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Systems, World Domination, Economic Matrices and the Destruction of Sovereignty

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This isn't complete. More needs to be said at a later date.

Ownership is very important to most of us. It's a necessity. But how far does one need to go for a certain type of ownership? This can become an important question in many contexts.

Now a traditional type of ownership might be one where you simply buy something you want, need or feel inclined to acquire. Won't bore you with the basics, as everyone realizes this. Ownership of a more abstract and even macro kind is a different ballgame altogether. This is part of what I want to focus on.

Ownership needs systems of all kinds to keep it all together; contractual legal agreements would be one. The more obscure the ownership or claim to ownership, the harder it may be to keep track of possessions and therefore, and at times, transfers of ownership. More on this later on.

Systems of ownership were once mostly and traditionally confined within national sovereign borders. There were exceptions, of course, but globalization along with other schemes has changed this. It's hard to keep track of who owns what, at times, these days.

Now one might argue that it's the US multinationals along with other global multinationals leading the way to globalize things, and they have been doing this for decades; and in some instances, for over a century.

A problem tho these days is it's not US multinationals, like it use to be, but multinationals in general, that might be based in the US or elsewhere. The point here is that these incredibly large institutions, companies etc might be using the US, for example, as a host (and using their valuable resources etc) but they have broken away (not completely) from the traditional boundaries from one's sovereign nation.

Well if this is happening all over the world, and not just in the US, then a nation might (and has in many cases) lose its sovereignty even more. The theory of the world eventually being run by sets of large corporations/banks etc is an old one. So is the formation of a one-world governed system, which will never take off, as stated in some of my other posts.

It does appear that large corporations and banks are dominating the world like never before, and their influence and power is gaining momentum, especially if the collective middle classes, via small to medium sized businesses can't compete with (yes) their rivals. Not always the case, but this is becoming more evident and an increasing problem.

The middle classes in many parts of the world are where they use to be a decade or so ago, but acquiring more and more debt; some of which wasn't theirs to begin with!

So where to next?

It seems like most of us will continue to help build these pyramidic organizations in some shape or form, while continually trying to build our own wealth etc, of course. The idea of a national identity might become increasingly obscured in some parts of the world, because of the lack of capital to finance sovereign-type projects, for example. Selling state-owned military assets to pay-down debts or just simply making cut-backs in the military are classic examples, and this is continually occurring.

If the middle classes are not functioning the way they should be then there are some serious trade-offs that affect a country's ie economic state and sovereignty. One way to weaken a country's military/defense is to make sure their citizens are struggling economically; ie the lack of tax revenue to pay for important public service jobs. As mentioned before in my threads, it's easier for some large multinationals, banks etc to do business in just about any country they see fit, if they don't have (the necessary) restrictions applied to them by, for example, the Pentagon.

Various multinational organizations, led by the large wholesale central banks, are increasingly seeking world domination, the likes of which we have never seen before. They have control of the complex economic systems that have strong controllable links to other systems that also govern our day to day lives. More to be said about this for sure!

A rebalancing of the world's economy is underway. Out of all the great economic minds etc, you would think that many of the sets of problems some countries face, like the ones in the EU, would be dealt with more appropriately than at present; austerity and growth don't go hand in hand. The so-called economic commentators and experts must know this. Allowing bond vigilantes and speculators, for example, to manipulate markets at the expense of nations and its people is adding to the problems; margin hikes, which aren't perfect but are effective, are one way to prevent the rampant speculation that goes on, but isn't really used all that often.

A rebalancing here would mean that the attempt is for countries to become more economically alike in various ways. But this is not working and is having disastrous consequences. It's disastrous for those countries, but not necessarily for those seeking world domination, as this is also strengthening their net positions relative to the rest. It also enables 'buyers' to come in and purchase many assets on the cheap! There is a predictability element there too, whereby a potential buyer would know or have a better understanding of the not so distant future value of a certain asset; ie, they're struggling and we can go in there and buy it for less.

The increasing presence of sophisticated financial modules and instruments, like derivatives, and the increase in volumes of traders of all kinds, is adding to the problems for many nations. A country like Greece or Spain, that have operated pretty much the same way as they did a decade and more ago, are easy targets for bond vigilantes and the like. There are more and more traders etc on the other side than in previous decades with more cheap money to do as they please. And a country's banks in Europe had to borrow from the LTRO window and use that money to counteract the attempts in the bond markets to push yields higher. So that money doesn't go into their real economy! A disgrace; not the retail bank's fault as they have to keep the yields lower.

A Potential Restructuring of the Geopolitical Landscape might be on the cards, but not to the extent that will be sought after by those seeking control. An aim would be to do away with the many restrictions already present, and do business in parts of the world, at levels never seen before, that is ie currently off-limits. But this won't happen like 'they' desire, for many reasons.

The aim would be for the US to lose its grip on patrolling several parts of the world. I don't see this happening for too long, anyway. But lets say it did. You would not have the relative order and stability needed to enable economic systems of all kinds to flourish in regions that can't, for one, relate to democratic and vibrant capitalist systems. Multinationals and banks would be able to set-up shop and do some business in some of those regions, but trade might be flatter than expected and potential serious problems, like regional and domestic conflicts might unexpectedly arise; which would potentially leave even the most bullish of investors net negative. Under this model, if it were to arise, multinationals and banks would not have the support of ie the US military, if things don't go their way. Contracts in some parts of the world are just pieces of paper.

Multinationals and wholesale banks etc eventually need the backing of a (or even better, their!) military at some point, even if it's just an indirect presence from afar. The newer world order types would not be able to function effectively and efficiently on their own and without the indirect (and sometimes direct) backing of strong, reliable defense organizations, that can provide protection and provide official and unofficial intel on regions, countries, cities, people, dynamics etc etc.

Some multinationals and central banks etc on their own could very easily cease to exist over, and in a short amount of, time, if they go at it alone and without the indirect protection of their defense agencies. Let's say the US wasn't patrolling or helping patrol the seas, skies around the world, what's to stop an aggressive foreign force from acquiring assets that belonged to those large businesses? This sort of thing happens a fair bit.

Furthermore, does anyone really believe that the void of world domination, even if it's a failed attempt, by other nations backed by their own military, doesn't need to be filled?! It has for centuries and will continue to be a sought after prize by many nations moving forward. So large corporations (that need to pay more tax because they can and need to) and central banks won't be able to travel too far on their own (and without the support of defense) into the geopolitical world, without meeting some serious opposition.

to be continued ...
 
The Issue With Derivatives ..

A lot more transparency is needed about the following:

"The 9 largest U.S. banks have a total of 228.72 trillion dollars of exposure to derivatives. That is approximately 3 times the size of the entire global economy. It is a financial bubble so immense in size that it is nearly impossible to fully comprehend how large it is."

from: http://www.yolohub.com/economy/22-red-flags-that-indicate-serious-doom-is-coming

There are many reports about this type of exposure from large banks and investment institutions from around the world. The numbers may vary, but you'll find that the reports are about exposures to derivatives and maybe other instruments, in the trillions of dollars!

If these reports are true, then various problems arise. For one, and there are many, there aren't enough $US around to cover potential margin calls, payment of large amounts of IOUs, refinancing etc of these derivatives, if these types of calls are ever made.

If this ever was to happen, then a range of possibilities would arise. Not being able to pay a large debt like the ones reported about the astronomically high derivative exposures (as reported by many) could mean a financial meltdown that nobody would want. Let's hope it doesn't go in that direction!

Now what concerns me and many, I'm sure, is that if these calls were made (ie refinancing or margin calls) on these derivative exposures, and it fell-out of the practical and logistical scope of the $US to cover any of these calls, and no one (in their right mind!) would want a potential financial meltdown to occur (so something had to be done), then it may be possible that a newer type of legal tendered currency, bond etc would be needed to cover any type of call mentioned above. A newer type of bond, let's say, backed by GOD knows what!

Would these potential set of circumstances mean that the $US would lose its reserve currency status to, not even a basket of current currencies (like many propose), but to a potentially newer form of legally tendered bond or currency? One that would need to be created, if this were to happen, to cover derivative debt obligations of this size?

Another way of looking at this is to ask: Is there some (non US) organization waiting for (these calls to be made, and) the opportunity to come in and set-up bonds of some kind, that can be used instead of $USs, to start covering ongoing debt obligations of this magnitude? This surely would constitute a transfer to a newer reserve currency, if it were to happen. For a while only, I think, as this currency or bond wouldn't have any type of backing of substance, and because I couldn't see the US at large wanting this to happen!

No wholesale bank, even the ones that like to help poorer nations (!) is big enough to steel the US's thunder. I hope they realize this.
 
I think you need to get a job.:rolleyes:

Needs to study the subject.

konkon, in sincerity you need to get yourself a copy of "Currency Wars" by James Rickards, 2011

The answers and possible outcomes (and it will be one of them he articulates) are all in this fine text.

And a "meltdown" or, otherwise described as a "bank holiday", will occur and my guess is no later than the end of 2014 as the powers that be are asleep at the wheel and Dracula is in charge.

In the charge to privatisation and the watering down of audited accountability Maam Margi Thatcher laid the foundation for making paper out of nothing. Though it was really Nixon who set the stage by removing gold backing.

However this is far too simplistic as there are many intricate and different economic theories being played out in the global system now and only a master such as Rickards can give one an idea.
 
Needs to study the subject.

konkon, in sincerity you need to get yourself a copy of "Currency Wars" by James Rickards, 2011

The answers and possible outcomes (and it will be one of them he articulates) are all in this fine text.

And a "meltdown" or, otherwise described as a "bank holiday", will occur and my guess is no later than the end of 2014 as the powers that be are asleep at the wheel and Dracula is in charge.

In the charge to privatisation and the watering down of audited accountability Maam Margi Thatcher laid the foundation for making paper out of nothing. Though it was really Nixon who set the stage by removing gold backing.

However this is far too simplistic as there are many intricate and different economic theories being played out in the global system now and only a master such as Rickards can give one an idea.

I'm reading it now. A fascinating read. Just a few points thus far:

The world would be reluctant to go back to a gold standard, as he suggests when writing about hypothetical 'economic war game' scenarios, especially during a hypothetical first few stages of mayhem in the capital markets; repositioning etc. No leading country would want to back their currency, under his currency war games hypothesis, to gold. Other scenarios would eventuate and any currency pegged to a gold valued range, would do more harm than good, i'd say, esp during those early (hypothetical) stages & even later.

I reckon around 60% of the economic system has to make sense. the other 40% doesn't; and one can use this latter 'part' to one's advantage. I think that's what would happen too.

A great read though and thanks for bringing this excellent book to my attention.
 
It will be a race to a Gold standard, China is leading the way now by not allowing any Gold to be exported and any gold found has to be sold to the Fed's not outside the country also China has set up fed owned shops to sell gold to the public and I guess if the crunch comes it has millions owning gold they can confiscate if necessary.
Gold and sliver is now legal currency in some USA states.
 
It will be a race to a Gold standard, China is leading the way now by not allowing any Gold to be exported and any gold found has to be sold to the Fed's not outside the country also China has set up fed owned shops to sell gold to the public and I guess if the crunch comes it has millions owning gold they can confiscate if necessary.
Gold and sliver is now legal currency in some USA states.

There certainly is huge interest and for different reasons to own gold in some shape or form. I do it occasionally myself in the form of etfs or etcs, when the time is right, but I tend to be pretty quick to offload it too.

The China example is a really interesting one, for sure. My view is that one of the main reasons why they're buying up gold, copper etc etc, and even stockpiling it, is because of the commodity currency play; defacto commodity currencies like the cad, aud, and especially for the Chinese, the euro (Europe being China's largest trading partner, mainly one way unfortunately for most EZ nations!) tend to maintain their levels or appreciate when commodities go higher in value. This gives the Europeans, for example, more buying power of Chinese goods, and this is something that China really wants and needs.

But there's a long-term trade-off and that is higher commodity costs, that keep rising too, end up having a demand destruction function associated with it. So the EZ purchasing powers, as we have seen for some time now, aren't quite what they use to be, even with a higher euro to the yuan/usd peg.

It possible that China will force itself, even, to keep propping up and buying more sets of commodities, but runs the risk of making them so expensive, that if the USA was to unexpectedly raise interest rates, by even more that expected, then China would have a hard time offloading gold, copper etc or see these values drop heaps, while still holding on to and stockpiling these commodities.

And over time, a higher usd means a lower aud, euro etc, generally speaking, and this wouldn't be in China's best interests. If currency wars, like Rickards describes, really go on (and I'm sure they do and have for a long time!) and the USA wanted to reinforce its supremacy later on, the US could always surprise the world, and including China, with an unexpected series of interest rate hikes. Other factors would also be needed but this would certainly weigh on the price of gold, for instance. I'm not suggesting they should do this, but this, to me, seems like one of many possibilities.
 
China is using its surplus steel to build more steel plants,it has no need to own copper if no one is buying, they are stockpiling Gold so they can have a gold backed currency and make the RMB the reserve currency, USA puts IR then its all over for them.
Owning psychical Gold is better than over subscribed ETF etc.
Assuming Japan doesn't kill us all over the next few years.l
 
China is using its surplus steel to build more steel plants,it has no need to own copper if no one is buying, they are stockpiling Gold so they can have a gold backed currency and make the RMB the reserve currency, USA puts IR then its all over for them.
Owning psychical Gold is better than over subscribed ETF etc.
Assuming Japan doesn't kill us all over the next few years.l

You're right, China's aim would be to have a reserve currency and to even back it to gold. But this is a goal only, I think. It's an excellent point you made though.

QEs and other attempts to devalue the USD are not going to spur growth in the US's real economy. These Fed schemes are placing unfair disadvantages to middle class Americans. There is very little need to save in the US and it becomes harder when there is no real interest rate for bank deposits, and even more so when QEs etc make imported products more expensive for consumers in the US. A devaluation of the $US is the wrong way to go about things and is causing more problems for the United States.

I am living in Australia and I remember how difficult things were when our currency was devalued far more than it should've been in the 90s.

The current Fed leadership needs to be replaced eventually (probably won't tho) with ones having a different mandate. The Fed's policy of having incredibly low interest rates for a long time will, I think, have equally harmful effects on middle class America over and beyond that same period. The official unemployment rate, for example, that's paraded around, is not one to judge how well or how poorly the US economy is fairing. We all know the real unemployment rate is much higher. The latest round of macro economic statistics have been quite poor too.

I don't think the current Fed officials have a 'follow-thru, stage by stage, plan' to really solve this crisis. They, for now, seem to be playing into China's hands by assisting higher gold prices, with a lower usd, and this gives credence to your view that china will one day want to peg its currency to gold, which it is accumulating. And from this, try (and I think, only try) to establish a reserve currency.
 
A further note on James Rickard's excellent book, Currency Wars: his description of systems in the real world is great, but i think misses other complex systems like, for instance, the bizarre quantum 'world' that 'interacts' with the complex systems he (and others) describe. There are probably other 'things' affecting systems of all sorts and we haven't 'discovered' them as yet.

But markets at large are also about pricing sets of things at t, for eg, and perhaps relative to other sets at t1 etc. This is one example and there's more to it than this of course, but there doesn't at times have to be anything necessitatingly 'real' associated with these types of practices at large; valuing/pricing. Sure, valuing/pricing at t, for eg, is real in one sense. of course! but there is NO intrinsic principle that makes it ie 100% meaningful, even to ie 1,000,000 interconnected futuristic quantum supercomputers working overtime, in some future, or even theoretical future.

One point i'm making here, and there are plenty, is economic systems based on valuing/pricing etc don't and won't make a whole lot of sense in some consistent and structured way, especially when trying to comprehend complex economic systems or trying to create a theoretical framework to fully understand them; which u can't do!

I also don't buy the premise that complex systems, whether they be economic or something else, have to collapse. They don't have to, but really complex system sets can and do transfer their 'parts' into some other system, that may look like a collapse, but isn't necessarily one.

'They' can collapse, but aren't necessarily headed there, just because they're complex, confusing etc. Trying to 'create' a classical market theoretical framework to maybe better understand how markets can work makes sense, but u can't treat this like applied science and rely on it too much.

Happy guesstimating everyone! Although the probability game (or ie what are the chances of 60% chance of 70% etc etc) is a good option mixed in with other metrics of course.
 
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