The ECONO-MATRIX
Alex Wallenwein
Apr 26, 2005
In the financial world we live in, nothing is as it seems anymore
- except for one thing:
We are all operating under
the same illusion.
Well, most of us, anyway. Let
me explain what I mean.
One of the cornerstones of what we call "reality" is
that it is, by and large, the same for everyone. While we all
have different mental perceptions and interpretations of the
things we see, hear, feel, taste, and touch around us, on a strictly
sensory level the vast majority of us agree on what kind of world
we live in.
The same thing should be true of what we will call "economic
reality." In a sane world, we all should be operating on
the same economic and financial signals as everyone else.
The trouble is that we don't.
The ultimate kind of signal in any economy, whether it's local
regional, national, or global, is price. The price of whatever
it is we want to either buy, rent, or sell.
I am not arguing that all prices should be the same. That would
be idiotic, of course. What I am saying is that the way in which
we as humans determine the price of anything should be reliable.
It should be determined based on a rock-solid, commonly shared,
universally acceptable, and unalterable unit of account.
And that unit of account should be physically and conceptually
inseparable from the very thing we use as payment for whatever
it is we buy or sell.
Without that absolute unity, even identity, between the three
aspects of money (medium of exchange, unit of account, and store
of value) in every respect in the very thing we use as money
there can be no reliable price-discovery mechanism.
"The market" is absolutely helpless when it comes to
discovering the price of anything if there is no mechanism that
makes the hidden costs of manipulation immediately (or at least
mediately) noticeable.
When you give the power of determining the value of what we regard
as money to mortal humans, mere individuals whose judgment will
invariably be clouded by their own agenda, their own desires,
their own ideas of what is right and wrong, correct and incorrect,
then you create a financial world that resembles far more one
of those computerized "programs" humans were fed in
the movie called "The Matrix" than actual market reality.
When mere humans have the power to:
- determine the amount of currency-creation and of the cost of
borrowing that currency at will;
- decree that certain institutions (banks) are allowed to literally
loan currency into existence while being able to demand actual,
tangible collateral from their borrowers as security;
When the right to operate the "ultimate lender" - the
"creator" of currency is farmed out to a private corporation
with private shareholders;
When these private shareholders of such corporation(s) are then
recruited to perform the jobs of the elected officials who are
supposed to oversee the actions of their own kind, then
you have created a financial "matrix" of such epic,
such diabolical proportions that no normal human being - or even
group, organization, or nation of human beings, can be expected
to figure out what the real price of anything actually is.
It's like living in another movie called "Dark City"
where a group of "administrators" nightly changes every
individual's and family's apartment, address, furnishings, associations,
etc. while people sleep. When they wake up, they live in new
surroundings, with new people, having new jobs working for mew
businesses, which keeps them so on edge and so confused and disoriented
that they can never quite figure out what's wrong with their
world.
That is what is happening to us, to real human beings, when we
participate in what we are taught to regard as the "free
market."
As long as central planners determine the nature, the amount,
the value, and the design of the currency we all are required
to earn, spend, and save, we do not live in economic reality.
We are like little kids living in "Neverland" - and
you know what happens to little kids over there.
They quite literally get shafted.
There is an easy, very visual way to get an idea how out of whack
the world is that these central planners have created for us
(or the world that we have allowed them to create for us), and
that is to look at a chart of just about any economic parameter
showing how it behaved before and after the world's reserve currency
was decoupled from real money - gold.
Look at the difference in the several charts between the periods
before 1971 and after 1971:
To create this chart I simply
picked randomly from about twenty different time series stored
in my "workspace" on "Economagic.com."
I'll bet you get a very similar result if you pick other series.
If the various lines are seen as symbolizing the heartbeat of
the US (and therefore the world) economy, you can see that this
"patient" is suffering a heart attack. (Better get
out of that hospital, quick!).
What you are looking at is a picture-book example of unmanageable,
formerly un-imaginable imbalances being created - imbalances
which will soon kill this patient dead.
What our leaders did to the world economy by taking all currencies
off gold is akin to taking a passenger jetliner off the "autopilot"
(i.e., a gold-referenced currency system) and letting a twelve-year
old, adrenaline-crazed video game junkie take control of the
cockpit!
How anyone with half a brain wave, looking at this chart, can
still believe that our money-masters have "everything under
control" and will surely prevent a "hard landing"
if only we let them do their jobs in peace, is utterly beyond
me.
But yet, such people exist. Not only that, they are in the majority.
They are mainstream investors clutching their 401Ks.
They are the baby-boomers who are patiently hoping that this
half-crazed twelve-year old in the cockpit will "fix social
security" in time for their retirement.
They are the currency and stock day-traders who are convinced
that riding these insane market-waves up and down will bring
them lasting peace, prosperity and security.
They are the school teachers and college professors who educate
our young.
They are the politicians we elect into public office - and the
ones who elect them.
They are your banker, your cab driver, your boss, and your coworkers
and friends.
They consider the "hoarding" of gold to be a mild form
of insanity.
They will even consider having an RFID chip implanted under their
skin for future payment and identification purposes. After all,
it's so that "terrorists" can no longer fly big machines
into buildings, unannounced, right?
Yet, while "they" believe that "all will be fine"
and that paper-money is the way to go (after all, they can buy
what they need, right?), a powerful, up-and-coming, global economic
force with over one billion inhabitants, with a communist government
and a freer market than ours, with a two-thousand year history
of imperial atrocities...
This blooming power is telling its own citizens to "hoard
gold!"
This power has been methodically liberating its formerly repressed
gold market.
This power has had its unofficial agents buy up gold wherever
it could be found during the "terrible nineties."
This power is most likely who's buying the gold being divested
by European central banks in their attempt to ensure a smooth
transition away from the dollar-reserve system.
This power is now creating the newly licensed profession of "gold
analyst."
This power is putting out trial balloons launched by non-officials,
who talk about pegging its currency to gold instead of the dollar
(just "temporarily" of course).
Maybe, just maybe, "they" - whoever they are - should
"take the red pill" and take a good, hard, painful
but healing look at reality? Maybe they should think again, when
it comes to gold?
Get gold!
Alex Wallenwein
Editor, Publisher
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