22 January 2008

Supkis on Money and Magic

Money and magic: they are like intertwined snakes. They have the same properties. One of the top tricks of all magicians is the ability to make things vanish in a flash or reappear suddenly out of nowhere. Money does this, too, and for the same effects. The Brothers Grimm in Germany collected odd fairy tales. One important one is called 'Godfather Death.'

A man's wife had a thirteenth child. The father knew this was a magical child so he sought out the most powerful godfather for him. God, himself, came and offered to be the child's guardian. 'No, you give to the rich and let the poor starve,' said the man [aren't peasants cynical?]. Then the Devil came with the same offer and added lots of gold, too. 'No,' said the man, 'You are a liar.' Then Death said he would make all men equal in the end.' The peasant agreed this was a good thing [being at heart, a revolutionary, eh?].

Death then said, 'Of course, I also control the source of all wealth and gold as well as life. I will make your son rich and powerful.' But even with Death guiding him and getting very wealthy, the boy grew up and decided he wanted more and more and more. He began to interfere with Death and one day, prevented Death from carrying off a princess. So Death carried him off, instead, to the rage and horror of the godson.

When Spain found the New World, all they wanted was the gold. There was lots of gold in the New World unlike the old world where it had been mined our sought for thousands of years and thus, harder to get. The vast gold wealth of the New World came at a terrible price. Most of the people living innocently in the midst of this metal, innocent stone-age people, were worked to death, died of disease. Then, to make more wealth, millions of innocent Africans were rounded up and shipped to this world to toil in the mines and fields, producing wealth. Their only reward was death.

As we see the world go through another vaporization of vast wealth, we must remember that the real wealth is right under our feet and is all around us in the form of Nature, Life and Love. Love is as infinite as Wealth but unlike Wealth, it is Life, not Death. The wife of the peasant in the old story here had lots of love and lots of life. The godson saved the Princess not because he loved her but because he lusted for her and that was why he was punished. He wanted her body and her powerful position. If he loved her, he would have asked Death to take him, not her. But he didn't want to do that.

We are going to see a scramble as everyone will grab at every possible physical thing they can as money vaporizes. This rush to Safety does not surprise me. I have had a very rough life. I went from jet setting around the world to hitch hiking due to no money. I have lived several times in mansions, one of which I bought with cash I earned, myself. I have lived on the streets. At one point, we all lived in a tent complex I built out of cast off building materials from the dump...for ten years!

Now I live in a beautiful house on a mountain which I designed and built mostly by myself. With my son assisting as much as he could as he grew up. I have seen money come and vanish. And it vanishes very fast! A great deal can turn into a great liability in a matter of hours in a crash. If we let easy gains go to our heads or swift losses drive us to despair, we are missing the truth of Life.

Life is living. Some readers may be mystified as to why I pointed out the distress of the mothers of Gaza on today, of all days. To me, they are a clear indication of what is important: children are dying. A muscular move is being made in the real world, not the magic world of mirrors in the stock markets. People are dying. In Kenya, an election was stolen and people are dying in riots and insurrections. In Burma, the priests were put brutally down while the world did nothing. Pakistan seethes and bombs go off. Around the world, workers are going hungry due to the sudden rise in oil and food prices. We must feel the mercy of the angels in all this, not fret about the magic money.

The people who mastered the magic formulas and who got ahold of the power levers that controls magic money making got greedy and silly about this and pushed all the levers to the 'Endless Wealth' level. They set the system to make infinite money, forgetting that this means Death will take over as always.

The history of bubbles is long and well-known for hundreds of years yet the very sophisticated and powerful people at the top of global society have decided yet again. to create bubbles and blow them up as much as possible. Tomorrow will bring ruin to many here in America. They will run to the rulers and hold out their hands and beg to be saved from the follies of the rulers. The rulers will go to Death and demand more gold, more power and more land. 'Make us gods!' they will order, sternly. And Death will flick a finger and more wealth will vanish. Poof.

Alas, the temptation to use the ultimate tool for wealth and power will rise before everyone's eyes. What does a bank robber, a Spanish conquistador, a Napoleon, a Hitler do when they need money? It is too tempting, too simple: kill someone who has something to steal. No one can steal anything from the US that we can't take back using our nukes, no one but...China.

And we can see the world is breaking in two. Instead of the usual money flow we are accustomed to over the last 50 years we have a new flow. It was initiated last July after the G7 nations chose to protect the Japanese 0.5% carry trade that is flooding the world with liquidity in the form of debts being piled all over the place. China called a halt to all this. They said, if the yuan must rise in value, so must the yen. This logic is all-important. But the G7 refused so China has begun a process of shutting down inflation, shutting down the financial machine of the world. They did this by raising interest rates, bank ratios and instituting severe economic curbs that are now hammering world monetary flows.

It doesn't take much to reset a system. In nature, a few degrees difference in the oceans or atmosphere can trigger vast ice sheets or tremendous warmth. Scientists call these changes 'flips' and the economic world 'flips' all the time. These resets or redirections are like when the earth suddenly shifts north and south polarities. This happens regularly on this earth. We are very near such a flip. We have no idea how this will impact nature or our machines. The earth also resets whole regions moving them suddenly many yards or even a mile in one split second. Huge waves can appear out of nowhere and wash away millions of people. Volcanoes can suddenly erupt of a meteorite strike a city. Or nuclear bombs can be launched without warning.

The Chinese simply changed their plans for their banking system. They wanted to negotiate a consensus for change and have the Bank of Japan, in particular, raise rates and the value of the yen. Everyone knows the dollar is worthless but all the central banks of all our trade partners who have surpluses with us have kept the dollar stronger than it really should be. The Chinese wanted to change this the proper way, everyone cooperating.

But the whole INVESTMENT world is addicted to the Japanese carry trade. The Chinese proposals last summer irritated these people who are also our rulers. They told China to go to hell. They imagine the Chinese can be cheated out of their funds and think that if China uses these funds to buy up the West, they will simply lose it if the wealth vanishes.

But magic money has very odd properties. If we wish to cheat the Chinese, the vanishing act will destroy us. The money will not be in the top hat when the magician reaches in but out pops Death in all his malicious gory glory. For the Chinese are not the Japanese nor the Germans. They have a huge military and nuclear bombs. China can't be penned in while we mock them as we rub our hands with glee over the idea of cheating them.

People forget that the US has enemies. People hate us. And we can't play magic money games which involves cheating our trade partners. We won't go home, laughing. They will follow us and do something nasty. The US thinks, our nukes will protect us but we can't rule the world as bankrupts and liars. Any more than Russia could under the communists.

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