A Lesson from a World Class Trader

Martin Armstrong, who at one time may have been the most sought after money manager in the world, always assumes his trades are wrong. This skepticism forces him to quadruple check his assumptions and rationale. If only the mainstream media, pundits, and almost all of us would have the same discipline before offering up an opinion, or doubting what America is all about.

Most intellectually honest people have a good idea how we got ourselves in the current economic and ethical quagmire. Success breeds complacency and arrogance, and absolute success produces an absolute corruption of power. Yes, there are many people who have no clue, or want to keep their heads buried in the sand to keep from turning their idealistic world upside down. However, the silent majority values honesty, integrity, and all of the other traits that once made this county the envy of the world, and would at least support a movement to restore those values.

There are also proud Americans that use their memories of past successes to defend hijacked policies, or any politician that remotely trumpets values of yesteryear. Even though, those same politicians simultaneously abuse the trust for their own self-interest. Other Americans point to past abuses of power and human flaws as evidence that the American experiment is a failure, not acknowledging that those same abuses and flaws exist in every society. They also fail to realize things for what they are, like the fact that we have not had free-market capitalism for well over 30 years. Both of these groups need to quadruple check their assumptions, rationale, and recommended solutions.

For example, Glenn Beck made an impassioned plea on Hannity last Monday night for Americans to trust each other and go back to the values that made us great. One would be hard pressed to find anything wrong with what he said, unless they questioned every point and solution that was proposed. Case in point, after expressing very heartfelt concerns for the county, his solution was “we have to pay off the debt”. On the surface, one may think this is perfectly appropriate and proper. Let’s quadruple check our assumptions and rationale.

How did we get so far in debt? Who creates the debt? Who benefits from paying off the debt? Who suffers from paying off the debt? If you research each of these questions you will find that the people who created the debt problem are the same ones that benefit from paying it off. The Federal Reserve and the money center banks created the debt-based system for the purpose of enriching the banking cartel. The debt and asset stripping model was used by the banks in Africa and South America to enrich themselves at the expense of the citizenry. They employed the same model in Europe in the last decade, and are using the same model to devour their own country. If you ask any one of these sociopath’s why they did it, they would likely say, “it was only business”.

Mr. Beck used Albert Einstein’s quote, “No problem can be solved from the same level of consciousness that created it”. If debt was created by the banking cartel, and the banking cartel benefits from paying off the debt, while the citizenry suffers from the austerity required to pay off the debt, then why is it good to pay off the debt?  Not to mention, that it is virtually impossible to pay off.

Mr. Beck, how are we supposed to pay off a debt that is 11 times higher than it was 30 years ago (not including the unfunded liabilities), yet the percentage of the population that is employed has fallen back to where in was 30 years ago?  Incomes have also been declining for the 99%, so how are tax receipts supposed to magically increase to pay off the debt? Raise tax rates, so the capital needed for growth is reduced?

employment-population ratio

Therefore, Mr. Beck’s solution of trying to pay off the debt will result in the masses being permanent debt slaves, just like the majority of student loan borrowers. Unless, by some miracle, everyone starts analyzing the Comprehensive Annual Financial Reports (CAFR’s) of every municipality to truly understand the assets owned, and income generated by those assets (after all, it is the tax payers that own those assets).   Einstein was right. We do need a new consciousness that is not the same one that created the current fraudulent systems.

Since Glenn does and says so many good things, I don’t know whether to give him the benefit of the doubt, and simply chalk it up to economic ignorance; or is his home spun, old-fashioned values just another one of his acting shtick’s, meant to make it easier to put rings through the noses of the Sheeple so they can be led down the path to serfdom? The unforeseen bad consequences of liberals/progressives may best be captured by the proverb, “the road to hell is paved with good intentions”; but Thomas Paine may have best captured the consequences of conservatives.

ThomasPaine

Since the fraudulent business model of the bankster banks is to issue ever more debt, every attempt must be made to suck more money out of the citizens to make payments on the debt, instead of implementing Tax Retirement Funds (TRF’s) to use the assets the tax payer has already bought. I guess Glenn is in favor of higher taxes and direct bail-ins of pensions, IRA’s, 401K’s, and deposits, because that is what it would take. Maybe, it’s simply that Glenn knows bail-ins have already been written into the banking strategy of most western central banks, and will be employed the next time banks are insolvent (Michael Noonan, Ireland’s Minister for Finance, confirmed on Tuesday that bail-ins or deposit confiscation will be used in Europe).

Karl Denninger captures the essence of the fraud in a recent post, when he said:

See, it is the issuance of credit unbacked by anything that causes income disparity.  The reason is that it also causes asset bubbles, and that in turn raises the cost of living.  You can’t keep up due to economic inefficiency — that is, your income always rises at a slower rate than the increased credit availability.

But those in the very top are able to access leverage and they gain access to inside information and ways to use it without going to prison.  The latter is essential because without it the inevitable collapses of said bubbles will always bankrupt you.

Businesses of all sizes default on their debt all the time – so do countries. Default and bankruptcy are the mother’s milk of free market capitalism and innovation. As the former chief executive of Eastern Airlines, Frank Borman, once said: “Capitalism without bankruptcy is like religion without hell. It doesn’t work.” The corrupt practice of bailouts on the other hand, disgraces capitalism. It was because the Occupy Wall Street movement understood the difference between cronyism and capitalism that they had to be squashed by the establishment.

By the way, the “demands of  OWS” that are paraded around by the media, have about as much to do with real message as the Tea Party foundation, or the official unemployment stats, CPI, and saying we have free-market capitalism. The media hijack’s the message so they can paint all the backers as fringe lunatics from the Haight. It’s propaganda 101, and the masses devour it. The silent majority has one thing in common with OWS and the Tea Party, and that is: bankster’s need to go to prison, and that scares the sh*t out of the people who roll the debt of media companies, fund political campaigns, and remains silent on the assets and incomes in the CAFR’s…which just might explain the messaging and policies.

If you make imprudent loans, which includes extending leveraged credit, backed by mythical and hypothicated assets, and the investment goes south, then the lender should lose his investment and go bankrupt. Bankruptcy forces the lender to maintain higher quality capital and not to make imprudent loans. It also forces the market to demand a higher return for greater risk. None of these conditions exist in the current fraudulent world of crony capitalism, which is quickly morphing into Fascism. Lower interest rates are extended for greater risk, and bailouts or bail-ins are provided for riskier and higher leveraged investments that go bad. Does that sound like free-market capitalism?

If economic hitmen intentionally over-extend credit to countries so they can either confiscate the countries assets or force the citizens into debt slavery and austerity, it would not be viewed favorably by the average American. So, why should the average American think it is acceptable to have the same asset stripping game played on themselves? It’s nuts, which is why the establishment must use propaganda to guilt and intimidate society into slitting their own throat.

In foreign countries when the leaders don’t play along with the banksters game, the Jackals are sent in to intimidate, bribe, blackmail, and if necessary, assassinate. If none of these tactics work, that’s when our brave men and women in uniform are called in to do the banksters dirty work (under a cloud of propaganda that incites patriotism, of course). It’s just business, after all. The same tactics are used stateside. Political “leaders” either continue pressing the thumb of govt down on the folks to extract the money for the banks, or their cozy lifestyles come to an end, at a minimum.

The solution is not painless, but it can be done. The monetary and political system must be totally reformed, assets owned by all levels of government (and bought by taxpayers) must be restructured for the benefit of the people, and there are people who know how to do it. The only problem is, none of them are in government, and the solution entails the loss of jobs, perks, and power for those in government.

If I could make just one change to get the ball rolling in the right direction, it would be the implementation of term-limits of one term. Everyone knows politicians will never do it. The only question that really matters is, will the masses demand it?

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