Just a whacked out theory

Quick apology: this is so far off-the-grid as to be almost unrelated.  I promise to go back to ravens and seals for the next one.  But I had to write this.  It’s an idea, really.  A theory, kinda.  Probably just a delusional, paranoid conspiracy theory.  Read for amusement only.

The theory is simple to say: No one knows how much money is out there, and that such ‘not knowing’ was planned and that it is an aggressive act.   

Furthermore, even if they (?) did know how much there was today, it would not matter because the source of money is running amok and more and more is being created without any sort of controls. As a consequence of this, money is no longer real, it is just fantasy.  But it’s a fantasy that is being used as a weapon.

Bear with me on this:  I have no idea what I am talking about but I’ve been thinking and I want to get this off my chest.

Most everyone knows that there are a number of ‘monies’ out there.  Depending on the nation, they are generally referred to as M0, M1, M2, M3 and so on.  It’s a fairly simple concept that describes money and ‘actually-used-as-money’.  The printed, coined, hard currency that one carries in one’s pocket would be M0 or M1.  Easy to count.  M1 or M2 (depends on where the country starts – at 0 or 1?) would be the additional money created by having credit.

For instance, I might have only $1000.00 (actual dollars) in the bank but that, a good credit rating and a job allows me to borrow as much as $100,000 more should I need it.  If I buy a house, I may be able to borrow or ‘create’ even more.  In effect, my ‘credit’ created this ‘optional’ money that I am now responsible for. Money was ‘created’.  Like amoeba.

This optional money includes credit cards, car loans and the like.  If I add up my ‘creditworthiness’, I may be able to ‘control’ as much as $1M depending on the perceived value of what I buy with it.  I.e. it is easier to buy real estate with little real money than it is to buy chocolate bars (but it can be done with chocolate, too.  See: Commodities markets).

There is another level of money that is also created by my $1000.00.  The bank is allowed to loan out to someone else a ‘ratio-based’ amount of money based on that $1000.00.  They used to have to keep a ‘real amount’ in case people wanted some to buy bread, butter or gasoline but that amount was only a fraction of what the bank could lend.  The last time I read about that it was less than 6%.  That meant that my $1,000 created another $16,000 in money supply that was ‘just created’ and can then be lent.

And so it goes.  Here is a typical breakdown of money supplies from Wikipedia:

Type of money M0 MB M1 M2 M3 MZM
Notes and coins (currency) in circulation (outside Federal Reserve Banks, and the vaults of depository institutions) V V V V V V
Notes and coins (currency) in bank vaults V
Federal Reserve Bank credit (minimum reserves and excess reserves V
traveler’s checks of non-bank issuers V V V V
demand deposits V V V V
other checkable deposits (OCDs), which consist primarily of negotiable order of withdrawal (NOW) accounts at depository institutions and credit union share draft accounts. V V V V
savings deposits V V V
time deposits less than $100,000 and money-market deposit accounts for individuals V V
large time deposits, institutional money market funds, short-term repurchase and other larger liquid assets V
all money market funds V

But there is more.  Way more.  When the US needed a couple of trillion dollars to ‘stabilize’ the system back in 2007/2008, they didn’t tally up what the ‘M’s represented and use that as a guide.  They just printed it.  And that is the really funny part – they didn’t even print it!  They just ‘authorized’ the adding of zeros to bank accounts!  Little digital ‘zeros’ to AIG and Fannie Mae and so on.

So bloody ‘unreal’ as to be just the stroke on a computer keypad.

And Brussels (Euro) is doing the same thing.

Put another way: no one sits in a room full of lawyers and pushes briefcase after briefcase full of money across boardroom tables anymore.  Only the ‘criminals’ who are officially branded as criminals do that and even they ‘launder it’ (HSBC was the Chinese Laundry of choice) so that the money they have can eventually be ‘swept up’ in that great Money Morass we call the money supply(s).  Then it is ‘somehow’ legit.

“Dave!  So what?  Computers and accountants keep track.  It is all accounted for.  What’s your point?”

Well, in 2006 the governments decided that keeping track of all the ‘M’s was too much trouble.  They stopped doing it.  In effect they said, “Sheesh!  There is so much money out there and banks and credit unions and crooks and department stores and hedge funds are just continuing to create it willy nilly, we just can’t get a handle on it.  To hell with it!”

So then there were no controls over how much money is out there.  There may still be some kind of control over how much is ‘hard currency’, that is the stuff-in-pockets and purses and in circulation but the rest, I think, is just an ephemeral number.

If you control the reserve currency as the US does, think what that means…………it is a license to ‘print’ money (actually, as I said, they do not have to print it.  They just have to authorize the zeros).  They can buy anything.  Spend whatever. They can take over the world.

“They are not that irresponsible!”

No.  I agree.  They are a bunch of great guys.  But let us imagine what would happen if some creative but not-so-great guys got involved. Staying on a corporate level, a Gordon Gekko type says, “Let’s buy XYZ coroporation!”

“We don’t have the money!”

“Never mind.  I’ll get my buddy at the hedge fund to front it.  It’s just zeros.  We buy XYZ with imaginary zeros!”

But what if the shareholders of XYZ want their money?”

“Don’t be crazy!  No one takes their money anymore.  They just get zeros added to their electronic accounts.  We’ll send them zeros!”

“But someone, somewhere has to have real cash.  Ya know.  Like for the pizza delivery guy, right?”

“Yes.  Of course.  We’ll have to find some ‘real money’ for that sort of thing but real banks seem to do OK with just a 6% or less reserve amount of real cash.  The banks will have a token amount of real cash and that should do the job.”

“This is crazy!  You can’t buy stuff without real money!”

“You can if there is agreement between us (corporations), the banks and the government.  We three could control the money supply.  Ooops………the illusion of the money supply!”

“Why would they cooperate with that?”

“Well, the banks get their cut so they are naturally in.  And the government allows us to ‘wage financial war’ on the rest of the world so that eventually we own everything!  It’s beautiful, man.  It’s so simple.  No guns.  Just ‘play money’ and we will own everything!”

“The people will catch on! We will bankrupt them! They’ll revolt.”

“What are they gonna do?  Occupy Wall Street!?  Ha ha ha.  Give your head a shake.  And even if they do, we’ll just pepper spray them, arrest them for having nose-rings or whatever.  C’mon!”

OK.  It is just a thought.  Just a theory.  Call it paranoid.  Delusional, if you prefer.  Or could it be a sophisticated kind of warfare?  Could it be like the cold war only with zeroes and dollar signs?  Coming to a theatre near youMONEY WARS   

 

4 thoughts on “Just a whacked out theory

  1. You blog hits the nail on the head. Steve Keen is a professor in economics and finance at the University of Western Sydney has a similar theory to yours. Professor Steve Keen writes: “Because the levels of debt(American) are only slowly being reduced. The American data I know best and the American level peaked at 300% of GDP – that’s private debt.”
    “I thought America was bad when it had a total private debt ratio of 300% of GDP. Even the Treasury’s figures here(England) have you at 450% of GDP. And whereas America’s financial sector debt peaked at 120% of GDP, yours is 250%. And at various times in the past 3 or 4 years something like 60% of aggregate demand in the economy has come from rising debt.”
    “The level of debt England’s taken on is breathtaking.”

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  2. Seals! No one loves seal. Would you give your seal of approval to giving low income Canadians cash money to stimulate the economy? May be $500 per child back to school boost. This would expand the currently existing programs such as buy an efficient furnace and the government will rebate money from the furnace cost.

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    • Nah. I see no point in giveaways. The ‘sellers’ just jack up the prices to ‘get’ the stimulus. Just like when the government increased welfare by $100 a month, the slum-landlords jacked up the rent to absorb it (this was when I was working in skidrow). I honestly think the government should pave roads, build brides and manage hospitals. They should be ‘managers’, not ‘entrepreneurs’.

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  3. What do you think about the debt to GDP ratio? 300%? Little control of the money supply, massive speculation, exporting of raw resources rather than making stuff and employing people and encouraging more debt.

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