Posted by: dreamstarworld | 30/10/2008

The Era of Monopoly Money: Hedge Funds, Mortgage-Backed Derivatives and Government IOU’s…

Monopoly Money

Monopoly Money

The world is facing unprecedented economic times. There has never been so much loss of wealth in all of earth’s history. This colossal loss of wealth is underscored by an equally  precarious explosion of DEBT caused by unregulated greed, excess and gambling with hedge funds and other derivatives within the world’s stock markets. Current global DEBT stands  at $1400 Trillion. Current  global assets (GNP) stand at $53 Trillion. This DEBT Bubble is set to sink the world economy into an abyss from which they will be no return.

Politicians, economists and pundits refuse to face the obvious truths. NO amount of monopoly money printed by Central Banks will avert the impending disaster just up ahead. We may allay the inevitable for awhile but eventually the dominoes will fall.

Many of us do not remember the words of Henry Ford: “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”

What an ominous statement by the late Mr. Ford!!!

Have you noticed recently that your money is not going as far as it used to especially in the supermarket?

Have you noticed the incremental increases in the prices of basic living commodities?

Most families on fixed incomes have decided for the sake of expediency to rein in their spending on luxury items, vacation travel, eating out while concentrating on just the necessities, with others having to make decisions as to what to do with the investments they have, especially in the area of 401K’s.

The era of mindless partying, free spending and excess has suddenly hit a giant brick wall.

Political and economic pundits are using apocalyptic language like “Biblical proportions”; “falling off a cliff”; “the worst climate since the Great Depression”, just to describe the anomalies which are facing the world’s economic markets as we perch precariously on the precipice of a “Deep Depression.”

Paul Collier argues that Alan Greenspan and Gordon Brown have been the architects of our present financial condition. Yet Brown stood in the halls of Congress refusing to apologize for the mess he help create but tried to sound a clarion call for unity amongst the US and the UK vis-a-vie Europe.  Collier is vehement in his scathing attack on these two so-called financial wizards – Greenspan & Brown who have brought the world to its knees. He argues that because of:

“Gordon Brown’s emasculation of financial regulation in the UK and Alan Greenspan’s era of neglect in the US. This mantra radically exaggerates the upside potential of finance. At best, the contribution of the financial sector to the growth of an economy is second order: it facilitates the creativity of other sectors. Only at its worst is finance first order: as we are now seeing, it can be catastrophic.”

Others like Larry Edelson believes that: “if you think the biggest cost of the $700-billion bailout package is going to be higher taxes down the road, you’re wrong. The biggest cost is going to be the sheer destruction of the purchasing power of your money, an outright devaluation of the dollar that’s going to occur, no matter what.

You see, the ultimate source of all money in the U.S. is either DEBT, or “monopoly money” created by the Federal Reserve. Or some combination of the two. Either way, it’s not real money. It’s fictitious money. It’s nothing but a bunch of IOUs and electronic credits and debits. It’s nothing more than a promise to pay you something of value – if you wait around long enough to get paid.

Craig M. Boise in a thought-provoking article entitled “ Playing with ‘Monopoly Money’: Phony Profits, Fraud Penalties and Equity” Case Western Reserve University – School of Law (Minnesota Law Review, Vol. 90, p. 144, 2005 Case Legal Studies Research Paper No. 05-9 ) argues that:

“Although most U.S. corporations don’t pay Federal income taxes, over the last several years some corporations have been willing to report, and shell out to the Treasury, hundreds of millions of dollars in taxes that they didn’t owe. They did so to conceal the fact that they were playing with Monopoly Money – fabricating profits as phony as the pastel-colored money used in the classic Parker Brothers board game. Of course, once the game was up, these corporations wanted to raid the Community Chest to get their tax money back. But is it appropriate to refund taxes in such circumstances? This Article traces the history of tax refund suits and concludes that such suits are in essence claims in equity. This means that claimants are subject to well-established equitable defenses like the doctrine of unclean hands and equitable estoppel. This Article argues that given the potentially corrosive effects of tax fraud on the U.S. tax system, the assertion by the Internal Revenue Service of equitable defenses to earnings inflation-related refund claims would provide a more effective penalty regime than the current statutory system. In making this argument, this Article necessarily traverses several areas of law, including corporate fraud, the history and development of equity, the rules versus standards debate, law and economics, risk management, optimal penalty theory and even a bit of tax policy.”

So in essence the first U.S. 700 billion dollar TAXPAYER bailout was HUSH-MONEY to the “FAT-CATS” who are really George Bush and Hank Paulsen’s friends and cronies on Wall Street and in the financial markets of Central London and around Europe.

In Alexander James’ book “The Hidden History of Money & New World Order Usury Secrets, he describes that the:

“History of how the current enslaving monetary system, in which Bank-Lords get a credit monopoly (which gives them the power to create unlimited money from nothing at no liability to themselves because it is redeemable for goods or services produced by anyone forced to accept the private Federal Reserve dollar currency notes and cheques) and use our Tax System to collect the fraudulent interest was brought about by the forces of banking family dynasties working to establish a tyrannical New World Order through a series of wars, depressions, deficits, propaganda and crimes in which good politicians are murdered or removed by the New World Order (NWO) mafias (CIA, Mossad, MI5/6, Vatican, Jesuits, CFR, Bilderbergers, Trilateral Commission, Knights Templar aka ‘Freemasons’, etc). How ancient pagan cults are elitist-made inventions designed to allow their priesthood (Pharisees) to con value out of the public and how they are leading everyone back towards feudal fascist enslavement.”

The despicable irony is that we who claim to be intellectually enlightened are complicit in this fiasco as we compromise to protect our own piece of turf from the ravages of this menacing dragon. Many of us would rather be in denial or simply relegate this kind of discourse to mere speculative theory or the butt of some joke about “conspiracy theory”…

From the government’s point of view, government is always a success until it self-destructs from its own internal rot and corruption. When the stuff hits the fan, there is still no apology, accountability or acceptance of responsibility.

“All organizations are organized for the benefit of the organizers.” This can be said of the “bank-lords” and their exercise of free-will and the insidious creation of a pseudo-economy of hedge funds and derivatives which have helped create a counterfeit economy that many experts have said  lead to what could very well be a full-blown economic depression.

In an era of hyperreality, Overstock.com CEO and hedge fund activist Patrick Byrne contend that “there are a lot of us who think we are living on the edge of 1929.”

“When you consider what’s happened with mortgage-backed securities, you get the feeling these might be the first rumblings. There may be more IOUs in the system than there is liquidity, in which case the entire thing is going to vapor lock as soon as it is exposed.”

If this is the case, as is predicted, not only will the financial markets continue to freeze up but the printing of more money and throwing money at the problems in the form of so-called “stimulus packages” will only create hyperinflation and exacerbate a deeper depression on the world market but will eventually lead to global social instability, unrest, anarchy and war.

America and other “first-world” countries will be hit hardest by civil unrest, moral hazards and social instability unheard of in their history as a nation if the looming crisis is not averted.

President Obama has an uphill struggle to restore economic competence, assurance and confidence in the market that this phase will pass.

Many are not very optimistic…

As the world teeter-totters, let us be reminded of the words of Scripture:

” Seek the Lord while He may be found”…

Judgment is upon the world. Righteousness exalts a nation but sin is a reproach to any people. We are living in the times foretold by the prophets in Scripture. Anything that can be shaken will be shaken so that what remains will be worthwhile.

Let the nations examine themselves. Let our leaders cast of their dark and malevolent deeds and seek God with repentance so that the impending doom which lurks on the horizon can be averted and wholesale slaughter be quelled.

Sadly, I won’t bet on it…

Be inspired!!!

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