Systemic Upheaval, Economic Recovery Vs Propaganda Reality Check
by Jim Willie
Some extremely powerful differentials in power are setting themselves up, in a manner never seen before in modern history. Those who dismiss the uniqueness of the situation are those who continually are surprised by events as they unfold. The pressure features the managers of the system, complete with corruption and fraud with official coverups in a never-ending sequence of crime scenes, pitted against the forces of justice and fair markets. Not a single fair market exists in USDollar terms. In pure Orwellian style, every single market has a US-based or London-based financial engineer at a control panel doing duty in price intervention. The Western defenders of the syndicate do not wish for the price structure to reflect the reality of physical shortage or the bounty of paper-based surplus, for the currencies to reflect true toxic value, and for the discovery price systems to reflect the raids of private accounts. The system is broken, and the pressure is building. When young in school, the principles of entropy and enthalpy were introduced in chemistry classes. The ENTROPY was taught as the thermodynamic property toward equilibrium and dissipation. In layman’s terms it was the tendency for a system to seek greater randomness. Sometimes the dissipation comes from the scattered heat, but often the spread of physical items. Like smoke from a fireplace to spread about the neighborhood, like for the odor of nail polish remover to dissipate about the house or porch, like for the toys from a children’s playbox to relocate in every corner of the house, like for pet mice to scatter from a shoebox in a bedroom closet, like for the heat from a car engine to spread across the driveway and around the yard. Extend toward information to spread on grapevines about the office building.
The ENTHALPY was taught as a measure of the total energy of a thermodynamic system. It includes the internal energy, and the amount of energy required to contain a system by displacing its environment when establishing its volume and pressure. Enthalpy is a thermodynamic potential, which is layman’s terms can be thought of as the tendency for an object or system to seek its lowest potential energy. Like a tree toppling in the wind, like a group of items moving from the top of the stairwell to the bottom, like tattered roof parts falling to the ground, like wall ornaments hitting the floor during a storm or tremor. Extend toward a market removing its props, where all channels of data enter the room to effect change toward an equilibrium. Transfer the concept the the financial system. The lower potential energy comes from the extraordinary coils and loaded springs that hold the artificial price structure in place, even the information devices that distort truth. Enthalpy is more recently defined as the amount of heat content used or released in a system at constant pressure. Notice the rising heat within the current distorted financial system. Enthalpy is usually expressed as the change in enthalpy. The pressure in the financial markets is building. Heat is soon to be released in great volumes. The victim will be the USDollar, the USEconomy, the USTreasury Bond, and the price structures all held with great artificial forces. The system seeks the familiar randomness of fair equilibrium-based structures, not the 8am daily whack to the gold price from the London fix, not the regular 10am or 3pm rescue to the S&P500 stock index, not the regular ceiling placed on a 1% upleg in the gold price from capping efforts. The most prominent energy relief valve is the USTBond 10-year yield, which had moved below the 1.5% mark comfortably, as the Jackass forecasted. Its move toward 1.0% would signal systemic failure, as capital needs would give way to the vortex of the Black Hole of USTBonds described in May. Consider in brief terms the many extreme conflicts and pressure points. None of these existed five or ten or fifteen years ago, yet all are somehow considered part of the New Normal landscape. Give credit to Mohamed El-Erian for his contribution to Orwellian logic, the new spokesman for established normality and revisionist equilibriumn stasis. Nothing normal here, even if declared by the Harvard escapee. The conflicts and pressures come from every conceivable financial arena and marbled office, every nook and cranny. EURO CENTRAL BANK VS MARGIN CALLS
EU TROIKA BANKERS VS PIIGS PEOPLE The battle between bankers and people has been clear for over two years. The Greek Model is stark and clear. The bankers wish to redeem their toxic sovereign bonds by whatever means. The European Commission of babblers from Brussels has not shown any restraint, despite their forum being discredited as an empty chamber of voices. The finance ministers continue to talk a good game but with nothing under their belts to impress eager hands from the private sector in search of satisfaction, even a cheap thrill from a quick redemption. The Euro Central Bank has conspired to accumulate a mountain of worthless bonds in its basement, sure to disappoint their masters in the castles. Their balance sheets are running negative in the $trillions. On the other side is the people, the depositors at banks, the taxpayers to fund the government offices, even if their disheveled outposts resemble a tsunami on the day after in Athens. The stock investors and bond investors have been ravaged by the Troika who pay homage to the bankers with one vacant bailout after another. My forecast 12 to 18 months ago was that the bailouts would continue until the streets witnessed protest and violence. That has come. The pressures build for public release of anger. The dissipation is of people to the streets, out of their confined offices which no longer seem to harbor the function of added value in production terms. Random violence has grown common. The conflict and pressure will grow until the pressure spills over.
LIBOR BIG BANKS VS LILLIPUTIAN VICTIMS The LIBOR scandal is best described as an assault on the center of Western banking, where the discovery process as part of justice will pry open every conceivable filing cabinet, computer hard drive, email box, and contract in a drawer. Permission is granted to search. The process will relieve the pressures upon distorted markets and inherent collusion. The brush fires will extend from the basic LIBOR forest to the narco money laundering fields to the Allocated Gold account basements to the raided GLD fund vaults. The extended brush fires will be enabled by the dispersion forces known to the crowbar. As the light is directed to the scummy basements and putrid laundry fields, the potential exists for serious systemic change as the pillars of syndicate controls are slowly removed. That process will come by means of erosion, faltering, and dismantlement. The other side is chockfull of victims, the lists becoming gradually clear. Any recipient of a swap contract is a loser. Any underwriter to an adjustable rate mortgage is a loser. Any financial engineer who re-geared complex machinery via swaps is a loser. They will all line up in lawsuits, sure to capture attention. The gaggle of class action cases will be just as important as the collection of high profile cases. The armada of smaller victims will form like Lilliputians to tie down the oversized Too Big To Fail banks. Oh, how the Jackass despises that moniker! It means too big to control, too big to enforce the law, too big to succeed, standing as the billboard of failure on the flipside to the Fascist Business Model. Pressure will be relieved and lower potential energy will be realized as the big banks suffer massive lawsuit awards as pent-up grievances are addressed. Their control of the system cannot continue under such circumstances. The greater de-centralization of bank power will be the manifestation of much higher randomness. Systems might seek some concentration of power, but not like what the West has formed. The banks will eventually serve a noble but boring cause, of acting like utilities in bill payments, cash dispersal, and currency conversion. They will also manage credit dispensation. The age of the investment banker will revert to regional offices. The conflict and pressure will grow until the pressure spills over.
US BANKS VS LONDON BANKS VS EURO BANKS The first real evidence of bankers from one region attacking the bankers from another came not from the LIBOR scandal, but from inside word about Deutsche Bank. My banker source from Central Europe informed that in the wake of Josef Ackerman being deposed as CEO without ceremony, the once venerable bank has turned state’s evidence and is working closely with the Intl Court of Hague, the Interpol special fraud division, and other key investigators. The DBank officials wish to avoid prison time as they assist in attacks on London bankers and New York bankers for multi-$billion criminal activity. The new sheriff from the East is busy at work and has lined up some formidable snitches. The same source mentioned how Diamond of Barclays would cooperate in London to avoid prosecution, but he would be eaten by US wolves. He mentioned how DBank in Germany would avoid prosecution in the homeland but would be devoured by the US wolves. The stage is set for vast attacks, retaliation, and exposures. The result will be the bankers from all three camps decimated, discredited, and scattered to the wolves and their thirst for justice. They will tear each other apart with grand gestures laden in attack, appearing as self-preservation. Back in May, the Jackass wrote about how the Wall Street bankers would undermine Europe in order to deflect blame, as they would accelerate the sovereign bond bust in Europe in order to redirect attention from the USTBond bubble and wecked machinery to support it. That process is moving along as scheduled. What follows will be a grand amplification though, as each camp betrays the others in a battle for survival. Irony will win, as each will deliver mortal blows to the others, leaving all three camps in ruin. The public will not be aware of the source of informational grenades and computer file howitzers. The pressures between camps cannot be ameliorated by subsidiaries of foreign origin. The loyalties will be tested. Immunity offered by one group of authorities will not count for anything as the other authorities will ignore such deals and proceed with deeply damaging assaults. The jurisdiction lines will become battle lines in a banker war already begun. Defensive maneuvers will deliver deep wounds across the oceans. All camps will lose their banker helm positions of strength. The conflict and pressure will grow until the pressure spills over.
EASTERN TRADE PARTNERS VS USDEPT TREASURY A battle for trade standards has been building for five years. The dominant industrial producers in the East, the developing nations, have been gaining numbers and building strength. They oppose the USDollar standard, which funnels all flow through the mighty swift gates of US control. A recent important event saw the Chinese offer their $3 trillion in reserves, mostly held in USTBonds, as a core to a trade fund for usage by the many partners in global trade. The US is left handcuffed, unable to respond. The bank bond fraud, the unbridled USFed hyper monetary inflation, the heavy handed usage of banks as weapons (see SWIFT bank code tactic), the favored treatment by the inflitrated IMF and World Bank, these all invite retaliation. The pressure builds to conform to the USDollar reserve standard or face isolation if not military rebuke. The East rallies in response around the new global leader in China. They are developing a new trade settlement system. It is ready for prime time usage. They await the collapse of the USDollar flagship running aground in the troubled bubbly USTBond waters, contaminated by the acidic sovereign bonds, weighed down by arrogance. A vast differential in potential energy has set up a very dangerous global situation. The US$-based system is on its last legs, yet half the Western population cannot see the clear message. The billboards are too dominated by the corrupted press, which spews a banker message of resolve, recovery, and solutions. The chief negotiator and medical administrator remains Jack Daniels with his staff from Southern Comfort. They solve nothing. As the de-centralization of trade settlement becomes the norm, the dispersion of power centers will exert its powerful opposing forces. It will be a remarkable sight. The US might actually be left out almost completely from the process, and suffer walking through the doorway into the Third World. The Fascist Business Model has a portal to the Third World which is not well understood, as inefficiency and corruption push elements on the pathway. The USGovt officials will be powerless to stop the movement. The Chinese will be unfettered in pursuing the non-US$ solution. It is only natural to seek water from many alternate storage centers, to channel from the most available local supply locations, not just the USFed and the US big banks. The relief of vast differential forces is near. The Jackass has called it a Paradigm Shift in past work. Few comprehend it. The conflict and pressure will grow until the pressure spills over. August 4, 2012 Copyright © 2012 Market Oracle
|
