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Thread: The rise and fall of gold, oil, debt and empires.

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    Default The rise and fall of gold, oil, debt and empires.

    A couple of more things clicked for me in the last few days.

    We (humans on this planet) are entering a period of economic and financial decline of grand proportions.

    When humanity makes use of a grand new source of energy, such as wood burning, coal burning and over the last century, petroleum burning, that provides a much more abundant and (initially) economical source of energy, this enables a major advancement in the industrial and technical capacity of our civilization.

    Unfortunately, two fundamental processes are in play when this happens, and they march to different cycles. The funding of the building of new capacity is done via exponentially expanding debt, while the gains in energy efficiency obtained rise and then fall, as the easy energy sources are used up.

    When the relentless rise in outstanding debt meets the decline in actual returns on investments in improved productivity, a civilization collapses to an earlier economic stage, fairly rapidly.

    The initial build up.
    The initial build out of newer, larger, mining, manufacturing, transportation, distribution, worker training and management structure requires pulling forward anticipated future profits.

    As Gail Tverberg has explained so well on her blog Our Finite World over the last few years, this expansion of productivity requires an expansion of debt.

    For example, the farmer working a small plot of land with a hoe cannot hope to save up enough money to buy a tractor for cash. But if tractors are available for a modest cost, and gas is ten cents per gallon, then it can be well worth it for the farmer to borrow the money to buy the tractor, because that will increase his productivity and the amount of land he can work, and he will easily be able to repay the debt from his increased earnings.

    Over the last century, it made immense good sense to borrow money to build up infrastructure, highways, ports, railroads, factories, warehouses, trucks, universities, offices, immense national governments, and multi-national corporations. The potential for increased productivity from these investments, relying primarily on plentiful, cheap, petroleum for energy, was immense.
    The collapse.
    However ... debt is an exponentially growing liability, while major new sources of energy are (have been so far anyway) cyclic in their cost and in their expected return on investment.

    Empty cities and abandoned factories in China, oil tankers sitting idle and empty at sea, and most of the gas and oil fracking in the US in recent times, can no longer generate enough income to meet the payments on the debt that funded their construction. Students in the US can no longer earn enough income to pay down their student debt, even as that debt has mushroomed to a trillion dollars in the last decade.

    Governments, corporations, pension plans, financial markets, and various other stores of wealth and sources of potential future gains income (such as a college education) promise more and more, while the efficiency of petroleum energy rises in the early phases, and falls later on, as it becomes increasingly difficult to get gas and oil from remote locations and lower quality deposits.
    The collapse of debt money.
    Over the last century, we saw a major increase in debt-money, culminating with the dominance of the US Dollar as the world's reserve currency. Increasingly, from the formation of the US Federal Reserve in 1913, the US Dollar has been lent into existence, and increasingly its value depended on its ties to the flow of petroleum.

    That great debt structure now burdens individuals, corporations and governments, across the globe, far more than they can hope to repay from future earnings.

    At the same time, the cost (in units of energy spent to extract a unit of energy from the ground) of drilling and fracking for gas and oil has been rising relentlessly. Initially, that caused the cost of gas and oil to rise. That encouraged yet more debt, to fund yet more drilling and fracking, much of which, such as the fracking in the US, can only hope to return enough profit to repay its debt if oil remains high priced.

    However, as that was happening, the world economy began to decline, as the burden of debt and promised social benefits and investment returns began to overwhelm many individuals and institutions. Gas and oil companies are forced to pump as much as they can, just to fund debt payments, even as the price they can get keeps falling, due to a declining demand and an excess of supply. Soon we will have filled up all the world's storage tanks and oil ships, and the price will fall even further, as there will be nowhere to store what is pumped from the ground.

    Debt money, which was the primary monetary system we know of that can finance such a dramatic expansion of industrial, production and infrastructure capacity has, as usual, culminated in an immense bubble of future promises of returns, benefits and profits that can no longer possibly be realized.
    That is why the elite are pushing gold and silver once again.

    As you can tell from listening to the following interview of Jim Rickards, last month, the elite are setting up to shift us back towards a monetary system that depends on the national stores of precious metals, rather than on the lending capacity of major banks, to back currencies. Massive, truly massive, amounts of bonds, loans, derivatives, promised social benefits, pension plan and investment savings, equity gains in real estate, expected gains in future income from education, expected gains in productivity from factories and infrastructure, ... will be defaulted, confiscated or inflated away.

    Jim Richards is a consumate insider, who can speak freely to some of the highest placed positions of power in both the West and the East. A month ago, he published a new book The New Case for Gold. Ron Paul, conservative American politician and one time Presidential candidate wrote of this book: “This excellent book proves that, contrary to the propaganda of fiat currency apologists, gold is real money. Rickards makes a compelling case for why those looking for a way to protect themselves and their families from economic chaos created by central bankers should consider gold.

    The great age of petroleum, with its grand expanse of human economic activity over the last century, is coming to an end. Such peaks of economic activity, that result from some new major energy source, end far more rapidly than they build up, as the exponentially rising "investing future anticipated profits into present day expansion" runs into the declining gains to be gotten from such continued expansion.

    Until when and if some new source of energy, even more efficient in actual wide spread use, able to power civilization on an even more grand scale, comes into use, we are likely in a period of rapid depression, with an unstable mix of depression (no one has money) and inflation (money won't buy anything). Savings and investments are confiscated or inflated out of existence. The value of stocks, bonds, real estate and advanced degrees collapse. Jobs are scarce, and pay little.

    Solar, wind, geothermal and other such energy sources simply do not scale to the level needed to replace the role that petroleum has held for the last century, at least not in anything resembling their current form.

    The debt-money system that was essential in funding the growth of the last century, is exponentially expanding, even as the promised returns on that debt collapse.

    The elite are shifting humanity back to a precious metal system, as money backed by promised returns on US Dollar (and related currencies) backed debt, even the king of debt, US Treasury bills, notes and bonds, collapses into default and/or high inflation.

    Here is Jim Rickards in an interview a month ago ... clearly speaking from the perspective of some of the elite on this planet:


    Here is Gail Tverberg in an interview four months ago ... clearly spelling out the role that the rise and fall of the returns possible from petroleum production are playing on our world's economic, financial and energy capacity:


    I listen to Jim Rickards because he is a good source of what (some of) the elite want us to hear. I listen to Gail Tverberg because she is a good source of actual understanding of the time shifting values of money and energy and their interplay, in history and in the present.

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    Default Re: The rise and fall of gold, oil, debt and empires.

    I just don't see what the carrot is to get the current big players, usurpers and people enjoying their wealth and power now to play along with a 'shift back to a precious metal backed system' and how they'll see it as in their benefit, including your predicted collapse of their stocks, bonds and real estate.

    I predict things will drag along relatively the same for quite a while longer, and dow, monsanto, tesla, google, big pharma, general foods, at&t, comcast, etc etc have absolutely nothing to worry about in terms of suddenly having a world where no one can afford their products anymore.

    It this imminent change is on the books, nobody told these big players. They are forging full speed ahead building massive new headquarters, products and making investments in the future as usual as if nothing big is going to happen to eff them up.

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    Default Re: The rise and fall of gold, oil, debt and empires.

    Good summation Paul. Wade Frazier has also highlighted the blight of the oil epoch and how it's collapse is inevitable, just as the other four extinction events occurred based on energy throughout our history.

    What we have with oil , which we did not have with coal, or firewood, is the exponential growth of the population, due to oils capacity to increase agriculture, as well as all other technologies in support of this growth. In 1804 there were just 1 billion people on the planet,and it took till 1927 to reach 2 billion, and just 90 more years to reach close to 8 billion where we are now.

    So, keep in mind, before the dollar pegged to oil will collapse, humanity will do what it has always done and stave of the inevitable quantum shift by clinging to old paradigms, and we will see the cannibalization of all asset classes in a ferocious deflation, in an attempt to service the debt, before the final attempt to save the dollar and avoid default goes into hyper inflation.

    We are in the deflation now, although it is well hidden through manipulating assets and transferring liabilities on bogus balance sheets, leveraging WAY into the future with promises, and sidelining risk into derivatives, which are literally piles of dead corpses piled on the sidelines of bad bets against the outcome.

    This is quite literally the most leveraged ponzi scheme to ever be perpetuated on this planet, and trying to go back to some semblance of an asset backed exchange medium such as gold, seems somewhat antiquated. I would be more inclined to move completely away from gold as currency, or oil as currency, or even a basket of commodities as currency, but shift to a whole new paradigm, releasing free energy, breaking the monopolistic cartels of controllers, defaulting on their phony debt based currencies, and eliminating most of the debt and the need for usury.

    If we don't do that, and we cling to old paradigms, the population will decline exponentially as well. My vote is to release the free energy technology.
    Last edited by gripreaper; 16th May 2016 at 02:56.
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    Default Re: The rise and fall of gold, oil, debt and empires.

    In light of the above, we are in a position to understand, better than anyone I know has stated, the significance of all the "gold bug" talk, including Jim Rickards above telling us that gold is going from its current $1300 per ounce to $10,000 or even $50,000 per ounce.

    Such claims may well turn out to be true ... but they are deeply deceptive. I expect gold and silver to rise dramatically, in the next few years, in another bubble, much the same as the dot-com stocks in Silicon Valley, and the real estate property prices there and elsewhere, went through bubbles that I profited from, in prior decades. If US Dollar inflation is rapid enough, the nominal price of gold and silver might actually reach $10,000 or $50,000.

    But "they" are telling us those numbers in part to keep us outsiders from selling too soon, before the insiders have a chance to get out of that bubble market.


    The real reason for this bubble in precious metals is not however, for the benefit of the common man with a few gold or silver coins in his pocket. The real reason is to sell the populace a new monetary system, replacing the current US Petro-Dollar debt-money system.

    Moreover, the primary way that such estimates as the $10,000 or $50,000 are made, by comparing current M1 money supply to known gold reserves, is deeply fraudulent.

    The current M1 money supply, cash in circulation or on deposit in checking accounts or on the Federal Reserve balance sheet is mostly not in circulation. Most of it is monetized US debt, in the preliminary stages of the collapse of the US Dollar debt-money system. The big banks are "extending and pretending" ... lending more debt to keep existing debt from going into default. The central banks are in turn doing their own "extending and pretending", playing shell games with the massive overhang of debt and derivatives that would bankrupt the major banks if honestly accounted for. The supposed value of the massive increase of the US Federal Reserve's balance sheet since 2008 is illusory ... that value will never be realized in any actual goods or services. Other major Western banks and central banks similarly have immense quantities assets on their books that will fail, catastrophically, once accounted for properly.

    So most of the West's so called liquid money (M1 deposits with banks and central banks and in circulation) is not money in use. Rather it's wall paper, used to cover up failing debt.

    Therefore that supposed "real" value of gold, comparing ounces of gold in national bank reserve accounts to "money" on the books of the central and major banks, is an illusion. That "money" is an illusion, that will soon vanish before our eyes.

    Nor are Rickards and others of the elite, or with the forbearance of the elite, hyping up the future value of gold and silver for the purpose of benefiting the common man. No, of course not. Rather they are setting the stage to replace the failed debt-money system, which served its purpose in the prior century to fund the build-out of the grand age of petroleum powered industry and infrastructure on this planet, with a precious metal money system, more suited to a stagnate or declining world economy.

    The "gold bugs" who have held out, keeping their stash of gold and silver coins "under their mattress" for the last several years, as gold and silver declined in price, will now serve the aims of the elite, singing the praises of gold and silver to the rafters, as the prices of gold and silver rise, and reports of their shortage are common.

    Initially the US, as in Rickard's talk in the Youtube video in my post above, will claim to still have 8000 tons of gold in reserve "in Fort Knox." The US will issue a new Treasury dollar, based on that supposed gold reserve, to replace the debt-money of current Federal Reserve notes. However that 8000 tons supposedly "in Fort Knox" will be found to be a grand lie, as that gold has already been stolen by the Bush-Clinton-Etc crime families over the last few decades. Then the US will fall back to claiming that its currency is backed by gold leased from China. That will be somewhat more true, but that gold will be kept in Far East vaults by China, as China certainly would not trust the US to take possession of it, and the US will have paid a high price for that gold, leasing in return mineral, agricultural, trading and manufacturing rights to large portions of America to the Chinese, for China's long term profit.

    Currently, the US imports far more than it exports, and pays for it with (increasingly worthless) debt-money. The new US Treasury gold backed certificates will decline in their value in trade, until the US can demonstrate to the rest of the trading world that they actually have (at least on lease from China) some actual gold, and it will decline in value until the US imports decline to equal their exports.

    That means that the price in domestic Dollars of US goods that depend on imports -- dang near everything these days -- will rise to perhaps 2, 3 or 4 times higher than today, until a balance is achieved.

    So - get out of debt and otherwise do everything to lower how much money you need each month to get by. Hold onto any gold or silver coins you have hidden beneath your mattress, but as with any bubble, ride it like a surfer riding a big wave in Maui, Hawaii ... keen to get off before the wave crashes on the beach. Don't count on money in any sort of account that sends you a monthly paper statement to keep its value ... as Lindsey Williams is fond of saying, "If it's written on a piece of paper, it's worth the paper it's written on".

    Some big banks will fail, taking their depositors money with them. Pension plans will fail. US government Social Security, Medicare and Obamacare plans will fail or decline substantially in payouts. The most overpriced medical system in the world, in the US, will collapse substantially. Real estate, stock and bond investments will collapse. Governments will fail in Europe, South America and in the US. Some city and state governments in the US will file for bankruptcy, and even the US Federal government will undergo great stress.

    Gold and silver will enter yet another bubble ... coming soon to a news headline near you ... based like most bubbles partly in reality and partly in grand deception.
    Last edited by Paul; 16th May 2016 at 14:04.

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    Default Re: The rise and fall of gold, oil, debt and empires.

    Quote Posted by waves (here)
    I just don't see what the carrot is to get the current big players, usurpers and people enjoying their wealth and power now to play along with a 'shift back to a precious metal backed system' and how they'll see it as in their benefit, including your predicted collapse of their stocks, bonds and real estate.
    The "big players" are not in control of this. The way that major new energy sources effect the economic activity of human civilization, and the way that debt-money systems inevitably rise, and rise, and rise some more before collapsing, are both forces more powerful than any corporation or national government.

    Debt money systems depend on a rising productivity, to continue to keep the value of future repayments greater than the value lent out. Once a new energy system becomes sufficiently expensive (less efficient at generating new energy), then the existing debt payments and other promised or expected stores of wealth or future benefits simply overwhelm the declining ability to fund them, causing a down turn, which further exacerbates the debt problem. No corporation or government is large enough to fight this.

    Some of the big players will adapt, as for example in this news from March of this year, 2016: Rockefeller family charity to withdraw all investments in fossil fuel companies.

    Some will fail.

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    Default Re: The rise and fall of gold, oil, debt and empires.

    Quote Posted by gripreaper (here)
    I would be more inclined to move completely away from gold as currency, or oil as currency, or even a basket of commodities as currency, but shift to a whole new paradigm, releasing free energy, breaking the monopolistic cartels of controllers, defaulting on their phony debt based currencies, and eliminating most of the debt and the need for usury.

    If we don't do that, and we cling to old paradigms, the population will decline exponentially as well. My vote is to release the free energy technology.
    I might be similarly inclined.

    But neither the Kissingers and Rickards of the world, nor their bosses, give a hoot what I might be inclined to do.

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    Default Re: The rise and fall of gold, oil, debt and empires.

    Quote Posted by Paul (here)
    Quote Posted by gripreaper (here)
    I would be more inclined to move completely away from gold as currency, or oil as currency, or even a basket of commodities as currency, but shift to a whole new paradigm, releasing free energy, breaking the monopolistic cartels of controllers, defaulting on their phony debt based currencies, and eliminating most of the debt and the need for usury.

    If we don't do that, and we cling to old paradigms, the population will decline exponentially as well. My vote is to release the free energy technology.
    I might be similarly inclined.

    But neither the Kissingers and Rickards of the world, nor their bosses, give a hoot what I might be inclined to do.
    Like you said in the post above this one, even the big players can't stop the inertia of a paradigm shift in energy. So whether they give a hoot about what you or I think, I'm hoping to be thinking on the right side of the trade and the correct side of the epochal paradigm shift.
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    Default Re: The rise and fall of gold, oil, debt and empires.

    If there are any others reading this thread who have been students of the dismal science of economics for as long as I have, then they might enjoy this article on Zerohedge: The Endgame. The article dissects the conventional economic analysis of our current monetary system, and describes the stresses that our debt money system is under. It's critique of current conventional economics is astute.

    In particular, this Zerohedge article observes that "In the US alone, bank deposits and checking accounts have increased from $2.33 trillion in July 2008, just before the Lehman collapse, to $10.17 trillion today". The crisis of 2008 has led those with liquid assets to prefer to hold them as cash deposits in banks, rather than as investments in stock, money market or mutual funds.

    These depositors are likely to soon learn that banks, too, are a risky place to store money. The banks of Japan and Europe are in some ways under even more stress, such as evidenced by negative interest rates, than the banks of the US.

    Once a wider concern develops among those who hold these large bank deposits that their deposits may be confiscated by failing banks, then the financial ministers of these nations and regions will have a binary choice: save the currency or save the financial system. In other words, either print sufficient money to keep the financial system from collapsing (destroying the currency by excess inflation) or don't print sufficient money (causing the financial system to collapse.)

    ===

    Someone else noted (in an article that I read a few days ago, and no longer have a link to) that such a collapse may well resemble the onset of a tsunami after a coastal earthquake. First the water rushes out, exposing the beach. Then it rushes back in, flooding the low lying land.

    In the case of such a monetary collapse, this article that I read expected a brief period of shortage of funds, in which stores and businesses report a sharp drop in sales, as some sort of financial/monetary panic freezes up non-critical spending. Then it expected a flood of money and more rapid inflation, as money rushes into the market, either from the above savers, choosing to spend any savings they can on anything they can "get their hands on", or from the government and central banks, if they have chosen to try to print their way out of the crisis.

    Whether this will be the exact sequence of events I don't know. But I do expect increasingly large instabilities in the system, as the stresses build up and things start to fall apart. Imagine flying in an airplane that has entered a storm, a hurricane, tornado or cyclone, that is more powerful than the plane can withstand. It's likely impossible to predict just how the plane will disintegrate, but it's quite likely that the plane ride will not end well.

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    Default Re: The rise and fall of gold, oil, debt and empires.

    The last great round of investing in increased manufacturing, infrastructure, and technology, funded by borrowing against the future anticipated returns from petroleum (and in this case, coal) burning occurred over the last 25 years in China.

    Richard Duncan reports on this today in the post China’s Economic Crisis: Part 2, The Colossal Boom (1990 – 2014):

    ===========
    Chinese Investment increased 50-fold between 1990 and 2014. Investment (i.e. Gross Fixed Capital Formation or GFCF) in China grew from US$92 billion in 1990 to US$4.6 trillion in 2014. During the last 25 years in China:
    • The Gross Output Value of Construction increased by 134 times, growing at an average annual rate of 21%.
    • Building Area Under Construction increased by 33 times, at an average annual rate of 15%.
    • Steel Production increased by 12 times, at an average rate of 11% growth per year. Consequently, China now has 50% of global steel capacity.
    • Cement Production increased 12-fold, growing by an average annual rate of 11%. During just three years (2011 to 2013), China produced more cement than the United States did during the entire 20th Century. China now has 59% of global cement capacity.
    To put China’s investment boom in better perspective, let’s compare it with the level of investment in the world’s largest economy, the United States. Between 2000 and 2014, Investment (GFCF) in the United States amounted to US$976 billion, while Investment in China came to US$4,216 billion – 4.3 times more.

    In 2014, Investment in the US made up 18% of US GDP. In China, it accounted for an extraordinary 44% of GDP – a level of Investment to GDP probably not witnessed since the Pharaohs built the pyramids with slave labor four thousand years ago.

    In the last Macro Watch video, we saw how China accumulated a US$4 trillion surplus on its Current and Financial Accounts between 1982 and 2014. In the new Macro Watch video, uploaded today, we will see how the investment of that money created the greatest economic boom in history.

    We also find, however, that China’s colossal boom came to an end in 2015. Trees don’t grow to the sky.

    Last week, we were told by an “authoritative figure” quoted in The People’s Daily, that China would experience “an L-Shaped Recovery”. It is worth keeping in mind that Japan has been in an L-Shaped Recovery now for 26 years.
    ===========

    This truly immense investment by China will suppress any potential future profits from other such investments, whether by China or by other nations, for a while to come. There is now an immense overhang of productive capacity, unable to sell into a world whose economy is collapsing due to an exponentially growing burden of debt.

    Fortunately perhaps for China, its own debt burden is mostly internal. It has little foreign debt, and it continues to have a positive balance of payments, selling more into the world markets than it purchases. It also has an economic, financial, monetary and political structure that is more centrally controlled. This means that China will have more options to force the internal default of its own, recently acquired, internal debt burden. Such options will not be available to other nations, especially to the U.S., which has an immense foreign debt burden, with its Treasury debt held as a primary form of foreign reserves by most other nations.

    ===

    But all nations will feel the hurt, each in their own way. Many of us live in nations, such as in Europe and the U.S, which have been relatively stable and prosperous since World War II. However many "other" nations have gone through periods of great turmoil, sometimes multiple such periods, in the last half century.

    From Rulers of the Planet: Why US Leaders Intervene Everywhere (WorldDialogue.org; 2003):
    Quote US leaders profess a dedication to democracy. Yet over the past five decades, democratically elected reformist governments—guilty of introducing redistributive economic programmes—in Guatemala, Guyana, the Dominican Republic, Brazil, Chile, Uruguay, Syria, Indonesia (under Sukarno), Greece, Cyprus, Argentina, Bolivia, Haiti, the Congo, and numerous other nations, were overthrown by their respective military forces funded and advised by the United States. The newly installed military rulers then rolled back any reforms and opened their countries all the wider to foreign corporate investors. The US national security state has participated in covert actions or proxy mercenary wars against reformist or revolutionary governments in Cuba, Angola, Mozambique, Ethiopia, Portugal, Nicaragua, Cambodia, East Timor, Western Sahara, Egypt, Cambodia, Lebanon, Peru, Iran, Syria, Jamaica, South Yemen, the Fiji Islands, Afghanistan, and elsewhere. In many cases, the attacks were directed at “soft targets” such as schools, farm co-operatives, health clinics, and whole villages. These wars of attrition exacted a horrific toll of human life and frequently forced the reformist or revolutionary government to discard its programmes.

    Since the Second World War, US forces have invaded or launched aerial assaults against Vietnam, Laos, the Dominican Republic, North Korea, Cambodia, Lebanon, Grenada, Panama, Libya, Iraq, Somalia, Yugoslavia, Afghanistan, and most recently Iraq again—a record of military aggression unmatched by any communist government in history. US/NATO forces delivered round-the-clock terrorist bombings on Yugoslavia for two-and-a-half months in 1999, targeting housing projects, private homes, hospitals, schools, state-owned factories, radio and television stations, government-owned hotels, municipal power stations, water supply systems, and bridges, along with hundreds of other non-military targets, inflicting great loss of civilian life. In some instances, neo-imperialism has been replaced with an old-fashioned direct colonialist occupation, as in Bosnia, Kosovo, the Former Yugoslav Republic of Macedonia, and now Iraq.
    A world wide economic collapse will bring such turmoil close to home for many of us.

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  19. Link to Post #10
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    Default Re: The rise and fall of gold, oil, debt and empires.

    Any new form of energy, such as might be based on physics that has been kept "dark" for the last century, will likely not provide rapid relief to our civilization's woes.

    First the existing debt overhang must be demolished. We will no longer be able to fund social benefit and retirement programs. Wealth we thought we had stored in financial markets, banks, insurance plans, capital appreciation, specialized training, education, ... will all evaporate more or less entirely.

    Only then can we refocus our talents and energy on building a new infrastructure, starting with the education and training of humans around the world, and creating new small businesses and institutions based on new paradigms that can build their way up.

    It took many decades to build our current world-wide, interconnected, complex petroleum based world economy. That building only occurred once the previous nations and economies were deeply deconstructed, by the decades of two great wars and an intervening great depression.

    I am hopeful that things can proceed a bit more quickly this time, with less mass death and destruction and poverty, but it still won't be easy. We do have one advantage - our computation and communication infrastructure, such as the World Wide Web, is already putting in place a planetary wide "nerve system" that can connect humans around the planet. This should make war between larger nations more difficult to carry out on a grand scale. It should support development of new capabilities supporting a renewed growth of human civilization.

    We still have a lot of clean-up to do first, however. We must first undergo a global detox, cleansing ourselves of the economic, environmental, monetary, intellectual, agricultural, medical, political, and industrial toxins with which we have been poisoning ourselves, our civilization, and our planet.

    ===

    One thing I learned while at the leading edge of computer development for several decades:
    The changes that I could foresee took longer than I expected, while the changes that I did not foresee ended up being more profound than I was able to imagine.
    Last edited by Paul; 19th May 2016 at 17:18.

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    Default Re: The rise and fall of gold, oil, debt and empires.

    The above post Paul is going to be printed out, laminated and put in front of me, above my desk - very well done - thank you for that.

    Bob

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    Default Re: The rise and fall of gold, oil, debt and empires.

    Brandon Smith, over at Alt-Market.com, remains one of my favorite commentators on the world economic and monetary situation.

    Back in Feb of this year (2016) he held the following interview with Rory of The Daily Coin. In it, Brandon provides a clear overview of his present understanding of what's going on with the world's economic, financial and monetary crises.

    In short, he sees a plan of the elite bankers to establish a world currency by 2018, as laid out in the Rothschild's key journal "The Economist" back in 1988, unfolding pretty much as planned.

    Here's the interview:

    Here's my notes on this interview, with MM:SS timestamps into the above video:

    ========
    Brandon Smith - Interview on 8 Feb 2016
    The Controlled Demolition of Our Economy

    3:57 Predicts more Fed Rate Hikes, spread out, in rest of 2016 This is part of a deliberate controlled demolition of the US economy
    5:30 Fed no loyalty to the US or America. Their loyalty is to the globalists. Goal: centralize all economic power into one global currency, monetary authority and government.
    6:16 US Dollar and American system stand in the way, so must be taken down.
    8:34 China is the new economic engine for this global system. The elite typically ransfer their wealth before collapsing an empire.
    10:40 China part of SDR currency basket. They support the IMF and UN China and Russia are not anti-banker. Sometimes they are anti-America.
    13:18 BRICS bank not countering IMF, but reliant on and cooperating with IMF.
    14:40 Throughout modern history, banking interests fund both sides of major geopolitical conflicts, choosing the winners and losers. See for example books by Antony C. Sutton.
    16:20 It's the same situation here. It's not a Cold War in terms of nuclear warfare. It's more an economic war.
    16:35 When the American system, the Western citizens are supposed to blame Eastern interests, and Eastern interests are supposed to the West was decadent and foolish and brought it on themselves.
    17:02 In reality, neither side really caused it. The bankers sabotaged the entire system for the past several decades.
    17:22 The bankers goal is to be sure we don't blame them, but each other.
    17:44 That may mean sacrificing certain banking institutions, the Federal Reserve. It is an expendable appendage.
    18:18 The 1988 article in the Rothschild owned magazie the Economist laid out this plan, expecting to get a global "Phoenix" currency by 2017 or 2018. The "Phoenix" would start out as a basket of national currencies, like the SDR, but in time its value against national currencies would cease to matter, because people would choose to conduct trade and finances in this global currency, because of its convenience aand the stability of its purchasing power.
    18:52 Brandon bases his predictions exactly on what the globalist financiers actually say they are intending to do.
    20:45 Everything that is happening today, including the reduction of major economies, making way for the SDR system, in turn is a stepping stone toward a global currency system. The SDR is a bridge, not the global currency system goal.
    21:57 Christine Lagarde recently said the SDR is "the currency of currencies."
    23:05 The SDR will first replace the US Dollar as reserve and for oil trade. Nations will retain their national currencies for a while.
    24:09 But the value in trade of national currencies will be SDR based, causing SDR's or similar "Phoenix" global currency to slowly replace national currencies.
    25:17 The loss of petro status for the US Dollar will be the next major economic trigger event. The OPEC nations plan to diversify away from the dollar and into a basket of currencies in order to "stabilize" oil prices, rather than reduce supply. The US recently removed a 40 year old ban on exporting oil, contributing to this "oil glut" problem.
    25:57 When the OPEC nations depeg from the dollar, that will help the globalists bring in the SDR as the basis for a world reserve currency.
    26:09 Once petro status is lost for the US Dollar, the value of the Dollar will be smashed, by at least half almost immediately.
    27:27 Brandon expects that the dollar will lose petro status. When this happens, and the collapse in value of the US Dollar in trace smashes the US economy and destroying the current global reserve currency, the IMF and BIS will step in with a "solution", using the SDR basket system as a new global reserve currency basis.
    28:00 People will be maleable at that point for this solution, given the economic collapse. The crisis will be so promiment, so frightening, that people will do anything to avoid it.
    29:12 The elites sticking to their plan to have a global currency by 2018. Some pretty substantial crisis will have to occur within these next two years to get to a point where they can introduce a global currency system.
    30:16 So within the next two years (as of Feb 2016) there will have to be a severe crisis in the United States. The Fed raising interest rates again, and a controlled collapse in the US stock market would play into this.
    31:35 The Fed's loyalty is to the globalists, not to the US. Rate hikes cause a serious crisis in the equity markets, but they want to bring it down at a controlled rate. We could have riots in the street and people starving. "They" want to control that collapse, such as with a series of 10% declines in the market, every few months down another 10%.
    34:10 Gold lost some value, but never that much. Gold and silver retaining their value as a safety net. Gold will continue to trend overall way up.
    36:35 Once we have a move toward a new global reserve system, they will have to have something of tangible value in order to convince the masses that this new system is better than the US Dollar. Brandon believes that gold and silver will be used by the elites as at least partial backing of the new currency, at least initially. They will need the "psychological plus" of gold and silver backing initially.
    ========

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    Default Re: The rise and fall of gold, oil, debt and empires.

    In a more recent article, just last week, Brandon Smith (see post just above) lays out what he thinks The Global Economy Will Look Like After The ‘Great Reset'.

    My summary of Brandon's article:

    ========
    Brandon expects that there will be an initial trigger, a catalyst, such as the Saudi's depegging their sale of oil from the US Dollar, or a major terrorist event, or a major financial collapse, that will cause chaos. Such chaos is essential to the globalists plans.

    In a world where most people cannot cope without the usual economic supply and service chains working, a disruption of these would result in considerable poverty and death.

    This would lead frightened people to demand and accept government control to "fix" the situation. More centralized control will be sold as the remedy for the excess complexity that caused the collapse. Some major financial institutions will be sacrificed along the say, such as perhaps Deutsche Bank or the US Federal Reserve.

    Bank "bail-ins" (taking depositors money) will be a useful part of fueling the crisis and panic.

    It will be claimed that excess complexity of the banking and monetary system caused the collapse, and that banks needed the bail-ins to avoid going failing.

    It will not be admitted to the public that the elite caused the collapse, and that the primary purpose of the bail-ins was to further stoke the panic in the populace.

    There will be currency devaluations world wide. The dollar is a primary target of the globalists and WILL be brought down. It won’t disappear, but it will become progressively irrelevant on the global stage.

    Another goal is to put an end to all transactions involving physical cash, and digitize all monetary transactions around the world and in a way that is traceable and foolproof. To be sure, the “blockchain” technology that the elites have in mind to accomplish this will never allow for anonymous transactions, because digital currency is not about anonymity or “convenience,” it is about control.

    After the collapse, the elite intent to impose a perpetual lack of supply, impoverishing people world wide and motivating large scale management of production. The elite intend to end local and private production and business. Anthropogenic climate change is THE model the elites must assert if they hope to convince the citizenry that a concrete ceiling on production and population is acceptable, and that a global "carbon tax" is necessary.

    However ... we aren't there yet. Likely the globalist elite will be able to trigger this collapse. They are well along that path now.

    However what gets rebuilt after that will depend on who rebuilds afterward, and on their understanding of what's going on and what our goals should be.
    ========

    See What Will The Global Economy Look Like After The ‘Great Reset'? for the entire article.

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    Default Re: The rise and fall of gold, oil, debt and empires.

    A key purpose of my writings here on the economy, and of my study of the area for the last decade, is to help myself and others better understand what's really going on.

    Those who understand roughly what's happening in a crisis situation, even if they have done little physical preparation for the event, are in a fundamentally better position to handle the situation, than those whose world view is shattered, leaving them in a desperate panic.

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    Default Re: The rise and fall of gold, oil, debt and empires.

    In the latest monthly edition of Jim Willie's subscription Hattrick Letter, Jim observes that:
    • The oil and commodity companies are in deep debt.
    • They are in deep distress due to collapsing oil and commodity prices.
    • The banks are required to offset the risks of credit lines and loans with derivatives.
    • The cost of these derivatives is rising sharply, due to the increased risk of defaults on this debt.
    • This will force banks to cut back on the credit to the oil and commodity companies.
    • (My words here, not Jim's) This is a classic way to trigger a major economic and financial collapse - cutting back on credit.
    • Therefore, expect a major "Lehman" event soon - the failure of a major bank or of the debt of an emerging market nation.

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