Posts Tagged ‘organized violence’

The nature of governments is organized violence

December 6, 2014

What is the nature of governments? They are operations of organized violence.

A widely-recognized point of historical innovation was the Prophet Noah’s implicit declaration of war (on behalf of the Hebrew tribes) against the rest of humanity. The idea apparently was that “we, the elite, must establish court systems in order to govern all of humanity by force (or else an apocalyptic catastrophe worse than the recent Great Flood will wipe out all of humanity).”

This was distinct from the prior legal system internal to the Hebrew tribes. Noah’s declaration was basically “our group is the only rightful authority not only over our own 12 tribes as before, but now over all of humanity.” (That was in contrast to the time prior to Noah’s declaration of a Seventh commandment – “to establish courts of justice” – to add to the six that, according to Hebrew tradition, existed prior to Noah.)

However, we see similar declarations of universal or global authority in many places and times, such as the Holy Roman Empire’s declaration of global political domination in the 1400s. Empires are inherently “expansionist” systems. Isolationism is the exception (when two adjacent empires respect each other’s boundaries), not the standard in human history.

Later, by the time of Moses, (as recorded in the book of Numbers), the Hebrew tribes began their massacres and enslavements of neighboring tribes such as the Midianites. As for the various military campaigns of the Hebrew tribes in the last few thousand years, those are naturally not documented in the Bible.


However, there are many traditions that claim the ancient Hebrew prophet Abraham as a patriarch. One branch is the Holy Roman Empire and another set of branches would be the various Muslim empires.

Organized violence is the root of money (& tax extortion systems)

April 17, 2014

The foundation of all courts systems and governing systems is organized violence. That is one of my “pet subjects.”

The ancient Hebrew prophet Noah promoted the idea of a future threat of apocalypse. Recent versions have been global warming, some kind of epidemic disease, nuclear annihilation, and so on.

What was Noah’s solution to the alleged threat of extermination by a morally-insulted God? Use systems of organized violence to regulate the efficiency of inequitable redistributions of wealth!

He called them court systems for the establishing of a new idea called justice, which means whatever the ruling judge dictated as the judgment that the mercenaries of the court system would enforce through organized violence. Noah also claimed that the Hebrews had authority over all of the rest of humanity because that was the only way to avoid another apocalypse.

Later, another Hebrew warlord/ruler named Moses ordered the slaughter of the Midianites by the Levites. After enough slaughters by the priest-soldiers (tax collectors/mobsters), the masses started to “wise up” and give ritual tithes or taxes to purchase the “protection” of the Levite warrior-priests. That is the foundation of the great April 15th tax day ritual.

Here is an example from Exodus 32:

Moses Breaks the Tablets
27He said to them, “Thus says the LORD, the God of Israel, ‘Every man of you put his sword upon his thigh, and go back and forth from gate to gate in the camp, and kill every man his brother, and every man his friend, and every man his neighbor.'” 28So the sons of Levi did as Moses instructed, and about three thousand men of the people fell that day.29Then Moses said, “Dedicate yourselves today to the LORD– for every man has been against his son and against his brother– in order that He may bestow a blessing upon you today.”

Another example of the organized violence of the ancient Hebrews is in

Numbers 31

Vengeance on the Midianites

 1 The LORD said to Moses, 2 “Take vengeance on the Midianites for the Israelites. After that, you will be gathered to your people.”

 3 So Moses said to the people, “Arm some of your men to go to war against the Midianites and to carry out the LORD’s vengeance on them. 4 Send into battle a thousand men from each of the tribes of Israel.” 5 So twelve thousand men armed for battle, a thousand from each tribe, were supplied from the clans of Israel.6 Moses sent them into battle, a thousand from each tribe, along with Phinehas son of Eleazar, the priest, who took with him articles from the sanctuary and the trumpets for signaling.

 7 They fought against Midian, as the LORD commanded Moses, and killed every man8 Among their victims were Evi, Rekem, Zur, Hur and Reba—the five kings of Midian. They also killed Balaam son of Beor with the sword. 9 The Israelites captured the Midianite women and children and took all the Midianite herds, flocks and goods as plunder. 10 They burned all the towns where the Midianites had settled, as well as all their camps. 11 They took all the plunder and spoils, including the people and animals, 12 and brought the captives, spoils and plunder to Moses and Eleazar the priest and the Israelite assembly at their camp on the plains of Moab, by the Jordan across from Jericho.

 13 Moses, Eleazar the priest and all the leaders of the community went to meet them outside the camp. 14 Moses was angry with the officers of the army—the commanders of thousands and commanders of hundreds—who returned from the battle.

 15 “Have you allowed all the women to live?” he asked them. 16 “They were the ones who followed Balaam’s advice and were the means of turning the Israelites away from the LORD in what happened at Peor, so that a plague struck the LORD’s people. 17 Now kill all the boys. And kill every woman who has slept with a man, 18 but save for yourselves every girl who has never slept with a man.

Because of their military superiority, the ancient Hebrews thrived on the productivity of those that they ruled through intimidation. The twist with their massive system of extortion was that it was not really too useful to the Levites to get a bunch of huge donations of sheep and wheat and so on all at once. So, a huge innovation was the creation of tokens that were acceptable to the gangsters for paying off the tax debts invented out of thin air. Those tokens were the first money or currency.

So, the Levities would monopolize access to some rare mineral like gold and then tell their slaves / taxpayers that the slaves needed to BUY some gold coins from the Levites in order to pay taxes. The Levites set the exchange rate (how many useful sheep or how much useful wheat was required to obtain a shiny little trinket of gold from the Levites).

Since the Levites had lots of gold but had no use for it, they created demand for it by requiring the masses to PURCHASE gold in order to pay taxes. So, maybe they spent $1000 dollars of resources to mine the gold that they forced the masses to buy for $100,000 worth of something actually useful, like wheat or salt or sheep.

In the last century or so, diamonds have been the big profit-maker for the modern-day Levites. They may spend $10 to obtain a stone that eventually they sell for $1,000 or more.

What gives currency value (purchasing power)?

November 12, 2012

war veterans


You may know the phrase “the full faith and credit of the United States of America.” What exactly does it mean? What really gives the US Dollar market value (purchasing power)?


president obama


Some libertarians assert that gold and silver give value to a currency. That is an understandable presumption, but clearly false.


ron paul and mitt romney


In 1971, the US Dollar went from being redeemable for gold (by non-citizens only) to not being redeemable for any particular substance. You could use that currency to do business with the US, like to pay taxes or pay court fees to file a lawsuit or produce an eviction or foreclosure auction or levy.


If the currency had collapsed by 1972, then clearly gold would have been what gave it value. However, 41 years later, the US Dollar is still the dominant currency in the world.

Are there more US Dollars in circulation today than in 1971? Yes, but so what? Is one US Dollar worth about what two dimes were worth in 1971? Yes, but so what? That does not alter the fact that the US Dollar is the dominant currency in the world, being used in millions of transactions day after day.


veterans day


Therefore, the clear reality behind the purchasing power of the US Dollar is obviously not gold (and thus we can presume that it never was). The purchasing power comes from organized violence (and always has).


us soldiers veterans


1861 Confederate States of American half dolla...

1861 Confederate States of American half dollar coin, front and back (Photo credit: Wikipedia)


That is just the beginning of the issue (as it relates to the bubble or speculative demand for gold). The other issue, which I have often repeated in recent years, is that court systems of organized violence created demand for materials like gold and silver by requiring payment in that substance. Why? Because they could mine it and the common people could not.


Imagine- what if a court system says “every citizen in this country has to pay us 2 ounces of gold per year or we will arrest and execute them?” Then that gives a certain demand for gold- especially if the threat is believable. Or, if the threat hinges on “4 ounces of gold per year,” then that extortion racket or taxation scheme will create even more demand for gold.


The public compete with each other for gold even more when the annual requirement is 4 ounces. Why? Not because they want gold, but because they fear the organized violence of the gangsters making the threat.


What if a government demanded that every citizen provide an 8-carat diamond to the government every year. Would that effect public demand for diamonds? What if they demanded a currency like Euros or Yen or confederate dollars?


8 carat diamond


At some point, the people may rebel against the extortion racket, potentially leading to a civil war or colonial revolution. If the rebels kill enough of the old regime, they may then set up their own court systems of organized coercion. If the rebels get nuked or starved to death, then that eventually leaves less people to compete for the same amount of gold, so the slaves settle down and get back to work on the financial plantation.


rand paul - government bullies


6 Confederate States of America currency notes...

6 Confederate States of America currency notes three $10 notes 3 $20 notes (Photo credit: Wikipedia)


So, even the former value of gold when it has been accepted as a currency is not from the chemical compound itself, but from the organized violence of governments who accept that chemical compound as a “casino token” worth a particular amount of organized violence. $5,000 can buy 100 times as much organized violence from a court system as $50. That is the proper way to think of it.


When court systems collapse, then the prior demand “abruptly declines” for dollars or gold or whatever was accepted by that court system. In the case of fiat currency, the value of the paper as a collector’s item is negligible (like what happened to the Confederate dollar when the court system of organized violence of the confederacy no longer forced people to use that currency to pay them taxes). In the case of a metal coin like a dime or nickel, there is the raw metal itself- also almost worthless- or the wood in the case of an old wooden nickel, which you could use as fuel in a fire, right?


wooden nickel


If Libya or Iraq accept gold, that effects overall demand for gold right- certainly locally at least, right? What gives gold it’s purchasing power? I assert that it is primarily just the organized violence of government court systems which offer their organized violence in exchange for gold (or silver or whatever).


Is there industrial value (practical functionality) to silver and gold? Of course! That is why the bimetallic standard eventually was dropped. The masses had too much access to newly mined or newly imported metal. The fact that local supply of metal was no longer controlled by a court system attempting to monopolize coercion is what led to the dropping of gold and silver, with the rise of fiat currencies.


ron paul - silver and gold


Organized violence has always been the issue. Gold and silver were convenient tokens for the elite when they could tightly control supply of those rare, convenient materials for them to mint “casino tokens.”




memorial day



Campaign poster showing William McKinley holdi...

Campaign poster showing William McKinley holding U.S. flag and standing on gold coin “sound money”, held up by group of men, in front of ships “commerce” and factories “civilization”. (Photo credit: Wikipedia)



is 1984 BBC anti-government propaganda?

February 9, 2012
Some groups of people may establish systems of organized coercion, also known as governments. The rest of us may call those people the rulers, the leaders, the elite, the patriarchs or “the founding fathers.”
Then those groups who establish violent governing systems with courts, regulations and of course armed law enforcement mercenaries may publicize their systems. They may create propaganda systems to further influence the attention, perception, and behavior of the target populations, including even to produce anti-government sentiment. There are two basic kinds of propaganda of course: (1) propaganda to promote compliance as in the perception of legitimacy of a particular system of organized coercion and (2) propaganda to entice the disloyal to identify themselves and take some action to justify the re-education, correction, punishment, or even the execution of those cultivated rebels.
The cultivating of rebels in order to identify them was the theme of George Orwell‘s famous book 1984, in which Winston Smith volunteers to participate in an anti-government conspiracy, which happens to be a false front operation of the ruling government. Oddly, many people seem to miss that point and instead interpret the book as merely a criticism of tyranny. To present the basic behavioral patterns of tyranny is not to criticize tyranny, but simply to direct attention to it.
Category:George Orwell Category:Nineteen Eight...

Image via Wikipedia

Ideally, the flow of anti-government sentiment cultivated by propaganda is typically kept moderate, as in a steady trickle. However, there are times when a clash between governments may be produced (like the invasion or “liberation” of one government by another). Prior to that, there may also be a larger polarization (as in first divide and conquer next) in which the morale of a population is reduced by anti-government sentiment being cultivated more than usual.
Civilian anti-government protesters may even be enticed to confront riot squads and tanks. Typically, such confrontations go rather poorly for the civilian anti-government protesters.
More protests may be used to justify more draconian measures. More draconian measures may be used to justify more protests, and so on it goes.
If indigenous populations rebel, governments may increase the frequency of bombing. If slaves rebel, governments may tighten policing and encourage lynching and torture, perhaps protecting (through the politically-directed discretion of local government criminal prosecutors) those in league with the government who commit atrocities.
Police Tank in Tunisia 
Wise tyrants know that the best way to neutralize anti-government protests is to be the ones who start them or at least to infiltrate them and guide them, sometimes with funding and training. For whatever reason, former employees of intelligence (spy) agencies like the CIA or the KGB may be among the most celebrated leaders of anti-government conspiracy. “Ex-CIA agent criticizes CIA” always makes for a dramatic headline, right?
When in the 1930s USMC Major General Smedley Butler presented his criticism of war (or at least of US imperialism in central America) called “War is a Racket,” it was published first by Round Table Press and then in condensed form by Reader’s Digest, achieving a huge circulation. However, how many people notice “Round Table” as the name of the publisher and what that name implies?
What if the publication of that content intentionally produced a wave of anti-government sentiment? If so, could the publishers have been producing anti-government sentiment (anti-US) on behalf of the interests of the US government? We might presume that anti-American sentiment would be cultivated by foreign enemies of the US, but, again, George Orwell suggested that governments may cultivate sentiment against the very ones doing the cultivating. Are they inciting riots in order to justify firing on anti-government rebel fanatics?
Police attacked by protesters in Algeria
Several years ago, the creators of the US TV show “South Park” had an episode parodying how having peace protests in the US looks good for international PR: “Yes, we are invading and occupying your country, but most of us are sensitive and peace-loving folks, so please don’t get the wrong idea about us just because we are dropping bombs on civilians (again).” I had never thought of that.
When I read 1984, I had never before thought that governments might entice rebellion for their own purposes, such as to identify isolated rebels and attract the rebels to throw themselves (armed only with big signs with anti-government slogans) at riot squads armed with… tanks. Now, I think of the practical value to governments of enticing anti-government sentiment and congregating herds of protesters. Some governments might even be so dishonest as to “plant” fake protesters among the sincere ones and then have those fake protesters do something dramatic like throw a rock or a molotov cocktail at armed government mercenaries, thus justifying the use of deadly force against the entire mob of protesters.
Tank of the Tampa Florida (US) Police Department (above)
There are three basic orientations that one can have in regard to governments: anti-governments, pro-governments, or neutral toward governments. Those who are generally anti-governments may be the least likely to perform those behaviors that result in rewards from governments that enhance social status, such as government contracts, but also compliance with laws, familiarity with the protections offered by a particular legal system and use of those protections.
In mid-2002, when I started researching the forecasting of trends, I had no idea what I was getting in to. I found not only trends of things like birth rates, but also of the inflation-adjusted cost of fuel, which had been dropping dramatically for many centuries, but then reversed trend in 1999. I also found trends in approval ratings of governments, as in trends in pro-government sentiment and anti-government sentiment. Further, those trends of social psychology closely correlated with trends of stock market price. Trends of stock market prices were an excellent predictor of things like the re-election of an incumbent President in the US as well as the sentiment ratings toward the current US President (which is apparently polled much more often than overall sentiment about the entire US government in general).
I encourage people to use the protections offered by any legal system. I do not say to do that because of any concern with morality or fairness, but what I call a practical concern.
If you can legally increase your net worth and profit, why not? In other words, if you can legally reduce your taxes, why not at least explore it? If you can legally reduce your debt, why not at least explore it?
Of course, I personally offer services in these realms, so it is not just that I am encouraging that people concern themselves with practicality first and things like morality and fairness only in the context of practicality. That is true, too. But I also specifically encourage people to use my own services solely for their practical value.
Protect your assets simply because it is valuable. Reduce your taxes and debt simply because it is valuable.
If focusing on morality is valuable, then do it! If focusing on fairness is valuable, then do it!
However, be aware that moralities vary from place to place and time to time. Practicality is always valuable.
Moralities are learned, as in indoctrinated from one generation to another, from one group to another. When the elite are propagandizing the masses as to the morality of a particular war and the immorality of a particular target enemy, that is just practical propaganda. It is valuable to the elite to program systems of morality in those ways, even if it is untrue that the target enemy is actually guilty of something like the possession of weapons of mass destruction.
First, condemn the morality of possessing weapons of mass destruction. Then, accuse someone of violating that morality. That is a very practical way to distract people from the clear and obvious fact that one is also violating that same moral code. Using weapons of mass destruction to punish someone accused of weapons of mass destruction… is a classic example of the practical amorality of the elite in governments and media outlets worldwide.
Arab leaders might have used the same principles of propaganda to justify something like an economic embargo against NATO: “economic embargoes are morally wrong, plus NATO is accused of planning an economic embargo against someone somewhere, therefore we must punish them by using an economic embargo against them.” The elite in one system may pretend to be quite different from the elite in another system, but, even with various notable differences, there may be tremendous consistency in their methods.

Governments consistently use organized coercion to collect revenues such as taxes. They also punish others for the unlicensed practice of extortion and racketeering. Only officials like government tax agencies are allowed to practice extortion and racketeering.
Blackmail and bribery are also illegal throughout the world, except for law enforcement agents when making deals with suspects to get more information about other suspects. In that case, blackmail, bribery, and even torture and threats of execution have been used quite consistently by governments for thousands of years. From police officials to the guards of prisoner of war camps, reservations, and internment camps, government officials use whatever methods they deem practical.
Governments may cover up atrocities when practical (or blame them on enemies, such as when the Soviets blamed the Nazis for the massacres at Katyn Forest in 1940). Governments also consistently offer lenience like presidential pardons to convicted criminals who are the friends or business partners of the ruling officials, such as the pardons granted to Oliver North.
So, shouldn’t we condemn the propaganda, organized coercion, deception, fraud, extortion, and racketeering of some or all governments? Well, that may be the reaction that we have been trained to have.
However, those who condemn such patterns of behavior may include many who practice such behaviors. For instance, let’s review the personal history of George Orwell:
From 1941- 1943, he was a propagandist for the BBC (the British government’s public TV station). Here is another interesting detail: “On the outbreak of World War II, Orwell’s wife Eileen started work in the Censorship Department in London.” By the way, while Americans might not know it, Orwell’s references to a “Ministry of Information” were not fantasy, but part of his daily life:
English: George Orwell in Hampstead On the cor...

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Was Orwell assigned by government officials to write his famous books? I don’t know. However, it is notable that the BBC made Orwell’s 1984 in to a TV movie in 1954: and it did produce a wave of people identifying themselves to the BBC as outraged by the ideas presented in their TV broadcast of 1984: “The production proved to be hugely controversial, with questions asked in Parliament and many viewer complaints over its supposed subversive nature and horrific content.”
Also, if Orwell’s writing was so threatening to governments, then how is it that his two books Nineteen Eighty-Four (1949) and Animal Farm (1945), “together have sold more copies than any two books by any other 20th-century author?[5]” Isn’t it odd that I was introduced to the book 1984 as assigned reading in a public school class?
The book is represented as a condemnation written by a disgruntled BBC propagandist in 1948 (and published the next year). However, only 6 years after writing it, 1984 was made in to a TV program by the BBC. Isn’t that more than a little ironic?
Was the government station BBC intentionally stirring up anti-government sentiment in 1954? To propose that they were not is rather ridiculous.
Was Orwell intentionally stirring up anti-government sentiment? If so, why? Well, what did he write in regard to the intentional stirring up of anti-government sentiment in his own book? He indicates that anti-government propaganda can created by governments and used to stir up anti-government sentiment in order to create “thought criminals” and entice the thought criminals to identify themselves.
Again, I do not particularly condemn the use of organized coercion by governments or anyone else. For thousands of years, groups of humans have killed each other. To exclusively celebrate a particular occasion of organized violence, such as the US Revolutionary War or Civil War, seems odd to me.
One may be anti-violence or pro-violence, but why some of each? Other than after-the-fact moral justifications indoctrinated by propagandists on behalf of the winning group of organized coercion, I am not aware of any reason to celebrate (or condemn) any particular instance of organized coercion (or propaganda). Yes, wars in particular are dangerous- and governments in general.
But recognizing their danger does not imply condemning them. I also recognize the danger of sharks, airplane crashes, gambling, pharmaceutical drugs, heart surgery, and tornadoes.
So, former British government propagandist George Orwell’s anti-government propaganda was notably successful. Even the government liked it- or perhaps even especially the government there in the UK. The BBC took only a few years to make 1984 in to a movie. It took nearly 50 years for the BBC to make Huxley’s “Brave New World” in to a movie.
Again, though, the BBC, a government channel, made two of the most famous books of anti-government criticism in to movies. Isn’t that extremely odd?
I was assigned both of those books in public high school classes. Isn’t that also extremely odd?

Do governments ever cultivate anti-governments sentiment? If so, how often? Further, exactly how practically valuable is it for them to do so?

Do governments ever discourage people from using the protections promised by government courts? Do “political activists” ever threaten people with economic repercussions for their political activity? In West Africa in the 1990s, apparently thousands of people had their hands cut off for daring to vote “the wrong way” in an election that had implications for the global diamond cartel, DeBeers. In the recent movie “The Gangs of New York,” politics is presented as openly violent. If there is such a thing as political violence, then violence can be political and politics can be violent.
As for me, I promote the full use of government protections such as evicting delinquent tenants, reporting all sorts of crimes including white collar financial crimes to bring about the arresting and punishing of certain people, and the use of the most skilled and effective criminal defense lawyer that a suspect is able and willing to hire. Further, I promote the full use of government protections such as asset protection, tax planning, estate planning, and debt interventions including re-organization of one’s finances under bankruptcy exemptions and benefits. If someone chooses to volunteer more money than is legally required out of guilt, so be it. However, if someone chooses to exercise their personal discretion and personal responsibility to the fullest extent possible, so be it.
If some people create legal systems or alter them or even oppose and overthrow them, so be it. If some people use lobbying or bribery or diplomacy or any other means to produce changes in the regulatory policies and practices of any particular governing system, so be it.
If George Orwell and the entire BBC create anti-government propaganda to incite anti-government sentiment, so be it. If I tell “everyone” to Occupy Wall Street or put their money in to insurance industry ponzi scams or whatever else, so be it. Maybe I get commissions from it or maybe I am sincere as in just doing it to ease my own fears or a guilty conscience.
I forecast the major opportunities and risks of the last 9 years of the global economy. However, lots of folks may prefer to focus away from the actual practical risks and practical opportunities to instead argue about propaganda, government corruption, immorality, injustice and, of course, arguing.
“People should not argue. I condemn arguing.”
Or, on the other hand, maybe some people encourage others to argue because it is practically valuable for huge proportions of a target population to be arguing amongst themselves: Christians vs Muslims (as in NATO vs OPEC), Democrats vs Republicans, boys vs girls, etc. “Divide and conquer” is still practical, right?

the root of all money: evil

January 14, 2012
Reality quiz:

Prince Nikola III Zrinski thaler minted in Gvozdansko castle, Croatia, in the early 16th century (until 1534)

Money can be very useful. Money allows for reliable access to things of value.
Paper money only has value when there is an organization enforcing it’s value. If the organization ceases to function to enforce the value of the paper money, the paper money has no value, like with the Confederate Dollar when the Confederacy collapsed or a casino’s tokens when the casino stops operating as a business.
The enforcing of the value of money involves force, like arrests, evictions, repossessions, foreclosures, levies, garnishments, and so on. When there is a revolution, like in Cuba, or when the US invaded Iraq or Vietnam or Korea etc, then that new pattern of force can change the possession of property (through a new redistribution of wealth as well as destruction and death) and will influence the enforcement of the prior currency systems of organized violence, similar to when the Union army defeated the US Confederate army and the prior currency system of the Confederacy ceased to operate.
In summary so far, currency systems are systems of organized violence. Even when dictators (called kings) instituted systems of claiming various amounts of wealth from various other people, the establishment of a particular new currency as the “lawful money” or “coin of the realm” was based on the actual operation of organized violence upon which the claims of tax liability were enforced.
No one already wanted to give up a bunch of livestock or produce for a little shiny coin or a casino token accepted at any of the dictator’s court outlets. The masses gave up those useful things for currency because of the threat of violence if they did not pay taxes or other tribute and the only way to pay those taxes was to buy the coins or tokens or currency of the dictator from the dictator’s outlets and at the exchange rates set by the dictator.
Obviously, a competing dictator or operation of a currency system of organized violence could influence or even overthrow a particular currency system, as when the US Confederacy “seceded.” Actually, “seceded” may be the terminology used by the winner of that dispute. Maybe the Confederacy was attempting to continue to operate under the Articles of Confederation from 1777 while the Union was claiming authority under the later Constitution of 1789. Maybe “secede” was a term that the Union used to label their colonial target’s “disloyalty,” like if the UN invaded China on the basis that China was seceding from the UN without getting proper permission from the UN. Or, consider if the UN invaded the US based (allegedly) on the US threatening to secede or withdraw from the UN.
So, why is it that the various currency enforcement systems of organized violence have used various substances as the selected material for minting a “coin of the realm?” Silver and gold have long been used as currencies. These substances were relatively durable (at least if alloyed with other metals) and were also rare. That is, it was not easy for just anyone to find a lot of gold, at least not in the places where gold was used as a currency. When large new sources of gold and silver from the American continent upset exchange rates in Europe, such as the California gold rush around 1849, new currency systems that did not use those substances were naturally explored, developed, and established.
The value to the operators of the system of organized violence was that access to the gold mines could be monopolized. The military dictators could assemble an army and take over all of the local mines in the area, then strictly limit the supply of minted “coin of the realm.” They would strictly limit the supply because they were the only ones with the technology and organization to monopolize access to the mines, to melt the metals and mint the coins, and of course to force the populace to exchange perfectly good livestock and produce for little casino tokens or coins of the realm or lawful money.
Next, unlike casinos, which may operate against other nearby casinos, governments violently discourage competition. Governments create criminal codes that criminalize unlicensed racketeering (AKA unlicensed taxation as in extortion) as well as unlicensed creation of money (counterfeiting). These criminal codes are enforced by organized violence. Similarly, if someone tried to “break in” or trespass on the government’s mines and steal some unminted metal, that would be punished by organized violence, such as prompt execution.
Once the consistent nature of all currency systems and governments is clear, there is the additional subject of propaganda. Just as governments can declare that a neighboring geographical region is attempting to secede and must be annexed to insure for the freedom of the populace there, like if the UN announced that it is invading or occupying or “liberating” the US in it’s entirety (or even just Texas, like the US previously “liberated” Texas from Mexico), governments can also declare unlicensed operations of organized violence to be criminal, corrupt, evil, immoral, and so on.
One of the most universal taboos of propaganda would be propaganda itself. While organized violence is terrible (according to propaganda), nothing is quite so vile as propaganda. Anti-propaganda propaganda is essential for most any other propaganda to be accepted. If the masses go around creating and publicizing competing systems of propaganda, that can be very unfavorable for the economic interests or national security of a particular operation of organized violence.
By the way, here is apparently a real gold coin, but counterfeit in that it was (to the best of my knowledge) not issued by the Confederate States of America (and perhaps by the Union):
Once propaganda is monopolized, then various branches of propaganda can announce that they are unrelated. For instance, the churches and the media outlets can all issue statements declaring the separation of church and media. Further, the government and the public school system can issue statements that they are entirely isolated operations.
Actually, propaganda may not even really focus on certain issues. Propaganda has to be believable, like the saying “a war to end all wars” or “peace-keeping” missiles.
However, if the masses can be distracted and confused in regard to enough issues of hysterical drama and controversy, then it may not be required to indoctrinate the masses specifically to be morally repulsed (ashamed/terrified) by any mention of the possibility of the existence of propaganda. The masses may be adequately trained to be reactively outraged about new revelations (press releases?) concerning how a particular currency system has been discovered to be a racketeering fraud from the start or how a particular government has been accused of being an operation of organized violence from the start or how a particular politician is accused of being corrupt or manipulative or just a little bit too pre-occupied with PR and public perception. The masses, in order to be properly influenced or governed in terms of their perceptions and behaviors, can be propagandized about morality, criminality, spirituality, and so on.
Finally, consider the global diamond cartel DeBeers. They may have used deceit and blackmail and violence and so on to establish and maintain control of the supply of diamonds worldwide. They hired Edward Bernays (a famous propagandist) to help them place their products in movies, even having movies written around the entire subject of an emotionally-moving scene in which the handsome leading man presents a huge diamond to the female lead actress as he asks her to marry him (the actor). After dozens and dozens of movies repeating a female lead actress being receptive after being offered some large piece of diamond jewelry, then Bernays arranged to have the actresses (and eventually the British royalty) to wear elaborate diamond jewelry at press events where the media photographers would be photographing them in their diamonds.
Of course, it is all a scam (as in an advertising campaign or propaganda campaign). Diamonds were not widely available until recent centuries. There is no inherent connection between romance or getting married or sexual receptivity. The connection was indoctrinated on to the masses of movie-goers and then swiftly accepted by the culture overall.
Similarly, if DeBeers had the military capacity to dictate to the various governments of the world that those governments owed DeBeers taxes of 75 million carats of diamonds per year, that would be a lot like how kings dictated systems of currency on to their target populations. DeBeers could then dictate the exchange rate between “officially acceptable” units of diamonds relative to ounces of gold, barrels of oil, or bushels of corn.
Again, that pattern precisely parallels the origin of all currency systems of organized violence.  Dictators say if the standard of value is gold or diamonds or whatever thing for which they control the supply, such as crude oil. If the dictators can maintain a system of organized violence to enforce the exchange rate that they set, then that exchange rate persists.

Examples of German and Austrian Thalers compared to a U.S. quarter (bottom center)

In closing, let’s review the origin of the word “Dollar.” It refers to a particular amount of silver.

“The Thaler (or Taler or Talir) was a silver coin used throughout Europe for almost four hundred years. Its name lives on in various currencies as the dollar or tolar. Etymologically, “Thaler” is an abbreviation of “Joachimsthaler”, a coin type from the city of Joachimsthal(Jáchymov) in Bohemia, where some of the first such coins were minted in 1518. (Thal is German for “valley”. A “thaler” is a person or a thing “from the valley”. In 1902, the official spelling was changed from Thal to Tal.)”
Below is the image of the currency of an organization that previously operated a sovereign currency system of organized violence which no longer functions independently. That organization is called the United States of America, which was functionally superseded by the Federal Reserve in 1933:

This is a silver certificate which was, at least in the 1910s, redeemable for a Silver Dollar (coin) from the United States of America and it's outlets.

The above image is from an article I wrote in 2005 in which I detailed the future of the US economy as rising fuel prices would continue to rise and eventually would “pinch” (or pop) the economy, thus slowing credit trends (borrowing and lending), decreasing real estate prices and stock prices, and other producing predictable results as indicated therein (which have been manifesting in precise accord with what I indicated). See:

what is the devil?

January 6, 2012
  • English: President Saddam Hussein of Iraq, fro...

    Image via Wikipedia


    before 900;
    Middle English devel, Old English dēofol  < Late Latin dia-bolus  < Greek diá-bolos
    to assault someone’s character, slander, accuse, 
    (to vilify, to shame, to relate to from a spirit of contempt)
    Of the various categories of human action, one can label some bad or evil or any one of many labels that may be more or less extreme in their connotations. You may even think that the acts themselves are inherently evil or good or diabolical or bad or pure or heroic, which is exactly what you have been trained to do. However, occasionally people may disagree or even change their perception as to whether a particular event was heroic or evil or what.
    I know what the root of the word devil is, as in dia-bolos (shown above). I know what it means (shown above).
    It is a reference to labeling something bad as if that thing is inherently bad, rather than recognizing the labeling as one valid way of relating to something. It is a very, very simple linguistic issue- elementary, fundamental, self-evident, but perhaps only rarely recognized.

    So, when politicians demonize other politicians (the “enemy”), that may be intentional propaganda or it may be sincere rage. In the case of the US, villification of the alleged threat posed by the Native Americans has been followed by vilification of the British, the French, the Spanish, the Cubans, the Japanese, the Germans, the Soviets, and various other former allies throughout the world. Basically, as George Orwell pointed out in his book 1984, all of our greatest enemies were our prior allies (and perhaps will be again soon). By “ours,” George Orwell of course implied “whoever and wherever you are.”
    In the case of Saddam Hussein, the propagandists of the US presented justifications of pre-emptive strikes by condemning his use of chemical weapons against civilian populations in the 1980s. The US supplied those weapons and did not seem to condemn the use of them at the time, nor any of the many uses of chemical weapons by the US against civilians, such as the 3 million Vietnamese civilians allegedly killed by the US military in about 10 years, many through Agent Orange and other chemical weapons.
    So, is it demonizing to suddenly condemn something, especially while one is hypocritically doing the same thing? Yes, that would be demonizing.
    Let’s look at the root of the word vilify:
    15th century, Latin: vilificare
    to make worthless to make vile, to speak evil of, to speak ill of, to slander, to defame
    In other words, vilifying or demonizing is to cultivate ill will or contempt. We might even call it to curse, as in a type of black magic.
    What does the root of the word vile mean? “Common.”
    So, propaganda may be used to justify certain actions by condemning other actions. If the action condemned and the action justified are essentially the same action, that is still propaganda.
    In many traditional forms of spiritual practice, there are warnings about the spirit of contempt or the spirit of the devil. In some cases, people may even be trained to have contempt for contempt or to condemn condemnation or to vilify vilification. However, to be ware of or be aware of vilification is actually the core teaching.
    In the Christian New Testament, is the teaching to vilify vilification or to remove the blind rage from one’s own perspective before trying to remove the blind rage from someone else’s point of view? Is the teaching to throw stones of blind rage at those who throw stones… or to question the blind rage that might lead to throwing stones?
    While it may be popular to condemn the US government for propaganda, especially within certain subcultures of the US, which government in the last several thousand years has not consistently used propaganda? Given that the US has been the dominant imperialist operation on this planet for many decades, the US has certainly used propaganda much more than certain smaller operations.
    However, propaganda indoctrinating people to reactively and reflexively condemn all propaganda may be the single most universal ingredient of all propaganda campaigns for thousands of years. Propaganda is evil.
    Why is propaganda evil? Well, that is what the propagandists trained us to think, isn’t it?
    Why is vilification vilified? Well, if everyone knew the secret of what vilification is (and how easy it is to practice it in language), then concocted vilifications might not work nearly as well to govern the perceptions and actions of the masses.
    Propaganda must first be labeled evil for propaganda to be so openly and widely used. Propaganda must be vilified. Vilification must be demonized. Demonizing must be condemned.
    That may be the best way to keep a near monopoly on the power of demonizing and vilifying. That may be essential to the justifying of the operation of governments. If there are no enemies (near and far) requiring protectors and saviors, then why would people want to eagerly pay taxes to the ruling protection racketeers? Fear!
    Realistically, whenever there is an absence of a bureaucracy protecting the masses from organized violence through the use of organized violence, a new bureaucracy forms in filling that void. Dense populations of humans naturally produce social structures of stratification.
    The denser the population, the more stratified the structure is.
     The more stratified the structure, the more that justification of that stratification through propaganda is relevant.
    To serve that propaganda function, many dense populations of humans create enemies. Leaders of dense populations are those who unite dense populations by identifying enemies, even concocted enemies. Even the “global” enemy of global warming is used to justify new bureaucratic concentrations of authority.
    Other “global enemies” include epidemics or intergalactic threats like pole shifts or asteroids. Of course, one of the most popular global enemies is war, especially nuclear war.
    All of the organizations that have nuclear weapons seem to be very focused on keeping their club exclusive by discouraging any other organizations from developing nuclear weapons. Why do the organizations with nuclear weapons agree so consistently that nuclear weapons are so dangerous that any group that tries to develop nuclear weapons should be discouraged even if that means by using nuclear weapons against them? Well, perhaps because that kind of propaganda works very well to justify a wide variety of bureaucratic practices and produce compliance from the masses.
    Propagandists never announce that there is a new war being sold to perpetuate warfare and war profiteering and the perpetuating of governments of organized coercion. Propagandists instead announce that there is another new war to end all wars.
    How many thousands of years have propagandists been justifying wars in the name of peace and national security? I am not certain. I would guess that propagandists have been rationalizing “peace-keeping” wars of organized coercion for about as long as propagandists have been vilifying propaganda.
    Given that taxation could be considered a war of organized coercion against the domestic population, I would assert that propagandists must have been useful to governments almost as long as mercenaries. In fact, if a competent propagandist hires enough mercenaries to perform operations of organized violence, that might be the origin of all political systems and governments. When an operation of organized violence is so effective that it excludes competing operations of organized violence and forms a functional monopoly, that is called a government.
    I am not aware of a single operation of government that does not extensively use language for propaganda to justify the existence of that operation. Mythology about the heroism of the founders of a government is one of the universals of propaganda, besides the obvious anti-propaganda propaganda.

santa and dramatic scandals

November 6, 2011
Look, everyone knows that the Santa Claus story is just a linguistic concoction that is publicized to influence the behavior of children. Parents could simply say to their kids instead, “hey, do what I tell you and I will give you some presents that you will like, but if you misbehave or rebel or bug me, then you won’t get as many presents or the ones you asked for.”
English: Santa Claus with a little girl Espera...

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It’s a classic case of bribery first and of fraud only secondarily. It directs the attention of the children to a future reward and teaches them discipline. Sure, the Santa myth involves some trickery and, since it is pretty popular, we can presume that it has worked well enough to keep the story popular for however long so far.
It is also manipulative, deceptive, and dishonest. So, why would we expect something much different from social institutions and their PR campaigns?
Governments govern people, right? They implement rewards and punishments (like the tortures of the Holy Roman Inquisition). Along with using organized violence like cops and armies and jails, governments concoct myths and propaganda to influence behavior. They promote their agendas through public schools and the media.
Governments redistribute wealth. They take from some groups (like taking Texas away from Mexico) and give to other groups (like for building roads and weapons of mass destruction and to pay for the elderly to get expensive pharmaceutical drugs that suppress the functioning of their immune systems). Maybe all of that is scandalous. Maybe all of that is “business as usual.”
Did governments “suddenly” get corrupt? Well, if the use of deceptive stories like the Santa Claus story is an example of corruption, then is government even any more corrupt than any other category of social organization?
Did politicians begin lying just recently, or has that been going on for “a while?” Thousands of years ago, did humans commonly enslave other humans, like in Egypt or Greece? You could name a type of corruption and I could name cases of that type of so-called “corruption” that are hundreds or thousands of years old, right?
Didn’t early European imperialists like Columbus and Coronado  massacre or enslave Native Americans? Were blankets that were infected with small pox intentionally distributed to other Native Americans later as “gifts?”
Churches and governments teach us what is corrupt (punishable) and what is proper (rewarded). The Holy Roman Inquisition may have promoted the idea that murder is one of the ten basic sins punishable by an eternity of torture in hell, but a short torture and public burning was a primary practice of their system of ritual human sacrifice. However, now they are against abortion because it is allegedly evil to take a human life.
So, just as our parents defined to us what behavior is good (rewarded) or bad (punished), so do social institutions (like producing alcohol was legal at first, then criminalized by a constitutional amendment in the US, and now it is subsidized as an alternative to fossil fuel). Whether our parents used a deceptive fraud like the Santa Claus myth is really rather incidental. We all got rewarded and punished by our parents, right? Whether they used fraudulent methods of bribery or direct, explicit bribery is a secondary issue.
Whether governments use fraudulent PR or not is also incidental. For instance, alcohol is now legal to sell to the public in the US in most jurisdictions, but only if first you pay the government $20,000 or whatever a license costs these days. It does not really matter why. If you break the rule and get caught, the government will probably punish you. Also, if you have a great lawyer that you can pay $10,000 to defend you, then the government will probably punish you less, if at all.
So, whose rule is it that alcohol is only legal to sell to the public if the government approves? That is their rule: the government’s. They make up the rules and then enforce the rules on you and they do not require your agreement, just like Santa’s definitions of good and bad behavior do not require your agreement.
“Yeah, but can’t the people influence the government’s rules?” Of course. Try lobbying for the elimination of the government licensure of the public sale of alcohol. Go ahead. You might even win. So what?
“Yeah, but shouldn’t I be personally responsible for fixing governments so that they are no longer corrupt?” Who made up that rule? What are the effects of acting as if it is true?
“Yeah, but shouldn’t we eliminate the corrupt practices of bribing children and deceiving them? Shouldn’t I influence how other people discipline their children, like to defend the children from those evil, corrupt parents? Shouldn’t I be responsible for fixing how other parents operate? Shouldn’t I avoid bribing my children or deceiving them with stories of Santa Claus?”
If that is what you were taught by your parents or your public school or your church or your media or your government, then go ahead. You might even succeed. So what?
“Yeah, but those trustworthy people told me that it is okay to eat lots of candy, especially on Halloween, and best to eat lots of empty carbohydrates and dangerous to eat things that nourish me. Now, I think it was inaccurate and maybe even intentionally deceptive!”
Aha, and so is this the first time that something inaccurate and intentionally deceptive has ever been presented to you, Santa? By the way, when you say that those people are trustworthy, are you sure that a more accurate term might be “trusted?” You trusted them. Then you found out they lied and that they probably knew they were lying all along. They were never trustworthy. They were lying all along- whether or not they knew it, right?
“Yeah, but the government people told us that if we ever noticed any corruption, then we should report it immediately to the government people so that the government people could investigate the alleged corruption.” Right, and then they would punish any unlicensed fraud as a threat to their monopoly on fraud. So what?
“Wait, are you saying that the government trained us to report ourselves to the government if we ever caught on to any instances of corruption, like so they could better cover up their corruption and to make it easier for them to distinguish the half-wit people from the no-wit people?” Well, I did read about that once in a book by George Orwell called 1984, but I am sure that those trustworthy people in all the governments of the world would never create a deception in which they protected their network of other deceptions by training half-witted people to report themselves to the government by campaigning earnestly for justice in regard to some isolated instance of deception or corruption or organized violence or fraud or governing.
However, I will say that when I reported my parents for bribery and fraud in regard to their manipulative use of a fabricated story about Santa Claus to influence the behavior of myself and my sister when we were small children, my parents were acquitted by a jury of their peers. I was shocked. Then, I realized that all the other people on the jury implemented the exact same methods of bribery and fraud on their own children.
Anyway, if you want to go to some government people to report the methods of some other government people, go ahead. Government people love to justify their programs of coercive wealth redistribution by occasionally spotlighting an allegedly isolated case of government corruption and then condemning it harshly.
“Governments should not be corrupt! Oliver North should not have used bribery or fraud! By the way, this [allegedly] isolated case is [allegedly] obviously just an isolated case!”
That makes for a dramatic scandal and attracts a big audience, which advertisers like. Then, when Oliver North is pardoned by the President on the last day of his administration, only a few people notice.
The rest of the people are still celebrating that governments protect people from corruption and all things that are bad or evil or dangerous. Those celebrating people got so drunk with alcohol- purchased from a licensed seller of mind-numbing potion of course-  that they were still passed out from intoxication when the pardon was announced.
By the way, Santa Claus is a staunch opponent of bribery and deception and manipulation, which are dangerous, at least for those without proper licensure. That is why you will not get any presents if we catch you committing acts of bribery, deception, or manipulation. Now, consume all of your biochemical nutrients until your dish is empty, or else we will not give you any fix for your addiction to refined carbohydrates, which would mean that you are good as in obedient as in valuable to us.
Governments protect us from corruption and organized violence by using organized violence and corruption. Churches protect us from things like the psychological torture of an eternal hell by psychologically torturing us with threats of an eternal hell. The media protects us from paying attention to anything besides whatever they are broadcasting. Finally, Santa Claus protects us from accepting gifts from strangers.

when do global stock markets crash?

September 21, 2011
If the costs of conducting “business as usual” rise enough that profit margins turn negative, wouldn’t any business owner consider shutting down? When costs rise so much that net operating profits do not just disappear, but turn into net operating losses, what would you do as a business owner? When continuing to operate a business clearly is less favorable than simply shutting down, then any business would likely close, right? What if a bunch of them closed at once?
That is probably one of the most unappealing possibilities conceivable. If one business depends on others (suppliers, customers, etc), and then even just one essential supplier shuts down, then other businesses depending on that supplier CANNOT continue to conduct “business as usual”- at least not until they can replace that supplier.
This is the same basic issue that people have been concerned about in regard to the government of Greece or of Minnesota, but those isolated budget issues are symptoms of a broader issue: the end of the age of cheap fossil fuel. I will come back to the rising cost of commodities in a minute.
First, if the government of Greece ceased to function, that would definitely effect the operation of private businesses in Greece, right? Private businesses typically rely on government courts not only to provide basic services like road maintenance, but in particular to enforce all legal contracts with organized coercion. If private businesses could not hire governments to use force to evict delinquent tenants and foreclose on them, or to force their suppliers and customers to do as they legally promised, then private businesses would be responsible for the additional cost of acting as it’s own collection agency, rather than hiring the court’s deputies to take their guns and enforce contracts with organized coercion.
From an economic perspective, one can think of any government as a collection agency that is organized and funded by the owners of private businesses in order to arbitrate debt claims for validity and then collect validated debts using organized coercion. The owners of private businesses uniformly agree to promote a sort of monopoly in the use of organized coercion. While there are different levels of government, like city and county and state and national, usually these concentric monopolies co-exist peacefully.
Of course, nations have a history of invading other nations. But outside of that, the only time that local and national governments have a major conflict is when there is a “civil war” between one operation of organized coercion that is claiming to have authority over smaller operations of organized coercion that then “secede” and band together, like to attempt to preserve the patterns of a prior system of relatively decentralized organized coercion.
For instance, let’s say that the government Treasury of Greece eventually defaults. It owes debt to the US, Italy, Germany, and so on. Well, what if Italy, Germany, and the US all start to fight over ruling Greece and cutting up it’s resources? That is basically a world war, like if it includes a distant global power like the US coming over to Europe to defend “US national interests” in Greece from the “axis” of an alliance between Italy and Germany.
Or, what if Germany or Greece wants to secede from the EU instead of being subject to the decisions issued down by the central EU authority? For instance, what if the EU decrees that Germany is liable for the debts entered in to by Greece. That might produce a civil war, right? If a lot of the debt that is owed to Germany (and Germans) is suddenly declared to be paid by Germans and Germany, there is also a logical or logistical issue there, right?
With the USSR, various smaller jurisdictions might “secede” and rebel from the central authority. With the US in the 1860s, the same could happen. With the EU today, it’s about the same. Also, Yugoslavia used to be one country, then, in the 1990s, ceased to function as a singularity and officially split in to several republics, but not before a civil war that involved the militaries of lots of outside nations.
When one government falters or is defeated militarily by another, that is not the end of government monopolies on organized coercion, but sudden changes in procedure can arise. Certain businesses also tend not to operate as profitably when there is a civil war going on and large portions of consumer population is getting killed or goes to war to kill their opponents. Consumption may shift towards the basic “staples” or even “the bare essentials.”
Sometimes a prior central unity of organized coercion is maintained and sometimes a new centralizing of organized coercion develops. Sometimes what happens is a split in to two or more independent operations of organized coercion. In the case of the European Union in recent years, numerous nations went from relatively informal alliances like NATO or NAFTA or the UN to a much more formal alliance of a single set of consistent procedures, passports, and currency, such as the EU and it’s Euro currency.
Now, before we look closer at prices of commodities and how rising commodities prices are related to global economic activity, let’s look at a chart of the cumulative stock prices of 1800 global companies, priced in Euros:
Here is the same global stock market index, but priced in US Dollars:
While the two charts are very similar, a few differences are notable.  In 2007, the Euro pricing topped and reversed prior to the $ pricing. In 2008, the Euro pricing made a low and started a multi-year rebound while the $ pricing made another low in early 2009  and then started a multi-year rebound. Finally, in early 2011, the Euro pricing topped and reversed while the $ pricing once again topped a few months later and then reversed sharply.
The pattern is obvious. The Euro pricing is the leader and the $ pricing is the laggard.
However, as I have indicated from the beginning, the real leader may not be stock prices at all. It may be that those fluctuations in stock prices are symptoms of a simpler development.
Since 2004, I have suggested that rising commodities prices, especially rising fuel prices, would eventually slow down and then de-stabilize the global economy. I even specified that the issue was debt, and that eventually the cost of borrowing to pay for increasingly scarce resources would “pop the credit bubble” and bring down real estate prices worldwide, which I have been forecasting since 2003.
Above is a chart of the prices of a bundle of global commodities (priced in US Dollars and shown in blue) and an index of the overall prices of 1800 global stocks (priced in US Dollars and shown in red). It is easy enough to note that eventually (by 2007), the mutual rising of those two lines diverged. As commodity prices soared to such a high level that economic activity declined, like when the price for a gallon of diesel exceed $11 in the UK in 2008,  stock prices fell first and kept falling.
Once demand for commodities dropped enough that commodity prices came down, stock markets were already “caught in a tide” of a deflating credit bubble. In other words, the aggressive borrowing that had allowed for global stock prices to keep up with global commodity prices from 2004-2007 did n0t resume. Previously stable lenders were in trouble.
Naturally, I am oversimplifying a bit, but the basic idea is that a relative scarcity of resources (especially fossil fuels like oil) drove up commodity prices leading to other effects. The “relative scarcity,” by the way, is not that supplies of tangible commodities were plummeting, but that demand was growing at a historic pace while supply volumes (production of crude oil, for instance) was flattening or even declining slightly.
In the case of oil, this development (relative scarcity of oil supplies- relative to ballooning demand) was predicted in the 1950s and was repeatedly referenced in the 1970s by US Presidents Nixon, Ford, and Carter. However, that was just a national issue, since as US oil production peaked, the US could afford to import oil from elsewhere. now, with global oil production peaking in 2006, a much more widespread issue is emerging.
This issue is not specific to a particular exclusive region of the globe like the US or to a single currency or to a particular system of organized violence (court system) which enforces the value of all currencies and indeed of all financial contracts. There is no particular national political solution to a global economic shortage of fuel. Courts only have power over human activity (including the “activity” of human perception or interpretations in language), but not over the geological facts of the volume of oil reserves globally. Reports can lie, but deceptive reports do not deceive the wells or the amount of oil in the oil deposits.
That bring us to a different perspective on the prices of the global stock market. Above, we reviewed the price of the global stock market relative to the US Dollar and also relative to the Euro, which we also saw has a clear history of forecasting the trend reversals of global stock prices measured in US Dollars.
Now, let’s look at about 4 years of global stock market prices relative to global commodity prices. This is a chart showing changes over time in how much tangible resources can be purchased by selling the same set of global stocks.
The most obvious thing is that this chart has gone down rather consistently for all 4 years. There was no recovery in the tangible purchasing power of the global stock market in 2009 and 2010 relative to that particular set of major global commodities called “CCI.”
Global stocks measured in US Dollars made a low in early 2009. Global stocks measured in Euro made a low prior to that in late 2008.
However, prior to both of those, the above chart of global stocks relative to global commodities made a low in mid-2008, then rallied in to late 2008, then floated a bit for a year or two and recently broke sharply below the lows of early 2011.
As in late 2008, we may now see prices of global commodities and global stocks tumble together. In late 2008, global commodity prices did the worst, then global stock prices, then- much better than either of those two- the Euro did quite well. However, by far, the US Dollar did better than any of those 3 other alternatives (for late 2008).
That is a fit with what I began predicting in 2003. Now, we are one the brink of a continuation of the shift that was notable in global stocks by 2007. Relative scarcity of global commodities is slowing global economy activity, especially in relation to fuels, but that rising fuel prices also cause rising prices in transportation costs of all things shipped long distances.
Rising fuel costs are not inflation. If it was just inflation, then US real estate prices would not have begun a historic plummet in 2005. If it was just inflation, then global stocks priced in whatever currency would not have plunged.
Back in 1999, when global oil prices began a rally and doubled in less than 12 months, the prices of a group of companies very dependent on the price of fuel fell by 40%: airlines in the US. Stock prices of ending institutions also declined, though not as far. Again, the decline in prices of airlines and lenders preceded the top of the high-tech bubble as well as the broader stock market decline of 2000-2002.
Commodity prices matter. When diesel hit $11 per gallon in the UK (and Germany) in 2008, people changed their behavior, including business owners.
Stock prices shifted (down). Currency values shifted (eventually, way up relative to historical norms).
Now, the instability in the EU that myself and others have been referencing for many years is now getting attention from the mainstream media in the US. While there is perhaps no open talk of civil war, there have been a series of riots, including riots not directly explained by economics or politics. However, when an economy is de-stabilizing, that can manifest in “short-fuse” public hysteria, in epidemics related to stressed immune systems, and of course in prices.
Previously, people perceived that stocks were quite safe, as in a “safe haven.” Then, when stocks fell, people perceived that real estate was safe. Then, when real estate was safe, people perceived that all commodities, including gold and silver, would be safe.
However, silver prices fell over 90%  from 1980 to 2000. Is that the kind of safety that people are seeking?
In late 2008, the Euro was safer than most alternatives (rising against a wide variety of alternatives), and the US Dollar was even safer than that. This time, the Euro may not do so well. The entire EU may not do so well.
The economy of the EU is much more dependent on foreign oil than the US. The economy of the EU is a bit more like the economy of Japan, which is even more dependent on foreign oil, and has been in a deflation for nearly 22 years now.
Will Europeans (others who have been invested in the EU) flood to the US Dollar and US economy? I think so. However, I do not think that the US economy will do well.
In fact,  as we look at the chart above of Japan, the Japanese currency (Yen) has done extremely well in recent decades even though the economy there (and stock market prices) have not done so well. As the court system in Japan is recognized as more and more crucial to the economy of Japan, the Yen have been very well-respected by the Japanese and others.
Will the Yen or the Euro or the US Dollar collapse in to hyperinflation or a civil split (civil war) resulting in the use of multiple currencies? Or, will the global centralizing of court systems continue as the UN, World Court, World Bank, and BIS continue extending their empire?
In the case of the USSR, the central government disbanded, but initially a monetary union was maintained by 15 of the independent states (operations of organized coercion). As time went on, the various independent jurisdictions (of organized coercion) issued their own currencies.
Russia continued to use rubles, but in the old USSR, rubles were only good to purchase certain things from the government, rather like credits for a prisoner in jail or like gift certificates that can only be used with a certain store or certain catalog. The rubles had no particular functionality outside of the USSR. Now, Russian rubles are traded in open market exchanges at variable rates with other national currencies.
Relative to the US and the $, the EU and the Euro may do well, but I do not expect so at least in the mid-term. While many in the US are concerned about the creditworthiness of the US Treasury, everything is relative in investment markets.
Relative to US real estate, US Dollars have done very well for several years. Relative to US stocks, US Dollars did so well in 2008 alone that stocks are still way behind and, as of recent months, have resumed falling.
Today, I have titled this blog post “when do global stock markets crash” because today is an interesting juncture in global stock markets. In 2003, I was already forecasting the type of stock decline that developed in 2007. I am clear, especially when looking at prices of global stocks relative to global commodities, that the decline that began in 2007, which I forecast back in 2003, did not end.
Further, in the days and weeks and months ahead, I expect that more and more will realize that the global stock market top in 2007 is not going to be exceeded any time soon. I expect that market pricing of global stocks, including in the US, will reflect that recognition with a series of large declines and increasing volatility.
In other words, people will increasingly recognize the value of the operations of organized coercion within their midst and increasingly recognize the instability of most if not all private lending institutions. I expect that the attention to credit ratings as if they are anywhere near as important as cash and cash flow will end.
English: Various Euro bills.

Image via Wikipedia

When a currency is only accepted by one particular government and that government operation of organized coercion has a functional monopoly on the operation of all businesses within a jurisdiction, credit ratings may simply not be an issue. Similarly, with food stamps, there is no issue of credit rating. Prisoners are not lent funds by the prison. Soldiers do not apply for credit lines at the commissary, but are issued a ration of coupons. During wartime, that is also common for civilians, and something similar happened in the US in the 1970s in regard to gasoline.
Private credit markets are destabilizing. I have published warnings about this since 2003. But that is just the symptom of a simpler issue.
Human populations are increasingly demanding access to diminishing resources. Governments will change or arise to stabilize and regulate access to resources.
Governments are operations of organized coercion. Organized coercion is the basis of the purchasing power of all currencies (and all financial contracts).
Increasingly, populations will recognize the value of organized coercion to maintain order. They will seek to pay off old debt and will diminish involvement in borrowing as well as lending. Private credit markets as we know them may cease to function, as in the case of jurisdictions like the USSR or Cuba. Public trading of private corporations may drop in volume considerably, or private corporations may be socialized, as we see happening in the US within such fields as education, gambling, health insurance, and health care, plus, as of 2008, the auto industry and banking industry. Of course, the US national government with the FDIC, FHA, HUD, GNMA, FNMA, FDMC, SLMA and so on… have long been involved in direct financial responsibility for much of the US economy.
50 years ago, what percentage of the public lived in government housing? 50 years ago, what percentage of the population received subsidies (like social security or unemployment) from the federal government?
How about 100 years ago? Socialism has made immense progress in the US in the last 100 years, though many might resist even considering that idea or would at least propose some other alternative as favorable.
Imagine that if the bureaucracy of the EU were to so dominate the economy of Europe that after, for instance, 150 or 250 years, Europeans forgot that Germany and France were ever not united? That would be like New Yorkers and Georgians forgetting their historical roots- back when they had independent currencies and very distinct cultures, and even fought in wars against each other. Impossible?
However, a major logistical problem in the EU is the absence of a common language. Will a global empire establish English as the imperial language, or will the EU dissolve, or what?
Well, I do not know yet. But the EU is facing huge logistical problems, especially due to rising gasoline prices which have recently approached their highs of 2008 (in Europe and elsewhere), and the US is in position to receive a huge surge of people seeking a “safe haven.” However, perceived safe havens have a history of being perceived as safe only temporarily.

above average intelligence

June 30, 2010

I’m presenting a very broad presentation about the emerging shift in economics and finance. I’ll start with a few simple definitions, and just these definitions may already be quite distinctive and insightful to you, even though you may already know all of this. You may have never thought of it this way, though….

Economics is the study of human behavior in regard to prioritizing different activities (basically, possible uses of one’s time). Finance is just a system of measuring economic patterns of behavior using prices (as in counting or accounting).

More specifically, economics addresses questions of priority: like what outcome to target first, what next, then what after that… as well as what methods to use and who will do what (and when/by when). Thus, economics is a primary realm of activity for housewives, farmers, breeders, choir directors and pirate captains as well as merchants and bureaucrats.

Finance may address questions of how to actually produce the priority results, and is particularly focused on counting the costs, including of time, involved in doing any particular thing. Finance tends to be a tool for comparing various methods to use to accomplish a selected outcome, but also informs which outcome to value as a priority.

Accounting is the field of activity in which people may focus most on time (like when a debt is due) and one very rudimentary form of accounting is taking inventory as in the counting of raw materials in stock, while finance is the specific type of accounting particularly concerned with prices and cash flow. At least that is how I will be using those terms.


Economics addresses questions of why, what, who, when and how. Almost everyone explores those questions and more or less continuously.

Accounting and finance are tools used to inform choices regarding who, when and, in particular, how. Not everyone uses accounting or finance to explore those questions, or perhaps only occasionally.

There is one big distinction about finances as distinct from all of the rest of economics. Finances involves voluntary exchange.

Economics can involve all forms of piracy as well as hurricanes and earthquakes and bombs damaging infrastructure and interrupting plans. Farmers may deal with practical issues of soil chemistry, weather, transportation, insects, pollution, animals, thieves, war, natural disaster, employee management, as well as market prices.

Market prices are the only element of economics that involves voluntary exchange. Finance, as I use the term, is about the voluntary aspect of economics, including barter. That is actually a rather small part of economics, but it can be an important part, at least occasionally.

So, prices, generally speaking, refer to an actual agreement of a buyer and a seller to voluntarily exchange one thing for one or more other things. When two agree on an exchange rate between the two things to be exchanged and then actually exchange them, that exchange rate for a real transaction is called a price.

Of course, price can also refer to an offer to sell (like the asking price of a home that has not sold for 6 months, perhaps by a seller who may not be particularly motivated to produce an actual transaction) or a bid (like an offer to do a certain job or to buy an item at an open auction, which is basically what a stock market is: an open auction in which people buy and sell shares of ownership of private companies). Note that prices of actual transactions are generally much more relevant than recent prices of similar investments (AKA “comps“) or than “outlying” bid prices or ask prices. By outlying prices, I mean prices that lay outside the range of actual market activity- so far from the actual value to qualified buyers or sellers that the outlying offers may go weeks or months without producing any actual transaction or agreement.

Note further that there can be a lot of “involuntary” influences on prices. There may be extensive interventions beyond the voluntary realm and into the realm of mafia rackets and other forms of government. Note that any coercive activity to influence the behavior of other people involuntarily is what I mean by the term “government,” so thugs and warlords and the mafia and even churches may all fit within my definition of a governing operation.

If any system persistently influences or governs human behavior, especially involuntarily or coercively or deceptively, that is a form of governing AKA government. All forms of advertising and commercial media thus are also within my definition of government.

Free markets” evidence patterns of voluntary exchange (buying and selling as well as borrowing and lending). Governments, as I define them, have the singular purpose of coercively influencing, inhibiting and redirecting the voluntary exchange of individuals and groups. Governments manipulate economic behavior with methods ranging from subsidies to prohibitive taxes, or from licensure requirements to criminal penalties for marketing or even just possessing certain materials, such as censored books or nuclear weapons or psychedelic plants.

Note that to many people, governments are no more heroic or villainous than the weather or soil chemistry. Government is just another reality to be considered in economic questions of priority results and methods. Obviously, a relatively small number of people form and direct governments to influence the behavior of other people.

In other words, this is the conspiracy theory of government, which is that all government is conspiracy (though a conspiracy that is as conspicuous and overt as any conspiracy could be). Of course, given that most private businesses also have trade secrets or exclusive copyrights and patents (and thus set up governments to protect the interests of those private businesses), it is equally true to say that all business is conspiracy and government is just the business of coercion, as distinct from retail businesses that target voluntary exchange.

So, commercial advertising, while designed to influence behavior, is not nearly as coercive as foreign militaries and the occupying forces of law enforcement. While there is clearly a spectrum of variations, there is really no clear distinction between what is a legitimate government of organized coercion and any other system of human activity. However, governments universally publicize claims of the legitimacy of their organized violence. Perhaps that is ultimately the only distinction: the open claims to legitimacy.

Withdrawing from such potentially challenging or even controversial questions about coercion and claims about legitimate coercions, let’s focus on voluntary exchange.

Voluntary exchange is the primary behavior that is of interest in the realms of finances. Again. the primary purpose of governments is to systematically interfere with voluntary exchange. Economic behavior includes voluntary exchange, but also includes any other way of acquiring or accessing or even just claiming something, as well as all sorts of non-financial things like building a house, repairing a house, tearing down a house, or even just composing this essay.

Even the gathering of twigs into a nest by a bird could be considered an economic activity. While the organized violence of governments is inherently economic, so is most everything else, including the organizing of a choir or orchestra or the creating of a work of visual art. Economics is simply doing anything “on purpose” – that is, consciously or with awareness, as in pre-meditated. Even if I spontaneously create two pieces of artwork, the choice to display one or both or neither is an economic choice.

So, all of that was background to clarify common misconceptions as preparation for the following. Now, I’m going to compare three broad categories of economic value. Here are three broad categories that people may value differently at different times:

1) raw materials (things like oil, food, cotton fabric, and bricks)

2) human ingenuity, technology, and voluntary exchange (the value of other people in general)

3) governments which openly and systematically take things by force (the value of the organized violence of law enforcement and militaries)

I’m proposing that global commodity prices reflect the voluntary and spontaneous human valuations of various raw materials. That is uncontroversial. I’m also proposing that global stock market prices reflect the voluntary and spontaneous human valuations of private commercial business based on voluntary consent. Again, that is not especially controversial.

We can compare price valuations of commodities and stocks and presume that those prices tell us something about the voluntary and spontaneous behavior and preferences of humans worldwide in relative to the priority they give to raw materials relative to the ownership of private businesses in general. Of course, the fluctuating valuations of certain businesses may be distinctive, such as AIG or Microsoft (United States) or Sony (Japan) or BMW (Germany), just as are the fluctuating valuations of a few tangible materials, such as oil or gold or sugar or paper (or the most famous original ingredient of Coca-Cola: cocaine).

Again, none of that is especially controversial. What I have never before directly stated, at least not in a published format like this, is that government bond markets may reflect the voluntary and spontaneous human valuations of the priority value of operations of organized violence.

To be quite direct, governments collect debts with the use of force. That is a primary function of the court systems of modern governments: the systematic collection of debts using force. That includes foreclosures, garnishments, levies and repossessions as well as evictions and bankruptcies.

What people may be saying when they choose to direct their investments toward government bonds instead of raw materials or the ownership of private businesses is that the investors value the promises of government to use force, including to involuntarily collect debts and repay claims of debt ruled to be valid by that governing operation, over the prospects of human voluntary exchange (ownership of commercial businesses through stock markets) or the value of tangible materials. In other words, people who are investing in government bonds want accountability and practical security, not more stuff or more ideas.

Ideas are the business of businesses. Sometimes people want more of that. Stuff is always valuable, too, but sometimes people want more protection for whatever they already have- more armed security- not more stuff. When people are investing their trust not in more ideas and not in more stuff but in more organized violence, they may voluntarily and spontaneously choose to buy more government bonds.

Yes, these patterns may also correspond to baby boomers retiring and ballooning the population of elderly people who systematically liquidate their pensions and sell their stocks to pay for their retirement, favoring the bonds of the governments that they perceive to be most stable… over the much less stable investments of stock markets (and who want young and healthy people to provide for them with the intervention of coercive governments through taxation). However, an awareness of such demographic trends is optional. The fluctuating valuations of price charts are clear enough, and anyone with access to the internet can confirm the relevant data.

So, I’m proposing the above interpretations on the following information. I’m reporting to you that there has obviously been a major shift in the overall values of humanity in the last 10 or 11 years. I’m also proposing that it is clearly evident in the following chart:

That is a chart of the last 11 years of prices for a bundle of commodities priced in US Dollars (in blue), the red Dow Jones Index of global stock market prices (not to be confused with the more popular but much less comprehensive Dow Jones Industrial Average of 30 leading US companies), and the green line of yields (interest rates for the lending of money to the US Treasury for 30 year periods, also known as “buying government savings bonds“).

Obviously, the most remarkable thing about that chart is the huge surge in the US Dollar prices of commodities from 1999 to 2008, followed by the sharp drop in 8 months from 10942 to 3105, a decline of about 72%. (People worldwide wanted a lot more stuff, then basically changed their minds abruptly and dramatically.) Here is a close-up of the last few years of that Commodity Index:

Note that the 8-month rebound which peaked in October 2009 only recovered about 21% of the losses of the prior 8 month period. In other words, there are now two clear pieces of evidence that we may have seen the end of the prior multi-year trend of increasing demand for raw materials in general. First was the historic collapse in commodities prices, and second was the weak rebound.

Since October 2009, prices have twice approached the prior high (see yellow highlights below). After faltering from the shelf or plateau in April 2010 (the yellow line), prices fell in May to approach the level of several prior reversals (blue line with four reversals in purple). So far, the subsequent rebound across June 2010 has been quite small and may have already ended.

Next, let’s look at global stock prices compared to that same price index for commodities:

You may notice that the prices of stocks and commodities generally have moved in the same direction. In 2001, they came down together. In 2003-2005, they went up together, and did so again in 2007. In 2008, they came down together. In 2009, they went up together. Note the arrows below showing the periods of consistent price movement.

However, many of the times that both price lines reversed, the reversals were preceded by an obvious divergence (that is, one price index reversed before the other). Note the orange marks below showing periods of diverging trends, when global commodity prices and global stock prices moved in opposite directions.

Those are the divergences that are easy to see. Not so easy to see on the above chart is the following brief divergence.

In early 2009, global commodity prices rose in late February while global stock prices continued down for a few more weeks. That was a signal to me to look for a rebound in stock prices. (Note that I publicly forecast most of the reversals shown above and, for those interested, I can document that.)

Further, note again that the commodity index topped in October of 2009, months before stocks, but now both are dropping together. There was a period of divergence, perhaps marking a destabilizing of the prior trend, and then stocks, which had been continuing the prior trend of rising prices beyond October 2009 into early 2010, then joined the downward trend of commodities.

Again, these price charts are simply measurements of the voluntary behavioral valuations (buying and selling) of investors worldwide. In summary of the chart above, we can conclude that global investors across the last 10 or eleven years were relatively stable in their behavior and valuation regarding the publicly-traded stock share ownership of private businesses. I say relative in regard to their behavior and valuation in relation to commodities, which favored commodities over stocks from 2002 through 2005 as well as 2007 and much of 2008.

However, as of late 2008, global investors not only dramatically decreased their valuation of global stocks, but decreased their valuation of raw materials even faster. In 2009, global investors continue to relatively favor stocks over commodities (as they had during 2008 when commodity prices plummeted 72% while stock prices fell only 59 percent). In 2009, the rebound in stocks was a 59% reversal of the prior decline of 59%(!), while commodities rebounded only 21% and that rebound lasted only 8 months, while stocks continued rebounding. (Top to bottom was 320 to 130, a change of 190, with a rebound of 112 points: 59%)

I’m going to briefly devote some time now to the geometric pattern of the above chart. Look at what geometric patterns you can notice by yourself before going to the next page.

What I have highlighted above is two double zigzags (separated by another shorter double zigzag). Since the latter part of the second zigzag is about the same size as the first zigzag, we could count these as two zigzags or as three.

Note that the rebound also forms a triple zigzag with momentum clearly declining as of late 2009, highlighted below:

By declining momentum, I simply mean that the slope of the line of rising prices is steepest in the early part of the rebound. Further, each of the three segments of the rebound is smaller than the one before, which is another sign of decreasing momentum.

Now, having looked at the prices of commodities and stocks (representing the relative priority of stuff and ideas), let’s look closely at the most stable of the three lines from the first chart: the interest rate (yield) of long-term US Treasury bonds. Again, consider that this line may represent the perceived valuation of organized violence (though a declining interest rate means an increasing confidence in the organized violence of the US Treasury to collect debts from it’s underwriters, which is the US citizenry including private businesses, and repay it’s lenders, which are the people who lend money to the US Treasury by purchasing bonds, which are just written promises to repay a loan.)

Here is the most obvious thing I see when I look at this chart, a steady trend (see blue line below) of declining interest rates:

Again, looking at the geometric patterns, I see two double zigzags (note that this chart is for 11 years).

Again, they are also divided by a double zigzag in the middle (ending at the second touch to the blue line), plus the first zigzag (of 1999 – 2005) can be further subdivided into more double zigzags:

Finally, the last year or so has formed another double zigzag (and this chart also highlights the double zigzag in 2006 and 2007):

In other words, there are a lot of double zigzags showing up in these charts, as well as occasional oddities such as the blue trendline above. While some people might speculate that these zigzag patterns (or the three peaks that form a straight line) are somehow random, consider that they simply reflect clear trends in human behavior and valuation, that is, the priority that people give to various alternatives. These trends sometimes form waves and they sometimes form straight lines.

In other words, they might not be random at all. They might be an orderly transition forming over a period of time.

I propose that the last 11 years has clearly evidenced a global shift toward human investors voluntarily prioritizing of the operations of organized violence, organized coercion, organized force, an organizing of the involuntary transfer of affluence and influence. While there have been continuing increases in demand for stuff and for ideas, the demand for action (or for a certain type of action in particular) has been increasing rather steadily in zigzags of fluctuation across the last 11 years.

Further, as of 2007, the demand for ideas has dropped. In 2008, the declining demand for stuff joined and surpassed the declining demand for ideas. Now, we are ripe for an accelerated shift in demand away from stuff and ideas toward action (or a certain type of action in particular).

I first published forecasts of the shift of the last several years in early 2003, and detailed the precise sequence of events in later years. The “capitulation phase” has already begun. Soon, even those most resistant to acknowledging what is developing will admit that investors worldwide have demonstrated the shift in their priorities. They have demonstrated that shift in priorities or values through their behavior, including of buying and selling as well as of borrowing and lending.

Consider, last, that none of these conclusions are actually at all controversial. Of course, history will let us know one way or the other.

Change equals opportunity. Are you willing to experience all change as opportunity?

Note that certain private businesses may not decrease in demand. Are you willing to be part of the exception?

By the way, not everyone can be above average. Are you willing to be above average anyway?

change equals opportunity

June 17, 2010

Change equals opportunity


(2010, June 17th)


Virgina Satir

Virgina Satir (Photo credit: Wikipedia)


“Life is not what it’s supposed to be. Its what it is. The way you cope with it is what makes the difference.” Virginia Satir (1916-1988)


Note that the video has extensive extra content (and context!). Also, the video falls behind the audio, so you may prefer to just listen while you scroll down and read along.


Humanity is in the midst of immense changes. What immense changes am I thinking of? I think of the long-term advancement of technology from boats to cars and planes as well as from the telegraph to radio and satellite to the internet. However, we are also in the midst of sudden short-term change, like the destabilizing of global lending markets and even vast changes in the governing organizations that define and enforce property rights (AKA “legal” ownership). When those governing operations of organized violence clash with each other or simply dissolve, people may be reminded quickly of appreciating what they may have been taking for granted.




New patterns of behavior are emerging quickly, including a return to certain patterns that some people may have discounted as obsolete. New questions are being asked and explored, and that learning involves new information which informs new models.


There is also a huge shift in demographics worldwide. The wealth of the retiring generation of baby boomers of the industrialized nations is quickly being distributed more widely to the relatively poor and young populations of developing nations, especially in Asia, including many Muslims.


This is called a crisis by mainstream news and politicians, as the huge imbalance in price of real estate and businesses (stocks) in the industrialized world drop toward the average prices in the majority of the world. The disproportionate affluence of certain nations is diminishing rapidly, as 20% of the world’s population may no longer easily access 80% of the oil, as in prior decades. In particular, the disproportionate affluence of certain populations of relatively unproductive elderly people is subject to distribute more evenly to the vigorous, virile, and increasingly well-educated masses of the developing world.


As the technological infrastructures of the West are increasingly available worldwide, the regions of economic growth are rapidly shifting. The idea that consumption and debt equate to wealth is being challenged by the possibility that consumption and debt may actually diminish wealth.


Now, old patterns of investing and even old patterns of organizing one’s finances may be suddenly less popular. A decline in popularity correlates to a decline in demand and a decline in price.


So, it’s not that suburban retirees value their homes much less than they did years ago, but that the rest of the world is increasingly less attracted to those suburban homes. Price is a function not just of the owner’s values, but the of the entire marketplace of buyers and sellers. Further, as socialism and communism advance in many nations, the enforcement by governing operations of private property regulations is subject to shift to increasingly aggressive acquisitions of that same property by those governing operations, whether through taxes or otherwise.


US Treasury Building

US Treasury Building (Photo credit: Scorpions and Centaurs)


As certain government programs destabilize, if not the governments themselves, investors can flee to perceived safety. To date, that has been great for the US Treasury but not so good for Greece or Spain (or New Jersey). When governments have been selectively favoring a particular market with tax privileges or direct subsidies and guarantees, such as real estate in the US, an interruption of that favoritism can be financially disastrous to the baby boomers who have been disproportionately benefiting from those interventions and protections.


Those who have the curiosity and courage to face these obvious developments can be responsible for adapting to them prudently. Whenever something changes, some people may benefit more than others from that change. If you are interested in exploring practical personal adjustments that you can make to be among those who receive the benefits of the vast emerging changes, I request that you contact me immediately.


In early 2003, J.R. began publishing warnings about an emerging global credit crisis and an eventual sharp decline in US Real Estate. In 2004 and 2005, he focused his publications on the future of rising oil prices, also pinpointing the top of the stock prices of the US Housing Sector (which has since fallen nearly 70%). In 2006, he produced triple-digit gains gains by trading the waves of metals. In 2007, he re-emphasized his warnings about US Real Estate, reporting the 15% decline in Phoenix, AZ median list prices (which were down 37% as of 9/2008 and kept falling). Throughout 2008, he issued warnings about the predictable consequences of the retiring of the first wave of the baby boom, including a final spike in prices of metals and oil, and the sequence of events that could follow that, including certain political “antics.” In early 2009, he forecast a “multi-month” rebound in US stocks and most global stocks, which, as of early 2010, has completed.




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