War

Despite a rare display of intelligence shown by a group of politicians, with the British parliament rejecting their Prime Minister’s call for war, at least for now; and despite serious questions raised by the likes of a former NPR reporter with years of on-the-ground experience in the Middle East who states that eyewitnesses say it is the Saudis who supplied the chemical weapons to the rebel forces; it seems almost certain that the US will be waging war in Syria, likely beginning with attacks launched from US naval vessels.

Most people might think this will be another “Libya” type of war with US techno-hardware pummeling the country for a couple of months and then it will be over. A bunch of political posing and sniping. Lots of discussion about whether annihilating people is legal! Little or no direct inconvenience to anyone in the US or Europe. And little consideration of the reality of those who will hold someone they love in their arms and experience the agony of seeing their beautiful friend demolished.

Why is this war less likely to be a brief campaign and more likely lead to World War 3?

1. There are 30,000 Russians living in Syria. If some of these people are killed, do you think Russia will just say, “Oh well. No problem.”

2. Russia is a long-time ally of Syria. They have a naval base there. They sell lots of arms to Syria. If Assad is toppled, Russia loses big strategically and economically: they wil likely lose their naval base; they lose a good arms customer; but most importantly, a new regime might be quite happy to allow the Qatari’s to build a natural gas pipeline across Syria to supply Europe with natural gas, breaking the Russian monopoly on the European natgas market.

3. Iran is an ally of Syria. Both countries are well aware that they are on the list of countries  whose governments the US planned to topple as early as 2001, as reported in this required-listening two minute video interview with General Wesley Clark:

So I came back to see him a few weeks later, and by that time we were bombing in Afghanistan. I said, “Are we still going to war with Iraq?” And he said, “Oh, it’s worse than that.” He reached over on his desk. He picked up a piece of paper. And he said, “I just got this down from upstairs” — meaning the Secretary of Defense’s office — “today.” And he said, “This is a memo that describes how we’re going to take out seven countries in five years, starting with Iraq, and then Syria, Lebanon, Libya, Somalia, Sudan and, finishing off, Iran.”

And Iran is an ally of China.

4. Cycles: Manfred Zimmel, whose excellent forecasting work we have discussed here and here, has for many years been predicting that the period from 2013 to 2018 will be “the War Years.”

5. Cycles: The uncanny Wheeler Cycle of War and Political Change, discussed here, arrives again at its most intense point for the risk of major war in 2014:

WheelerCycle

6. Cycles: Michael Mau’s books predicted world war for this period unless humanity can stand up to being manipulated into war yet again. Mau’s books contain detailed discussions regarding who manipulates politicians and populations into war. So this is a big test for humanity: do people want war or have they truly had enough of it?

7. Cycles: August 2013 was given here as a major potential economic turning point. Oftentimes, people and nations play their part when a big cycle is ready to turn.

8. The US badly needs a distraction from the revelations of illegal spying that arrive almost daily.

9. The US badly needs distraction from its financial failures and its upcoming battle over the debt ceiling. Even researchers from within the US Federal Reserve have admitted that the Fed’s money printing has had little positive effect, and they have announced that they would like to gradually stop printing so much. (Perhaps the White House will basically force them to keep printing to support a war?) And even that gold-bashing defender of the status quo, the Financial Times, began an article with this quote:

The world is doomed to an endless cycle of bubble, financial crisis and currency collapse.

And included this sentence in the same article:

A stable international financial system has eluded the world since the end of the gold standard.

(Side note: Numbers 8 and 9 are partial indications that things have not been going so well for the US lately. This too is a result of a specific cyclic influence, so if you are confident that a US war foray will be quick and successful, you might wish to contemplate what the news flow has looked like for the US for the last several months.)

10. There are always those powerful groups who stand to profit greatly, financially and politically, from war, as described so well by US Marine Corp hero General Smedley Butler in his booklet War Is A Racket.

So what’s it going to be, folks? Have we had enough of war? Or do too many still want war, or not care one way or the other? Whatever the numbers, it seems that humanity still does not understand that the advice “Do unto others as you would have them do unto you,” contains the idea that what you do to others you are doing to yourself. Humanity is one, though it appears that few are aware of their awareness that such is the case.

If you have chosen to have preparations in place for when it really hits the fan, and if you have not completed those plans, my suggestion would be that you wrap them up now. Not in a state of fear, not in a panic, but with definite persistence and logic. Perhaps the status quo in this world can hold on till 2014, or even 2015. But betting that way entails some serious risks. Besides, preparing for a life independent of the theftocracy–that is, working with gardens, greenhouses, plug-in vehicles, solar arrays, water wells, and so forth–is a lot of fun.

More cycles

Yet another instance of the accelerating flood cycle: a photo from the devastating Himalayan floods, indicating a stance people might wish to take during these times:

submerged-lord-shiva-idol-in-rishikesh-1

* * *

Despite being surrounded by the cyclic nature of physical life (breathing, heartbeat, blinking, day/night, tides, seasons, birth/death … and the less visible or invisible: sound waves, radio waves, x-rays, microwave cooking, evolution … and for a fun contemplation of large astronomical cycles, see this and this), for the most part, people tend to ignore cyclicality in favor of seeing life as a straight-line progression. This is unfortunate for at least two reasons: first, because all form is cyclic—form emerges, flourishes to some extent, and dissolves; second, because there are some not-so-obvious cycles that offer understanding for what is otherwise quite mysterious. In fact, here at Thundering Heard, we are on a path to discuss the biggest cycle of them all for people, a cycle that, once grasped, contains the answers to “little” questions like the meaning of life, why are we here, and so forth. But first, let’s get more adept at seeing the cyclic aspect of life and how important it is.

The Sunspot Cycle

There is a peak of sunspot activity every 10 to 13 years, with 11 years being the average for each cycle. A chart of the peaks and troughs of sunspot activity from 1926 to 2009 looks like this:

Sunspots_Longer_Annot3

Let’s look at the three peaks labeled A, B, and C.

The peaks of sunspot activity often really “rev people up” financially, that is, there is typically an excitation of human activity that leads to a financial market bubble that coincides with the sunspot peak.

Three peaks ago, the peak in 1980, labeled A above, coincided with the peak of the commodity price boom and price inflation that took place in the 1970s after Nixon defaulted on the US promise, made near the end of World War 2, to always support conversion of Dollars into gold. Those were the days when the so-called Misery Index (inflation plus the unemployment rate) was tracked in daily newspapers, and mortgage rates in the US rose to 18%.

Here’s a closer look at the last two peaks of sunspot cycle activity:

Sunspots_2_Annot

The cycle peak labeled B was in 1990 and corresponded with the peak in Japan of bubbles in their stock and real estate markets. This was the time when it was generally held that Japan Inc. would rule the world, or at least own it; that its economy would soon be the largest in the world. A single block of downtown Tokyo real estate was said to be worth more than all of the real estate in California. Now that’s a bubble! (We’ll see in our next post on cycles why that Japan bubble grew so large when we cover another cycle that also contributed to this Japan peak. When multiple important cycles converge, the results can be gargantuan.) Following that peak, Japan experienced what has come to be called The Lost Decade, though it has now run for two decades. Both their stock and real estate markets lost 75% of their “value” after that peak, and they still have not come anywhere close to recovering their former glory as Japan has been mired in nearly constant recession ever since.

The sunspot peak labeled C aligned with the peak in the internet/technology stocks in the Spring and Summer of 2000, another famous bubble. Again money flowed, this time into Pets.com, Webvan,com, Geocities,com, DrKoop.com, and many others, most of which had little going for them except an idea and a web site. Little or no sales, no profits—who cared! They were going to the moon. It was a New Paradigm. If you thought it was insane, you “just didn’t get it.” And the thing is, that craziness for internet stocks had been in play for a few years; that hoopla could have ended in 1998 or 1999. But it didn’t. It ended when the sunspot cycle peaked in 2000.

Looking back, it would have been great for the participants in those bubbles to be aware of the sunspot cycle peak. They could have sidestepped a lot of trouble. So what’s going to happen this time around? Well, for a few years, I have thought that  this economic cycle might hang on into the peak of the current sunspot cycle, called Solar Cycle 24, which was projected for August 2013. But Amon Ra may have thrown us a curve ball. It looks like this cycle will not have the usual single large peak, but rather a dual peak like Solar Cycle 14 from the early 20th Century. According to solar physicist Dean Pesnell of NASA’s Goddard Space Flight Center:

“This is solar maximum. But it looks different from what we expected because it is double peaked.” Pesnell noted similarities between the current cycle and Solar Cycle 14, which happened between February 1902 and August 1913 and experienced a double peak. If the two cycles are in fact twins, he said that “it would mean one peak in late 2013 and another in 2015.”

Here is a chart that shows the peak in 2000 plus our current cycle:

sunspts_predict_l

If the NASA guy is right, there should be a bubble peak in either 2013 or 2015. But a bubble in what? Here are some clues:

  • Lots of savings accounts pay only 0.01% in interest.
  • Mortgage rates got near 1% in Japan and 3% in the US. (Would you lend money to a stranger for 30 years for 3% interest? Neither would banks, which is why almost all mortgages need a guarantee from a government program or the banks won’t make the loan.)
  • Short-term interest rates in Germany and Switzerland recently went negative. That’s right, if you wanted to lend money to Germany or Switzerland on a short term basis, you had the pay them for the privilege.

If you think these phenomena don’t make a lot of sense, you are right. But it points to the culprit that has all the hallmarks of a monster bubble: the world government bond market. The bull market in bonds has been running for over 30 years. On May 2, if you wanted to lend money to Germany for 10 years, they would pay you an interest rate of 1.2%; the US, 1.6%. And if you wanted to lend Switzerland money for 10 years in December, they were paying a whopping 0.4%. Japan? 0.45%.

And in the case of Japan in particular, they are working very hard to devalue their currency, to make sure the yen falls in value. So the question is, who in their right mind would lend to these countries for such a pittance in interest, especially while most of them are printing money to intentionally debase the value of their currencies!?! You get a very poor interest rate and, if you get your capital back, it will be in a currency that will have fallen in value over 10 years. Yet, that is what institutions and people are doing. Recently, if you wanted to get a reasonable interest rate on 10-year government bonds, then you would have lend money to the country of Rwanda; they paid 7% on a recent offering of 10 year bonds. Best of luck getting your capital back 10 years from now.

When this bubble bursts, the consequences will be huge. This is not a bubble in one country, like Japan in 1980, or in one sector of the economy, like tech stocks in 2000, we’re talking about government bonds, worldwide! This is the market that supports military spending, education, transportation, and just about every safety net (in the US: Social Security, Medicare, Food Stamps, Medicaid, Unemployment Insurance, and so forth) on the planet. And you get this paltry interest rate when you might not even get your capital back in 10 years. A number of governments are on a clear trajectory for bankruptcy; there is a good chance that bond buyers will not get their capital back! And yet they lend huge amounts of money to these governments. Especially Baby Boomers, they have been pouring money into bond funds. Just like they poured money into stocks in 2000, and real estate investments in 2006. Oh well.

When do I think the bond bubble will pop? This year! 2013. I don’t think it can last to 2015. In fact, the bubble pop may have already started. And guess which institutions count government bonds as their major “stable” capital: banks. Yet another reason to watch out for the banks!

Furthermore, the solar cycle might actually peak this year. The NASA guy might be wrong about the dual-peak forecast.

What will it mean if this bubble pops? It means interest rates will rise, possibly a lot. This will strongly increase the amount of interest governments must pay on their debts. Their deficits will skyrocket.

Mortgage interest rates are closely tied to the government bond market, so mortgage rates will rise as well. (US mortgage rates rose from 3.88% to 4.35% just over the last week!) And if government deficits skyrocket, programs will need to be cut, so the massive support they are currently providing for the mortgage market will be in jeopardy, threatening even further rate increases.

Still, two cycles that we will discuss in the next post about cycles argue for that 2015 date.

* * *

I would like to make one thing very clear: If you woke up tomorrow and heard that a large “systemically important” international bank had collapsed, causing chaos in the rest of the financial system, and that most banks would be closed for some number of days, would you really be surprised? Probably not. Many people are starting to get the idea that the system is not exactly solid. I am certainly in that camp. So when I talk about August 2013 or some month in 2015 as the month when the real systemic collapse will commence, please know that, in my view, the more-than-sufficient conditions are in place for that full system collapse to happen at any minute. Discussions like the one above are an attempt to get a handle on probabilities. In terms of preparation, acceleration is not to be trifled with: I think that everyone should be doing what they can to be prepared now. If it turns out there is more time for preparation, fabulous, this type of preparation takes awhile and I’m sure we can all use the time. But that time may be short indeed. As the photo at the top of the post shows, when change arrives in your area, it may be monumental change.

A Forecast for the Next Eleven Years

Today we’ll review one of the single best pieces of economic / political / social analysis I’ve been lucky enough to see. Read this post and you’ll have an extremely important input for how the world will proceed over the next eleven years. How can I make such a statement? Because this analysis landed on my screen in December, 2007, and it covered the time period from 1995 through 2024, and it has been working extremely well. I promised more about cycles. This is from the world of cycles.

Understand this analysis and you will understand what Ben Bernanke of the US Federal Reserve has publicly admitted has been befuddling him and his colleagues.

At the time of publication at the end of 2007, this analysis said that we had reached a major turning point: That while the period from 1995 through 2007 had been characterized by optimism (think of all the “new era” talk), manias (think bubbles in stocks and real estate), high confidence, free enterprise, free trade, globalization, unfettered capitalism, and so forth–all of which had clearly been at the forefront during that period–that the period from 2008 through 2024 would be characterized by caution, fear, contraction, pessimism, restrictions on freedom, economies planned by the state, trade barriers, low confidence, and so forth. Here is part of what was presented:

Manfred_Pluto_Switch_ed

To put it mildly, an awful lot of people would have benefited if they had known about this huge switch that did occur, just as predicted, in January 2008. It really was as if, at the end of 2007, someone threw a big switch and changed things dramatically. Central bankers and politicians around the world are still scratching their collective balding heads about why all of the things they used to do in the past, things that would work to stimulate economies, are barely working today. At first they used their old tried-and-true methods–lowering interest rates, feigning confidence, stuffing cash into the banks, spending money on stimulus plans–and they got an anemic recovery at best. So they pulled out the really big guns. “Unconventional” methods, as they call them. Also known collectively as printing money. Lots of it. Enough since 2009 that they have basically tried to add the equivalent of one year of the US economy to the global economy.

What has it got them? Well, since the printed money went into buying assets rather than creating jobs, the rich and their vendors–Sotheby’s, Porsche, Armani, et al–have done very well. Everyone else, not so well. The huge divide between rich and poor is widening at an accelerating pace. Historically, that has always been a dangerous setup. You can only push people so far before they push back. Sometimes fiercely. Overall, what it got them was continuing recession and debt crises in Europe, a US economy with paltry growth at best, and China joined the club of getting themselves over-indebted to keep their economy growing, but now that excess of debt is coming back to bite them and their economy is rapidly losing steam. Japan remains in near-continuous recession no matter what they do.

Since the analysis above has been working remarkably well for 18 years, it makes a whole lot of sense to figure that it will keep working for the next eleven years. That was the claim for this cycle, that it would have two phases, one from 1995 through 2007, and the second, radically different in tone, from 2008 through 2024.

What could be the cause, the source, of such an influential cycle, one that seems to have changed the energetic tone for the majority of people, from excessive optimism from 1995–2007, to caution from 2008–2024? Let’s show more about what the top of that table looked like when presented in December 2007, right at the point of the big switch:

Manfred_Pluto_Switch_ed2

The table was astrological in nature.  It showed what was about to happen as Pluto moved  from Sagittarius into Capricorn.

This outstanding piece of analysis was put forth by Manfred Zimmel through his web site  in his Forecast Issue for the year 2008. At the web site, you can sign up for his free newsletter or paid subscription service. The information above was given to his paid subscribers only.

Now I know that some readers here have a low opinion of astrology. I would say two things about that: First, I agree that popular astrology as shown in daily newspapers and glossy magazines is worse than useless. Second, as with most complex fields of endeavor, there is a small group of practitioners doing excellent work and a much larger group of practitioners who do not. But excluding astrology from one’s view of the world precludes access to information like the above, which can be exceptionally useful in guiding real world decisions. Also, it can provide an outstanding “truth filter” for claims about the world. For example, the article at this link contains five predictions Bernanke made in 2008 that, armed with the information above, one could see at the time that these were more than likely to be wrong. They turned out to be, in fact, entirely wrong:

1/10/08 — The Federal Reserve is not currently forecasting a recession. WRONG

2/27/08 — I expect there will be some failures [among smaller regional banks]… Among the largest banks, the capital ratios remain good and I don’t anticipate any serious problems of that sort among the large, internationally active banks that make up a very substantial part of our banking system. WRONG

4/2/08 — In separate comments, Mr. Bernanke went further than he had in the past, suggesting that the Fed would remain aggressive and vigilant to prevent a repetition of a collapse like that of Bear Stearns, though he said he saw no such problems on the horizon. WRONG

6/10/08 — The risk that the economy has entered a substantial downturn appears to have diminished over the past month or so. WRONG

7/16/08 — [Fannie Mae and Freddie Mac are] adequately capitalized. They are in no danger of failing… [However,] the weakness in market confidence is having real effects as their stock prices fall, and it’s difficult for them to raise capital. WRONG, they needed bailouts to the tune of $160 billion.

The point here is that automatically excluding information because of its source can put a person at a distinct disadvantage in understanding how the world works and where it is heading. Anyone who has read more than a couple of my posts knows that I regularly give the US Federal Reserve a well-deserved lambasting for its lies, its attempts to get over-indebted people to borrow and spend more, and its only real goal: protecting the stranglehold that the large banks have on our society. But I used one of their reports in 2005 to decide when to sell out of real estate. They published a great research paper in 2005 that analyzed the history of maybe 30 real estate booms and busts from many countries. They said that real estate bubbles popped in the following manner: once sales volume peaked, price peaked, on average, six months later. US sales volume peaked in October 2005, and the US price peak was in June 2006, so their estimate was quite good. I took their research seriously and sold in Feb 2006. They, however, did not take their own research very seriously, at least in their public statements. Here are some quotes from Bernanke in 2007 (I won’t bother putting the WRONG label after each.):

7/1/2005CNBC interview:

INTERVIEWER: Tell me, what is the worst-case scenario? We have so many economists coming on our air saying ‘Oh, this is a bubble, and it’s going to burst, and this is going to be a real issue for the economy.’ Some say it could even cause a recession at some point. What is the worst-case scenario if in fact we were to see prices come down substantially across the country?

BERNANKE: Well, I guess I don’t buy your premise. It’s a pretty unlikely possibility. We’ve never had a decline in house prices on a nationwide basis. So, what I think is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s gonna drive the economy too far from its full employment path, though.

10/20/05: BERNANKE: House prices have risen by nearly 25 percent over the past two years. Although speculative activity has increased in some areas, at a national level these price increases largely reflect strong economic fundamentals. (Ha!)

So, acting on the Fed’s research can be very helpful. Acting on their opinions and forecasts is a mistake. They aren’t trying to help you, they are trying to help the banks. Anyone who understands that distinction can put Fed forecasts in the proper perspective.

So the next time you hear rosy predictions about the great recovery that is turning out to be perennially “just around the corner,” whether those predictions are from someone who is mistaken or someone with malevolent intent, now you can understand that what these forecasters are up against is this: for an economy based on debt to grow, they need to get people to borrow more money. And until 2024, people are under the influence of Pluto in Capricorn, and most of them don’t really want to take on more debt. Quite the contrary, a lot of them have replaced the notion of “how much debt can I qualify for” with a wish to have less debt. Many have now seen the slavery of debt and they didn’t like what they saw.

Perhaps after 2024 the economists will be able to stimulate the majority’s “animal spirits” again. The question is: can this financial system, which depends on the constant growth of debt, survive through 2024 with people not wanting more and more debt?  I decided quite some time ago that the answer is no and persistently take those pleasant actions that ready a person for financial system collapse.  I take the influence of this Pluto “big switch” as a small but important part of the energetic change bringing us the long-awaited Transition.

Thanks to Manfred Zimmel for permission to reprint this excellent piece of research.

What is the Transition? Conclusion

Now you can’t say that no one ever told you.
–David Daniels

In Part 7, I promised predictions for this installment. And there will be predictions. The important question is: predictions based on what? The web and the media present piles of predictions, most of which turn out to be wrong.

So based on what? Evidence; and a model of how things work. Most predictions go awry because they aren’t based on either. Or if they are said to be based on models, the models are flawed.

Evidence is what Part 1 through Part 7 were all about. And all of us, consciously or not, operate from models of what the world is like. If we walk into a dark room and flip a light switch, we are operating from a model of the world where electricity is flowing into a building with wires connected to lights controlled by switches, and flicking a switch–that often sits precisely where we expect it to be even if we’ve never entered that room–lights one or more light bulbs. We have all sorts of such models in our heads having to do with gravity, internal combustion engines, computers, shoelaces, banks, the properties of water, etc. When correct, these models have predictive abilities that make our interactions with the world relatively easy and efficient compared to operating without such models.

So these models lead to predictions about the future, and when correct, they yield excellent results. When we turn the key in a vehicle ignition, we expect the engine to start, and typically we aren’t disappointed. Thus we made a prediction about the future, one that has generally turned out to be true. Perhaps not every time. Once in awhile, the car might not start. But the results are good enough, the model reliable enough, that we rarely “give it a second thought.”

In my view, this scales up to the major aspects of our lives. Though it does seem that, the larger the scale, the greater the disagreements people have on the topic. Yet I contend that getting large-scale models right is important and possible. When we get the large scale models wrong, life can be unnecessarily confusing and difficult; when we get them right, the results can be profound.

Bias, the bringer of difficulty

We all like to think we aren’t biased, but on this planet at this time, that is a rare achievement. It runs deeper than we like to admit. Were that not true, the mystics would not have to advise us to pierce the veil. Without bias, we would likely see that there is no veil.

Let’s look at a good example of why people have a tough time getting large scale models right. This is one where, were it a multiple-choice question on a standardized test, most highschoolers would get it right. But on this one, the “masters of Wall St” got it wrong. Big time.

Several decades ago, one researcher pointed out that the economy of the USA operates on a roughly 25 year recession/depression cycle, that is, roughly every 25 years, there is either a recession or depression. Yes, there could be recessions at other times, but you could rely on the idea that one would happen roughly every 25 years.  This cycle has been active since early in the 1800s and predicted that there would be a recession or depression starting ideally in December, 2007. I told a number of people about this ahead of time, and few thought the idea had merit despite the historical track record, part of which looked like this at the time:

9/1857: very serious recession 6/1857-12/1858 (18 months contraction)
2/1882: depression 3/1882-5/1885 (38 months contraction)
7/1906: serious recession 5/1907-6/1908 (13 months contraction)
10/1932: serious depression 8/1929-3/1933 (43 months contraction)
7/1958: recession 8/1957-4/1958 (8 months contraction)
12/1981: very serious recession 7/1981-11/1982 (16 months contraction)
12/2007:

Every August, George Soros has a meeting at his Long Island estate for the biggest movers and shakers on Wall St. By August 2007, the sub-prime mortgage market was already falling to pieces. Soros asked his 21 guests, people who have the money to buy the purportedly best research on the planet, whether the current situation would lead to a recession in the US. Twenty of twenty-one said no recession. But right on schedule for the 25 year cycle, a recession started in December 2007. Some say we are still in the depression that started then, and there is good evidence for that.

So how come people would ignore such a prescient cycle with a long and excellent track record? First, because while most people are well aware of being surrounded by cycles such as heartbeats, breathing, night and day, moon phases, ocean tides, the seasons, years, birth and death, to name just a few cycles to which we are subject, they believe that such cycles couldn’t possibly apply to an economy, that such thinking is equivalent to voodoo. Second, the researcher who was the first to publish about this cycle was Edgar Cayce, and to most hard-nosed Wall St people who think they are operating by logic and science, how could Edgar Cayce possibly be right about anything.  What they think of as hard-nosed is actually thick-skulled because Cayce was right about plenty of things. But he doesn’t fit their constrained view of “logic and science,” so out goes Cayce and anyone like him. While it would be fun to say “too bad for them,” when their firms failed in 2008, it was the rest of us who got stuck with the bill for bailing them out so they could keep their bonuses, stock options, and corporate jets.

So as we all know, in 2008 we got a humdinger (serious academic term) of a recession despite the bad models being used by the Wall St mavens and people like Fed Chairman Ben Bernanke that said we would not get a recession. So why did the masters of Wall St and most others dismiss such information? Probably because, if they heard the source of the prediction, most would discount something from Edgar Cayce because it was information channeled from the other side. And “everyone knows” that stuff is only for new age goofballs. So the real answer is: bias. People would rather hang onto their bias than admit that correct information is useful if they despise the source.

Oddly, another researcher, Manfred Zimmel of www.amanita.at, later figured out the basis for Cayce’s information. OK, check your biases. For some of you, this is about to get worse. Here’s that same recession/depression series from above exactly as I first saw it, presented by Manfred, in 2006:

Ø conjunction 9/1857: very serious recession 6/1857-12/1858 (18 months contraction)
Ø conjunction 2/1882: depression 3/1882-5/1885 (38 months contraction)
Ø conjunction 7/1906: serious recession 5/1907-6/1908 (13 months contraction)
Ø conjunction 10/1932: serious depression 8/1929-3/1933 (43 months contraction)
Ø conjunction 7/1958: recession 8/1957-4/1958 (8 months contraction)
Ø conjunction 12/1981: very serious recession 7/1981-11/1982 (16 months contraction) – last deep recession
Ø conjunction 12/2007:

Yep, you guessed it (heh), the cycle is actually the Jupiter-Pluto conjunction cycle. So an astrological model has reared it head! Yikes, so if the Wall Streeters had heeded either the channeled or the astrological model for this cycle, they could have saved their firms tens of billions in losses and turned 2008 into a year of tens of billions in profits by aligning their trading with the idea that a recession was very likely. This is not a stretch since there were hedge funds that did make billions from the financial collapse in 2008.

If a model is clearly working in significant ways, it is useful to ask whether allegiance to one’s biases is more important than being on the right side of major trends on this planet. One of the worst things a person can do in this rapidly-evolving environment is get in front of a major negative trend and stay put thinking that trend is not important. Millions have gone bankrupt in recent years doing just that. In the markets, they call it picking up pennies in front of a bulldozer. Sometimes having a good or bad model is a matter of life or death, for example, a bad model about the nature of the Nazi party brought horrific suffering and the deaths of many millions. (Side note: Thundering-Heard.com exists because I think understanding and heeding good models versus bad ones could very well be a matter of life or death over the next few years, or perhaps even months.)

Handling predictions

One more brief topic, and then on to predictions about the Transition: What is a person supposed to do when they hear a prediction about the world? Assuming that they want to do anything at all, here is an approach from some people whose livelihood depends on their expert handling of predictions. When you hear a prediction:

1. Put aside the natural human propensity for wanting to know immediately whether the prediction is correct. This is emotion coming to the fore. All of the remaining steps are about eliminating emotion from this process so that rationality, research, and observation can take their rightful place.

2. Consider the prediction a script about how the future will unfold.

3. After giving it some thought, assign a rating, say from 1 to 100, on whether you think the predicted event can possibly emerge from current conditions. If it has any chance of emerging, write down the script and place it in your script pile wherein scripts about the future are sorted by your numeric ranking. If there is no chance that the event can arise from current conditions, then throw it out.

4. If the outcome of a script would be important to you, do research on the topic and, if it is appropriate based on your research, adjust your numeric ranking for the prediction in the future script pile. If there is a way to investigate the track record of the person making the prediction, and on the internet there often is, this can help a lot in rating a prediction. People with a bad track record are typically operating from a narrow or faulty model and usually continue doing so. Few people, especially people who have achieved some fame using one model, will admit their errors and find a better model.

5. Watch as evidence about all of your scripts unfolds and adjust your script pile accordingly, tossing out scripts where emerging events show a script to be faulty, and upwardly adjusting the numeric rankings of those scripts where the evidence is pointing to the idea that they might be right.

Through this process, predictions that are false are discarded and those that are true rise to the top of the pile. Emotions are kept at bay, biases fall as evidence accumulates, observation and logic guide the process. And you learn a lot about how the world works.

The Evidence

So what have we observed?

1. Acceleration, evident in a wide variety of ways, including:

2. Weather extremes and wildness, including floods, windstorms, typhoons/hurricanes, tornadoes, heat waves, droughts, superstorms, etc. The insurance industry reports a greater than tripling of “loss-related weather events” since 1980. (Part 1)

3. Earthquakes of magnitude 6.0 or greater up more than 50% since 1990. (Part 1)

4. Tsunamis up fivefold in this century versus the last. (Part 1)

5. Volcanic eruptions clearly on the rise. (Part 1)

6. Magnetic poles on an accelerating shift accompanied by hemispheric temperature changes . (Part 2)

7. Sea level rise. (Part 3)

8. Species extinction rising exponentially along with rising human population. (Part 3)

9. Sinkholes increasing rapidly enough to go from obscurity to the mainstream media. (Part 4)

10. Asteroid encounters appear to be on the rise. (Part 4)

11. Nuclear plants compromised by the increasing earth and weather changes causing problems for people. (Part 4)

12. People’s perception of time as speeding up. (Part 5)

13. An exponential rise in the price/performance of technology. (Part 5)

14. Exponential growth in money, debt, and unemployment. (Part 5)

15. Exponential growth in the amassing of physical gold by those, such as China and the oil sheikdoms, who supply real goods for all this printed money. (Part 5)

16. Relentless growth in the prices of real goods such as food and fossil fuels in response to the massive influx of printed money.

17. Despite an exponential increase in money printing, borrowing, and spending by governments to simulate economies, these same economies remain moribund and these tactics clearly show diminishing returns. (Part 5)

18. The “age of truth” brings increasing revelations of lies and truth. (Part 6)

And with people, acceleration is bringing increases in (Part 7):

19. Communication/connectedness.

20. Inner work.

21. Insistence on knowledge over belief.

22. Group consciousness.

23. A changing attitude toward the physical sciences.

And increasing exploration of (Part 7):

24. Healing methods.

25. The energetic nature of everything.

26. That energy is different at different locations on the planet.

27. The multi-plane nature of life.

28. Interaction with nature intelligences.

29. People changing from “what can I get” to “what can I do to help.”

And accelerating (Part 7):

30. General insanity.

31. Use of legal and illegal drugs and of alcohol to cope with acceleration.

Predictions

OK, so where will this lead us? Does anyone have a model that accounts for accelerating change in most if not all aspects of life on this planet? A model which we might then be able to look to for guidance about the future, from which we could actually expect some reliability?

Surprisingly, yes.  In early 2007, I was fortunate enough to run into such a model described in a book published in 2003. It went into my script pile at the time. Given that the book had been published four years earlier, I was able to evaluate whether a portion of its predictions were coming true or not, and they definitely were. I was already convinced prior to reading the book that we were likely to experience an all-out collapse of the financial system within 5 to 7 years. The book entirely agreed with that perspective, but it took things way beyond the financial world and covered the topic of the Transition from historical, geologic, meteorological, political, educational, occult, and cosmological perspectives, to name a few.  And this wasn’t a book of vague wishy-washy predictions that could be interpreted several ways. It was exceedingly specific. Here is what it said—and this was in 2003, before the explosive growth of sub-prime mortgages being sold to anyone who could fog a mirror, with those mortgages being packaged up and sold to institutions across the world as blue-ribbon, good-as-gold, AAA-rated securities—about the real estate bubble. And this was when almost all people considered real estate a perfect investment, something whose price could never go down, something that was definitely not a bubble at all:

Many who pulled their money out of the stock market…rushed to invest these funds in real estate, but again this mad rush created yet another bubble of inflated real estate. Finance companies, mortgage brokers, and banks readily accorded mortgage loans to these buyers. Once they obtained the signature of the borrower on the loans papers, they sold the mortgages to non-bank secondary mortgage companies. In order to purchase these mortgages, these secondary mortgage companies borrowed money by issuing bonds and derivatives on these bonds.

In essence, though this convoluted maze of borrowing, these non-bank financial institutions…own indirectly most properties purchased with a mortgage…

As the world economy deflates, more and more people will lose their jobs, they will default on their house mortgage payments, and be thrown out into the streets. The sinister secondary mortgage companies will take possession of the property.

When mortgage defaults reach a critical mass, the secondary mortgage companies will collapse leaving a wasteland of properties. This will spell the end of the financial grip the Dark Forces hold on the world, and the towers of finance they have spent centuries to build will fall one by one like dominoes.

So what we have here is an exceedingly accurate description of the work-in-progress that is the real estate bubble and its associated derivatives taking down the financial system. Lots of “dominoes” have already fallen. In 2007, Wall St had five big investment banks. The sub-prime mortgage collapse took three of them to insolvency—Merrill Lynch, Bear Stearns, and Lehman Bros—which were either broken up or absorbed into other companies, and it would have taken down the last two, Goldman Sachs and JP Morgan, but the government temporarily stabilized them by saying the they were now backed by FDIC deposit insurance even though they had never before paid a penny into the FDIC insurance program. In fact, they had shunned the FDIC program because they wanted less regulation.

As tracked by the Mortgage Lender Implod-o-Meter, 388 US and 13 non-US mortgage lenders have gone belly up so far. This includes giants such as “secondary mortgage companies” Fannie Mae and Freddie Mac and lenders such Countrywide, Washington Mutual, and Wachovia Mortgage. (The full list is here.) And now with sinister companies like Blackrock rushing in to buy foreclosed houses, the game is not completely over, but it won’t be long before the dominoes have all fallen.

Anyway, back to this book I’ve been speaking of. Of the 31 trends identified above, this book covered 26 of them, and for all I know, I may have forgotten references to the other five.

The book is The Sanctus Germanus Prophecies, Volume 1 by Michael Mau. It was followed by Volume 2 in 2006, and Volume 3 in 2009. The books can be purchased here or here.

There are a lot of books out there these days that are really highly-padded versions of what  could be a five or ten page article.  Mau’s books are not in that category, as demonstrated by the quote above, that is, the real estate crisis was discussed in detail on one page and that was it, the author moved on to other topics.  So an attempt to summarize the vast array of information in these books will do them serious injustice, but I will make the attempt anyway as a conclusion to this series of posts. The best advice, of course, is to read the books:

We are living in a period of transition during which much that impedes humanity’s evolution—warmongering, the manipulation/exploitation for power and profit of the many by a very few, the intentional distraction of people from their higher self, and so forth–will be cleared away. Energetic acceleration and earth changes will assure that this clearing/cleansing process takes place. The transition is a normal period of relative rest in the vast multi-billion year evolutionary cycle of our solar system called the manvantara in which people evolve through hundreds and even thousands of incarnations. Many people, called lightbearers in these books, incarnated now with the intention of helping people through this turbulent process and preserving, through the period of the transition, that which is conducive to people’s true evolution. The overall goal of the transition is to place humanity in a new golden age in which people can pursue soul liberation with excellent support and without interference. Getting to that golden age requires the dissolution of those organizations that serve the interests of those who seek to control everyone else for their own power and for material acquisition far beyond what any person would need during a lifetime. Since these organizations are not going quietly, we are dealing with increasing turbulence during which all people will have to decide where they stand with respect to war and the array of slaveries that permeate civilization. The degree of turbulence that can be expected is strongly related to whether or not people wake up and stand on the side of freedom and conscious evolution.

Volume 2 lists twelve regions on the planet that are called spiritual regions, higher elevation areas away from the coasts that, while not immune to the earth changes, are relatively safe with respect them, and which are conducive to lightbearers retrieving those abilities they cultivated in prior incarnations.

Here are some highlights from the timetable at the back of Volume 2:

2005-2012:

  • Severe worldwide economic and financial crisis
  • World economy hits bottom and stays there, all conventional efforts to revive it fail
  • Water-related catastrophes: tsunamis, hurricanes, rise in sea level, floods of lowlands and coastal areas
  • Spiritual Regions on higher ground begin to develop: initial preparations

2013-2020:

  • Water-related catastrophes multiply making more and more low-lying areas uninhabitable
  • Massive population displacements to higher ground
  • Spiritual Regions take hold as lightbearers find their way there
  • Period of Reconstruction: Transitional societies begin to consolidate in the Spiritual Regions

2021-2080

  • Indications of major continental shifts, rifts, and movements begin to perturb the earth’s surface

There is a lot more to these books that what I’ve summarized here. They place the Transition in a perspective that ranges from the innermost to the cosmic. They say that, far from being over, that we are early in many of the accelerating trends identified above. These books have risen to the top of my “script pile.” They have become a stable platform from which to view the changes and turbulence in the world, and have given me confidence that life on this planet can and will be changed, and vastly for the better, and that this goal is way beyond worth working for. These days, when I hear a prediction–and I do seek out a lot of them–if it clearly conflicts with the information in these books, I relegate it to the category of “very unlikely,” and that repeatedly works very well.

One of the main reasons that so many predictions go awry is because they are drawn from experience of a small slice of life. We hear predictions all the time about finance, politics, weather, health, the use of energy, the environment, social trends, and now even meteors and comets. I contend that so many of those predictions go awry because they work from a narrow band and fail to take into account the larger context. Most would relate to maybe one or a few of the 31 trends identified above. Mau’s books place almost all of these individual trends in the context of a much larger one.

And seeing all of these trends in their larger context is precisely what we need right now as change permeates, well, just about everything! A narrowly focused model has no chance of accounting for across-the-board acceleration in, for example, finance, earth changes, mass shootings, and the emergence of truth.

So what’s a person to do about all this?

It is truly up to each person.

What would I do? I will provide a detailed post about that soon where I will contend that a wait-and-see attitude about these changes is no longer appropriate. Life is, as usual, being very kind by giving us a preview of exactly how this will all unfold by not bringing change all at once, but by ramping up all of these trends. But it’s up to us to read the signs and take action.

In the mean time, if you haven’t done so already, you may want to do your own research on these topics. If you come to some understandings, an action plan may naturally emerge from what you learn.

One piece of advice I would give is to never underestimate the power of an accelerating trend. As trends become obviously exponential, they can be quite breathtaking in their speed, power, and scope. As a friend from Cyprus told me: “On Friday night, when we went to sleep, everything was normal. On Saturday, we were told that the banks were closed and that we would have very restricted access to our bank accounts and that we might lose a lot of our the money.” When things change these days, they can change radically and quickly.

There are suggestions for dealing with the collapse of the financial system in the post What then can we do?.

And I leave you with outstanding comments on this topic from Gandhi: View the Forces of Nature bringing Earth Changes as Opportunity to Change the World.

Thanks very much for reading this long series and this long post.

We interrupt this program…

For two items:

1. The Cyprus Bailout
2. Gold: Last Chance

That title phrase was used when normal television programming was to be interrupted for a special news announcement. And this post is an interruption of sorts—of the What is the Transition series—though actually it is a continuation of a general theme here: Lots of the events that we are all seeing—from earth and weather changes to financial events to the fact that more and more people are taking up meditation by the day—are hints, clues, indicators of things to come. They are not isolated one-off events. They are part of a trend, signs to be read and understood to see what’s coming next. Life has been very kind, bringing things on in evolutionary fashion for anyone who wishes to heed the signs. But things are ramping up. This strongly favors action over a wait-and-see attitude. This first story is a perfect example:

1. The Cyprus Bailout

Europe Does It Again: Cyprus Depositor Haircut “Bailout” Turns Into Saver “Panic”, Frozen Assets, Bank Runs, Broken ATMs

The fifth European national bailout pertains to Cyprus, where receipt of the bailout money is contingent on the confiscation of money directly from people’s bank accounts. The government will take 6.75% of the deposits of anyone with under 100,000 Euros. And they will take 9.9% of anything over 100,000 Euros.

The people will not send in this money, it will be taken directly from their accounts on Tuesday if the Cypriot legislature approves the bailout plan.

Funds to pay the levy were frozen in accounts immediately, ECB Executive Board Member Joerg Asmussen said. The levy will be assessed before Cypriot banks reopen on March 19 after a March 18 national holiday. Sarris said electronic transfers will also be limited until then.

When bankers and politicians want someone’s money…

If a word to the wise is sufficient, one can only hope that more will gain wisdom from this event.  One German newspaper is already suggesting today that a 15% “wealth tax” be levied in Italy to help with its debt problem.

2. Gold: Last Chance

Jim Sinclair (there is always a link to his web site JSMineSet.com on the Thundering-Heard BlogRoll) held lots of gold in the precious metals bull market of the 1980’s, riding the price from $40 to $850 per ounce. He sold his holdings on the very day of the top price in 1980 and thus entered the ranks of investment legends.

In 2003, he started a web site and went public with the prediction, which he reiterated many times in the years that followed, that gold would rise from its 2003 price in the mid-$300’s to $1,620 per ounce by January 2011. He was roundly derided for both the predicted rise of the price and for the precision of the predicted timeframe. It turned out he was off by 8 months: gold’s price did not rise to $1,620 until August of 2011, not January.

The gold price in dollars has been in a sideways correction since late 2011. Recently, Jim has been pounding the table that the current sideways movement in the gold price will be complete before the end of this month, March 2013, and begin its next phase of upward price movement to $3,500 per ounce and beyond. When Jim makes predictions about gold, it pays to listen.

If anyone has been hesitant about buying gold because of claims by those who have been wrong all along about gold that the gold bull market was over, that the “gold bubble” has popped, let’s just look at a few charts, first of gold, and then of charts where bubbles did pop. I think you’ll be able to clearly see that the people claiming a “bubble pop” for gold don’t know the first thing about how to read charts, meaning that they know very little indeed about financial markets. Here’s the longer term chart of gold, from the year 2000 through now:

GoldSince2000 Notice that sideways price drift at the top right of the chart? Chart readers call this a “correction in an ongoing bull market.” It’s a bull market taking a breather before powering higher.

Now, want to see what the chart of a real popped bubble looks like? Here’s a chart of the Nasdaq stock index from Stockcharts.com. This index represented the internet and tech stocks during that time when we were told that there was a new paradigm, that everyone remotely connected with technology was going to be rich rich rich because they had started a web site to sell, well, whatever, it didn’t matter at the time:

Nasd_Bubble

Notice the parabolic upmove as price increased 15-fold in less than 10 years and then: SPLAT! A high-speed drop of 78% in just over two years. Thirteen years and trillions of printed dollars later, the Nasdaq is still 36% below that all-time high price.

Here’s the chart of crude oil from 2003 to 2009 with price rising to $140 per barrel and then crashing back to $32 per barrel in less than a year:

CrudeCrash

Note in both of those cases, no sideways price movement for months and months, as is seen on the gold chart, just a sharp fast very-nasty price crash.

I think Jim Sinclair is correct. I published back in June 2012 (What then can we do?) that people might want to complete their conversion from paper/electronic currency into gold by August 2012. That was a good idea. But cycles research at the time showed that it was possible that we would get one more price downmove, into March of 2013 at the latest, so I did not label that Summer 2012 opportunity as the “last chance” to get gold at a decent price. Now price has come down again into that same area where it was during the Summer of 2012. This time I think that “last chance” phrase is appropriate. Jim Sinclair says, and I agree, that after this month, you won’t ever be able to buy gold anywhere near $1,600 per ounce again.

Gold Goes Mainstream

Gross: Stock and bond managers today must be alchemists: turn lead into gold. NOT likely. Too much lead (bubbled assets).
–Tweet from Bill Gross, Founder of PIMCO, which manages $1.8 trillion

**************

“Do you own gold?” “Oh yeah. I do…There’s no sensible reason not to have some.”
–Ray Dalio to the Council on Foreign Relations

This is being written to put the precious metals market in a larger context for those people who still see the world proceeding much as it has proceeded in the past, a world without the large financial and supply chain disruptions that we foresee.

Strong multi-year upmoves in the price of any asset, aka a secular bull market in that asset, go through three stages:

  1. The speculative, early-proponent phase during which the mainstream investment community ignores or derides the potential of that asset.
  2. The mainstream phase, where the mainstream decides that exposure to that asset is a good idea for just about everyone.
  3. The mania phase, where just about everyone feels that they must own that asset and will tell you so when you meet them by chance in the supermarket.

Phase 1 for gold has been marked by derision from the mainstream investment community. Quoting Keynes, they call gold the “barbarous relic.” Otherwise-intelligent economic commentators such as Nouriel Roubini have been calling for a price top in gold for several years. Some who are old enough to have experienced the gold bull market of the 1970s have been saying, “We heard all this before in the 1970s, anyone who buys gold now will regret it later.” All of these people have been wrong all along as gold and silver have powered higher in price.

During most of Phase 1, the major central banks of the world have been sellers of gold, preferring to buy government bonds of various countries (such as Greece and Spain!) to “get a return” on their money. Gold has been a far better investment for the last 12 years. Over the last three years, central banks have become net buyers of gold, to the tune of hundreds of tons per year. Most but not all of this buying has come from Asia as the western central banks have been preoccupied with printing money in a mad scramble to keep their markets afloat.

Gold has been in Phase 1 since 2001. Most in the financial community regard it as an annoyance when their clients ask about it. The price increased from $256 in 2001 to $1,911 in August, 2011.

A couple of weeks ago, Ray Dalio gave a presentation to the CFR. He was asked if he owned gold, and he said, “Oh yeah. I do.” This marked the start of Phase 2, the mainstream phase.

Who is Ray Dalio? Most people in the investment community respect him as the best active hedge fund manager on the planet. We mentioned his firm, Bridgewater Associates, in a previous post. They manage about $140 billion. Ray is highly respected in both financial and political circles.

And the CFR is the Council on Foreign Relations. If you had to pick one organization that has the most influence on the mainstream political thought in the US, it would have to be the CFR. It was founded by the Rockefellers. You have to apply for membership. There are currently 4,700 members, including Bill Clinton, Robert Zoellick, Janet Yellen, Paul Wolfowitz, Lloyd Blankfein, Jamie Dimon…in other words, the CFR is the public face of The Powers That Be/Were.

Now that all of these mainstream movers and shakers have heard from what some consider the smartest money man on the planet that owning gold is a good idea, well, if we haven’t yet convinced you to get rid of a mainstream financial advisor such as a broker, said broker is likely to be calling you in the not-too-distant future with their “innovative” idea that you should get some gold. Of course, being mainstream, they will likely advise you to own it in paper rather than physical form, which will be a big mistake, but that will be their advice. And they will advise that you put a maximum of 5% of your assets into gold or gold mining stocks. In normal times, this would characterize the mainstream phase for gold, during which its price would rise steadily for years.

More evidence that we’ve entered the mainstream phase comes from Bill Gross, known to many as the “Bond King.” Gross founded PIMCO, which manages over $1.8 trillion. Yes, that’s trillion with a T. Almost all of the money is in conservative bond funds. But here’s a tweet this week from Gross:

Gross: Stock and bond managers today must be alchemists: turn lead into gold. NOT likely. Too much lead (bubbled assets).

Note that Gross, the Bond King, is saying that stocks and bonds are bubble markets. That money managers should turn that lead into gold. Though he also says that’s not likely.
Those who hate gold claim gold is in a bubble. Great examples of bubble markets are internet stocks in 1998 through early 2000; or real estate running up to 2006; or government bonds now. Gold, on the other hand, has had a nice steady rise for years, nothing meteoric or bubble-like at all. And here is someone, Bill Gross, who may know more about bonds than anyone on the planet, saying that bonds and stocks are the bubble, not gold.

Gold can’t possibly enter a bubble until it enters Phase 3, the mania phase. During this phase, you will be regaled on a regular basis from media sources and individuals with stories of people who got rich from gold and silver. Like the stock day traders of the year 2000, or the real estate flippers of 2006, there will be lots people trading gold on a daily basis, probably at gold trading shops like the day trading shops that were operating in 1999. People will be quitting their jobs to trade precious metals to “make their fortune.” 90% of people who talk about gold will assure you that it is the surest thing on earth to guaranteed riches. CEOs of gold mining companies will be like rock stars, getting interviewed by Charlie Rose. That’s what a bubble looks like. How many people do you know who own gold and silver?

Now, with the acceleration that is all around us, it is unlikely that we will proceed through these three phases of a secular bull market as we would in normal times. It is far more likely that gold will have a meteoric rise quite soon. But if you think that the world will proceed in a conventional manner in the years to come, we have outlined the path of the precious metals for you.

Slings and Arrows

To be or not to be, that is the question:
Whether ’tis nobler in the mind to suffer
The slings and arrows of outrageous fortune,
Or to take arms against a sea of troubles
And by opposing, end them.
Shakespeare, Hamlet

Sometimes slings and arrows feel very difficult indeed. But sometimes, and I guess some would say always, they are our friends, as they help to end pernicious cycles. Our increasingly-being-shown-as-notorious financial system is experiencing its end-of-cycle as its lies and chief liars are exposed, as major world banks have been shutting down public access to their systems for days at a time, as criminal hackers have figured out how to pilfer billions from the accounts of high net worth individuals at banks, etc.

We documented the base-level lies in The financial system is based on twelve promises that are lies. But each and every week now, more of the operational lies of the system are revealed.

Matt Taibbi of Rolling Stone reported on a court case showing that the big banks have for decades criminally deceived participants in the municipal bond market, robbing cities, towns, hospitals, etc. of interest payments due to them: The Scam Wall Street Learned From the Mafia.

Too bad that cities and towns are going broke, the banksters must get their bonuses. And their posh offices. Drive around any city in the industrialized world. Who has the largest and fanciest buildings, whose buildings dominate the skylines? Banks and insurance companies. Check it out. But I digress. Back to the latest slings and arrows.

Everyone has probably heard about the LIBOR scandal where the big banks–and it is looking like most or all of them–colluded in criminal fashion to manipulate interest rates. The LIBOR rate is used to calculate the interest rates on myriad types of loans including mortgages, business loans, credit card rates, etc. It is used as the basis for hundreds of trillions of dollars worth of derivatives. The top executives at Barclay’s were the first to be caught, but now RBS has been fined, and Deutsche Bank is under investigation. Others will follow. And the fired CEO of Barclay’s, Bob Diamond, has publicly stated that he was told to manipulate LIBOR by the guy who is second in command at the Bank of England, Paul Tucker. How long before we find out the US Federal Reserve was giving out the same kinds of orders for illegal acts?

And speaking of investigations, how about Spain investigating the top executives of  Bankia, headquarters pictured here, I kid you not:

Photo from Mike Krieger’s site.

A year ago, when they were selling stock in the bank to the public, these executives touted Bankia’s greatness. They stated two months ago that everything was fine, in fact profitable, at Bankia. Within a few weeks, it was determined that the bank needed a $19 billion bailout.

And it looks like JP Morgan has been caught pulling an Enron, manipulating the electric power market in California and the Midwest: JPMorgan’s Role in Power Market Comes Under Scrutiny.

The Vatican can’t resist joining the financial criminality party, assisted, of course, by JP Morgan: Catholic Church Fears Growing Vatican Bank Scandal.

We also have the mystery of large banks shutting their systems to any public access. RBS, one of the biggest UK banks, had a major “system outage” for days that halted the processing of just about everything including credit and debit cards, ATMs, payroll checks, account balance inquiries, i.e., everything! See: As RBS’ ATM “Glitch” Enters Fifth Day, The Bailed Out Bank Issues A Statement.

And yesterday the largest bank in Russia stopped all public access to its systems, so no credit or debit cards swipes would work, no on-line transactions, etc.: RBS ‘Glitch’ Goes Airborne As Biggest Russian Bank Halts All Credit, Debit Card Operations.

RBS gave a potentially plausible explanation of their outage in testimony to the UK Treasury: RBS gives more detail on IT failure train wreck.

However, it seems suspicious that the biggest bank in Russia also had to shut out the public. Perhaps it had something to do with criminal hackers figuring out how to initiate wire transfers from the accounts of high net worth individuals at 60 banks! Haven’t heard of that one? It broke in the news about two weeks ago and was promptly “disappeared” from many websites. As of this minute, the story is still currently available at the Times of India: Cyber criminals may have siphoned off 2 billion euros from 60 banks. From the article:

The study highlighted a highly sophisticated, multi-tiered, global financial fraud ring that is comprised of at least a dozen groups using active and passive automated transfer systems to steal high value amounts from high balance accounts.

“This fraud empire, dubbed Operation High Roller, has impacted every class of financial institution: credit union, large global bank and regional bank, using smaller and less detectable automated transactions,” McAfee said in a statement.

Could it be that these banks recognize that they are being hacked, and their accounts drained, and they have no way to stop it other than preventing all public access to their systems? And why did coverage of this story virtually disappear? That’s an easy one: When criminal hackers hear that a class of juicy targets is hackable, it’s like pouring blood into water near sharks, they all want a piece of the action.  And we can’t have depositors getting nervous about their deposits when the whole system is based on confidence.

Perhaps the problem isn’t hacking. But then how could these large bank systems, famous for their redundancies, backups, and all-around bulletproofness, fail in such catastrophic ways? Could it be that the Sun has decided to make a statement or two about who really runs this sector of the universe? Did 18 M-class solar flares over three days cause glitches in these systems? (Eighteen (18) M-Class Flares Within Last 72 Hours) Followed by an X-class solar flare? (Sunspot Region 1515 Fires Off X-Class Flare) Or are their systems based on MS-Windows? (Joke. Sort of.)

Either way, I have to wonder how people with their savings in electronic accounts feel about that. The system is based on lies. The people who run it are pulling continuous criminal capers, and it looks like they have been doing so for decades. Hackers have figured out how to drain accounts electronically. And the Sun may even be contributing to bank computer mayhem, with NASA admitting that the Sun will be ramping up its activity into mid-2013.

We think it best to consider all of these as indications of a system that is in something beyond peril. It is going down. It will fail. It’s only a matter of time. The pace of slings and arrows impacting the system is accelerating.

Let’s recall that people value money because it is a medium of exchange through which a wild variety of good and services can be exchanged in some comparable way; and a store of value providing one way to save the energy expended in work today to meet needs at some future time. Our current paper currencies (Dollar, Euro, Pound, Yen, etc.) are masters of exchange, but are cascading toward failure as stores of value. Some who have studied the history of money say–and I have no way to verify this–that the longest reigning currency regime based on unbacked paper lasted 41 years. Well, the world went fully into unbacked paper currency in 1971. Add 41 years and you get 2012. Can we set a new record? Perhaps. But the system is showing so many signs of being in its death throes, why take the chance?

People keeping their savings in the banking/brokerage system reminds me of the old Eddie Murphy comedy routine where he asks about movies like Poltergeist and Amityville Horror, “When there’s a ghost in the house, why don’t white people just leave the house?” If profanity offends you, don’t go to the link.

We have all been warned. Over and over. And the warnings are increasingly clear and loud. But we can take arms against this sea of troubles, at least for ourselves. And if we do, we’ll be in a position to help when the slings and arrows end this financial system.

Where there are things to be done, the end is not to survey and recognize the various things, but to do them.
Aristotle, Nicomachean Ethics