Podcast

It's A Wonderful Life/Paramount

Nomi Prins: The Sinister Evolution Of Our Modern Banking System

Because we're all about those banks, 'bout those banks...
Saturday, January 31, 2015, 11:06 PM

I quit Wall Street and decided that it was time to talk more about what was going on inside it, as it had changed. It had become far more sinister and far more dangerous. 

~ Nomi Prins

Today, the 'revolving door' connecting our political and financial systems is evident to anyone with eyes. But this entwined relationship between Washington DC and Wall Street is nothing new, predating even the formation of the Federal Reserve.

To chronicle the evolution to where we find ourselves today, we welcome Nomi Prins, Wall Street veteran turned financial industry reformist, and author of the excellent expose All The Presidents Bankers.

In this well-detailed interview, Nomi goes into depth of the rationale and process behind the creation of the Federal Reserve, and more important, how its mandate -- and the behavior of the banking system overall -- metastasized into the every-banker-for-himself regime of sanctioned theft we now live with.

Chris Martenson:   To me, it couldn’t have been more obviously obscene then in 2010, and I believe maybe 2009, right after the big banks had been handed just vast, huge, very favorable handouts and bailouts during the Great Recession -- and then they handed themselves record bonuses. I thought optically that was just horrible. As somebody who was inside the banking system: Are they that tone deaf? What’s behind that sort of behavior?

Nomi Prins:   Indeed, they have become very isolated.

It began with the period before the 1970s when different people were rising to leadership in banks, and worsened in the 80s when we started seeing people who had more sociopathic tendencies or less ability to appreciate the idea of the public's economic stability being beneficial to growing their institutions. They no longer viewed it as necessary.

And with the advent of the larger futures market, the options market, the derivatives market, and all the off-shore elements of banking that were able to be developed, so much capital was now available and off of the books that the idea of maintaining some sort of a connection to stability policy -- or even to whatever the Presidency might want -- dissolved. At the same time, all the Presidents that were involved in running the country around that time didn’t ask or require accountability towards financial stability from them.

So there was a bunch of things that were happening at the same time, and that’s why the media does a poor job of critiquing this because they’re not looking at all the strands. None of this is simple. A lot of things happened at the same time to create these kinds of shifts. On the one hand, you have no restraint: you don’t have the Gold Standard anymore, so you have less of a strain on having something physical be reserved against your leverage. You now have this ability of petrodollars being recycled. You have the ability to leverage more debt. You have less humility. You have a more technologically-advanced, less transparent global financial system, so you can make and hide money easier. And then you have ascendancies of leadership in banks and in the government that are OK with all this, and allow it to fester.

It's all defended as some sort of example of a free market and competition -- "the best gets the best", and so forth -- when the reality is it just destabilizes the entire system and creates an artificiality. We see central banks supporting all of this mess, as opposed to figuring out what the exit policy is -- which none of them have a clue about. That’s really where we’ve evolved to. 

Click the play button below to listen to Chris' interview with Nomi Prins (52m:45s)

Transcript: 

Chris Martenson: Welcome to this Peak Prosperity Podcast. I am your host Chris Martenson. You know it’s been six, I guess going on seven years now since the Great Crash of 2008 and according to the cheerful headlines we are well on the way to recovery. Auto sales are booming, house sales are reasonable and employment is back above its pre-recessionary levels. But if we dig deeper we note that everything that was either the cause of or which exasperated the Great Recession remain with us today. For instance, too-big-to-fail and even to-big-to-jail banks are even bigger. Sovereign debts are higher. In many cases startlingly so. Derivatives are a hundred trillion dollars higher than they were in 2007. Income and wealth inequality are vastly higher today than six years ago. So in short, everything that should have gotten smaller actually got bigger. Now, to students of the so called modern system of banking, which actually began some hundred years ago with the birth of the Federal Reserve, none of this is really surprising. While peddled as the best system for creating wealth fairly and equitably, modern banking is nothing of the sort. It’s actually a system for concentrating power and wealth while providing passable air cover for the idea that it’s doing something more equitable and noble than that.

As I often say, to know where you’re going you have to at least know where you are, and in order to understand where you are you have to know where you came from. Today we have a very special guest to help us figure all of that out. With us today is Nomi Prins, a renowned journalist, author and speaker. And her latest book, a must read, is All the President’s Bankers: The Hidden Alliances that Drive American Power. This is a ground breaking narrative about the relationships of president’s to key bankers over the past century and how they impacted domestic and foreign policy. Her other books include a historical novel about the 1929 crash, Black Tuesday, and the hard hitting expose It Takes a Pillage: Behind the Bonuses Bailout’s and Backroom Deals from Washington to Wall Street. Welcome Nomi.

Nomi Prins: Thank you so much. I’m really thrilled to be on Chris.

Chris Martenson: Oh it’s such a pleasure to have you. So let’s begin with your origin story. Tell us about your time on Wall Street, you know, where you worked and what you learned.

Nomi Prins: Well I started off actually at the Chase Manhattan Bank around the time of the Flash Crash of1987 so quite a ways back as a very junior analyst with a math background. Then I went on to Lehman Brothers, which no longer exists, working on futures and options and sort of the nascent aspects of those and foreign exchange and then on went on to Bear Stearns in London where I built the analytics group there in London and focused a lot on sort of nascent credit products that ultimately became part of what we know as credit default swaps and CDO’s and all the sort of esoteric and combination toxic assets that were the heart of the most financial crash.

Then I went on to Goldman Sachs before I quit Wall Street and decided that it was time to really talk more about what was going on inside it as it had changed, as it had become just not different but far more sinister and far more dangerous. Then I went on to write my first book after I left Goldman, Other People’s Money: The Corporate Mugging of America but it was really about the banking relationships that had propelled the frauds of Enron and WorldCom and all the deregulation meetings and such that had gone on from the heads of some of the places that I had been at with the more elite people in Washington that were in charge of those forms of legislation. And I’ve just been doing that really since, well for about 12-13 years now.

Chris Martenson: That’s about the same amount of time I checked out of corporate the world and decided I needed to do something different. But it’s fair to say then that you were in the belly of the beast, you saw it up close and personal and was it your sense there that it was just doing what it had always done or that is was somehow morphing into something different under your careful gaze?

Nomi Prins: It definitely morphed while I was in it and then, of course, stepping outside I see how historically a lot of what I saw had been there before just in sort of different ways. But while I was there really became a much more aggressive stance towards not necessarily aligning with clients but really trying to screw them. I mean that was really, maybe not what was said or sometimes it was said but, you know, the idea was to just find ways to create more and more complex products because they had more and more fees attached to them, you know, combining an insurance product with a credit product with a foreign exchange aspect with an interest rate, had all these things added on fees, they added on structure, they added on complexity and they added on risk to ultimately whoever was involved on the other side and there was just much more of that and much more of a frenzied push towards more of that than simply, you know, looking at, you know, saying helping a central bank balance it’s portfolio by virtue of certain more slightly spreadier, slightly risky assets but actually looking at the up and down sides analytically, which was my job, of what those could entail. It became much more sort of create something complex, dump it in, explain it a little bit but not too much and then just kind of leave the table and have that risk off of the bank's books, off of my company's books but on to the risk of whoever was purchasing it. And that just became worse and worse after I left.

Chris Martenson: You know it was I guess the Wolf of Wall Street to take it down to the retail level. That movie displayed that Wall Street from that perspective is the way that story was told. Not so much about helping clients allocate or distribute or accumulate capital; it was about Wall Street harvesting capital from clients as in the vernacular of today, Muppets, as it were, to pick on one of your former employers there. So that’s always sort of been part of the game. But you’re saying that with advent of these more sophisticated products that Alan Greenspan said, "oh derivatives, they basically helped us launch risk into outer space, never to be seen again," it didn’t really do that is what you’re saying.

Nomi Prins: Every time there was a product or there is a product that has more complexity to it, has less transparency to it, has more documentation that says nothing attached to it, there is more profit to be made right when it goes out the door. Because what happens—and it happens more and more with those types of products, whether it’s just a simple credit default swap and sort of unregulated contract between two parties to multiple layers of those connected to multiple assets and so forth—however it is that sort of manifests, there’s money to be made at every step along the way by whoever got it out the door first, which is the banking institution. And there’s no accountability—and there never really was, historically. There’s no real accountability for what happens after that, especially when liquidity as recently as in when crashes happen or when credit becomes tight and when liquidity dies, every complex product is more risky to the buyers than they were to the creators and the sellers and that’s really what we’ve seen recently. It’s increased in that sort of risk relationship and that last relationship as complexity has increased. So that’s really what’s been happening. And as you said in the opening, to the extent to which there are more derivatives, there is more of a concentration of capital in fewer hands, and again that’s historical. There’s always been a concentration of capital at the largest, most politically connected institutions. But the more concentrated it is, the more dangerous the risk that it imposes to the rest of society, to the markets, to finance, to economics, it imposes. And that’s where we are now. We’re at higher concentration than ever before of capital, therefore, of risk, and there’s not opposing side on any political party or any sort of central bank initiative to do something about that, to look at this systemic problem that sheer concentration indicates. Again, not new; just bigger now.

Chris Martenson: So I want to turn back to that but first I want to help set the stage by really understanding how we got here and this is the part that I just—I love those parts I’ve read in your book about how the Federal Reserve was really formed and how it got there. So let’s turn to that origin story of the Federal Reserve. Take us all the way back. Who formed it and why?

Nomi Prins: There was a panic in 1907 for the same reasons we have panics and crashes since then. There was a set of manipulators in the copper shares, in copper stock, and then there was a set of leveragers or financiers on the other side and basically the copper speculators got hosed. Their game didn’t work, the confidence in their related institutions went down and there were runs on deposits at those institutions, which was going to create a bigger problem, in particular—and this is where the president-banker relationship comes into play for Theodore Roosevelt who had now been in office, he had trust busted, lots of different types of trusts, not banks, not what were called "money trusts" of which one of the main, actually of all time financier was J.P. Morgan. J.P. Morgan was summoned, effectively, you know, not to Washington but he tended to travel less and be communicated with more by Theodore Roosevelt and his treasury secretary to help to secure stability in this potentially rising panic. In the first or one of the largest cases, not the first case of the bailout of the Treasury Department on behalf of the financial community the Treasury Department allocated twenty five million dollars to J.P. Morgan to do with what he wanted to to stabilize the situation. So this is, again, Theodore Roosevelt, big trust buster, trusting J.P. Morgan with the government’s money to stabilize a speculator related panic.

J.P. Morgan, what he did was he took the twenty five million dollars and he put it into Trust Company of America, which was not the company at the core of the panic but it was a company in which he had interests and which his friends had interests and used some of their money as well to stabilize it. Ultimately the situation of panic was stabilized, The New York Times called J.P. Morgan sort of a King amongst humans and things looked sort of good on the outside. On the inside this worried the bankers. What worried them was not having liquidity sources, money sources, capital sources in these panics.

So there was another fellow in Washington who was the head of the Senate Finance Committee, it was called something else at the time, basically the Senate Finance Committee, Nelson Aldrich, who was a senator from Rhode Island who sort of felt this same way and had a lot of attachments and personal relationships with Morgan and other bankers on Wall Street and basically decided to put in place a United States Central Bank that would be able to capitalize institutions in panic. So J.P. Morgan wouldn’t have to call his friends up and tell them to sell their shares and stabilize other companies, it would just happen through this sort of Federal Government somehow. That was how it ultimately was seeded.

It had been talked about a for a while. Under William Taft, William Taft was the president after Teddy Roosevelt, he was a friend of Nelson Aldrich’s, he was very much a part of society and so forth. He was very much for this idea and Nelson Aldrich really had a two year commission to go to Europe supposedly to study, well he did. He went to New York with Vanderlip, Frank Vanderlip, who was one of National City Bank's senior officers and James Stillman, who was also a senior runner of National City Bank, to decide what was going on in Europe. He came back, he said "you know what, we need to do something similar, we need it more private," he didn’t say it like that, those weren’t his words but that was what happened. It took a couple of years of battering back and forth in Washington because there was a little bit of a public tide against this idea of what could be too much concentration in the hands of these private bankers. However, ultimately the meeting at Jeckyll Island, which happened in 1910, was a place where Nelson Aldrich and five other bankers, actually his assistant treasury secretary and four other bankers, all of whom are associated with J.P. Morgan because you had to have a member of Jeckyll Island sponsor any meeting. You could not get on and off that island, that resort, which was a very elite resort, unless you were sponsored. So basically he sponsored them and they came there, they met, they had Thanksgiving pheasants and all sorts of other things and meals while they were and they sort of hashed out this idea.

On the way back from Jeckyll Island Nelson Aldrich, who had prior to this been hit by a trolley care on Madison Avenue while he was meeting with some bankers before this meeting took place, fell ill and the two men that actually brought the policy into—that became the Federal Reserve—into Washington that presented it internally were two of the bankers that had been at that meeting. So Frank Vanderlip was one of the people, he also had been an eloquent writer, he was one of the people who presented it in Washington. So not only was this created by sort of a senator and a bunch of bankers at the bequest of a banker, it was presented initially as such. It didn’t get passed then. The Federal Reserve didn’t get created until a few years later under Woodrow Wilson, the democratic president. But he also—and I talk about this in the book—had very strong personal ties to the Morgan family and to Vanderlip, who had been a close associate of his while Wilson was running Princeton University and helped fund things at Princeton and so forth. There’s a lot of relationships there.

So ultimately the Federal Reserve Act did pass under Woodrow Wilson but it was something that was very much kicked about on both parties and with the banking community, the senior elite members of the banking community, before it was passed. That was the premise. I mean the idea was it would give liquidity to the system. That’s really what its opening preamble says. Somewhere deeper this idea that providing full employment and so forth came into play, but not at the time and not as it was originally structured.

Chris Martenson: You know my grandfather actually served under Volcker at the New York Federal Reserve for a while. He was a regional banker out of Upstate New York and I don’t think he would recognize the Federal Reserve today even from, you know, 1973 when he served on to today. There’s been an enormous shift. What you’re describing is originally the idea was that the bankers were scared of the fact that from time to time these panics would come and potentially wipe them out and if they had a central liquidity source then they would have the opportunity to tap that and use that in times of emergency. So it sounds like it started as sort of an emergency slush fund simply there to manage the liquidity in the system, most notably during times of panic. As I understand how it was originally formed, there was a thing called a discount window, which was a physical, literal window and bankers would bring their collateral over to that window in the form of physical paper bonds and there would be an exchange at that spot, and it’s morphed into something very different. But if we take it all the way back it sounds like powerful and well connected people set up for themselves a government sponsored cartel that really was there to help protect their interests first and foremost. Is that roughly right?

Nomi Prins: Well it was—also the people that were ultimately appointed to run the Federal Reserve and also, it has 12 branches, but the most power branch of it, which was the New York Federal Reserve, which is located in Wall Street and which was sort of the hub of Wall Street’s components of the Federal Reserve System, were effectively run by people who were also associated with this entire elite group. What happened was that the other reason—and it happened to have occurred around the same time is after the Federal Reserve was established for this purpose of providing liquidity and mostly to the people who could control it. The largest member banks who were the most elite individuals who had the strongest relationships, I mean they did control where this capital went. So even though Woodrow Wilson actually campaigned in 1912 about how before it happened that we needed a bank that could help credit for the rest of the country, for farmers and so forth so that they could overcome panics when they occurred. None of that was really how the funds left the Federal Reserve. They still left and they still do leave proportionality to the largest, most powerful institutions. That part hasn’t changed.

The other thing that happened though was that World War I happened. So right at the beginning of this institution being created there was this sort of American idea that was larger than liquidity, or connected to liquidity, the bankers or the largest bankers and which had to do with strengthening the currency. The dollar of the United States relative to these other currencies in Europe. That ultimately wound up happening. So the Federal Reserve, because it could present emergency money to these individuals and because the people on the board of the Federal Reserve were connected to the banks, the largest banks that were associated with it, they did work tougher. So Jack Morgan for example, who was the son of J.P. Morgan—J.P. Morgan died before the Federal Reserve was actually established. But his son Jack Morgan who took over the Morgan Bank was involved in war financing both because the Morgan Bank was so pre-eminent from a relationship standpoint because of how much money it had, how connected they were to the allies ultimately in Europe and to Woodrow Wilson that Jack Morgan had several meetings with Woodrow Wilson about financing the war and how sort of this private and government connection would happen and the Federal Reserve was a key component of that because if the private banks were going to extend financing to the United States and to it’s allies in the time of a war having this backup, you know, took on another level of importance and it actually helped propel U.S. banks into a pre-eminent position globally as the war went on and in reparations afterward in terms of lending to the European nations.

Chris Martenson: You know it strikes me that today there would be almost no opposition that you can really find to the Federal Reserve, you know, some minor calls for it to be audited here and there mostly from people with last names of Paul but if we look back there was actually considerable opposition at the time. There were a number of very outspoken critics to this idea of establishing a Federal Reserve at all and I thought some very well made arguments, both directions. One thing that always stood out to me though is that when I look at when the Federal Reserve Act was passed in 1913, if I’m correct that was on December 23rd wasn’t it?

Nomi Prins: Right it was right around Christmas when it was quite quiet.

Chris Martenson: How many people—so in 1913 it probably wasn’t all that easy to get home for Christmas if you were a senator or a congressman from Iowa say or some place further west. Did they put it up for a vote at a really quiet time because that was one of their best chances? Was that an act of politicking there?

Nomi Prins: They put it up in a quiet time mostly not because it was the best chance to be passed because at that point there actually was buy-in across parties and Woodrow Wilson was very much behind it. He had been the one to make a concession to have a stronger New York Federal Reserve because there were opponents, and they were mostly from the states that thought they would get shafted relative to the Wall Street bankers. So the farming states, the more westward states who were concerned about how the balance of capital power would continue—it had already been, but to shift to the east coast, this New York-Washington alliance. They were the opponents but for the most part there was buy-in on both sides. The element of secrecy that we hear about because of the public and so forth to a large extent that was more of the reason it was put to a vote around December. That’s when Glass–Steagall, which was—we’ll get on to that, but a lot of votes in Washington have been put to pass right before the holidays even since then, regardless of the fact that now travel has gotten simpler. So some of it was also to keep the public away from it and that way, again, Wilson could afterwards campaign, which he did, about how he had created this Federal Reserve to help the public to, again, provide credit to the farming states and so forth in times of trouble. I mean that was how he spun it even though in his conversations and the letters he had with Carter Glass who was the treasury secretary at the time and so forth, he was very a proponent of saying externally that it’s bad to have this concentration of power on Wall Street but in fact, creating this work-around, the New York Fed, to ensure that there would be a balance of power on Wall Street. There’s lots going on behind the scenes there.

Chris Martenson: Fascinating. Now I want to talk to you about this idea then—here’s how I look at it: Apparently one part of the entire banking game as it stood up right now is to privatize the profits, socialize the losses. That means the bankers take home fat bonuses when their risky bets pay off but hand the taxpayers the bill when things go bad. It’s sort of a heads they win tales we lose policy. Talk to us about that and how the creation of the Federal Reserve did or did not enable that.

Nomi Prins: Well in the beginning even though that idea, that policy existed of having the potential to have liquidity when losses were going to grow on the books of the largest banks by virtue of having a Federal Reserve, that existed from the moment the Federal Reserve was created. In the wake, for example, of the 1929 crash one of the things that Wilson explicitly, as I was mentioning just campaigned about didn’t happen, which was that the New York Banks closed ranks on the funding they had on the capital they had in this time of crisis, which they’ve done recently, which banks do. You know the more capital you have the more of a crisis is around it you kind of close it, you hoard it and that happened in the wake of the Crash of 1929 is that even though there was a Fed which was supposedly created to help credit throughout the country, it didn’t. New York Banks basically sat on credit and had easier access to it through the Federal Reserve than did a lot of the other interests in the United States and that’s why thousands of banks closed. That’s why thousands of smaller banks closed. That’s why thousands of smaller banks just closed, more like hundreds, but close to thousands of banks closed more recently as smaller banks because they don’t have the access to capital that larger banks do. So that’s, again, been pretty common it’s just more to the extent where today the Federal Reserve has four and half trillion dollars on it’s books basically supporting the financial system in particular the largest institutions which happen to be most connected to the four and half trillion dollars worth of assets that they have backed on their books. So that’s one thing that’s going on now.

But in the middle of all of that there was a period where things were a bit more stable after World War II when there had been a lot of financing of a second round of reparation with respect to the war by a lot of the same banks that had done that in World War I but a few more add ons. After that there was a period where the Federal Reserve didn’t really step in as much. There was more stability and there was more of a policy of prudence on behalf of the banks because after the Great Depression and into World War II, two of the leaders of the largest banks on Wall Street, a man named Winthrop Aldrich who was running Chase and James Perkins and other people who came in to run National City Bank, they didn’t leverage their money. They didn’t leverage their capital even though there was this Federal Reserve, even though they had the capacity to find it from somewhere in an emergency. They just managed better and they were more a part of the war effort and they were more a part of this sort of more stable growth of the country and so they didn’t, lend or borrow to lend beyond the capital they had, beyond the means they had and this created a lot of stability.

That changed really in the 70’s when a number of things happened, you know, new bankers came in to run these institutions or rose within them who had less of an infinity towards prudence or the public good or public stability. The gold standard was abandoned, as well as larger banks found money or found they could access capital and not just through the Fed but through petrodollars through basically recycling profits that were made in the Middle East into debt that was dumped into Latin America so the game became different on an international basis and more access to capital became available. Plus there was no gold standard to sort of create an extra reserve restraint on the banking system or on the currency and so things got a little more out of whack. But that’s why in the 80’s we had the Latin American debt crisis, which then also invited a large bail out of the institutions that had lent money into Latin America. Same thing with the 1994 Mexican Peso Crisis, there was a bailout that was orchestrated by new treasury secretary, former Goldman Co-Ceo Robert Rubin under Clinton, you know and so forth into the most recent epic case of what is now going on to ten to eleven trillion dollars subsidization of the global financial system mostly for the largest U.S. and global banks. So all of that has just ratcheted up many notches over the years but that’s basically what we’ve evolved to.

Chris Martenson: This is something that obviously a lot of our listeners, but I think most anybody is aware of and I think is presented poorly in the press. It’s not well characterized for what it is. To me it couldn’t have been more obviously obscene than in 2010 and I believe maybe 2009 but 2010. This was right after the Great Recession, the big banks had been handed just vast, huge, very favorable handouts and bailouts and things like that and then they handed themselves record bonuses. I thought optically that was just horrible. As somebody who was inside the banking system, are they that tone deaf or they just know that you have to make hay while the sun shines; what’s behind that sort of behavior?

Nomi Prins: They are very isolated and again this period before 70’s when more capital is found and different people were rising to leadership in banks and in other corporations and then in the 80’s and so forth when a combination of those types of people who had more sort of sociopathic tendencies or less ability to sort of balance this idea of the public economic stability being beneficial to growing their institutions and realize that that wasn’t necessary. You know, with the advent of the larger futures market, the options market, the derivatives market, all the off-shore elements of banking that were able to be developed, so much capital was around and off of the books that this idea of maintaining some sort of a connection to stability policy or even to whatever presidency might want dissolved. At the same time all the presidents that were involved in running the country around that time also didn’t ask or require accountability towards financial stability of these leaders. So there was a bunch of things that were happening at the same time and that’s why the media does a poor job of this like you’re saying Chris because they’re not looking at all the strands. I mean none of this is simple.

A lot of things happen at the same time to create these kinds of shifts. So again, on the one hand you have no restraint, you know, you don’t have the gold standard so you have less restraint on having something physical be reserved against your leverage. You also have, again, this ability of petrodollars being recycled. You have the ability to leverage more debt. You have less humility. You have a more technologically advanced, less transparent, global financial system so you can make and hide money easier. And then you have ascendancies and leadership in banks and in the government that are okay with all that and that allow it to fester as sort of some sort of example of, you know, a free market, you know, competition, you know, "the best gets the best" and so forth, when the reality is it really just destabilizes the entire system and it creates an artificiality, which we see today in the system, which was that then you’ll have central banks supporting all of this mess as opposed to figuring out what the exit policy is, which none of them have a clue about. Again, that’s really where we’ve evolved to. You add that together and that’s why you can see record bonuses being paid.

I’ll give you an example—there’s so many examples in the book, but you’re back in the 50’s for example—and this is about money and about taxation and this idea of where it comes in. There are bankers at the time that worked, for example, at Morgan who were on senior committees, who would have side conversations with President Eisenhower, and I have these letters, I talk about them in the book, where they say, "you know what, it would be better, for example, for us to say pay more taxes and for the population—" and these are like rich, you know, mega rich, wealthy, family connected bankers, you know— "because that would be better for the general public because more money in the pockets of the working person..." you know, this sounds like Marxist stuff but was coming from senior bankers who could just see that the idea of moving wealth, moving capital through a larger swath of individuals of the population of they system could actually also benefit them. So that mentality doesn’t exist at all either.

So a lot of things are happening and sort of evolving around the same times across the decades to give us the situation where we have now. The ratio between salaries in the 50’s of a chairman of Chase Bank, of John McCloy who was not only a chairman of Chase but he was the President of The World Bank, he was involved with many presidents and so forth—his relationship of what he made to what people who worked at the bank made was very, very tight, and we don’t have that anymore either. It would have embarrassed him. And he was a very powerful man, you know, very much mixed with the elite, directed a lot of policy in the country and foreignly. It just wouldn’t have made sense to him to have such a differentiation of pay and compensation. So again, those mentalities have changed as well.

Chris Martenson: Well I’ll tell, you know, in a headline that caught my eye this week, which I’m sure you might have run across as well. It came in The Guardian, and it says: "As Inequality Soars The Nervous Super Rich Are Already Planning Their Escapes." So you’re describing a series of statements and letters in the 50’s where people were openly saying "hey, it doesn’t make sense for me to be taking more than my fair share because, you know, our stability, our general welfare is actually really important to all of us." And now the mentality seems to be "listen, I’m going to grab as much as I can and if this stuff gets really bad I’m just going to skedaddle."

Nomi Prins: Right.

Chris Martenson: There’s a very different sense of responsibility towards, and being a participant in, society. It’s almost like there’s two societies. There’s me and my rich friends and then there’s those people and if I have to escape from them I’ll get in my jet and I’m out of here. That was a really striking headline I thought.

Nomi Prins: No definitely and again there’s always been, you know, particularly our country that there has been this differentiation between the very elite and the guys how hung out at Jeckyll Island and went there for two months with their families and the holidays between, you know, sort of pre-Christmas, post-New Year’s and so forth and talked about events of the day and all of that, they were definitely, definitely apart from the rest of society. There was no doubt. They were rich, they were powerful, they considered themselves different. They had a ratio at the Jeckyll Island club of something like eight servants to each one person. All of that stuff existed. And their period that ultimately led to the crash in 1929, saw an increase of that inequality and then, again, we saw stability for a while and a decrease of the inequality and growth, and growth of those companies and so forth.

Another example is Winthrop Aldrich, who I’ve mentioned who was very much about balancing the public good with being a tremendous capitalist. He was a republican, a capitalist, you know, all the things that—he came into a rich family, married into the Rockefellers and so forth. I mean he was definitely on the cusp of American power but he was also prudent. And so yes, again, there was a separation then of what we call now the top one percent or whatever the top half of one percent versus everybody else but there also came into leadership roles individuals who got that you could balance both. You could stay really, really rich and really, really separate and you could still think that balancing that with more public interest and good and works and so forth was useful to you and to, you know, having sort of spirit of a greater society and all of that.

We don’t have that now and part of it’s because—all the types of securities, the types of financial instruments, the ways to hide it, the ways to grow it, all of that has just gained. It’s accelerated in terms of how it’s used to create wealth and to hide wealth. And those are elements of wealth that are not available and it would be dangerous. They’re dangerous with people that create them that they’d be unavailable to most of the rest of society. And so there’s this other avenue that’s grown to separate the people who control it, the people who basically control capital versus the ones who controlled capital. Some of which are in the same families, you know, throughout all of these decades but there’s a difference in how they care about the rest of society and that’s where it becomes dangerous.

Even back then, even when J.P. Morgan sort of pushed for the creation of the Federal Reserve to create liquidity for the larger banks, even back then the idea of using so much of it, you know, of counting on so many trillions of dollars to stabilize their institutions would have been sort of unacceptable to them. And certainly in the 40’s through the early part of the 70’s the people running institutions wouldn’t have accepted—they wouldn’t have even thought it was imaginable to receive so much help from federal policy, from the Federal Reserve and so forth to sustain themselves. You know that all just started happening, again, from the sort of mid-70’s and accelerating up towards now. So yeah, if it’s so easy to get and so easy to have your losses protected, you know, as you said it’s so easy to socialize the losses and privatize the gains. The idea of exiting with them just seems logical and not really caring about what happens. And that’s really—it’s easier to get, it’s easier to maintain and it’s easier to escape with. So yes that’s another very dangerous element of the system in which we live now.

Chris Martenson: I want to talk about that dangerous part because this goes way back. One of my favorite Plutarch quotes, he of many, many centuries ago, of thousands of years ago, he said "An imbalance between rich and poor is the oldest and most fatal ailment of all republics." You mentioned that there was extraordinary concentration of power and money and wealth and all of that that came up in the 1920’s and then oops we had this little hiccup and call it the Great Depression, again, we’re back at sort of that apex of concentration. People are trying to say this time it’s different. You’re arguing it’s not different that this concentration—you would agree with Plutarch that that gap between rich and poor is a destabilizing force, not a stabilizing force, and you’re saying that bankers once upon a time got that. I think my grandfather was part of that cohort of bankers, right? They served a valuable function, they earned a modest share of profits. When my grandfather was a banker I think four percent of all profits and flows of the country went to the financial sector. Today that’s probably an order of magnitude off.

Nomi Prins: Right.

Chris Martenson: So once that game gets started now it’s interesting that we have this one dynamic of this increasing concentration of power and complexity in all of that but that’s all within the sphere of this E we call the economy at Peak Prosperity. We believe that the pie isn’t growing like it used to and it can’t on per capita basis because the resources just don’t exist. So the game is fundamentally changed but the old guard who are maintaining the game just want to keep doing what we used to do, which we don’t think we can do, fundamentally, because—here’s just economically what we were doing. Starting in early 1980’s under Regan the nation as a whole, not to pick on the government or any political party but the whole country started accumulating debt at twice the rate that our economy was growing and we call that normal and that broke in 2008 and instead of saying "hey, maybe that was a bad idea, trying to borrow at twice the rate our income is growing," that’s sort of a math problem that we were running into, the Federal Reserve and all of it’s guardians had decided that we’re going to do whatever it takes to, and I’m quoting here, "repair the credit markets," which was a wink to the idea that we’re just going to keep doing what we used to do.

From your time in the belly of the beast, here’s my biggest concern is that clearly something is very wrong with both the larger narrative and the smaller parts of this story and I’m worried that the people who are running the ship aren’t aware of that.

Nomi Prins: Yeah again, it depends on what element of the ship. I think running, if you're Jamie Dimon, you may or may not be aware of it but you don’t care, or you don’t need to care I should say I don’t, whatever’s going…

Chris Martenson: Right.

Nomi Prins: …on there personally but you don’t need to care because again, you’ve just amassed, you’ve just become the largest bank in the United States from an assets to positive perspective, you’ve grown your capital base, you have four times the amount of cash you had on your books as you had before, you know, all of these elements are occurring and you’re at the top of this, you know, you’re one of several but you’re at the top of this financial empire, you don’t need to care because you’re so insulated and if you add to that the government on either side, again, yeah I agree it’s not a partisan thing. It is both sides, both parties have funded the growth of this morale hazard, the growth of this risk, the growth of the leverage in the banking system—have sustained it, have helped to grow it and have helped to fund it when it goes wrong, when there are cracks in it. So there’s no incentive to really change direction. And the leaders who are sort of at the center of it, Janet Yellen or Ben Bernanke—Ben Bernanke as the head of the Federal Reserve kept on going back to this idea of what the Fed did or didn’t do in the wake of the 1929 crash and nowhere did he say, as far as I could tell reading all of his scholarly "research"—nowhere did he talk about the fact at that point disproportionately provided funding to the largest institutions, which in turn helped them survive while their competitors, you know, crashed and burned from lack of credit and then they consolidated further and so forth. You know, that’s the problem, the concentration of capital continues to consolidate and there’s no need to care.

For example, this latest round of QE next at the ECB, you know, this has been applauded by many official avenues of the main stream media as being something that the ECB had to do to sort of help Europe, and nowhere—not from what the Federal Reserve did with any of its QE moves, to the ECB—nowhere are any of the leaders of these institutions drawing an actual line because they can’t because it doesn’t exist, but even trying to draw an actual, physical, follow the money, follow the bond purchasing party line from that policy to anything that helps economic stability, wages, jobs, anything on the ground for the broader population. I mean it’s said, it’s mentioned but nowhere has any of the funding underlying any of these institutions connected any of the dots. So that’s troubling.

They convey that they believe that these dots are connected and that these polices do help broadly, but they don’t. Is that cluelessness or just simply white washing it? It’s hard to know, but if you have the ability to print or to create debt to plaster over problems what we have seen is that course of action will be taken and it will be approved by governments, central banks and the private institutions that are involved in being helped.

Chris Martenson: Absolutely. In 2008 when my Crash Course first came out I said most likely we’re going to point, I didn’t know they were going to call it quantitative easing at the time, and that’s where the Plutarch quote came up because I said the most predictable outcome of printing is that the rich are going to get richer. That’s what happens. So let’s talk about income inequality, wealth inequality. You know it is presented still as if it were some mysterious force of nature, you know, something that is just happening. And the media reports on it as if they were reporting on a meteor shower. It’s not as accidental as the media portrays it is it?

Nomi Prins: Well it goes back to the idea of, you know, sort of plutocratic but capital consolidation. The more that an institution and a government collaborate to insulate how capital is used, shifted, created, the more inequality is going to follow from that. For example, you go to what I said on Chase, on JPMorgan Chase, if they like other of the larger banking institutions now have four times the amount of cash on their books but they aren’t helping, for example, to shift some of that cash into really renegotiating mortgages with people or student loans or any sort of really in large numbers of small business lending at better rates so that growth can happen and it’s not this inequality of credit or inequality of finance or inequality of being able to pay your bills, which it perpetuates by them keeping the cash. That would be a way to alleviate inequality but if there’s only so much and, you know, you talk about this, you know, in the philosophy of things being at a peak, if there’s only so many resources or there’s only so much ability to create capital then you need to leverage capital because leveraging capital isn’t like leveraging an actual resource. It’s not really creating anything but it’s moving stuff around on the books and so it’s making whoever is in control of those books, whether it's by virtue getting a bonus out of it or dictating policy or collaborating on policy or whatever it might be or even institutionally, you’re basically able to suck more out of that equation. That becomes sort of like a zero-sum game in that you’re sucking out because you can, if you’re at the top of that capital food chain, and other people who are not involved in any aspect of the power or of the politics or of the capital that’s involved in the system and have no call on it are getting shafted on the other end. That’s what’s happening. What we’re seeing now since QE started, since this particular financial crisis, which is just larger in terms of the subsidies that are being provided to the private markets than before but not different from the idea of providing them, this is just accelerating. And so inequality of power, of capital, of economics continues to increase.

Chris Martenson: So Nomi as we end this podcast I note that the end of your book All The Presidents Bankers has this warning, and it says that either we break the alliances or they will break us. Tell me more about that. What did you mean there?

Nomi Prins: Well first, when I first left Wall Street, when I left Goldman and wrote Other People’s Money the idea was there. It was the same title actually of a book written by Brandeis which was called Other People’s Money, which came out around the time the Federal Reserve, as we were discussing, was being debated in 1910 and so forth. And he said these money trusts, these combinations of powerful interests that collaborated to manipulate markets, to take advantage of the fact that they were bigger so they could manipulate them even without trying very hard and so forth were dangerous to stability. And a hundred and something years later they’re still dangerous to stability. Except now the alliances that I talk about in the book between the presidency and sort of the main executive office in Washington and the private banks in the country are such that there’s no requirement from the standpoint of the senior elite politicians or presidents to restrain any of this from happening, and so now it’s not just that the money trusts are in control of the capital, it’s the political financial alliances that are in control of capital.

So I’m going back to this morning of over a hundred and something years ago that Brandeis said, which was that you break the money trust or the money trust will break us and now it’s like we have to break these alliances or they will break us. Because a lot of history has happened in between—and we’ve talked about some of the better, more stable periods—but the reality is right now we’re at a worse position than we were back then in terms of the concentration of capital, of assets, of deposits, of trading, assets of derivatives, of any aspect of financial instruments and capital in the hands of a few major players and subsidized by the governments of those players and the central banks that are involved in helping as well. So we—when I say "we" it’s kind of metaphorical, meaning that the idea that if there isn’t, if we don’t, if these alliances that allow this type of system to continue to fester are not broken, the system will continue to implode at more chaotic, at deeper levels, onto the rest of the global population increasingly so going forward because we’ve done nothing to change it and all we are doing is epically subsidizing it.

Chris Martenson: It sounds like you’re telling people to get ready because from where I sit, I don’t know, I look at like Dodd Frank or something, which was a beast of a bill watered down from the get go and then just death by a thousand cuts since. I haven’t seen anything that remotely smells like toothy, regulatory reform. In fact, I was a little astonished and maybe a little dismayed to watch Jamie Dimon give testimony and see that this guy was basically in charge of a criminal operation that should have been charged on a number of fronts and virtually every single person who was "grilling him" or asking him questions was really groveling, if I could use that term.

Nomi Prins: Yeah and I mean the Chase relationship with—JPMorgan Chase relationship with Washington has always been one of this sort of mutual adoration policy regardless of who’s running the institution, who’s on the elite committees of Chase and who revolves in and out going back to the Morgan Bank, going back to JPMorgan when it was not a part of JPMorgan Chase. So this has been there and yes there was a lot groveling and it was really—and maybe a lot of crimes were going on back then but yes, right now, you look at currency manipulation, the Libor interest rate manipulation, settlements on mortgage related—there’s nothing really that has not been in the forefront of some type of a fraud settlement or allegation. So yes, it’s definitely, that’s crime. I mean if a person were doing that with like street crime, with an actual street drug dealer they would be off the streets, they’d be in jail. So that’s something that continues to happen and the fact that—and Jamie Dimon has been the recipient, well of both his ambition and rising to the head of this organization, but of all of this history of alliances that now not only treat him with this respect but also provide him the policies and the capital to continue to command it. So again, there’s a real dangerous relationship that’s always been there but has just gotten worse and we are just noticing, well not noticing but the numbers behind this, the capital behind it, the leverage behind it, all the recklessness and the risk behind it that has grown since the financial crisis is still there.

Chris Martenson: Well thank you so much for helping people to become aware of it. I know it’s complicated and all of that but that’s really no excuse for people not to be paying attention to all of this because it affects us all deeply both today and in the future. And the part that we didn’t really have time to get to here, which I wish we could, is the risks. You had a point talking about the risk to society, to markets, some of them are big systemic risks, some of them are erosions of our basic principles, freedoms, all kinds of things. I mean this really is a very, very important topic. I know it’s complicated and thank you so much though for simplifying it and dedicating your life to bringing this story out. I’m sure there are days you wish you were writing travel guides or something different.

Nomi Prins: [Laughter]

Chris Martenson: Cause it’s hard work. I know it is. We’ve been talking with Nomi Prins. Obviously talented, very well spoken author, researcher and American thinker. Nomi, what’s next and where can people follow you and your work more closely?

Nomi Prins: Well I have a website under my name www.nomiprins.com and of course, The Presidents' Bankers book is available independent, Amazon, Barnes and Noble. It’s coming out in paperback in March so it will less heavy. Right now it’s a very, very heavy book. So there’s that. I’m actually working on some other ideas right now on sort of global speculation going back to Lincoln’s days. So I’m a little bit off blog but I do also have a thoughts page on my website that I invite people to check out. And again, I just want to say all the work that you do there Chris and I’ve followed you for years, I just—the fact that you and others like you are able to take on this idea of dissecting the complexity is what, you know, hopefully will make more people aware of all the elements that affect them.

Chris Martenson: Well thank you that’s very meaningful coming from you so thank you for that. It is hard work. There are days I do wish I was selling, I don’t know, pet rocks or something but this is the job I’ve got. Somebody’s got to it and it becomes a calling. So Nomi thank you so much for your time today. Very generous and I hope we can it again.

Nomi Prins: Thank you.

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43 Comments

pinecarr's picture
pinecarr
Status: Diamond Member (Offline)
Joined: Apr 13 2008
Posts: 2102
Great podcast; awesome historical insight!!

....into the relationship between the Federal Reserve, banksters and the US Gov't!!   It's a treat to hear Nomi Prins tell this story,  as someone with 1st hand personal insight (having worked in the banking system) and in-depth historical knowledge into the topic (having done extensive research for her book, "All The Presidents Bankers").  Add to that Nomi's high level of intellect, and you have the ingredients for a great conversation between two top-notch minds.

  Thanks Chris, Nomi and Adam!!

westcoastjan's picture
westcoastjan
Status: Platinum Member (Offline)
Joined: Jun 4 2012
Posts: 538
Great info, more reason to prep...

I really appreciated this podcast in that a complex subject was made much easier to absorb. A few thoughts with regard to some things that jumped out at me:

There’s always been a concentration of capital at the largest, most politically connected institutions. But the more concentrated it is, the more dangerous the risk that it imposes to the rest of society, to the markets, to finance, to economics, it imposes.

One of my favorite Plutarch quotes, he of many, many centuries ago, of thousands of years ago, he said "An imbalance between rich and poor is the oldest and most fatal ailment of all republics."

...you don’t need to care because you’re so insulated

The concentration of capital, shifting of risk and movement of society towards the inevitable financial end game was further enabled by computer technology. A sociopath in the financial world sees computer technology as a tool to achieve greedy, ill conceived ends, in the same manner that a pedophile sees computers as a tool to achieve their particular brand of evil. The rest of us see computer as a tool to do relatively benign things like uploading our daily lives to Facebook. The elites could not be happier with the general mindlessness.

Insulation works two ways. Much to the delight of the elites, the general populace has insulated themselves from reality, giving the elites free reign to do as they wish. We have said it here many times before, there is a massive state of denial with regard to what is really happening out there.

There are some cracks appearing in the denial game though, as witnessed by the changing of the guard in Greece and the protests in Portugal. Countries in South America are on the brink. The fuse has been lit and there are many small fires burning globally. With every new greedy action the elites are adding fuel to the fires. The stage is being set for a colossal bonfire. There will be a spark of outrage that will light the fire. We often call it a Black Swan event. I prefer to call it something simpler - people power. A day is soon going to come where someone, whether in Greece, Portugal, small town USA, or any other place on the globe where someone gets pushed too far, they cannot feed their family, their kids are crying all the time from hunger, they have the indignity of not being able to wipe their ass because toilet paper on the black market costs a hundred bucks, and then they hear about another bail-in or bail-out. Someone will snap, then someone else will join them, and within hours it will become a raging brush fire the likes of which has never been seen, jumping from country to country. There are too many oppressed, too many who have been screwed by the greedy socio-paths...people can only be pushed so far before they will start to resist. We are seeing that happen now.

No wonder the elites are making escape plans. They might just find that they can run but they can't hide.

What a black post!!! Holy, I am sitting here with my morning coffee wondering to myself "where did all that come from?" And I realized that if that is how I feel deep inside, in my comfortable, first world lifestyle, imagine how those in places like Greece and other places, who are in dire straits are feeling. I cannot imagine.

I do believe we are that much closer to the precipice. I also know the elites will drive this bus right over the edge, with the thinking that they are somehow insulated. In the years I have been visiting this site I have never felt quite so strongly the need to work on my preparations for what I feel will be a very changed world in the next couple of years. We are already in the deflation phase. Next comes the inflation and hyperinflation. Will I be ready to weather the storm?

Will you?

Jan

AKGrannyWGrit's picture
AKGrannyWGrit
Status: Gold Member (Offline)
Joined: Feb 6 2011
Posts: 298
First, great podcast. Second,

First, great podcast.

Second, nice to have you post Jan, I love the term "people power" and agree with her.

Third, not to pick on Chris or Nomi specifically but more of a general comment. The discussion, this one and most all others regarding the economic situation we are in are "sanitized and generalized".  By that I mean generic phrases are used like "a real dangerous relationship" and "the risk is still there" and "break the money trust or it will break us". How about "we are all deeply affected". Yawn, tisk, tisk, yep we all agree. It's akin to using the term "ethnic cleansing" when talking about the brutal, unconscionable slaughter of a group of people. Sooner or later someone, someone will have to be specific and call a spade a spade and instead if eloquent sanitization of the subject, talk about how we Middle Americans are being systematically robbed, and driven into poverty and starvation. How about the  blatant "stealing of our jobs, money, and the fundamental concept of the Constitution of "We The People" being turned into "We The Banks" and the corrupt cabal of leaders. We Middle Americans can barely pay our bills, put food on the table, find a job, especially one that sticks around, provides benefits and pays enough to live on.  "We are all deeply affected" no shit and those whose belly's are empty feel it ever so much more acutely than those of you/us who have plenty of extra money and can obsess over the stock price and PM prices. We don't notice the suffering of our neighbors but a time will come when they will insist that we pay attention. 

Marie Antoinette supposedly, when told the Peasants didn't have bread to eat, laughed and said "well let them eat cake". She lost her head to a guillotine. Unfortunately, history repeats over, and over, and over again.

AKGrannyWGrit

Hotrod's picture
Hotrod
Status: Silver Member (Offline)
Joined: Apr 20 2009
Posts: 135
Accountability

AK GrannyWGrit,

Thank you!

The Predator class is able to continually spout their economic nonsense, employ fraudulent financial practices with immunity, and expect the common person to not only support their hoarding of capital but actually support more of the same.  It is about time that they are called out individually.

HarryFlashman's picture
HarryFlashman
Status: Bronze Member (Offline)
Joined: Aug 1 2008
Posts: 53
An Idea

I know it's not new and it's been suggested before,but why don't we all just take all our money out of the banks? I did it in Japan because I was getting no interest and any time outside of banking hours that I wanted to withdraw money they charged me the equivalent of 2 dollars,so for three years I was outside the system.Is it practical?

robie robinson's picture
robie robinson
Status: Diamond Member (Offline)
Joined: Aug 25 2009
Posts: 1012
Yes, HarryFlashman

it  can be done

Oliveoilguy's picture
Oliveoilguy
Status: Platinum Member (Offline)
Joined: Jun 29 2012
Posts: 532
Jan

I agree with you on the outcome...that the system can not last, but I wonder historically if the fall of great civilizations comes from a popular uprising as you suggest might happen, or that the system just becomes so broken that it implodes leaving a vacuum to fill. It probably doesn't matter for the lowly (compared to the banker class) we just need to be ready. And another takeaway for me is that I need to give more to the less prepared.  Thanks for your passionate post.

pat the rat's picture
pat the rat
Status: Bronze Member (Offline)
Joined: Nov 1 2011
Posts: 70
hard?

Like it or the dollar bill is all that any of us know for all are lives.How do we change I do not know,oh brother this is going to be hard!

KennethPollinger's picture
KennethPollinger
Status: Platinum Member (Offline)
Joined: Sep 22 2010
Posts: 625
More from Griffin

Hi folks.  I came down to Costa Rica to avoid the cold, snow and ice.  It's so sunny here and Sooo agreeable. Planting more fruit trees, increasing the raised beds for veggies, now got 12, finally finished building my two Guest Houses (cabinas), created a plunge pool and a fire circle for gatherings, preparing for my daughter's chiropratic-yoga retreat, teaching English as a second language to my laborers, and building a much larger yoga pavilion.  Been invited out to the homes of the locals for local meals--very different and delicious. Clearing away some of the forest for a potential permaculture school/center, and swimming in the Pacific frequently.  See www.AwarenessCenters.com and click onto Costa Rica Retreat Center, and then down to Guest Houses Gallery and 2015 Pics.  It's been lovely taking a break from all the news but here comes another one about Griffin, in JoePlummer's offerings.



CNN Editorial Calls for a North American Union

Source: TheDailyBell.com

Is the campaign for a North American Union officially underway with this editorial appearing in CNN?



Certainly conspiracy theorists might be justified in thinking so.



For years, more than a decade, some have suspected that powerful bureaucracies in North America – especially in Washington – might seek to combine Mexico, the US and Canada into a single super-state.



This was always greeted with howls of contempt by those in the mainstream media, especially in the liberal congregation, who knew better. There was no need, no possibility, that Canada, Mexico and the US would ever form a single trading – and perhaps political – union in the manner of the EU.



But here we go. Those derisive hoots are now drowned out by the reality of what this editorial proposes.

Read full article at: http://www.thedailybell.com/news-analysis/36033/Shock-CNN-Editorial-Calls-for-a-North-American-Union/?uuid=6F805BB4-5056-9627-3C



COMMENT: G. Edward Griffin: “The objective is to draw the United States, Mexico, Canada, Japan, and Western Europe into political and economic union. Under slogans such as free trade and environmental protection, each nation is to surrender its sovereignty “piece by piece” until a full-blown regional government emerges from the process. …Once that has happened, it will be a relatively simple step to merge the regional governments into global government. That is the reality behind the so-called trade treaties within the European Union (EU) the North American Free Trade Agreement (NAFTA) the Asia-Pacific Economic Cooperation agreement (APEC), and the General Agreement on Tariffs and Trade (GATT). "



Expanding on Griffin’s assertion, the EU (European Union) provides a perfect example. What we now call the EU began as a simple trade agreement in 1951 between six European countries. That agreement was called The European Coal and Steel Community and it established a “free trade area” where coal and steel could be bought and sold without import/export duties. -In that very limited sense, the agreement “erased the borders” between those member nations.



But in 1957, a new agreement was signed and the concept of cooperation among member nations was greatly expanded. The new agreement was called the European Economic Community and its ultimate aim was the economic and eventual political merger of its member nations. (Policies on labor, social welfare, agriculture, transportation, foreign trade, etc. were to be “harmonized.”)



In 1992, the word “economic” was dropped and the organization became known as simply the European Community. And finally, in 1993, the European Community became the European Union.



http://joeplummer.com/chapter_5_building_a_new_world_order.html

blackeagle's picture
blackeagle
Status: Silver Member (Offline)
Joined: May 16 2013
Posts: 149
Is it possibe that...

... the bankers and politicians (as well as anyone else) are behaving logically? What they do can be represented by an "equation"? Behavior = F(Available resources per capita).

Let me explain: Many species, including our, are naturally altruist when there is enough for everyone. But lose quickly this trait when resources per capita diminishes, whatever the reason.

With this in mind, and the fact that world population exploded (2.5B in 1950, 7B 60 years later) is it possible that the behavior we see today is simply an adaptation to the reduction of available resource? (I use the term resource in its broadest meaning). We are no more altruist because the competition is tougher? and this justify "all means are good"?

Bankers Slave's picture
Bankers Slave
Status: Gold Member (Offline)
Joined: Jul 26 2012
Posts: 466
Puts things sharply into perspective I would say. What say you?

jgritter's picture
jgritter
Status: Gold Member (Offline)
Joined: Dec 13 2011
Posts: 266
The Cliff

The bus was driven off the years ago and has been falling in ghastly slow motion ever since.  The Greek elections would seem to suggest that the front of the bus has finally hit the ground and is beginning to crumple. 

AK granny, I share your frustration with the euphemistic language.  I had dinner last night with a dear friend who is a physician.  She is highly intelligent and very well educated.  I have been trying for years to get her to look at the "Crash Course" without success.  I've shown her my preps, my garden, my bees, solar panels, wood stove, etc.  I've taken her shooting.  I've tried every approach I can think of, she doesn't get it.  This morning I took my schizophrenic neighbor shopping with his SNAP card.  He has limited intelligence and little education.  In the years I've known him I haven't been able to convince him that his benefit might be better spent on 20 lbs. of potatoes rather then a 2 pound steak.  I'm now thinking that, with time apparently getting short, I'm going to have lay in an extra few hundred pounds of beans and a couple of thousand pounds of field corn just to feed people who don't, or can't, get it.  In Chris and Adams defense, how the hell do present this information so that people don't either get angry and defensive or think you're crazy?

Jan, I have to say that I share your dark mood.  By "weather the storm" do you mean arrive on the other side warm and dry, or simply alive?  I have a ton and a half of grain and legumes put back and I hope to double it if there's time, but there sooo many unprepared.

Ken, "Come to sunny Costa Rica" sounds a little like "Let them eat cake".  Just sayin'.

John G

KennethPollinger's picture
KennethPollinger
Status: Platinum Member (Offline)
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Posts: 625
"Either we break them or . . .

jgritter.  That was not my intention.  To the contrary, see below:

"We Break them, or

they break us."
 
Quite a choice!   However, with these established LARGE and COMPLEX institutions/organizations, along with police and military power/backing, in conjunction with the IMF, CFR, World Bank, Bank of Settlements, etc., the CIA, FBI, etc.,and too numerous "secret security" organizations, how in the hell can WE ever "break them?"
 
"People Power" as mentioned in this site seems quite naive.
 
Sociologists who study local, national and international "power structures"
speak of "The Iron Law of Oligarchy" and "The Circulation of the Elites."
Very little chance of change.
 
Even revolution hardly matters in the long-term, witness the American Revolution (co-opted by the Federal Reserve and the crony politicians), or the South Africa
after Nelson Mandela (now the blacks control the blacks instead of the whites controlling the blacks).
 
So I applaud the efforts here to lecture/write on how to:
 
*preserve our wealth
*live with sustainability
*learn new skills
*watch for the stock bottoms for jumping in again
*create a virtual community of like-minded folks who LOVE
    the Great Game, i.e., understanding intellectually the geopolitical scene
*and so forth and so on
 
HOWEVER, I do not see concrete plans/ideas/suggestions of HOW TO BREAK THEM.
Voting doesn't do it.  Internet signatures do little, it seems. Even Occupy was disorganized and petered out.
 
Am I missing something?  If so, please let me know.
 
For disappointment, frustration, disgust and even despair rears their ugly heads now and then.
 
  What is one to do?  Griffin in The Creature lists a few possible 
suggestions near the end of his book  Joe Plummer has a very activistic website and newsletter.
 
But I wonder why PEAK isn't on board with more on BREAKING THEM--BEFORE they break us??????????
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westcoastjan
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warm and sunny is the preference...

Hi John G smiley

I hope that I make it to the other side with some kind of a decent life, but I think what it will actually end up being is a toss up for most of us, largely dependent upon where one lives. And the proximity to large population centres, which could be come ground zero for masses of unhappy people who will help themselves.

I am trying hard not to have a dark outlook, but wow, it is hard some days. One almost has to tune right out and quit reading about world events. Not going to happen in my case. I do believe that awareness is half the battle and gives one a big advantage, providing of course they do something useful with that knowledge.

Best John,

Jan

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jgritter
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Ken

I never thought that was your intention, all your posts have shown you to be a deeply thoughtful and caring man.  My remark stems from my own weakness, fear and insecurity.  I live in an area that has been actively collapsing for some time, greater then 25% on food assistance.  I don't have the means to move.  I am preparing to shelter (perhaps die) in place.  It's apparent that I may have to shelter many loved ones with limited means.  "Come escape to a tropical paradise and help build an enlightened community" can be difficult to hear if it simply is not an option.  No offense was intended.

"Break them before they break us" is ridiculous.  The revolution happened years ago and we've already lost badly.  All they need to do to suppress a slave revolt is turn off the electricity and stop food and fuel deliveries and a revolt would collapse in a week.  To me  "People Power" means make our preps, bide our time, and be prepared to step into the power vacuum to rebuild after TPTB can no longer afford to bribe us with carrots or intimidate us sticks.  As things play out I think that we will have the opportunity to build enlightened communities in situ or revert to savagery, our choice.  The great challenge is that, if the current state of the world gives any indication, savagery would seem to be the most likely outcome.

For my part I think PP should keep doing exactly what it's been doing, providing tools, information and encouragement for individuals and communities to build resilience.  I think if you stand back and give it a little time, the social upheaval will happen on it's own.

John G.

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jgritter
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Jan

I, too, hope to make it to the other side but I agree, it looks like a crap shoot.  So many variables, so little hard data.  One of the hardest things for me is that as much as I'd like to say "This is making me uncomfortabe, I don't want to play this game anymore", we're all strapped in and we're all going to have to ride it out, come what may, no blue pill.

One of the great things about this community is it gives you a place were you can say "I am gravely concerned about the future and this is why" and rather then being treated like you're crazy or stupid, people respond with "your concerns are valid and we're concerned too.  One of my concerns is that as things progress, communication may be lost, and we may never know what becomes of each other.

In the mean time, it was good to hear from you,

John G.

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David Allan
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The cliff

John I liked your post and a couple of things came to mind

The bus was driven off the (cliff) years ago... Agreed. And I've been pondering how long ago. I suspect it's a long time indeed. There seems to be something about being human that means we have a massive blind spot. I think for a species to thrive and dominate like humans have a range characteristics are necessary. Adaptability, tenacity, drive, cleverness - these are all part of our makeup but the ability to integrate complex information is lacking for most. 

This dovetails into my second thought. ...people ...don't or cant get it.  how the hell do (you) present this information so that people don't either get angry and defensive or think you're crazy? I can't answer that but I stumbled on a useful article a while ago. I've lost the source but grabbed a few paragraphs.

When we observe the world, form models and use them to decide, there is a process termed “semantic closure”. This is where all the bits of information and their relationship with each other and correspondence to life purposes make sense with each other....

So what happens if “semantic closure” cannot be achieved? The answer is that those aspects of reality which do not fit are simply ignored.

So most people are simply not able to 'get' it. Their brains are unable to process and integrate information contrary to their overall world view. What you and I see as unavoidable, they see as unthinkable and ignore it.  This insight has helped me become less frustrated with otherwise intelligent people.

To wrap this up I guess I'm suggesting that our predicament is built in to our human nature. We can look at history and identify key times where different decisions could have been made. But would these have made any real difference? A different path to the same result?

When I was a kid I loved science fiction. I was fascinated by the prospect of alien life and slightly baffled that, in the vastness of the universe there was no sign of it. Perhaps this is the reason why - species that have the capability to achieve a global domination do not necessarily have the capacities to manage their success.

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jennifersam07
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Frog in boiling water myth gives me hope

So what happens if “semantic closure” cannot be achieved? The answer is that those aspects of reality which do not fit are simply ignored.

What helped me is reading the Jared Diamond book, Collapse, and pondering what the person cutting the last tree down on Easter Island was thinking. Or wondering why the Jews of Germany would not have risen up and fought to the death to avoid the camps. 

What I believe is different now and might change the outcome is the inescapable information explosion that makes it much harder to ignore facts and easier to create semantic closure within more a realistic framework that allows for time to adjust. After all, turns out the frog in boiling water imagery used to support the notion that resistance to change is baked into human nature is actually a myth.

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westcoastjan
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not getting it is a coping mechanism

David, interesting post. With regard to this paragraph:

This dovetails into my second thought. ...people ...don't or cant get it.  how the hell do (you) present this information so that people don't either get angry and defensive or think you're crazy?...

... I have to ask why is it that we here at PP can get it while others cannot? What is it that differentiates us from them?  My own proposition is that those who refuse to engage on this subject matter are simply using denial as a coping mechanism. On the other hand we who have bought into the concept do not engage in denial.

When presented with information people do make choices, and I think that (unless there is a mental disability of some sort) can't is not part of the equation. It is more "don't or won't".  To pretend something is not a problem or does not exist is to give one's self permission to not have to deal with it.

Think of it this way: people are watching TV and then one of those awful fundraising commercials comes on showing us pictures of starving, emaciated people with flies crawling all over them. The common reaction is "eeeeeeeeeeewwwwwwww, I don't wanna look at that" and we quickly change the channel. That does not mean the problem does not exist. We are simply denying it existence by looking the other way. Humans are famous for taking the easy way out. That saying that people do not change until a crisis hits exists for a reason.

The denial mindset was further exacerbated by the increased prevalence in the instant gratification mindset, a by product of the very evil banking system that is the main subject of this podcast. Many people, in complete denial of their own financial situations engaged in their own brand of irrational exuberance, falling hook, line and sinker for the manipulations of cheap, easy money to fuel lifestyles that are not in keeping with their reality. And now they cannot bear to admit that it was all a bad thing, they are in debt up to their eyeballs; that we have literally screwed our entire environment from excessive consumerism and greed; that they were part of the problem; that the solution management of the situation going forward is going to involve A LOT of pain... I surmise most people simply cannot handle that and so they just will not engage in any conversation that brings that reality front and centre. That would burst their denial bubble and make it real.

I am with John G in that it is wonderful to have this community to voice and share our concerns. These interactions help keep the sanity in this interested observer while she watches the world going down the tubes.

Jan

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lunableu22
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Easter Island Myth

Apparently, the last trees on Easter Island weren't felled by humans, but by rats, who reproduce faster than the native palm trees on Easter Island and use the palms as a food source.  Reference the Sixth Extinction by Elizabeth Kolbert.  The myth of Easter Island is handy for propagating the idea that "modern" humans are smarter, better, etc than earlier iterations.  (Also, we assume a lot about peoples who lived prior to written history.  Because there is no written history, anything can be made up about them to further the narrative of current superiority.  Humans managed to survive for 500,000 years without the benefits of our technology??!!  How stupid could they have been?  Really.)  Who is going to look like idiots for using the last of the liquid fossil fuels to make plastic s**t and import it from China?  And that really is what's happening.  The rats in our story stomp about on two legs.

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Atreat
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Chris selling pet rocks

Your comment that some days you would rather be selling pet rocks made me smile... I suspect you would find depth to the pet rock market that few could imagine or that within 17 minutes you would be pounding your pet rocks against your forehead from boredom.  

Great interview, hope you can get her back to discuss consequences.

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David Allan
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Consensus trance

I have to ask why is it that we here at PP can get it while others cannot? What is it that differentiates us from them?

Jan, I agree that denial is a big part of it and I like the way you link that to the instant gratification mentality. Another factor is busyness, most peoples lives are full of activity and few are inclined to think deeply on any issue. Many issues are seen as too intangible to worry about - immediate practical concerns take precedence. And don't forget people are brainwashed by the mainstream media and lulled by the collective assumption that technology will save us. The prevailing mindset is not called the consensus trance for nothing.

So why do we at PP get it while others cannot? Folks, I'm afraid it's time to face the ugly truth - we're just a bunch of freaks!

I am with John G in that it is wonderful to have this community to voice and share our concerns. These interactions help keep the sanity in this interested observer while she watches the world going down the tubes. Jan, I couldn't agree more

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Tim Ladson
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Amazing Interview Followed by an Equally Amazing Thread

I want to thank all contributors to this thread. Engaging friends in these subjects can be frustrating, but as was mentioned here, there is an unending stream of wisdom that flows from this site that keeps things in perspective for me.

As to Ken's call to action, I would say that in order to "break them" we need to convince more of our fellow citizens that we have a problem and how it affects them, I don't think we are there yet.        

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westcoastjan
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this is a great conversation...

Lots of interesting thoughts all around and I am really getting a lot out of those who are chiming in smiley

Ken, some interesting points in your post. I am curious though as to why you think "people power" is naive. I know this is a bit off topic of the original podcast, but I think the concept of people power vs. the evil bankers is a concept worth exploring, from the standpoint of asking "can any one person influence the course of society?" and therefore, can we "break them"?

You mention a few societal changes that, if I interpret what you are saying correctly, as ultimately being failures. For example you use the example of Nelson Mandela, and how in spite of his accomplishments South Africa has reverted to blacks controlling blacks, as opposed to what it was in the Apartheid era. So, a question for you - overall, in the grand scheme of things, did Nelson Mandela make a difference? Or was it a wasted effort?

This differentiation is important. It ties in with what we are doing, right here, right now: trying to make a difference and improve the world. Did Martin Luther King make a difference? How about Rosa Parks? Did Lech Walesa make a difference? How about Mother Theresa? How about William Wallace, for the history buffs? For my Canadian counterparts, how about Terry Fox, one of my personal heroes? My thinking is that each of these individuals, and the many others un-mentioned who also deserve accolades, moved the human race forward a few more steps through their sheer passion and determination to right wrongs that had been foisted on the masses, most of whom did not have the strength or fortitude to stand up and be counted. And yet, each of these people, Nelson Mandela included, were every day ordinary people who decided that they cared enough about some particular principle to stick their necks out, quite often at their own expense.

I hear you Ken, and understand what you are saying. But tell me: would you spend 27 years in prison for something that you believed in?

Do I believe in People Power to affect positive change? Abso-f***ing-lutely, as the saying goes.  There are some of us who are going to stick our necks out, and some who won't (not "can't"... "won't"). I do believe that when there is a 1% vs. a 99%, in spite of the initial odds, eventually, the people will prevail.

In some ways I feel that this thread kind of mirrors the PP membership, in that the thinking of those with monetary wealth and means to find alternatives is clearly separate from the members who do not have those means. It is neither right or wrong, good or bad, it just is.

To paraphrase your question in your last sentence Ken, will PP step up to the plate and stand with the "People Power" crowd to "break them before they break us"?

Jan

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locksmithuk
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Brick walls and headaches

jgritter wrote:

how the hell do present this information so that people don't either get angry and defensive or think you're crazy?

John, I think most of us have experienced the same frustration as you with getting others to come over to the dark side. You are definitely not alone. Loved ones are the most frustrating, because perhaps somehow deep down we feel almost offended that their love for us doesn’t translate into blind trust that we have solid reasoning & evidence behind us. For now you may just have to accept that you’re 'that eccentric friend' with a bit of the crazies about you.

Good responses from Jan and Davidallan to your question about how to get the message across. My own ‘conversion success rate’ when speaking to others is low. Nobody likes bad news, and for some their best view of life is enjoyed amid the subterranean sand. Most are reasonably receptive to having the conversation in the first place, but leading them to water is as far as I usually get, pretty much. Then for them it’s back to the latest news about the Kardashians, what features the next iPhone will have, etc. With some I know that I can articulate the basics about things like cause-and-effect of debt explosion, the nature of exponential growth and its practical applications in the real world. If I’m lucky I might hold their interest while I have a go at explaining the linkages between the 4 E’s. If I progress onto drawing air charts with imaginary curves I always check their eyes….  if I see that the wheel is still turning but the hamster's dead then I know it’s time to stop. However, my one – and probably only true – ‘conversion’ was a friend who’d experienced bankruptcy & a very acrimonious divorce as a result of living beyond his means. I didn’t have to speak long before he got it (although his maths and economics degrees helped, I’m sure). In fact he got it so fast that our global predicament freaked him out, but it also occurred to me that even amongst the intellectually capable, selling the message is still such a hard task because of willful avoidance of the truth, or perhaps misplaced trust that “someone will sort it all out – they always do”.

Maybe that’s what we need to do i.e. draw parallels to individual lives & real experiences in order to personalise the message. Maybe that’s the only thing which will hit our audiences hard enough between the eyes to trigger meaningful action, or at least serious consideration of the world’s predicament. My own eureka moment came when I stumbled across a GoldMoney address given by Chris in Madrid in 2011. See here:

If I’m about to pontificate about PP.com & it themes to others I first direct them to that video – its first 35 mins are the best investment of my time that I’ve made in a long, long while, and I couldn’t articulate the PP message any more succinctly.

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Christopher H
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Convert the unconverted or find the like-minded?

There's an episode of The Extraenvironmentalist Podcast that I keep saved and listen to fairly regularly -- it features John Michael Greer and Chris Martenson.  There is a passage in the interview with Chris that really hit home for me, and I think would for many others.  Basically, he said that up until five years ago, he thought he was in the information business, but it turned out he was in the belief challenging business.  And when you challenge someone's beliefs, you're inviting them to go through a pretty difficult process that forces them to re-examine just about EVERYTHING they've ever taken for granted.  And it's other people's perogative to say, "No thank you," to that invitation.

That's an important thing to keep in mind.  People learn by stories, not by data alone.  It's been wired into our psyches ever since early humans developed language.  When you tell someone the story of Limits to Growth, what you're doing is directly challenging the story of Unlimited Progress that they've lived pretty much their entire lives believing.  It's really no different, as John Michael Greer has written, than if you traveled back to England in the year 1000 AD and told a peasant farmer that God, Jesus, and all of the saints were just figments of their imagination, and they had no influence whatsoever over their lives.  The reaction you would get would range somewhere on the spectrum of blinkered confusion to chasing you down to burn you at the stake.

What is it that makes the PP crowd different in that regard?  I think it's because we are, pretty much as a rule, an intellectually curious bunch (something I've heard Chris M. say in an interview too).  I doubt that many of us are economists or mathematicians or even farmers as a "profession" -- yet we voluntarily delve into such subjects rather than spend time on such inanity as the Kardashians, Deflate-gate, or hand-wringing over the pandemic of measles that is about to wipe out an entire generation.  We read and work on new projects rather than watch TV, because we're more interested in learning and being creative than being mindlessly entertained. 

But in my own experience it has become important to keep in mind that this mindset is something that makes me DIFFERENT from the vast majority of people, and that most are never going to develop any interest in these matters, no matter how much prodding we may give them in that direction.  As a rule, I try to refrain from pushing these views on others -- and the times I end up ignoring that rule anymore it's usually been the result of having a drink or two too many, and never ends up being a productive discussion.  The antidote to this (again, in my personal experience) is to try and find other like-minded people to hang out with and discuss these things and work on projects together.

It's also important to keep in mind that, as the situation becomes more difficult for more people, they will be looking around for ways to make their life more livable.  If you're known as the eccentric person on the road who is able to produce a lot of food off of a small acreage, when times get tough they'll forget more about the "eccentric" part and instead come to you looking for help.  At that point, you'll have another member of your "community" not because you convinced them of the Limits to Growth -- but rather because you got head of the curve and provide a tangible example of true abundance just by the way you live your life.  As difficult as it is to process on an emotional level for me, this is really much more in alignment with the Permaculture Ethics of Earth Care, People Care, and Return of Surplus (to the first two) than converting the unconverted.

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jennifersam07
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Very well said.

Especially this part:

It's also important to keep in mind that, as the situation becomes more difficult for more people, they will be looking around for ways to make their life more livable.

And I would add, 'with the least amount of effort'. I think another difference between PP readers and the world at large is that most people only dig as deep as they have to to make themselves more comfortable, whereas PP readers seem to want to get to something close to the 'truth'.

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thc0655
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Marked for extinction

I hope it's not too harsh a statement, but many people are marked for extinction (by Nature, if you will).  We can't be sure in advance which ones exactly, nor does that account for unprepared people who will "make it" and prepared people who won't (by sheer luck).  I guess the important thing is to triage the people we encounter as best we can and work with those who look like they're going to "make it" and with those who might "make it" if they get the right help in time.  We do a disservice to those two small groups and to ourselves by "wasting" time on the great majority who willfully refuse to wake up.  And we at least owe those who seem to be in the majority who aren't going to "make it" to give them at least one effort at waking them up to the truth and not writing them off completely.

"Welcome to the Hunger Games. And may the odds be ever in your favor."

Tom

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Oliveoilguy
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Amazing Attitude

jgritter wrote:

I'm now thinking that, with time apparently getting short, I'm going to have lay in an extra few hundred pounds of beans and a couple of thousand pounds of field corn just to feed people who don't, or can't, get it.  

John G

John....I admire your preparedness, but more than that your willingness to prepare for your neighbors who don't yet understand. I know a lot of hoarders who plan to wall off their compound and have the  "to hell with everyone else" attitude. You take prepping to another level. Thanks for reaffirming that charity, compassion, and kindness have a place in even the worst of situations.

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Time2help
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All Depends on Rate

One approach, the 5 gallon bucket:  Rice, beans, powdered milk, hot sauce, water filter, matches, flashlight, some other odds and ends.  Goes for ~$35 per bucket, plan would be for families with kids (to buy them a bit of time).  Hoping for a temporarily interrupted or reduced supply chain over time.  Hope is not a strategy, however.

If there's a short, abrupt shift that takes out the supply lines...looking at an NSE for many, if not a majority. 

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Luke Moffat
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Thanks Banker's Slave

After watching your video i found this little gem;

My takeaway point was skill acquisition and knowledge sharing.

Roll on March so that i can start my seedlings! :)

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Afridev
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Some thoughts on historical cycles video

Luke, thanks for sharing, interesting video.

Some thoughts that popped up. The final decline (chaos) phase doesn't seem to be 'burnt into the system', but seems to be the result of a number of elements that work together and are mutually reinforcing (not in order of importance):

  • A disconnect between the 'top' of the society and the 'bottom', with both having different priorities and pursuing different agendas (with the bottom lacking the organisation to really get its points through).
  • Increasingly complicated/ complex hierarchical/ power, administrative systems set up to manage the 'dynasty'. To a large extent these system start as means to increase efficiency (i.e. sluice the maximum of resources to the 'top' and the management of society) and create loyalty to 'the king'. These systems start to live their own lives though and start to be parasitic to society as a whole.
  • Focusing on the 'wrong' priorities; wealth, efficiency, rules, religion (which can be a positive force but also a negative one), the 'self' (narcissistic elements), the short term, false pride, the own group, instead of rational and equitable sustainability (resilience is part of this) that covers all of society with its environment (including climate system), and including groups affected by your society.
  • Environmental degradation; while the demands/ expectations of society grow (the 'top' needs to grow and have their luxuries and the 'bottom' need to be provided with their 'bread and plays' and some hope), the foundation on which it is built (i.e. ecosystem services, relatively stable conditions) is degrading through.
  • In general not being able to adapt to changing conditions and natural/ cultural carrying capacity of society (think population numbers, carrying capacity of ecosystems).
  • Growing hostility (internal and external), possibly linked to earlier conflict, abusive relations, cultural differences, others trying to obtain the resources of the initial society.

To a large extent a progression through the phases is natural (easier to let the cat out of the bag than put it inside it) but could be blocked/ reversed by addressing these elements (yes, this is extremely challenging and in our 'democratic systems' probably impossible as it would be political suicide for a politician to pursue this path; I'm afraid our society has the political system it merits).

There is much more depth to be explored here, and I'm certainly missing elements.

A jewel that explores this is the book 'Collapse' from Jared Diamond (much of my thinking is based on this book). For an introduction, see the video http://www.ted.com/talks/jared_diamond_on_why_societies_collapse#t-288939

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Luke Moffat
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Excellent Points Afridev

I'll follow the link tomorrow when i'm sober and extend the same courtesy of a thoughtful response. There is also a paper on the cyclical nature of civilisations which i think serves well as a primer, The Fate of Empires written by John Glubb.

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ScottT
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Excellent perspective

The idea that the world might be going to "hell in a hand basket" is depressing and not a fun topic to discuss with anyone, except those of similar ilk.  It is very,very hard to drum up any sort of conversation with friends and acquaintances without them looking at you like you have a third eye.  People outside of PP generally don't see our predicament because they are not looking for it, not paying attention, don't care...as you accurately note we are all "busy" taking care of the day to day things.  The brittleness of our systems we have come to rely on are taken for granted by the vast majority of people.  But I think my (teen) kids are starting to get it now. smiley

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pinecarr
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Finance and Liberty: "Economic Collapse - How Bad will it Get"

"Finance and Liberty" recently posted a discussion on "How Bad Will It Get" with Elijah Johnson (FinanceAndLiberty.com), Andy Hoffman (MilesFranklin.com) and Chris Duane (SilverShieldXchange, YouTube.com/Truthnevertold) that I thought may be of interest to some posting on this thread.  I don't think there's anything terribly shocking/new.  But I found a couple of points they made to be interesting.  E.g., they gave one example of a person moving out of the US, only to find hatred of Americans where he moved to.  So he moved back, thinking it would safer for him in his own home country during a collapse.

Here's the link:

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Nomi Prins Podcast

Why don't we call a spade a spade--the US has become a fascist police state.  The bankers, politicians and special interests are all on the same team, and they owe NO allegiance to country, only to their own selfish interests.  George Carlin talked about the real owners of this country years ago, when he said, "it's a big club and you ain't in it".  This truly does bring up the issue of our beliefs being threatened by facts.

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Cornelius999
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Sometimes you can be Too Paranoid

What I liked about Prins was how she talked about about JP Morgan and his friends sorting out the panic of 1907, eventually leading up to the founding of the Fed on that island on that weekend. Despite Chris baiting her, she explained it all as it may actually have happened. People in the same line of business got together and did what had to be done as normal people do. She didn't go in for " New W O" Conspiracies or Evil Master Planners.  Ordinary human nature seemed to explain it all.  Am I too naive?  

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pinecarr
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More recent news from Matt Taibbi on banks behaving badly...

From Rolling Stone on 2/9/15: "Will HSBC Deal Come Back to Haunt Loretta Lynch?  Deal to save HSBC's American office looks very bad in retrospect".  The story is at http://www.rollingstone.com/politics/news/will-hsbc-deal-come-back-to-haunt-loretta-lynch-20150209,

In a report released on Sunday, the International Consortium of Investigative Journalists… said that secret documents revealed that bank employees had reassured clients that HSBC would not disclose details of their accounts to tax authorities in their home countries and discussed options to avoid paying taxes on those assets.

This story traces back to a leak of files apparently stolen by a former HSBC IT employee named Herve Falciani in Switzerland in 2007.

Taken out of Switzerland, the files were then shared with authorities in France, Spain, the United States and Britain. The monster cache of info about wealthy tax avoiders came to be referred to as the "Lagarde List," after Christine Lagarde, who was the French Finance minister at the time the information first began to be circulated.

What HSBC's Swiss unit was doing went far beyond passive bank secrecy. The bank was actively helping its wealthiest clients avoid paying taxes in their home countries, sometimes using highly creative methods – a sort of criminal advice service, if you will.

 
Luke Moffat's picture
Luke Moffat
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Joined: Jan 25 2014
Posts: 247
Afridev - my position (sorry it's a week late)

As our analysis concerns human societies I shall attempt to explain how human beings differ in their behaviour from other creatures. I see two unique characteristics inherent in homo sapiens that are not present in any other species;

1)      The ability to form abstractions

2)      The ability to develop methods for deliberate extermination

Chimp-Man

As a member of the biological kingdom our genome is passed through successful breeding with a healthy partner resulting in children. To maximise the chances that our offspring are successful in mating we enter into competition for the womb of a healthy and attractive female. To maximise our chances at winning the affections of such a female we seek to offer what none of the other primates can – security. Security in chimpanzee societies is obtained through a monopoly on violence within the troop. The alpha-chimp secures the right to the healthiest females by earning recognition through his display of strength. Effectively the chimp is securing recognition for himself by ensuring that all other chimps in the troop acknowledge his ferocity.

1)      The ability to form abstractions

Human societies are a little different based upon what we define as recognition. The unique nature of the human brain (namely the large neocortex) allows us to develop complex language. Through this language we can develop abstractions. So whereas a chimp will compete with other chimps to gain recognition for himself, a human will compete with other humans to gain recognition for an abstraction – this can be a flag, a prophet, a culture or an ideology. Undermining this abstraction causes distress. Having another person recognise this abstraction results in happiness for the believer as the body raises the amount of serotonin, a critical neurotransmitter, in his system.

2)      The ability to develop methods for deliberate extermination

My second point is probably a bit more obvious for all to see. Homo sapiens are the genocidal species par excellence. No other creature on this planet can exterminate life with either the scale or the efficiency that we are capable of. We have utilised our understanding of science (through our ability to abstract) to either exterminate or control other peoples, other species or indeed as unintentional environmental destruction through biological, chemical and nuclear methods.

Now if you combine the two; that is – a being who feels distress after having their fundamental value system ridiculed along the ability to commit genocide you have somewhat of a problem.

Last Chance Saloon

Finally, add our necessity to compete for a female into the equation. If our ability to compete is based largely on our underlying values – such as disposable culture, or the acquisition of wealth, it is difficult for me to see how a person would abandon their competitive edge and embrace a simpler existence if he lacks either the charm or the wit to engage a woman. If his sole means to ‘get lucky’ is reliant on either violence or greed then I really don’t see how he will abandon those traits. It would be a form of self-termination.

Abstractions in relation to breeding

Here is where my points regarding the unique attributes of Humanity intersect with those of the Chimp-Man. Men are capable of forming abstractions to aid them in their ability to have healthy and attractive offspring at the expense of a woman’s own desires. Such abstractions include polygyny, God’s mandate to go forth and spread across the earth, homophobia, suppression of women’s rights, sex-slave markets, prima nocte – take your pick.

So where does this put us in the collapse of society?

The Elites

I think the Elites worked this out a long time ago and have since been perfecting Philip 2nd of Macedon’s divide and conquer strategy ever since as a means to be the class who initiate the genocide should it be required. The Technocratic Elite have risen to prominence because they are best able to exploit Man’s abstractions for their own gain. The mandate would simply read; ‘placate Man and he will not rise up.’

In an effort to avoid interaction with us lesser beasts they insulate themselves through a measurement of wealth knowing full well that we will never reach that level of status. To do so requires plunder on the national scale, over which they have a monopoly.

So now you have a disconnect which Jared was talking about in the lecture you posted – the Elite are isolated from the rest of us. They think in short term prosperity at the cost of long term stability. They demand recognition of their wealth and prosperity. They demand access to the healthiest and most prestigious women. And they will rob you to get it, and if that means genocide then so be it.

The collapse comes when there exists no more surplus energy with which to placate us lowly debt-serfs. The Elite take a well-earned holiday, wait until the chaos passes and then return. King’s go into exile. Peasants go to the grave. Just ask Napoleon…

Cornelius999's picture
Cornelius999
Status: Silver Member (Offline)
Joined: Oct 17 2008
Posts: 237
It appears that science and

It appears that science and technology while appearing to emancipate us, despite contraception,has hastened our arrival at the concrete wall of resource limits.  And since Darwin and Dawkins our evaluation of our nature has gone from flawed angel to headless gene replicator.  We seem to have awakened from a dream into a nightmare. 

The enlightment hope for reason and human perfection are looking, just now, to be cruel misdirections, which we have fallen over ourselves to take.  Science's ultimate vision seems to be the heat death of the universe.  And any inner life we used to have, and our  time and space has been monolopized by gadgets and gimmicks.  Talk about a Faustiaun pact!

I don't think any good comes from class warfare. We are the elites on a bad day - DSK might now agree.  We do need to focus on our relationships and communities and as Treebeard has said,  not volunteer to impale ourselves on things that don't have to be in our minds 99% of the time, or at all. Most of our time, as Chris says, can be spent doing the next thing well.  And we'll no doubt surprise ourselves at how resourceful we can be under pressure.  While we come up with what may be the best salvation story yet. 

Luke Moffat's picture
Luke Moffat
Status: Silver Member (Offline)
Joined: Jan 25 2014
Posts: 247
Cornelius999 wrote: I don't

Cornelius999 wrote:

I don't think any good comes from class warfare. We are the elites on a bad day - DSK might now agree.  We do need to focus on our relationships and communities and as Treebeard has said,  not volunteer to impale ourselves on things that don't have to be in our minds 99% of the time, or at all. Most of our time, as Chris says, can be spent doing the next thing well.  And we'll no doubt surprise ourselves at how resourceful we can be under pressure.  While we come up with what may be the best salvation story yet. 

Absolutely, i wasn't advocating class warfare - i was just using historical evidence as a means to give context as to how human society functions. The reason my post is a week late is because i've been cutting up wood by hand and assembling raised beds in time for the spring (with various degrees of success :) ). I think the saying is think global act local.

For what it's worth i don't get too angry about it anymore. I'm at that point of system disassociation. I know how perverse it is but i also understand how dependent most people are on the system for resource and psychological necessities. If people want to be independent then they require food and energy independence - i don't see that happening on the scale required to avert a crisis. This will just become another history lesson for people to ignore.

All I can do at the minute is talk to the people close to me about what i do and why i do it. Sites like this help me to clarify certain aspects and present concise summaries on issues i'd never have the time to address myself. It's almost become an emotional refuge to see others here going through the same set of frustrations. But we're a minority, and it'll be the environment which changes before the people

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Bobby
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Posts: 18
Fantastic! A must listen.

Fantastic! A must listen. Just this one podcast is enough to gauge what can only happen in the future. The Fed shouldn't be given this much importance yet it gets to decide all functions of the economy with impunity without having a clue about the impending (next) doom. This whole concept of Fed and Monetary expansion has gone awry and nobody has the knowledge on how to resolve this and the world at large is getting adversely affected. Fed is medievalish. We need math-based (crypto currency) like features otherwise theres no telling when US$100 Trillion of unsubstantiated burden can go ten times this level. Humanity is at stake here. Thank Nomi Prins for the detailed history on Fed. She should replace Janet Yellin. Why not??

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pinecarr
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Joined: Apr 13 2008
Posts: 2102
Nomi Prins: Asian Infrastructure Investment Bank (& more)

The Freedom Report, at http://thefreedomreport.us/nomi-prins-asian-infrastructure-investment-bank-and-planned-free-trade-zones-april-18-2015/, has an interview with Nomi Prins,  "Nomi Prins: Asian Infrastructure Investment Bank and Planned Free-Trade Zones – (April 18, 2015)", for those who may be interested.

Published on Apr 18, 2015

THE MATTERHORN INTERVIEW – April 2015:
Nomi PRINS

The World is in Play

On behalf of Matterhorn Asset Management, Lars Schall talks with bestselling author Nomi Prins about current developments in finance and geopolitics, such as: the strength of the US dollar; the Chinese-lead Asian Infrastructure Investment Bank; the relationship between Wall Street and the City of London; and the planned free-trade zones in Asia and Europe with the United States.

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