Posts Tagged ‘financial meltdown’

About the Grand Chessboard of Zbigniew Machiavelli

Monday, November 24th, 2008

I am afraid the big change of Obama will not change anything at all. It looks like the financial elite has placed a new pawn on the chessboard but the game and the players stay the same. The Geopolitical Players are defining a strategy to beat Russia and China.

Obama is surrounding himself with old fashioned politicians who are part of the old fashioned networks of the financial Elite. They are part of the famous World Conspiracy Groups like the Bilderberg Group, the Council of Foreign Relations and the Trilateral Commission.

Obama is announcing the old-fashioned New Deal of Franklin D. Roosevelt to save the US and will use the same money printing machine of the FED to finance his plan.

The big difference with the time of Roosevelt is that the US is completely broke and has to start to pay his debts. Obama is postponing this moment because he knows (and the Elite knows) that the US Citizens are not prepared to move back to a state of poverty.

To save and to create jobs Obama has to Protect the US Economy againts the outflow of jobs to the New Economies, China and India. The emerging state of economic protection will generate huge effects in the World. When the US starts to protect its market others will follow soon.

The big question is if every country in the world will support the new policy of the US. The United States is still befriended with the four oil-rich Gulf States.

The US has already asked them 300 billion dollars to prevent its financial meltdown. The US is still by far wasting the biggest amount biggest of energy in the world and the Arabs need the US to sell their oil.

The biggest adversaries of the US, China and Russia are united in what is called the Shanghai Cooperation. The cooperation is connected to India and Pakistan but also to countries like South Africa and Brazil (BRIC).

One of the important geo-political strategists of the US is Zbigniew Brzezinski. He was one of the advisors of Obama on foreign policy. Brzezinski was also National Security Adviser of President Carter, the creator of the Trilateral Commission and an Associate of Henry Kissinger.

A few citations: “…The last decade of the twentieth century has witnessed a tectonic shift in world affairs. For the first time ever, a non-Eurasian power has emerged not only as a key arbiter of Eurasian power relations but also as the world’s paramount power. The defeat and collapse of the Soviet Union was the final step in the rapid ascendance of a Western Hemisphere power, the United States, as the sole and, indeed, the first truly global power…”

About 75 per cent of the world’s people live in Eurasia, and most of the world’s physical wealth is there as well, both in its enterprises and underneath its soil. Eurasia accounts for 60 per cent of the world’s GNP and about three-fourths of the world’s known energy resources.”"The most immediate task is to make certain that no state or combination of states gains the capacity to expel the United States from Eurasia.”

The strategy and tactics of Brzezinski and his colleagues (Kissinger) have inspired every government of the US until now. It becomes very clear why there is a war in Afghanistan and why Irak had to be destroyed. The aim is to create one dominant power that is controlling the World called the United States.

The power of the Sovjet Union was destroyed by Financial Warfare and Political Instability (Kosovo) generated by the US and its allies (including the Netherlands!).

The Sovjet Union has recovered and has restored its old fashioned control structure. It is has started a new expansion strategy and slowly moving to the West. Putin knows that NATO is unable to resist his policy because the focus of NATO is in the East.

Putin also knows that the West (especiallyGermany) needs his huge resouces of oil and gaz. He knows that the Pipelines are the most strategic tools to manipulate the EG.

He also knows that Germany is deep within not an Adversary but a Companion. The only thing he has to do is break the EG. This will happen soon because of the big internal differences between the Rich and the Poor Countries.

China has become one of the most powerful nations in the World. An alliance between the two (and with Germany the tree) old fashioned adversaries of the US is a super treat for the dominance of the West.

It is very clear that the US is losing its strategic positions in every part of the world except the Middle East. In this area Iran is the most important adversary and it is very clear why the US together with its ally Israel is trying to play the same trick it used with Irak to start a new war.

What will happen?

The CIA will go on with its destabilization programs. They will create new enemys of the West to justify military activity (Afghanistan). Military activity always helps to stimulate the economy and keeps the focus of the citizens away from the real game.

Financial Warfare has proven to be a very effective tactic. The activities of the FED will be aimed at destabilizing China. Russia is already in trouble. The closure of the US Economy will stop the economic explosion of China. The only thing that is left for the BRIC-countries is to create an internal market and a common currency. Other countries in the world have to make a choice. Will they follow the leadership of the US or join the still growing economies of BRIC. In the End the Old fashioned Cold War between the US and the Communists (Russia/China/India,…) will start again.

The last and the most helpful activity to destroy the enemies and to speed up the economy will be an old fashioned (Third) World War. The battlefield of this war has to be far away from the US to avoid “nasty” consequences. Eastern Europe (Germany, Poland, …) is by far the best place to act. You have to do this without disturbing the relationship with EU. This is simple.

The big trouble is that Germany and Russia have already negociated a secret treaty. They have divided Europe into two territories that have a lot in common with the famous Molotov-Ribbentrop Pact between Hilter and Stalin. The only thing Germany has to do is to break the EG into two parts.  This will generate a high tension between the old adversaries Germany and France.  

The EU will be in big trouble because of the economic crisis and every country will act on its own as soon as the weak countries (Spain, Greece, Portugal, Eastern Europe) really get into trouble. They will protect their economies and this will destabilize the European Union. The only thing you have to do to is to tease the Russians. They just want to be respected as a Super Power. Isolate them and show them that they are a powerless nation and they will become terribly angry.

The geopolitical players and followers of Machiavelli (Kissinger, Brzezinski, Poetin) don’t care about human lifes. They don’t care about democracy. Their only aim is to stay in power and to increase their power.

Machiavelli became famous by his book the Prince. It is a political cookbook for politicians to stay in power. The most important lesson is deceit. The politician has to show all the positive qualities needed to be loved by the people. He has to be merciful, faithful, humane, frank, and religious, but he should only seem to have these qualities.

A politician cannot truly have these qualities because at times it is necessary to act against them. The only ethic that matters is one that is beneficial to the politician in dealing with the concerns of his state. If his country wants a redeemer he has to look like a redeemer but behind the scene everything is allowed. You have to admit Obama is a great Actor and the Role of the Redeemer fits him well.

To defeat your opponents you have to commit them to your cause. If you are blamed. They are blamed also. The best way to beat the Clintons is to make them your partner. Hillary understands and practiced Machiavelli.

Introducing change is the most stupid thing you can do. You have to make everybody believe that the old is new. Everybody believes the New Deal was succesful and Roosevelt was a succesful president. So why not copy his scenario and (re)play his role.

`We must bear in mind, then, that there is nothing more difficult and dangerous, or more doubtful of success, than an attempt to introduce a new order of things in any state. For the innovator has for enemies all those who derived advantages from the old order of things, whilst those who expect to be benefited by the new institutions will be but lukewarm defenders. This indifference arises in part from fear of their adversaries who were favoured by the existing laws, and partly from the incredulity of men who have no faith in anything new that is not the result of well-established experience. Hence it is that, whenever the opponents of the new order of things have the opportunity to attack it, they will do it with the zeal of partisans, whilst the others defend it but feebly, so that it is dangerous to rely upon the latter.”

When his Power is at stake the Prince has to start a war.

A PRINCE ought to have no other aim or thought, nor select anything else for his study, than war and its rules and discipline; for this is the sole art that belongs to him who rules, and it is of such force that it not only upholds those who are born princes, but it often enables men to rise from a private station to that rank. And, on the contrary, it is seen that when princes have thought more of ease than of arms they have lost their states. And the first cause of your losing it is to neglect this art; and what enables you to acquire a state is to be master of the art“.

The big problem are mercenaries. To fight a war you need warriors who are dedicated to You and Nobody Else. Always please the Military Elite.

He who holds his State by means of mercenary troops can never be solidly or securely seated. For such troops are disunited, ambitious, insubordinate, treacherous, insolent among friends, cowardly before foes, and without fear of God or faith with man. Whenever they are attacked defeat follows; so that in peace you are plundered by them, in war by your enemies. And this because they have no tie or motive to keep them in the field beyond their paltry pay

When you want to fight a war fight a war with people who are not thinking in terms of strategy. The Chinese are highly stategic. They practise the Art of War of Sun Tzu. When you apply Sun Tzu you never fight a war. You exhaust your opponent. The best way to create a war is to tease your opponent to destroy himself.

My advice

If the current pattern is sustained my advice would be to find a hiding place. This hiding place has to be outside the area of the big earthquakes. It also has to be rather close to the equator because we will soon experience a new Ice Age. You have to be able to grow your own food so you need seeds and soil. Avoid the contaminated area’s in the world. The last thing is to avoid the battle ground of the last big war (Germany, Poland, Sweden).

How about Spain or Portugal?

Of course I could be wrong. Perhaps he is the real redeemer and I am deceiting myself because I don’t believe in honest politicians anymore. The best thing to do not to wait and see but to Act. The Citizens of the World don’t need big government to get into action. Creating networks is simple and everything you need is somewhere already available (even money). It is all about making the right connection!

LINKS

About Financial Warfare

About the FED Conspiracy

 The Grand Chessboard — American Primacy And It’s Geostrategic Imperatives,” Zbigniew Brzezinski, Basic Books, 1997

The text of the Prince of Machiavelli

Why the Russians always win a war

About the coming Ice Age

About the End of the Banking System

Sunday, May 18th, 2008

I left the Banking Industry in 1997 because I did not want to be part of an environment where cooperation and compassion was gone. At that time I expected a major crisis. It took ten years until the crisis of the Banking Industry was very visible to everybody.

Until now I don’t think many people are aware of what is really happening and what will finally happen. We are approaching the End of the Banking System. In this blog I will show you that everybody was aware of the reasons behind the crisis. The reasons are extreme greediness and incompetence.

The solution to the crisis is simple. We are able to create a New System with Ease. It is just a matter of time when this will happen.

Let me start with two citations out of an article of Fortune April 1, 2008: “half the huge gains from 2003 to mid-2007 could be attributed to increased leverage – otherwise known as gambling with borrowed money – that magnified earnings in a boom. If a firm’s portfolio is leveraged at 33 to 1, it takes a mere drop of 3% to wipe out its entire capital“. “The compensation system is a fundamental problem. The system rewards swashbuckling behavior by everyone from traders to CEOs“.

Bankers are Gambling with Your Money. When they Win they get huge bonusses. When they Lose You Pay their Debts. You Pay their Debts because Your Investment has evaporated and/or because You Pay more Taxes.

The Investment Bankers know everything that is happening in the Market months before You know What is Happening. They are not allowed to use this knowledge (Chinese Walls) but Bankers are Humans and Sometimes they Forget to Keep their Mouths Shut.

The Chinese Wall is an ethical barrier between different divisions of a financial institution to avoid conflict of interest. A Chinese Wall is said to exist, for example, between the corporate-advisory area and the brokering department to separate those giving corporate advice on takeovers from those advising clients about buying shares. In spite of Chinese Walls, these conflicts of interest allegedly arose during the heyday of the Dot/Com era, when financial research analysts published dishonest positive analysis on companies in which they, or related parties, owned shares.

The U.S. government has since passed laws strengthening the Chinese Wall concept (e.g. Sarbanes-Oxley Act) with the desire to more carefully formalize and prevent such conflicts.The big problem with procedures is that they are imaginary.

In reality people always find a way to avoid procedures. It all comes down to two things Personal Ethics and Transparent Working Methods implemented in “simple” IT-Systems. As you will see later the Personal Ethics is highly surpressed by the Corporate Culture and the IT-Systems are exceptional Complex.

 Now two citations out of an article of Bank Director, Second Quarter 2003 by John R. Engen.

The past few years have witnessed the big-money failures of institutions, due to fraud or risky business strategies“”But L. William Seidman, FDIC chairman in the Reagan and Bush administrations, says regulators shouldn’t be judged too harshly. The industry turned in record profits of $105.4 billion in 2002, up 21% from the previous year“. “To go through the stock-market drop we’ve had, 9/11, and everything else without a major banking problem shows the value of having someone looking over your shoulder“.

The Regulators knew and know about the Fraud and Risky Business Strategies but their Theory is simple. When the Banks make a Profit Everything Works Fine. The Banks earned the Profit by Gambling. The Regulators just watch over the shoulder of the Banks and are Very Happy about the Gambling System. It always Cures Itself. Some People Win, Some People Lose. It is all in the Game. Funny Enough the Winners are Always situated in the environment of the Banking Business and the losers are Small Investors.

A few citations out of an articles about Index Funds in The New York Times (May 17, 2008): “It has been long established that even most active fund managers fail to beat the overall market on a regular basis”"Stock bubbles are examples of huge inefficiencies, in which prices get completely out of whack for months and even years at a time” “We have people investing tens of billions of dollars in index funds and they are getting drawn into bubbles“.

The Stock Market is a Gambling Machine and the Value of your Stocks has nothing the do with the Real value of Your Stocks. Nobody is able to predict the effects of the manipulations of “Greedy” Bankers on the Market. The only people that really profit are the bankers themselves. They create the Stock Bubbles and Collect the Bonuses. The real value of your stocks is the dividend a company pays to his investors. Many Stocks are Highly Overvalued.

Let us move to the Employees. A few citations out of New York Times (May 16, 2008):

You’re seeing a very, very inconsistent message to employees,” “It’s, ‘I don’t know when it’s going to happen, it may be tomorrow, it may be next month; we may be able to keep you, we may not.’ “banks are keeping employees in the dark about the size and timing of layoffs”. “She did not return to her office and ended up asking the bank to send her the photos of her son that she kept on her desk”. “many laid-off employees are not allowed to return to their desks, because the banks fear departing employees will try to take valuable colleagues or clients with them” “Euphemisms for layoffs are making the rounds too. Banks do not just fire people anymore. They engage in “head count reduction,” “reduction in force” and “redundancies.” And gallows humor is rampant. One joke: A banker calls a colleague and asks, “Are you busy? Or are you lying?”

Investment Banks use Fear to Manipulate Their Employees. You Never Know if you are able to Keep your Job. When You Live in Fear You never tell the Truth. You are Busy or you are Lying.

When You have to Perform to keep You’re Job You have to take High Risks. You keep you’re mouth about these Risks because in a Fear Based Culture You never talk about Failures. You hide them and Hope Nobody will See. When You tell Somebody about the big problems that could happen You are Fired because Everybody Knows and Nobody Wants To Know. “Après moi, le déluge” (“After me, the deluge”)(Louis XV).

Again the New York Times (May 17, 2008):

Few employers want us around for 40 years, so our income is likely to have ups and downs and disappear altogether for brief periods between jobs. Saving for retirement is now mostly our responsibility, too. Health insurance, for those of us who have it and manage to keep it, requires increasingly large amounts of money out of our pockets. The list goes on and on”. “As fewer people have pensions and more retirees live longer, an increasing number of people may need financial help from their children” “Financial planners may not have all the answers, or the best answers, all of the time” “Thankfully, a number of Web communities and blogs have grown up around almost every aspect of spending and saving“.

Many more people will be Without a Pension. They have Lost their Investment at the Stock Market. Perhaps You even have to help you’re Parents. To do this You have to Save Money but You don’t know what to do with the Money You have Saved. The best way to get an independent advice is to use Networks of Experienced Customers. Never Ask a Bank to Give you an Advice.

And the Customers. Citations out of the Telegraph (16/05/2008):

The conventional wisdom in financial markets is that the time to move back into bank stocks is just after a slew of rights issues has depressed prices. There are, however, good reasons not to give the banking sector the benefit of the doubt. At the best of times, as Anthony Bolton, the fund manager who ran Fidelity’s Special Situations fund for many years, observes, banks “are the most opaque of all companies”. With a building materials company, you more or less know that, barring fraud, the right amount of stock is there. With a bank, it is much harder for investors to understand the assets on the balance sheet; and in the course of the credit crisis, it has transpired that the banks themselves experienced severe difficulties in this area“.

Nobody Understands the Financial Practises of a Bank. Even the Bankers Themselves don’t Understand what they are Doing. I am not convinced Banks have kept all the Data about You in the Right Order. Someday You will Find Out that You’re Savings are Gone and Nobody Knows Why.

It does not help to create Chinese Walls when Nobody Knows what is really happening. The Controllers are and were unable to understand the complicated financial structures that were created. The Book-Keeping systems are not Covering the Truth. Even very Bright Mathematicians are unable to value the Complicated Financial Transactions. The Effect is that Dealers are able to go their own way without a proper monitoring instrument. This has created many “unexpected” situations where low-level Dealers were able to build High-Risk Positions for a Long Time without the Knowledge of the Management. When the Gambling failed the Bank lost billions.

Reactions of readers to this Column:

I still think banks are greedy and lack integrety but they will bounce back because they are essential to a capitalist system” How can anyone believe a word they now say? Furthermore they remain in position, collecting their millions”. “It is the real investors namely pension savers and private investors who have no meaningful say and ultimately pay the price for this corrupt state of affairs, deception and lack of accountability” “Don’t let the politicians throw our money at bailing these irresponsible bankers out” “I am suffering in this downturn, and feel worried about the future. But we all have had a hand in this fiasco and we all can be affected by events (floods, droughts, disease, terrorism, earthquakes, storms and wars) which not wanted by anyone, we must plan for“.

The Customers are Powerless and Very Angry but there is no Alternative. We have to Live with the Greedy, non-Ethical Capitalistic System.

It is wrong to associate Banks with the Capitalistic System. Everywhere in the World people are Saving and Borrowing Money. The fundamental principle that was lost is to take Responsibility for what You are doing with the Money of Others. There is nothing wrong when you Gamble with you’re own money but don’t Gamble with the Money of Others. It is as simple as that.

My Conclusion:

There is Really Nothing that stops Us (the Customers) to start a Bank of our Own. The Technology is there and the Customers are really fed up with the Current System.

There are already Customers who are advising Customers for nothing. It will be very easy to transfer money without the Use of the Banking Payment Systems. If we agree on one principle, “You are trusted until you prove the opposite” it will be very easy to make a loan. There are already Systems Operational who are doing this. They are called Cooperations.

Nobody is taking the initiative to create a new Banking Infrastructure. Everybody is waiting for Everybody.

The Regulators wait and see. They hope the System will recover. I think it has died recently and nothing will help us to revive the dead body.

 

About Worldwide Disaster Planning

Thursday, April 17th, 2008

For more than five years I was responsible for the Security of a big bank. One of the responsibilities of Security is Disaster Planning.

Disaster Planning is very easy until you want to implement the disaster plan. You just sit down with a small group of creative people and imagine everything that could happen to your company. You have be to as disastrious as you can be.

When we performed our first Disaster Planning we asked the managers of the company to respond to every “Act of God” we could imagine.

Soon we discovered that some questions could not be answered. They could not be answered because there was no data available or there was no “decision-structure (+ priorities)” that could decide what to do.

The end of our first phase generated a lot of awareness and action. We even knew what would happen to the bank when the biggest disaster (a complete destruction of the computer centre) would occur. The answer was simple. The bank would go broke within 24 hours!

The next step was to take preventive measures. Some of them where easy to implement. The realization of a back-up computer center was very expensive even if we priotized the use of the centre to the bare minimum.

Suddenly all the disasters we imagined “would never occur” or could occur but with a very very low chance. We were Just Imagining.

At the end we convinced the top management to take measure and we created a full back-up center. The load was divided between the old and the new center and the data was copied at both places.

Soon after the back-up center was finished an airplane crashed very close to the data-center.

I am telling this short story to open up your Awareness to another level of Disaster Planning.

I want to do it on the level of planet Earth.

Have you ever imagined what disasters could happen to our planet and what we/you would do if this really happened?

What would it be to be without electricity, without heating, water, food, a doctor, medicine, a car, a telephone, work?

What would it be like when many people were looting and you have to defend yourself with weapons to survive?

What would it be like when there is no police or army to help you and you have to do it on your own?

Have you ever imagined what decision-structure and priorities we would need to handle this?

Any idea about the amount of money involved?

Do you know where we can build a Back-up Earth?

The Moon?

Mars?

Now I Know what NASA is Really Doing!

Do we have enough time (and budget and technology and ..) to save everybody when it happens?

I hope so. If not we have to decide who will stay! Perhaps we have to Organize a Lottery!

As a back-up strategy I advice you to do a Survival Training and build a back-up centre Yourself on a place on the Earth that will not be hit by “the disaster”!

Any Idea Where to GO?

Any Idea What to Look for to know when it Starts?

Perhaps A Global Warming of the Earth, Strange Weather, a Food Shortage, a Worldwide Financial Crisis or April 2010?

I Know where to Go, but If I tell you the place Everybody would Go there when it Really Happens!

I Think I Keep it a Secret.

Why are all the Bees dying?

Tuesday, March 4th, 2008
Haagen-Dazs is warning that a creature as small as a honeybee could become a big problem for the premium ice cream maker’s business. At issue are the disappearing bee colonies in the United States, a situation that continues to mystify scientists and frighten food-makers.
 
That’s because, according to Haagen-Dazs, one-third of the U.S. food supply – including a variety of fruits, vegetables and even nuts – depends on pollination from bees.It is now estimated that nearly half of Italy’s 50 billion bee population died last year. Meanwhile, the situation in the U.S., where up to 70% of honey bees have already died, is far worse than in Italy. The worldwide bee epidemic has also hit France, Germany, Britain, Brazil, Australia, and Canada.

Bees are responsible for the pollination of fruits, nuts, vegetables; such as, carrots, cucumbers, broccoli, onions, pumpkins, squash, apples, blueberries, avocados, almonds or cherries. Many animals and insects are dependent on these products. In the end the only thing that is left for us to eat is grain and seafood.

The wheat supplies around the world are at their lowest level in thirty years and the demand for seafood is also much bigger than the amount of fish that is produced. The effect is a permanent rise of the prices. At the end only the Rich people (We) are able to buy food. The rest of the World has to find other solutions. Don’t you think this will create a lot of conflicts?

Scientists are “mystified” by what they call Colony Collapse Disorder (CCD).

 Bees use the sky and the earth’s magnetic field to navigate. They communicate this information to their mates by the famous bees’ waggle dance on the honeycomb. Researchers at Landau University in Germany designed a simple experiment. They exposed bee-hives to the radiation of DECT-stations. Of course they also used a control group that was not exposed. For two microwave-exposed hives no bees at all returned. To one hive only six returned.

I think it is strange that a simple explanation is not accepted. When bees vanish there can be only one reason. They move out and are unable to find their way back. Because their navigation system depends on “the sky and the earth magnetic field” there must be something wrong with this field.

 Honeybees are one of the most sensitive indicator species for all the environmental pollution and dangerous technologies we perpetrate.

When honeybees disappear, we too, shall follow in due time.I have written more than once about the big changes that are taking place in the Magnetic Field of the Earth. Some changes are caused by external influences (the Sun Cycle) but most of the changes are caused by ourselves. We are polluting the sea, the earth and the sky.

Not only the telecommunication-industry is producing electro-magnetic pollution. The Military (US, Russia, China) have produced very powerfull Electro-Magnetic Weapons. This network is build by the US-Army is now covering the US. It produces so called ELF (Extreem Low Frequency) waves. It is proved that these network change the Magnetic Orientation with 10 degrees. ELF networks are also capable of influencing the Emotions.

I know that the policy-makers are aware of the problems. They know already for a very long time about the hazards. They don’t know what to do because we are now about a 100% dependent on the “mobile”-infrastructure. They don’t want to admit they told “lies” to the public.

It is a well known fact that when many people are compromised they just wait and see and hope for something that will save from a downfall when everybody starts to realize we are moving into a fatal disaster and they knew it all the time (!).

Not only the politicians are not acting. The users (Civilians and Soldiers) are also watching and using their beautifull gadgets. They are addicted and don’t realize that electro-magnetic infrastructures are also killing the Immune-system and affect our Emotional States.

The Military don’t mind about this. Destructing the Enemy is their Goal.

When you read this Blog please realize that You are again informed about a new step in the Destruction of Your own Environment.

If we go on this way we will be sick (Auto-Immune Diseases), poor and hungry (Shortage of Food) in due time.

 We will be poor because the financial system is crashing because of the spectacular amount of financial speculation. Speculation in Commodities is one part of a very big picture that shows that the Financial Industry is gambling on a very large scale. Speculation is one the most important factors for the rise of all the prices in commodities.

Sometimes we have to stop something and start all-over again. I am afraid we have to stop mobile communication almost immedeatly and move back to the old way of telecommunication using cables. I am sure we will find low-intensity solutions for Mobile Communication. There is really no need to send Movies and Pictures by the mobile network.There is abundance of Glass Fiber!

We also have to stop all the large scale “experiments” with Electro Magnetic Fields that are going on in the Weapon Industry. There is no need for more advanced highly destructive weapons. 

The House of Morgan or How the Great Depression was Created

Monday, December 10th, 2007
Black Tuesday

Black Tuesday

Black Tuesday,, October 29 1929 a giant economic implosion took place. This implosion was the official start of the Great Depression.

The  implosion took place because Something or Somebody was pushing the economy UP while it wanted to go down.
An artificial Up-movement of the Economy is called a Bubble.

J.P. Morgan was highly involved with the introduction of Fascism in Europe and the US.

He believed that the major enemy in the World were the Communists.

He was befriended with Mussolini and Hitler and organized a fascists putsch in the US by his own private army, the American Legion.

The putsch failed. The legion was used as a recruiting base for the rebirth of the Ku Klux Klan.

Morgan organized the US Communist Party to create an internal external enemy. Morgan used many other dirty tricks to accomplish his goals.

The British Empire was the largest empire in human history. At the time of the Great Depression it controlled a quarter of the world’s population (458 million) and total land area.

The ruling class of the Empire came out of old families and was trained in special institutions like Eton and Cambridge.

The British Empire was based on the ideology of “Free trade”. “Free trade” was necessary to expand the markets of the British Factories. The factories needed raw materials, logistics and markets.

When a country or a person blocked the free trade the British Army removed the obstacles.

Free trade was organized in Trading Companies. They created strategic outposts. When the outposts controlled the region the British Management System (Law, Education) was implemented.

The main goal of the System was to keep the natives under control, and to develop them slowly, and along their own lines.

The British Elite was very practical. They were conservative men with relativistic notions about what forms of government suited peoples (or ‘races’) best. They didn’t go in for ideal systems.

They also knew they did not have the numbers of personnel to try to revolutionize her subjects so they always used local collaborators. They practiced the method of “indirect rule”.

The American Friends of the British Elite shared the commercial attitude of their British friends. They opened up new markets and protected their trade.

They even invented a new tool, Financial Manipulation. In every other aspect they were very different. They were highly ideological and therefore not practical.

They were convinced they were the carriers of the Best Ideology on Earth, Capitalism.Their first priority was to Destroy the Evil Empire and the friends of the Evil Empire, the Soviet Union.

In contrary to their British friends they were not interested in indrect rule. When an enemy was destroyed they left the country and were convinced everybody would embrace their System.

The Power of the House of Morgan was lessened by the New Deal of Eleanor Roosevelt in 1933. Roosevelt organized a Social Contract that gave more influencers the possibility to take part in the US Government.

The Financial Power of Morgan never disappeared. His group is still behind many influential financial companies (Morgan Stanley, JPMorgan Chase) and institutions like the World Bank.

JPMorgan is reincarnated in the person of Jamie Dimon (JPMorgan Chase). He is playing the same game as his predecessor and is behind many of the intelligent tricks that are now performed behind the scenes in Washington.

Is History Repeating Itself??

The Economy was bubbling because the Government was “pumping” a huge amount of money into the economy. Therefore it was very easy to lend, to spend and to gamble with money on the stock-exchange.

Many people gambled enormous amounts of money on the Stock-Market but on Black Tuesday they lost their bet. They lost their bet because suddenly nobody believed the Up-state would continue.

Why was the US Government pumping so much money into the Economy?

The strange thing happened that the major money pumping engine (the FRS) was controlled by the Government of the British Empire. The US Government was not involved. It was totally powerlesss.The British Empire needed money to maintain the backing of the British Pound (The Golden Standard) and the “old boys” network in the Financial Business just made a deal.

The Government of the British Empire was controlled by an Elite. Lord Montagu Norman of the Bank of England and Benjamin Strong of the New York Federal Reserve Bank were of the same club. They arranged the Bubble.

Behind the Elite was one Very Important Person, J.P. Morgan. He was the sole owner of a small company called the House of Morgan. The House of Morgan held effective control of the American government for much of the late nineteenth and early twentieth centuries. Morgan used the US central banking system to increase the ability to lend more money than he possessed. US Citizens paid taxes and their money was used to realize the plans of Morgan and his friends.

Morgan helped his friends (including the Bush family(!)) to get rid of their huge debts and to “buy” many important US companies (AT&T, US Steel).

After Black Tuesday the “friends of Morgan” held directorships in 167 industrial concerns, banks, railroads, and utilities. They controlled the most important media in the United States, including the New York Times.
LINKS

Why the Finance Gurus Get Risk All Wrong

Tuesday, September 18th, 2007

When I read the news I feel the Worldwide Financial System is slowly moving into the disaster zone. The main reason is the absence of Trust. For almost 25 years I have been active in the Banking Industry.

I started my career as a mathematical analyst doing Operations Research. Our most important client was the International Money Market. The next 25 years I was in many roles involved in this area.

Banking is in its essence very simple. A bank buys and sells money. All the products of a bank are sometimes very complicated structures where the flow of money (the cash flow) is regulated. A bank has to balance its cash flow every day. When the cash flow is unbalanced it has to buy or sell money from other banks or the National Bank.

The money market is the most complicated market. The most important person in this market is called a Dealer. To balance the activities of the Dealers a Manager gives them all kinds of Limits. The sum of all the Limits has to be zero on a daily basis.

When they buy and sell money it is very easy to manage the dealers. You just have to add all the cash flows and compare them with the given number.It became much more complicated when the dealers created new products.

In these new products they started to trade Expectations (Options). An expectation is a statistical construction. To calculate the Limit a new way of calculation had to be developed. Not only a new way of calculation had to be developed we also needed a new way to keep the books.

Everytime when we were able to find a way to solve the problems the dealers invented a new product. They started to trade in expectations of expectations and many other very complicated combinations of other products. In the end we were not able to keep the book anymore.

This was the moment when things went totally wrong. Perhaps you remember the end of Barings where a dealer called Nick Leeson was able to fool almost everybody. He wanted to regain his losses and to do this he had to take more risk in every step he was taking. He was gambling with the money of the bank. I don’t want to offend dealers but I think GAMBLING is the best way to describe the current situation in the financial industry.

Not only the bank is gambling but also Companies and Customers are gambling in every aspect of their lives. Customers buy a house and hope the price of their house will rise. Companies buy a company and hope the merger will make a profit.

Gambling is a zero sum game. Gambling is a very complicated way to distribute a whole. The sum of all the chances is one. To state it simple when one person wins the other has to lose. We created a very complex system that hides the fundamental laws of gambling. An example is inflation. Inflation changes the value of a currency. To compensate the ups and the downs of the currencies money flows from one country to the other.

When a bank is unable to reach zero (balance) it has to lend money. There are many arrangements between banks to make this possible. Most of the time banks operate in clusters or networks. They use preferred partners to do so. When you are playing in the lower league you have to pay more. You are playing in the lower league when the chance that you become unbalanced is high. You are a risk and to compensate the risk you have to pay a higher price because the bank has to reserve money to compensate for the risk. The money the bank has to reserve is not making money.

A very long time ago I was responsible for a project called Global Limits. We used the GEIS (General Electric)-network to connect all the dealing centers in the world. The system operated on a real-time basis. Every transaction with a bank was stored in the central database. With one button a central manager could block a bank. If the bank was blocked the dealers were unable to deal with this bank.

The system was created because of the Oil Crisis. The management of the bank was very afraid the Domino-effect would take place. The Domino-effect happens when a bank goes broke and influences the next one. We calculated this effect on a daily basis.

At that time the banking network was not too complicated. Many banks worked in alliances (ABECOR) and the alliances could stop the cascade.

At this moment we are in a totally different situation. The banking network is worldwide, highly interconnected and the transactions between banks are based on expectations. When a worldwide expectation fails the system is almost unable to stop the cascade.

Most of the time expectations are also balanced. When many expectations fail at the same time the Insurance Industry calls this an Act of God. Acts of God (or Destiny) are outside the reach of statistics. They are so rare that it is impossible to predict them.

It looks like the world is hit by many Acts of God at the same time. The System is able to take one blow and a second blow but at a certain point in time the System is down. The money that was reserved to compensate is gone. At that time only Governments are able to help.

They are able to create (!!!) money to help the System to survive. Creating money is a temporary solution. In the end the balance has to be restored. The total System gets out of balance when very big or world-wide disasters occur. When the System is unbalanced for a long time the system is permanently vibrating and is basically unpredictable (volatile).

The creation of money creates Inflation. There is an end to this Support System when the Inflation rises to an unexceptable level.The only way to solve this problem is to change the value of the Currency or to hide the Inflation. This a trick many countries apply. It buys them some time.

The effect is a change of the flow of money from one country to the other country. The most terrible situation arises when the Economy is going down and Inflation is going up (Stagflation). Stagflation is something the brightest economists are unable to handle. You have to stimulate and stop the System at the same time.

The current system is still highly dependent on the Dollar. When the US is unable to manage the flows of money the Worldwide System is in big problems. Currently the World Economic Power is the cause of many Acts of God and experiences many Acts of God.

Yesterday the former president of the independent financial autority in the US(FED) Alan Greenspan predicted a financial disaster in the US. He explained that the US does not have the financial buffers to handle a crisis. When this crisis comes (the baby-boomers) they have to lend the money elsewhere.

What we see now is a very dangerous situation. The banks are afraid to help their colleagues. They don’t trust anybody anymore. When a bank is unbalanced it has to ask the Government for help. When the Bank has to ask the Government for help the customers that have given the bank a loan demand their loans back. The Bank is unable to survive this. When the first bank has fallen the other banks want their money back. When the money is gone the next bank falls and the next bank falls. An endless cascade starts to move like an avalanche.

In 1996 Per Bak wrote the book How Nature Works: The Science of Self-Organized Criticality.

Self-organized criticality is one of a number of important discoveries made in statistical physics and related fields over the latter half of the 20th century. Per Bak used the metaphorical visualization of a “sandpile” on which new sand grains were being slowly sprinkled to cause”avalanches”. The Domino-effect takes place when the last grain falls and all the sandpiles start to move.

What Per Bak discovered was a Power Law. The Acts of God are predictable by a mechanism that underlies the natural phenomenon in question. The Power Law is fractal which means that the rules of the system come back at every level and behave like the tones and overtones of music. Sometimes the disaster is repeated at every level of enfolding of the system and creates a multi-level avalanche.

What Per Bak discovered was that the sand-pile system is fractal. It is a self-reference. Old fashioned statistics, used by Banks, are unable to handle fractals.They are not able to predict the “sudden disaster“.

Benoit Mandelbrot (the inventor of fractals) and Nassim Nicholas Taleb wrote an article called “How the Finance Gurus Get Risk All Wrong

Conventional finance theory treats big one-day market jumps or drops as anomalies that can be safely ignored when gauging risk or forecasting returns. But if you remove the ten biggest one-day moves (both up and down) from a chart of the S&P 500 over the past 20 years, you get a picture very different from market reality. The big moves matter

In market terms, a power-law distribution implies that the likelihood of a daily or weekly drop exceeding 20% can be predicted from the frequency of drops exceeding 10%, and that the same ratio applies to a 10% vs. a5% drop. In bell-curve finance, the chance of big drops is vanishingly small and is thus ignored. The 1987 stock market crash was, according to such models, something that could happen only once in several billion billion years. Another aspect of the real world tackled by fractal finance is that markets keep the memory of past moves, particularly of volatile days, and act according to such memory. Volatility breeds volatility; it comes in clusters and lumps. This is not an impossibly difficult or obscure framework for understanding markets. In fact, it accords better with intuition and observed reality than the bell-curve finance that still dominates the discourse of both academics and many market players“.

What they are telling is that disaster breeds disasters. What they are also telling is that INTUITION is the best tool to use when you want to besuccessful in the financial market.

Alan Greenspan explained yesterday what he experienced when he was trying to convince the Government to stop to destroy the Country. He also told the reporter that he was convinced they would not stop the process and he was also convinced the process could not be stopped. I hope he is wrong.