As for V_L's ‘War on Cash’. . .

Blythe Masters, the British beauty, exuding confidence, who played midwifery to the derivatives game, is now onto an expansion of the bitcoins fad. . . as though we need another means of creating havoc in our economies.

Yes, indeed!

She is now CEO of a firm promoting Blockchains - or blockchainery, or blockchicanery - take your choice. Get out your copies of Andrew Dickson White's "Fiat money Inflation" and review the sequence; we're headed toward another version of "We never learn!"

The reason for the hue and cry (which BTW originated as an alert to the community that a crime was in process)? She wants to popularize the bitcoin algorithms and develop another, faster means of electronically reproducing faux currency to help handle the flurry of transactions anticipated shortly, no doubt.

She'd enlarge on the pre-Constitutional Articles that allowed every one of the United States to make its own currency, a mess that caused untold confusion in cross border transactions. Now all the bankers and brokers would be free to abrogate the terms of the Constitution - the section that declares,

The Congress shall have Power. . . To coin money, regulate the Value thereof, and of Foreign Coin, . . .

To provide for the Punishment of counterfeiting the Securities and current Coin of the United States, . . . "

Having created one disturbance which is not yet settled, she's off on another spree.

Of course, if that quote from Article one, Section eight of the US Constitution is to be interpreted as nickels and dimes, since they specify only coin, and not hundred and thousand dollar bills, that frees the rest of us to make whatever we choose as an object of value to finance our transactions to no upper limit with any kind of paper or fabric we choose, that is, if we'd take the risk of disregarding the punishment for counterfeiting involved; but, then, if our faux currency does not duplicate the government's, is that counterfeiting?

There is so much in the Andrew Dickson White work which applies to this new adventure of a true adventuress, that rather than quote nearly half the book which serves as a warning not to undertake such a destructive project as supplemental currency, we'll simply suggest reading Prof. White's (1896) work to get the full flavor of the 68 paged 200 year old historical warning. We’ll need it not as a Baedeker, but as a cookbook on what follows next on the menu.

Still we'll quote two passages: the first from the introduction; the other from the closing.

". . . I recall, as if it were yesterday, my feeling of regret at being obliged to bestow so much care and labor upon a subject to all appearance so utterly devoid of practical value. I am sure that it never occurred, . . . that it could ever have any bearing on our own country. It certainly never entered into our minds that any such folly as that exhibited in those French documents of the eighteenth century could ever find supporters in the United States of the nineteenth."

Was the good Professor truly convinced that this was a one time occurrence, never to be duplicated again by aother cast or in another location? Well, after a fairly large number of attempts similar to that which ended in 1724, we find ourselves following up on the folly of only two decades ago, (in which Ms. Masters was involved) or, to capitalize on Prof. White'slanguage, the folly of the twentieth century being supplanted by a similar folly in the twenty first century! The high rollers are setting us up for another scalping catastrophe - even before we're out of the last they foisted on us. That is criminal!

Considering speed of electronic transfers - addressed at length in the tsunami thread - once we begin churning out the play dough for bankers/brokers, there will be no holding them back before they collapse everything. Dickson explained this as "a law in social physics" on page 66, which he embellished with the observation that -

"It was comparatively easy to refrain from the first issue; it was exceedingly difficult to refrain from the second; to refrain from the third and those following was practically impossible."

Closing with -

". . . we shall see still more clearly the advantage of meeting a financial crisis in an honest and straightforward way, and by methods mentioned by the world's most costly experience, rather than by yielding to dreamers, theorists, phrase-mongers, declaimers, schemers, speculators or to that sort of 'Reform' which is the 'last refuge of a scoundrel'.

"There is a lesson in all this which it behooves every thinking man [and woman] to ponder."

(Ed., my addition in brackets.)

Throughout the text, Professor White cited other literature which included data he used or described circumstances and events in greater detail. None of it suggested it was path to be followed for a carefree life; nor was he the only historian who was aware of the French situation in the eighteenth century.

And!. . . This is not the only work that points out that those who suffer the most are not near the mid-point of the spectrum of social life. Certainly, neither those near the top, nor their lieutenants suffer.

.

NOTE:

The 403 blockade persists. The problem is limited to the "comments" section. Apparently, posting here is no problem, but am unable to "comment".

Too wordy for them? Are the intruders attempting to limit us to a single statement; or, have they not yet determined how to block initiating posts.

OR. . .!!!

Is this Google's way of telling us our free ride is finished. If there were a note of some kind addressing this quandary, we might profit by moving on. My prolific writer son is a publisher of his own material and I have asked him if he'd publish my works - particularly the conclusion of the Business Cycle. In that respect, it might be hinted that something original is in the air concerning description of business and the cycles that result. It is a large project and ir may be the fitting conclusion of O&G's jousting with windmills, a project, it would seem, for someone younger and more flexible intellectually. But, then, it's been noted often that fools rush in. . .

meanwhile, over in India

The thread "War on Cash" was started just about one year ago. That war has ramped up significantly this past week while much of the rest of the world has been distracted by the US presidential election.
India,the second most populated country on this planet and a member of the BRIC group, has suddenly discontinued bank notes of 500 rupee (approximately $7.50 US) or higher. The reason is the same, supposedly to prevent corruption. Unfortunately, most of the world's population are not aware that the biggest corruption on the planet involves sums of money from millions to billions and don't involve physical currency.I fear that India, a place where the general population values gold,cash on steroids, may find that commodity difficult to acquire for the purpose of hedging against fiat depreciation. If a government doesn't like cash to be available to main st man then they certainly won't allow precious metals.2016 is ending very interestingly.

Short and To the Point...

We all just had a "Doh!" Homer Simpson moment... how do you resolve a ridiculous financial strategy that turns out to be a nation-killing tragedy? With a war, of course.

This sitting President has saw us through 7+ years of mass terminating the competent so his degree'd buddies could play "corporate executive on salary with bonuses", let them walk away from mortgages they could afford to buy bigger homes made available for cheaper prices by the mass terminations, bailed big banks that were and still are as corrupt and dysfunctional as can be, lifted gays, blacks, righteous women and transgender freaks while scuttling the healthcare system with a mandatory obligation racket, inflicted Twitter on us and claims to be the most accessible POTUS in history but never responds, so probably isn't getting any messages or outright deletes them.

Short and sweet... a major war in the Middle East promoted by the "bring it on, smells like teen spirit" cardboard American crowd... ends America. While those nutcases and the NRA rally for war somebody else will fight (they will opt out), China is buying our inherited business platforms and technology. In fact, Silicon Valley sells more crappy invasive software to China than it does to garbage corporativism here.

WE ARE SCREWED.

Due Today...

Today, Big Oil is required to address it's commodity solvency. It lied about supply, demand and it's ability to deliver. Some experts say Big Oil used ancient FAS numbers to get obscene dollars at zero percent from member banks worldwide and now cannot pay on them. Iron is also in the spotlight... an unbelievable amount of iron has been sold to China where it sits in stockpile. America will likely need to buy it back to grow itself back into a viable economy.

There are a number of press sessions ahead that require companies to validate what Wall Street speculated stock buy premises on.

Big Media isn't going to announce it, but the odds do not favor shifty cocaine addicts to patronize businesses that are going out of business. Let us not forget that just last week, the government voted to no longer use the term--- Too Big To Fail and that Too Far Gone To Be In Business replaced it.

There are likely going to be some shiny apples in this bushel of rotting pulp. There are greedy investors who will seek those apples out. The ground the bushel sits on is crumbling beneath it. Commonsense would steer clear and live to seek better apples in a more stable bushel and hold out for it to contain mainly good apples. Apple is not one of them. When Goldman Sachs falls... everyone will hear it, whether in the woods or not.

Millennials Are Destroying Banks...

...Millennials are rejecting ownership. Millennials are not buying crap anymore, destroying businesses that, well, sell crap. Millennials this, Millennials that. Frankly, as a millennial, I'd like to copyright the term and earn a royalty every time it is uttered.
We were hit with the global financial crisis right as we were expected to get started in the workplace. That colors your worldview.
Few industries will face a greater struggle targeting these new consumers than banks, who seem wholly unprepared with what to do with us. Indeed, if ever there was a dark evil in the world that millennials as a whole would probably like to see completely destroyed, it is the banking industry.
Everyone hates bank fees, their complexity and lack of transparency. Traditional banks do not speak our language.
But if the big Wall Street banks fail in this new environment, it won't be because they failed to bring millennials into the fold.
It will be because they will have failed to innovate for all of their customers.

depends

In the US student (Millennials) loan debt is 1.2+ trillion dollars. And still rising. You are correct, they won't be buying much but the banks are profiting handsomely. Worldwide, our fearless leader political hacks have given banks tens of trillions in the past 8yrs (and still rising) that the citizens of the world are on the hook for. When that chicken comes home to roost, nobody (except the ultra rich) will be spending much.But the banks will profit handsomely.
Banks aren't really banks anymore, at least in the traditional sense of citizen depositors receiving modest interest while the bank evaluated risk and loaned the money to individuals and business at a greater rate of interest. Today everything is fee based and dump the responsibility onto citizens through backdoor methods (pension funds, eventual inflation, or outright bailouts).
Big banks have always been reckless and greedy. The problem today is that they've hijacked the political process, courts, and media. The process will continue until people wake-up and take action against the politicos that are colluding.

Today's banks

For a comprehensible definitive explanation of banks transition to today's banking business, look up some recent works by Adair Turner Credit, Money and leverage: What Wicksell, Hayek and Fisher knew and Modern Macroeconomics Forgot; or, Charles A. E. Goodhart - starting with Maturity mismatch stretching: Banking has taken a wrong turn with Enrico Perotti - a short CEPR Policy Insight (No. 81). Just copy and paste either title into your search box and google the titles.

I have seen the changes through the years and was fortunate enough to have been working with several banks over the longer stretch. As you all known, they are simply no longer banks in the classic sense. Speculative mills would be a more fitting description, since they attempt to do nothing less than churn out gambling chits, trying to beat everyone to the punch, fast talking, slow paying (or paying not at all), grasping hand enterprises. If you want to find a reputable, trustworthy bank look to the small, local establishments and search out Bauer Financial 5 star rated banks and S&Ls.

The greater financial crises we've encountered since the start of the twentieth century have mostly been caused by machinations with mortgages in residential and commercial real estate with unbelievable numbers. Everything has to do with ponderous operations getting out from under the load - think volatile, uncollateralized derivatives, laying off their commitments through affiliated outside ventures illegal for banks; too slow cash flow from long term liabilities and innovations which are intended to (but, do not!) supplement legitimate bank earnings to repair the damage from poor management judgments. Bankers behave as though they are no longer capable of reading balance sheets or calculate income over timelines.

Neither Goodhart nor Turner are youngsters, thoroughly experienced in the trade with full comprehension from all angles of the transitions that have become commonplace.

.

Also, appropriately enough, there is a Conference taking place soon, December 17-19 at Ancona, Italy, the Universita Politecnica Delle Marche, subject is Large-scale Crises 1929 vs 2008. Inasmuch as more respected Economists are speaking out against banking and commercial missteps, there should be some interesting thoughts emerging from that event. Given the 1929 Crash and the following Depression, the reach of the historical background is permitted into the latter part of the nineteenth century, which then involves three centuries of economic responses to banking and financing evolution - a challenging proposition!

The cast of scheduled attendees and speakers is impressive. We've addressed or hinted at most of the suggested possible topics here and in the "tsunami thread".

With over three thousand pages of entries in those two sites, even by chance, there isn't much we could have missed over the past seven - soon to be eight years.

Banks had the starch taken out of them during the Great Depression by a straight-talking President who saw the damage created as no other executive has before or since. Between his willingness to try and try again and the cooperation he had from the American voters and a cooperative legilation, the system was straightened out for a couple of decades before the new batch of sycophantic legislators began tearing the walls down and riding objectors out of office and Washington, DC. The last straw, of course, was the repeal of Glass-Steagall - and the flood of abuses and excesses that allowed a freedom that was promptly abused.

The banking industry now believes they've achieved Nirvana, more or less, and can go on chasing after the last shekel, drachma or polished stone if it has the slightest remaining value, with no interference.

Someone needs to do something to bring back outspoken economists like Veblen, and books like Economics as a Science of Human Action to highlight the responsibility issue if we're to have common sense in the market places and lending emporiums again.

Startups

" In the US student (Millennials) loan debt is 1.2 trillion dollars".
That means that almost all the products currently offered by banks are mostly irrevelant, since major purchases like homes will be pushed back, perhaps indefinitely.
No innovation from the traditional banks, while there has been innovation in the market from startups.
The banks are not ignorant. Jamie Dimon said " Silicon Valley is coming with hundreds of startups providing alternative to traditional banking services".

Banks are here to stay, for now. It is clear that startups, often led by millennials and hushering in millennials as early adopters, are coming for the heart of the banking industry. How it responds will determine who owns the capital of the most important capitalist country on the world.

It's the Vampire Squid (and associates)

First, Thanks Old and Gray for the links. The story is explained a little more eloquently than Taibbi from Rolling Stone. I think Taibbi might have read some of your posts and historical references.

The Vampire Squid. Amazing how the term is seldom heard anymore. Not surprising considering who owns the MSM.
It Doesn't matter if Millennials stop buying houses or whatever. The Squid only smells money. It'll quickly seek out new prey once it has drained it's former prey. O&G is correct that an extremely dedicated leader muzzled the squid for a few decades but it is loose again. Housing is drained but tax collection, municipal bonds, drug cartels, military weapons, student loans etc etc etc all involve money. Owe the IRS money? Their website will give you a choice of private collection agencies to arrange payment....for a fee. A few quotes from Taibbi's article (The Great American Bubble Machine):

"The first thing you need to know about Goldman Sachs is that it's everywhere. The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money. In fact, the history of the recent financial crisis, which doubles as a history of the rapid decline and fall of the suddenly swindled dry American empire, reads like a Who's Who of Goldman Sachs graduates."...

"But then, any attempt to construct a narrative around all the former Goldmanites in influential positions quickly becomes an absurd and pointless exercise, like trying to make a list of everything. What you need to know is the big picture: If America is circling the drain, Goldman Sachs has found a way to be that drain — an extremely unfortunate loophole in the system of Western democratic capitalism, which never foresaw that in a society governed passively by free markets and free elections, organized greed always defeats disorganized democracy...."

Organized Greed Always Defeats Disorganized Democracy....

No it doesn't. My father often remarked--- never let the college degree drive the tractor unless your goal is to lose the farm. A college degree will loosen the sole pebble keeping a massive boulder from continuing on it's journey downhill and offer excuses when it rolls over all the civilization built and thus destroys-- along it's path to the bottom, where it settles as a permanent impediment.

I also fully disagree with O&G that we will need to wait for a couple more generations and the exponentially-wider more horrific pain before something is done.

We ALL agreed some time ago that we were heading into uncharted waters because logic and commonsense stopped being relevant. For a FACT, our path has been psychotic and socio-psychopathic for most of this century. The people who graduated from high school just after I did and then got to go directly into college while the economy tanked, came out warp-minded. They had been what Animal House lampooned about college life. They were also placed directly into key management roles without a hide or skin. Throughout my career I was able to shift away from these pariah but I never realized what they were doing with our infrastructure until it was too late.

THINK about where we are. WE are the pebble and THEY have created a scenario where removing the pebble is truly an essential move now. If I am destitute, I don't need technology, GMO food, salaries, taxes, condominiums on shores or any other aspect of modern plastic hollow-headed psychopathic society. Stop envisioning mountain men and grasp that the holiday season sales are SO inactive that osmosis may be the solution to controlled complacency. Stock mongers are fleeing to Wal-Mart stock under a false belief that it's a BIG bastion that will survive catastrophic failure. Really? Really... not. Gold is crashing. Metals are because they were as falsely propped as stocks, bonds and all sorts of contracts. There is no place left to put cash except into non-trade-worthy commodities and those have a massive undisclosed factor because the poor hoard and use them. So... supplies do not define their value, people do.

It doesn't matter if the Fed raises the Bank Rate tomorrow. It matters a LOT if you are a Financier, Lawyer, CPA, Techno-god-let, Executive Management and Administrator. These roles won't survive the crash because of corruption. First, we kill all the lawyers... a tongue-in-cheek line in a play. It may suddenly become more real that lawyers can imagine. Change... it's coming like a Tsunami Wave now and psychopaths everywhere are standing on withdrawn shores remarking that it isn't real as it rises to enormous height. There is no one there to refute them, all the people with commonsense are way-far inland and in trees, hoping the momentum water doesn't get that far. Surely there is opportunity after the wave draws back to the sea and takes all sorts of debris with it. THAT doesn't take several generations.

It would depend how we define it

"I also fully disagree with O&G that we will need to wait for a couple more generations and the exponentially-wider more horrific pain before something is done."

Some would say it started with the establishment of The Federal Reserve on Christmas Eve about a hundred years ago, others would say it started with Nixon's actions concerning the gold standard, others would say NAFTA, yet others Graham-Leach-Biley.
My personal starting point was the early 80's rabid de-industrialization of the rust belt and textile industries.
I know you said that you disagree with waiting a couple of more generations, but, I didn't think that the demise would last this long.
Yesterdays 30 minute into the close ramp and todays continuation of that ramp indicates yet another leak of a "favorable" fed announcement tomorrow. I'm expecting something like raising the rate 1/8% and promising to buy all bad investment bank paper until the end of time (sarc).
Doesn't matter how poor people get as long as they're fed, sheltered, and have cable TV. When that ends, then they'll wake up.

We Are All Increasingly Awakening...But

We know that everything is rigged. The stock market, the news, the food, taxes, public schools and on and on. All these systems and industries are rigged to cheat us, and to suppress our human potential.
We can't beat a rigged system. That's why it is rigged. So stop playing in the rigged system. The house always wins. That is how casinos make money and it is how nearly everything else works, too.

We are all increasingly awakening, but we don't wake up. The whole point of emerging from the hypnotic tunnel of deception is to stay emerged. That is called progress. Knowing the truth is not paralyzing. They say: "But now that I am awake, what do I do?" That is a close cousin to surrender, and it is a precursor to going back to sleep.

Invent. Imagine. Create.

This is not the old model, where you sit around and hope someone will come up with a real great idea.

Rigged... Like Confining Jell-O Without A Mold...

It is rigged. But it is SO rigged that it cannot move itself either.

After Automated Updates yesterday, all the blogs I post on are no longer accessible to me. My presumptive fill-ins are rigged. I cannot submit anything to an elected Official, the system responds as if the Internet just went down at that exact moment. I AM SO PLEASED ABOUT THIS!!!!!!!!!!!!!!!! You have to think differently today (for Saldeck- the new anti-Order is non-duality thinking. Don't dwell in or on the past, don't predict the future, manipulate the here and now by the WAY you think, not WHAT you think). Why am I pleased? Because I am just one person who can post something so undermining that an omnipotent BIG considers it a threat. David standing on Goliath's carcass would've given me a high five. Change your thinking... omnipotence means So Big It Has To Fail.

Some numbers... many dispute my figure of $3 quadrillion for global corporate and entity debt. I get it from this-- experts tracking money in Switzerland claimed the global figure was $632 trillion in August 2012. Almost nothing has gone into actual economy since and stock markets are thousands of points higher globe-wide with each thousand cost more than the last thousands to achieve and maintain. The exponential cost would achieve record every day regardless of whether the stocks rose or fell because both activities required increased debt. If the Federal Reserve hikes the Bank Rate by a quarter-percent today... corporativism goes from zero-percent interest to paying $750 billion monthly to cover their obligations. There is no economy, they destroyed it, so the only place to get $750 billion monthly is through stock liquidation. Even inflating consumer prices won't achieve it. Based on the historic climb in stocks this century to-date, we will see the Dow lose 9,000 points in 2016 alone. That said, the Federal Reserve HAS TO BY IT'S OWN ACT restore the income it collects to our Federal Government. If the Treasury hoarded it, our US Savings Bonds would be paying more than 100% in annual returns. If it distributed the windfall it would compromise every indigenous entity and create the single-largest contiguous lawsuit-- ever. What we WILL do is evaporate the repaid capital, eliminating it from potential currency destruction. That compromises wealth so ubiquitously that being poor would be the place to be (all income by default, no obligatory outgo).

You can fool most of the people most of the time with sculpted data, but you cannot stop the savvy from doing their own tracking and ascertaining the TRUTH. Retail sales are non-existent this season. While the self-employed are struggling, BIG is swooning and more likely to succumb to contractual objectives and obligations. The surplus potential is enormous. A major retailer has crap goods stacked in the aisles at ridiculously under-cost prices to rid themselves of it. There are no takers because that stuff has no resale value even in thrift stores. The Bank Rate increase kills BIG and BIG knows it.

THINK... but change the WAY you think.

Probably Possible

Our current probability is the disintegration of humanity, with its global institutionalism of insanity, aiming for maximization of profitability, control over everything. War on Nature world and all of its majesty. A criminal system of perpetual poverty. A humanity submerged in a cultural celebration of mediocrity, filled with empy values and never-ending hipocrisy.
If there is a choice between probability and possibility, then I choose Hope in creative capacity, in the possibility of avoiding our current probability. It is probably possible, and just possibly probable, if you decide it to be.

Not disintegration. Never that!

Momentarily, things are not responding to our nudging, saldeck. We have some problems in acknowledging what should be included in our study of what we do. . . We've left out a couple of items which have been considered non-essential to this point and there are economists raising a little of that good old hue and cry about it. We're in the process of shucking off the old and turning toward a new - Lucas's claim for Macro-longevity of at least another hundred years notwithstanding.

What we have resisted including in our beautiful theories is the human element which is short on a necessity in mathematics, predictability - which also renders current economics "inhumane", we might jest. Not a good status for scholarship which over a hundred years ago was declared by the best-selling economic textbook of the age, Alfred Marshall's, to be a study of human activity - which has subsequently segued into a study into the artful application of mathematics to support superfluous theory.

We hear more and more of "Economists" who began their studies and received their degrees in other disciplines. Economics then becomes the second choice which rises to the first rank career activity. The latest Nobel laureate in Economics majored in math along with so many others. . Fisher, Wicksell. . Tinbergen was a physicist, was he not? a study strong in math. Then, there were lawyers. . .

It's easy to predict that the failures in current economic studies will be highlighted by this crisis. We'll spend time milling around in confusion before a generation or two from now leads the charge to decide that something else needs to be done to lend credence to the study. It needs just a little more of a tinge of the slapstick burlesque of ineptitude. Once it is no longer taken seriously, we'll change to evade the building humiliation.

It's really not that far off from being a "humane" activity. We may find it melding in with other social studies before long; and, borrowing from the prestige of the other studies in order to begin realizing its true potential. In its present state, if Economics were to respond to current indicated population growth trends and exerts pressure to have community activity redesigned, O&G would not want to see the result.

But, then, that's the price of living on an increasingly crowded planet: less space, closer quarters, more anger, more instability, need for more control, less freedom, less individuality, tighter straight-jackets. We're on the way now, with implanted chips, etc.

Change may be just beyond the next massive crisis - which will dwarf the current episode. The change has been written about in sci-fi, but, as a group, we are slow on the uptake. It's also been determined that under the constraints of a controlled society that production is less efficient and profit margins decline. That should be a warning for a nation with debt steadily climbing beyond GDP. It should also indicate we'll swing from moderate satisfaction with absolute wealth to accepting second place honors with relative wealth (discussed previously). Optimum will then move down a few notches and the goose with the golden eggs will be gone.

That may be real probability.

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Addition:

Just turned around and discovered this little remark from Ludwig von Mises in a forward to a book by another author -

"Essays on the history of economic thought are to be appreciated not only purely as history. No less important is the fact that they enable us to re-examine the present state of economic theory in the light of all attempts earlier generations made for their solution. In comparing our point of view with past achievements and errors we may either detect flaws in our own theories or find new and better reasons for their confirmation."

It fits here.

Stunning!

After interwieving 1,100 institutions throughout the country, the American Council of Trustees and Alumni have found that colleges are not teaching simple economics anymore. ACTA reveals that students from both public and private universities are graduating with little to no knoweledge of how money or the economy really works.
Of the 1,100 universities, only 34 taught economics course to graduates. This means that only 3% of colleges are teaching world finances. Stunning!

Vulnerability

How vulnerable is humanity? It is important to explore threats ranging from climate change and natural disasters to food, energy and water security, technology, artificial intelligence and the biggest threat to humanity...humans themselves.
We can afford to continue with "business as usual".
The Earth is vulnerable, life systems are vulnerable. We are vulnerable, just as any organisms are.

Changes in the global economy have created many more vulnerabilities. Inequality is the biggest contributor. Reducing vulnerability improves human development. But economists have lost sight of vulnerability.

Why the currency system will fail under bitcoin/blockchain

It's nothing more than another scam.

The derivatives scam caused failure in that pieces of paper (contracts) with no intrinsic value were offered in exchange for currency which was then taken out of circulation and collapsed the economy. Picture the condition of Lehman Brothers on the day of its failure: It had notes due in three days at levels that required more than three days to process. The claim was that Lehman had the value, but not the cash and that illiquidity was the cause of its failure. No market could respond fast enough if Lehman had chosen to sell its assets to cover its obligations. But, then the second stumbling block was that firms other than Lehman Brothers also needed cash, there was not enough cash in circulation to finance the needs.

The blockchain which is proposed to work along with digital bitcoins, is a transference of valueless bitcoins - lacking dependable value in their extreme volatility - which are deposited in a bank (preferably offshore) in exchange for currency. The bitcoins are simple items with insufficient backing, much too easy to create. Therefore, there can be a flood of highly volatile imaginary "coins", which have been collected in exchange for currency. . . which then goes where? Not in circulation supporting the real economy!

Eventually, the bank collecting the digital money will need to meet obligations with currency they no longer have, much in the manner of Lehman Brothers. So, we are asked to believe that there is money in the vault when there is nothing but digital paper without either legal standing or market value. Legal tender has credence because the issuing sovereignty has the power to tax. Where will banks get additional funds - other than through Central Banks working in collusion with the conspirators?

How does that differ from the collapse of Lehman Brothers?

The clever players will insist that the situation bears no resemblance at all to the Lehman Brothers situation. Well. . . no, if you consider the holder of the junk paper or receipts is in Mexico City or Brazil, or Malaysia. . . and they are all adults and entered into the contractual obligation of their own free will and everyone rewarded themselves with depositors' money which has been moved out of the country, and. . . . there is no law against it? . . or, the new law absolves them of blame. . . or places them beyond reach. . . or. . .

Does anyone recall that while the facts of the derivative scams were unveiling, some "reputable" brokerages were bundling leftover mortgages and testing markets with new tranches in search of buyers?

.

More than one commenter has proclaimed that with this latest ploy, Masters has dug her own grave as am economist/banker/financial wizard. She could very easily fall into the same category as Frank Lorenzo of Eastern and Continental Airlines fame being declared by a sitting judge to be unfit to run an airline when he, along with financial supporters, applied to start up a new airline venture?

Have we really forgotten so much so soon?

Delusion

When in the Detroit market, a major bank that had purchased a major Subprime wholesale lender for pennies in 2000. The portfolio had an accounting book value. No one had ever validated the actual value on a wholesale level. 2004- that bank sells that white elephant to Merrill Lynch. The portfolio collapses literally weeks later.

When in the Chicago market, I am listening to Lehman "experts" express calm about the recent financial turbulence that existed in late 2007 leading into 2008 on a radio interview. I call in. I bring up the variances in accounting versus real validation of assets. The interview goes off the air and my call is dropped.

I LOVE that I am not the only person bringing Andrew Dickson White back up. In Fiat Money Inflation in France, as in O&G's reprisal quotes-- it isn't the first wave of fake money printing that creates the fatal flaw condition, it's the panic-fueled second and last wave that turns the fake toxic and subsequent infusions to bolster failure actually condemn and accelerate. Simply put-- without a thriving native economy currencies come to a screeching halt and are no longer viable. The accumulation is toxic and the hoarded quantities do not dilute- they evaporate. There isn't a post-French Revolution Era trail for fake money or gold. Well into the 1830's, France was barren economically.

The Bitcoin has no future and no basis because it should be blatantly obvious now that the algorithm doesn't have a future either. We already know how to conduct enterprise around the seeming vise-grip monopoly of commercially driven technology. Big Retail tracking mechanisms are reporting that the online sales they get are actually in-store sales taken away from the brick-and-mortar. Simply-- those sales cost more in every possible way so there's no doubt financial hemorrhaging is occurring. Replacing hard-earned actually currency with algorithmic tomfoolery money that few recognize as anything merely infuses a poison pill effect into existing currencies that do not go through mainstream venues and generate economy.

It's no longer a matter of economic crash-- we are already there. It's more the Tsunami Wave of independent acts straight ahead that collapse the mechanism and reveal the Grand Canyon between what we think we know has value or what the market may be able to then bear that re-establishes value. Make believe is improbable. Once freed from contractual obligation to what essentially is Big Brother and his holding company, it will be interesting to see what the small entrepreneur does and what he/she recognizes as viable currency. A bitcoin in the hand may be the more viable ONLY if ties directly to indices recognized and used by those entrepreneurs.

What we have here is a root failure of the most simplistic aspect. It isn't-- he who has the gold makes the rules. It is-- he who gets the masses to recognize gold as valuable and trustworthy determines the currency unit. For all we know-- bottle caps could be it and the premise for their exchange becomes the validity factor. 15,000 years ago anyone could wade in the shallows for shells and find enough to become rich. They were the prevailing currency. It didn't work that way. The exchange component was the validity factor. You had to want something to be willing to work for it, you had to honor the agreement to have the work done and give tokens you were willing to accept back from a familiar face and conduct commerce by them.

Today, the pendulum has swung completely to the side of anti-trust and non-trust. It's the basis for today's global crises. The Bookkeeper cannot stand up and proclaim order-- he/she is completely untrustworthy, as is the Lawyer, Financier, Politician, Accountant, Administrator or Corporate Executive. It has to start at the bottom and gain popularity out of hopelessness. The road there is very hard but it IS being tread. You and I will be amazed at what prevails. Nothing you can see now-- will. Not any of it. I know it's hard when I suggest war but there is many different ways to have war. The way I suggest in play today is all around us. BIG is the enemy. Small wears thrift and is uncomplicated and clever.

company scrip

The nations largest retailer tried paying a portion of their employees wages using company scrip in Mexico (?) a few years back. I seem to remember that the Mexican courts stopped the practice.
US employees of this retailer are now being unofficially surveyed in the USA to determine if they would find accepting vouchers that can be used at their super stores as a performance bonus favorable. MSM claims that initial results of that survey are favorable. No comment.