfully demonstrated. In actuality it doesn't really matter, as they are all headed for the same fate. What does matter is how people can protect themselves against the collapse of their money.

This lies in gold and silver. They have historically been the only money that has ever actually worked, as all paper currencies have failed miserably, with no exceptions. They also happen to be the only two commodities that have had enormous gains over the past 10 years, when pretty much everything else has tanked miserably and lost people boatloads of money. I'll go further into gold and silver in a future post for those who are interested to see my reasoning behind holding savings and investments in these beautiful, illustrious, and intrinsically-valued commodities.

In the mean time, I implore you to do some digging on your own as to the benefits of gold and silver, and the risks of investing in today's money markets as they bubble up enormously. We all know what happens to a bubble when even a little bit of outside pressure is placed on it - it vanishes into thin air. You can consider paper currencies to follow the same principles, only it isn't immaterial and inconsequential - it is your life savings and very livelihood disappearing into thin air in the blink of an eye.

Is there money to be made in the money markets? Currently yes, as always happens with bubbles. Very short-term investments and quick buying and selling can definitly make you a quick buck - for now. The question simply becomes how long before the bubble bursts, and whether or not you can get your money out in time, what with the corporate media and huge global players saying one thing to the public, while at the same time using insider information to position themselves to continue stealing the wealth from the lower classes of the planet - and often from the very clients whose money they are investing.

The waiting game can be tedious, but it will be worth the display of fireworks that is inevitable when it all comes to a close. I wait with baited breath to see the spectacular explosion of societal unrest and turmoil as people wake up to the world of serfdom, feudalism and debt-slavery that we've been deceived into adopting as our way of life. It may be scary, but making sound and informed decisions now will help to carry us through, as well as making us far wiser when our next form of societal development comes around. The turmoil that will ensue is negative in some ways, but has far more positive implications for the future - tying everything back to the concept of "short-term pain enabling long-term gain", albeit on a magnitude with implications for the future of humanity.

You may be asking yourself how I got on the subject of societal collapse, and my answer to that would be that money is what makes our world go around. It sickens me to live in this reality, but that doesn't make it any less real. Society is driven by money. It's the glue that is holding our society together - but financial engineering and psychopathic and sycophantic banking practices (as well as corrupt politicians selling out to the banks) have eroded that glue to a point where we're now holding on by threads, suckling at the teat of the very people who put us into this mess in the first place. Somehow they remain obscenely wealthy, while the rest of us get poorer and poorer.

While this glue loses its ability to hold, we see more and more chaos in the world, and yet no one seems to have a solution to fix things - or at least no one is willing to make the difficult and necessary decisions for things to fix themselves. As money becomes valueless, society seemingly loses its drive for a better human future and gets swept up in symptoms of the much bigger systemic problems.

So, if money is what drives society and the money implodes, what will be left to drive society? Simple - a need for change. At this point I think it's too late to come back from the constant barrage of challenges we face. We're too far down the road. We need to let things come to a head and boil over in the form of revolution- whether that is peacefully or violently remains to be seen. Peacefully is preferable and much more rational, but people aren't rational when they lose everything they've worked for. I deplore violence, but I don't control the actions of the rest of my human brothers and sisters, nor could I blame them for turning to such a barbaric means of achieving their goals.
Societal collapse may seem scary, but is it not far more scary to perpetuate a world of endless problems and negativity simply because we are afraid of what may happen to our current way of life? Won't that keep us in the same boat we're in now, if not one far worse with every day that passes? Is fear of change really a valid reason to continue down the same road, or is it more intelligent to adapt out of necessity and embrace systemic change?

Reform of a system designed to stifle reform is futile. Collapse of that system and rebuilding a better and wiser system from its ashes, in my opinion, makes far more sense.

Let's recognize that we are in a transitional period of history, where we're seeing the end of one era and the beginning of a new one. Let's fight to make the new era a bright one, instead of fighting to reform the bleak one in which we currently live. Let us let collapse the system that people have become so dependent upon so as to free the whole of humanity from oppression and tyranny, so we have an opportunity to build a better world starting with a clean slate.

I hope more people wake up and come to see it this way, too. The more we fight to save the system the more we lose. Let's stop fighting to save something that never worked properly in the first place.

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