“For the human psyche is one of the great forces of nature, and what is most frightening about this space/time technology is that it exposes us to this force within us as nothing else ever has. We are standing in the storm of our own being.”
~ Michael Ventura
By Catherine Austin Fitts
The rebalancing of the global economies, begun with the creation of the WTO in 1995, is well underway. Initially, the focus was on production and the reorganization of global labor markets, whereby developed world labor competed more directly with those in the emerging markets. That reorganization has more to go. As Sir James Goldsmith said, this is a fundamental shift in the relationship between capital and labor dramatically in favor of capital.
A reminder of that fact was a report on a study we published on the blog recently that, in fact, the top 1% is not doing better. If you break down the wealth within the 1%, it is the top .01% that is doing better. That is the 1% of the 1%. The wealth of the remaining 0.99% has flat-lined.
With nearly 2 billion people with devices that can access the Internet – we are entering a new phase in the rebalancing of the global economy. We are not just using the reorganization of production and labor to provide the developed world with cheaper goods. As described in the 1st Quarter Wrap Up, we are reorganizing the global consumer and the methods of distributing media and entertainment and goods and services. We are reinventing the relationship between bytes and atoms. This has profound implications for both economy and culture. We are introducing millions of people to social media and the digital currencies and payment systems of centrally controlled financial institutions before faucets and toilets and we are doing it at high speed.
Watch the stories rolling out daily. On virtual currencies. On plans of the social media companies to achieve global Internet access. On plans to use cables under the sea, drones in the air and sub orbital satellite platforms in space. On the debate over space weaponry. On defense contractors funding university curriculum on cyber security. Connect the dots. What you are actually seeing is the nuts and bolts of global digital currencies being prototyped and created on an emergent basis. Such currencies will provide low-cost central intelligence on the entire world population.
The reality of a mobile enabled world population is a financial world based on more transactions and smaller spreads. The emerging markets cannot possibly afford the transactions costs currently maintained in the developed world – whether credit cards, bank wires or PayPal. The pressure to simplify transaction systems and lower costs is brutal and will get more so, while the value of the winners grows. And so we see Wal-Mart suing the credit card companies and Carl Icahn pressuring E-Bay to spin off PayPal as we enter a new phase of the retail disintermediation that started with the discount industry in the 1950’s.
The leadership in the developed world has engineered government regulation and financial systems to force centralization of the developed economies to ensure that the G-7 could compete successfully in a rebalanced global economy. The hope was that by imposing these economic controls that engineered flows of capital into large, publicly traded corporations and out of governments, households and small business, while shifting liabilities back into government, that those corporations would have the political advantage, financial capital and market clout sufficient to compete successfully against the corporations and investment capital created by the Asian juggernaut. At the same time, it was critical that the military capacity required to ensure full spectrum dominance was implemented. As I have said many times, capital never flows to sectors or places without an enforcement infrastructure in place.
In the world of “peak everything,” this rebalancing of the global economy places increasing stress on global resources, although part of that stress is relieved by lowering the per person environmental footprint in the developed world while increasing the global footprint in the emerging and frontier markets by encouraging their economic growth.
Part and parcel of the process is placing friendly regimes in place that operate within the global central banking system. To move to a digital currency, everyone has to be in the model. Note the list a subscriber sent to me today:
Ukraine: Just The Latest Chapter of America’s Coup Machine: Destroying Democracy Since 1953
Iran (1953); Guatemala(1954); Thailand (1957); Laos (1958-60); the Congo (1960); Turkey (1960, 1971 & 1980); Ecuador (1961 & 1963); South Vietnam (1963); Brazil (1964); the Dominican Republic (1963); Argentina (1963); Honduras (1963 & 2009); Iraq (1963 & 2003); Bolivia (1964, 1971 & 1980); Indonesia (1965); Ghana (1966); Greece (1967); Panama (1968 & 1989); Cambodia (1970); Chile (1973); Bangladesh (1975); Pakistan (1977); Grenada (1983); Mauritania (1984); Guinea (1984); Burkina Faso (1987); Paraguay (1989); Haiti (1991 & 2004); Russia (1993); Uganda (1996);and Libya (2011).
If you look at a list of the countries targeted by the US and G-7 in recent years, there is clearly an effort to get every last country into the model. The brutality targeted against countries such as North Korea that still remain outside the model is significant and rising.
By centralizing power and control into private investment pools and large corporations and central banks, free of many of the operational constraints and disclosure laws of government, global leadership has organized decision making to serve the goals believed to best achieve geopolitical dominance and to manage the risks involved with global control.
One of our many challenges is that we have arrived at a place of ridiculousness. The stated reasons for doing things are typically divorced from actual reality and intention. Increasingly, our leaders are made to look like fools or clowns. But this is Orwellian with a twist, since the corruption and incompetence we are hearing about is – if anything – a cover story. As described in my recent podcast with Andy Duncan, the system is going where it wants to go and it is using corruption and incompetence to get there.
I say this not because I necessarily agree with our leadership or any particular policy or because I am confident that their plans will work. What I want is to first and foremost understand what is happening and why. And this often comes down to understanding the “who, what, when, where, how and why” of money flows, financial machinations and economic and political controls.
Last week WH Group Ltd, the Chinese pork firm that purchased Smithfield Hams launched a $5.3 billion IPO in Hong Kong. It’s description of its acquisition stated that it was to ensure that the growing Chinese population has a steady flow of pork. The investors discovered that United States could produce pork for 60% of the cost of producing it in China. This was an important reminder of the extraordinary effort in the United States to consolidate and industrialize the agricultural industry, both domestically and globally.
Step back and look at a map of the United States. Look how so many of the rivers, roads and railroads that carry the agricultural produce to market converge into the Mississippi delta. Can there be any question why certain syndicates would want to use an event like Katrina to assert central control of the New Orleans port and the delta to reengineer it to serve the global marketing and distribution of US goods?
Food is one leg of the US juggernaut. Another one is energy, particularly as the US dollar depends on an oil standard. Last week Foreign Affairs posted an article touting our vast stores of oil and gas as a result of new fracking technology and predicting the impact this would have as America supplied LNG and fracking technology to Europe, freeing them of dependence on Russia. This was countered by a William Engdahl’s piece implying that the US was vastly exaggerating their supplies. Both pieces are a reminder of the delicate geopolitical dance now playing out in the oil and gas industry and the economic warfare involved in the setting of global oil and gas prices. This is not a marketplace. This is a war.
The global economic warfare of food and energy is not unrelated to the squabble in Nevada where the Bureau of Land Management has tried to confiscate a rancher’s cattle. It is one of many examples of the federal government using endangered species or environmental laws and grazing fees to own, manage and dominate large percentages of North American land. Whether the land is desired for revenue flow, agriculture, drilling or solar farms or to serve the Agenda 21 goals, the increasing pressure to steamroll local traditions and economics to serve the geopolitical squeeze is rising. This is an ever present reality in the fracking debates in the US, now shifting into Europe. The race to control energy requires providing energy. That means the pressure to increase domestic supplies is only going to grow. In turn, the steamrolling of local landowners and citizenry will become increasingly forceful with no mechanism to explain to the citizenry the relationship between the need for greater domestic energy supplies and the value of their government subsidies and the dollars in their wallets and bank accounts.
This need to steamroll locally without factual explanation and context is part of the impetus behind the push for gun control and a new round of trade agreements – both the Trans Pacific Partnership and the European Union Trade Agreement. If America’s food and energy is going to be sold abroad, consolidation of control will continue and prices will continue to rise. Food price inflation is here to stay.
The failure to achieve gun control in 2013 and Senator Harry Reid’s refusal to address trade agreements because of Democratic fears of facing an angry electorate during the 2014 elections has reverberated profoundly within the corporate and private investment communities. If you were in their shoes, responsible to achieve global supremacy, and dangerously bogged down in the mud from Iraq to the Ukraine to the South China Sea – this would be an intolerable situation. Between dividends and buybacks and trying to keep earnings steady or growing, US corporations are stretched thin. They feel the need for a more cohesive home base.
These events are in no small part why we see the Supreme Court lifting the restrictions on campaign donations. Rigging the voting computers will work to swing some portion of the votes. However, the electorate is now sufficiently furious that to steamroll things it is necessary to buy the elections. Between the removal of campaign financing restrictions and computer voting machines, the national elections in 2014 and 2016 will look increasingly like a production brought to you by Disney World. The Supreme Court decision will also be used to encourage activists to push for what the leadership most wants – a constitutional convention. Open that door, and the truck that drives through will look like the political equivalent of the Invasion of the Body Snatchers.
As oppressive as current events may seem, it is worth contemplating what would happen if our leadership failed. What would happen if Europe was dependent on Russia for oil and gas and as a result, Germany and/or Japan realigned with the thirteen nations in the G-20 that are not in the G-7?
What would happen if the BRIC nations were to create their own Internet, their own currencies, their own energy sources and their own financial markets and to simply disengage from the Anglo-American alliance and the Western economies?
The US leadership shifted capital out of the US, reinvested in the global economy, all on the bet that it could build an empire that would tax the global economy through its currency and bonds. That global debasement tax is what is being used to pay a flow of monthly income to more than a hundred million people dependent on means tested government subsidies and to pay many more their Social Security; not to mention to fund a global government and military bureaucracy.
The dependency of the general population in the United States on that flow is growing. While we are rebuilding the North American industrial base in places, we are doing so with new technology, automation and highly skilled labor. As much as 50% of US employment is highly susceptible to losing their jobs and income flows to automation and globalization over the next two decades. This means the pressure on US leadership to maintain some minimal social safety net is growing, as is the double bind that occurs when the US population object to them doing the things they do to ensure that the US dollar is maintained as the reserve currency globally.
A perfect example of this is the fight within the House Republicans regarding the extension of unemployment benefits. House Leader John Boehner is from Ohio, where unemployment is a serious problem. Without continued unemployment benefits or other government subsidies, voting Republicans could go homeless or die. Yet the Tea party constituents are adamant that dependency on federal government and deficits needs to be reduced, not increased.
One helpful solution, of course, is to permit a reengineering of the federal government flow of funds, contracts and credit within counties or Congressional districts, in a manner that would both create new jobs and lower the deficit. The opportunity is there to be had. However, it is likely to reduce the flow of money into large corporate contractors who generate geopolitical clout and campaign contributions and/or reduce the size of the federal bureaucracies. It also means bringing transparency to the sources and uses of appropriations, credit and contracts by place, which has shocking implications for the black budget. It will be “black” no longer.
The issue of who controls local markets and whether local markets will be allowed to be productive in the midst of increasing digital NSA-type invasiveness will continue to grow in significance. There is no place where the fractiousness of this local challenge was better demonstrated than in the articles last week about allegations of Yelps extortion of local business and promotion of bad online reviews of local businesses. If this is being allowed, my guess is that it is because such behavior helps to aggregate the local markets into the franchise chains. I was reminded of this when I made a dinner reservation in Nashville last week. I tried to find a local restaurant. My searches constantly produced national restaurant chains. The first five local restaurants I found with much digging had recently gone out of business. I found one on the sixth try. What does that say about the impact of social media and online systems on local markets?
Howard Schultz, Chairman of Starbucks, once said “The lifeblood of job creation in America is small business, but they can’t get access to credit.” He was right, although I would point out that government and the central bank have gone to great lengths including force to shut off that credit. And that is before asking the question as to who is giving air cover to online websites to run extortion rackets targeted at small business.
One of our opportunities as a society is to allow both banking credit and equity to flow locally. The development of crowdfunding systems is, in part, a work around of government regulation and enforcement that minimizes micro-equity markets. In a few years time, the human race has decided to give $1 billion away through Kickstarter rather than putting it in their bank and brokerage accounts. Add the other crowdfunding sites, and the total amounts donated are much more.
One of the advantages of allowing local equity markets to develop is that it eases the integration of new technology into our infrastructure and real estate. One of the challenges we face in the introduction of new technology is creative destruction. Often times, the value and employment in the old businesses are greater than the value and employment in the new businesses. That means it is essential for the investors and employees shifting out of the old businesses to be able to identify and create new opportunities for themselves. Realigning our financial ecosystems with our environmental ecosystems and reducing our environmental footprint are two of the most wealth creating opportunities of them all. The challenge is that these changes have profound implications for the current social and political order.
We don’t, however, seem to be moving towards building deeper local equity markets. Rather we are using smart meters to make sure utilities can bill plenty and promoting forced demand destruction with carbon taxes. We seem to be engaged in a global version of West Germany’s currency tender for East Germany in 1990. By bringing billions of people into the mobile ready world, we will keep expanding the base that carries the reserve currency float.
Then of course, the question hangs over everything, “Why are we engaged in a massive global spraying program that is spreading toxic concoctions on us all?” Has the global insurance industry found a way through geoengineering to manage its greatest risk positions?
As I watch the G-7 struggle to implement and manage this experiment at global empire, I wonder whether or not they will succeed. No matter how gruesome things are right now, the situation could be worse for many people in the developed world if they fail. Which is not to say that there will be anything to be happy about if they succeed. We appear to be moving closer to our Scylla and Charybdis moment in the evolution of global leadership. I believe this is part of the impetus for the promotion of women to political and business leadership throughout the United States and Europe. They will present a kinder, more collaborative face to a machinery that grows more oppressive and offensive daily.
[See my series, Promoting Women]
As events unfold in the Ukraine, it seems that much of the Russian response is based on the deep desire to be a sovereign nation rather than one run by G-7 corporations. Russia lost 27 million people during WWII. They probably lost as many during the 1990’s during the “Rape of Russia” by the US working with the oligarchs and organized crime. They see us as a deeply perverted society. And so we are. However, we have a much deeper economic and military machinery bench.
As a great deal of the agricultural harvest in the United States flows down into the Mississippi Delta and the Port of New Orleans, so the dance between the G-7 and G-20 and between the United States and Russia reduces down to a question of who controls the most effective weaponry. Who has the edge? If we are running a global taxation system, what powers does the US and the G-7 have to enforce and what powers does the rest of the G-20 have to defend or push back? (Russia now among them, having been kicked out of the G-8 as it dissolved back to the G-7 last month)
This is why I say that the future of the US dollar is in part a military question. The US confidence after 1995 related to the success of the “star wars” and satellite systems. As the Leonard Cohen song goes, “we are blinded by the beauty of our weapons.” Our arrogance, as demonstrated by our conduct in the military occupation of Iraq (see Charles Ferguson’s No End in Sight – it is not to be missed) or the revelations of Edward Snowden, have done a great deal to increase global fear and loathing of the United States, despite the best efforts of Hollywood and social media.
Which brings me to the comments by the Russian Deputy Prime Minister Dmitry Rogozin last week proposing that Russia create a permanent base on the moon. This statement was made immediately subsequent to NASA cancelling cooperation with the Russians in space. [Note the Chinese are also chiming in with the Chinese president this month calling for greater militarization of space.]
Watching events unfold in the Ukraine over the last few months, one wonders where Russia’s strength comes from. Russia has a nuclear arsenal to be sure. What else do they have? Remember, it was Russia that fielded the first satellite, not the United States [See our recent movie review of Sputnik Mania] Watching US encroachments in Eastern Europe over the last year, it is hard for me to fathom that the G-7 would depend on soft weapons and nuclear arsenals alone.
Clearly the space race is on.
Perhaps the Russians understand the story of the scorpion and the frog – that there is no point in making a deal with the scorpion. The scorpion kills against their own self interest – it is the nature of their character. In one sense I understand. I remember sitting in a Washington restaurant in 1998 realizing that that there was no point in making a deal with the lackeys of criminals drunk with power. I was fighting with people who believe in and practice slavery. Might as well fight, there being no real deal possible.
From where I sit, a key variable impacting the trading value of the US dollar over the next few years is the supremacy of the weaponry that stands behind it, including the ability to field weapon systems in space that create supremacy on both offense and defense and the ability to maintain and defend superior satellite systems in combination with soft weapons.
If the dollar remains the reserve currency, we are in one paradigm. If the dollar evolves into a global digital currency governed by G-7, we are in another paradigm. If the dollar falls from grace in the midst of currency wars without a clear replacement, we are in yet another. Whatever happens, the deciding vote is likely to be cast by those who have supremacy on the sea and in space. I think about this a lot each day. When you manage money, a shift in paradigms has profound implications for the valuations of everything. This is why so much of the dialogue on financial markets in the Internet media is less than coherent. We have not created a clear framework that outlines the paradigm options.
I say weaponry is likely to have a deciding role because I continue to be willing for a revolution in spiritual consciousness to kick in, inspire the human race to build immunity to divide and conquer media and politics and shift the entire situation. The English poet said, “Ye are many, they are few.” When we are all on line and connected, will we be entrained by our devices or will we find a way to communicate, to resonate and to engage the powers of our imagination to shift the entire situation? I have yet to hear a concrete reason why heaven on Earth is not possible. Our destiny is not to live as mobsters, perverts and slavers. We have the power to choose civilization.
The leadership have their various experiments in global Empire underway. Such experiments create unintended consequences. As Scripture reminds us in Genesis: “But as for you, ye thought evil against me; but God meant it unto good.” There is nothing inevitable about where we are going. So, think about the next part of the passage with which I began:
Spacelessness and timelessness are not objective realities out there somewhere. They are creations of our psyches. So we must face the fact that this may be our natural habitat. We have willy-nilly broken through all the old rigidities, all the limits we thought were Nature itself, and we can never go back. This is a new Nature. Dream has become reality. And through that fact echoes what may yet be the great line of our culture:
“In dreams begins responsibility.”
~ Michael Ventura
POSTSCRIPT:
For those of you who wonder why I have been focused lately on what in the world is happening in space around us, its because it is having such a profound impact on the value of what is in our wallet, what is on our hearts and what will happen over the next decade in our communities.
This is one of the reasons I will join Dr. Joseph Farrell, Richard Dolan, and Jon Rappaport among others in San Mateo on June 28-29th for the “Secret Space Programs & Breakaway Civilization Conference.”
As you can see we have a lot to talk about.
Here is the link if you want to join us in San Mateo or participate by stream.
