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Understanding ‘Consciousness’ is fundamental to understanding ‘Money’ !

January 30, 2012

Money and monetary policy has changed over our history. We need to understand these changes if we desire to prosper as investors!

The history of money is understood by few Americans and also few investors. Yet, money is the key to Capitalism and also the key to sound decision-making when making our investments. Many investors are now recognizing that our monetary SYSTEM has changed and that many of our current problems (debt and deficits) relate to our monetary issues.  The issues of ‘money’ can be presented in just a few categories…as below:

1. What item or items have historically been the foundation of ‘money’? If we go all the way back to the first Civilization on this planet (the Sumerians) we can show that their money item was an item from nature. The most popular money unit that emerged from the Sumerians was a silver coin called by the name ‘Shekel’. Monetary values were measured in ‘standard’ weights (mostly with silver as the money unit). Keep in mind that the purpose of ‘money’ is to serve as a ‘measure or standard of VALUE’. To accomplish this objective, ‘money’ needs to be defined in terms of some THING from nature. Money has included many THINGS or items from nature (copper, iron, silver, gold, tulip bulbs, nails, etc.) since the time of the Sumerians…however, the concept of ‘money’ has always included some THING outside my/your MIND…until today. What has happened to change all this?

2. What was the main cause for the psychological changes in our ‘money’?  After our GREAT DEPRESSION era of 1929-1944, our money units gradually became less and less real or less based on items of real VALUE. Historically, ‘value’ has been perceived as intrinsic in certain items from nature. The three most desired items from nature which were generally perceived as containing intrinsic VALUE were copper, silver, and gold. This made these three commodities ideal foundations for ‘money’. Since the purpose of ‘money’ is to measure VALUE, economists and philosophers generally thought that any money unit needed to be defined or directly related to an item of VALUE.

This was the logic and philosophy of the American monetary system. Basically, it was Thomas Jefferson and Alexander Hamilton who designed our monetary philosophy. After observing human behavior in the marketplace, they concluded that most people viewed items like copper, silver, and gold as desirable items for measuring VALUE. This made these commodities their choice for the foundation of our money system. Our ‘dollar’ was chosen as a NAME for our money unit and this NAME (dollar) was then defined in terms of silver (and indirectly in terms of gold).

Our money unit (the dollar) remained tied to some item viewed as containing intrinsic value until August 15, 1971. It was on this historical date when the foundation for our money unit (the dollar) was psychologically CHANGED. Our then President, Richard Milhous Nixon, upon advice from his Secretary of Treasury and other prominent economists decided to CHANGE the relationship of our money unit (the dollar) from all ties to an item with perceived intrinsic VALUE (gold). The NIXON SHOCK was the name for this historic change. Shortly after this change, monetary policy was made much more flexible and dynamic.

With no tie or definition of our money unit (the dollar) to an item from nature (a THING), it became possible to INFLATE the number of money units Ad infinitum (no limitation). Our monetary policy (after 1971) became a TOOL of Central Bankers who could manipulate the number of money units as they perceived as proper. At first, these Central Bankers could cause money units to increase via the ‘printing’ of new paper units. Then in the 1980’s and 1990’s a new technology emerged called the digital computer. This new technology made monetary policy even more flexible and dynamic. New money units (still called dollars) could now be created and destroyed via the computer. Digits in the computer screen replaced the ‘printing’ of money units (the dollar) and DIGITS (images in the computer screen called ‘numbers’) became our new ‘items’ for monetary exchange, investment, monetary policy, and for ‘measuring VALUE’.

3. Why is ‘Consciousness’ a key concept that we NOW must understand if we desire to make good decisions with our investments?  Consciousness is what our key Central Bankers use to originate their money unit creations. Today, Central Bankers like Ben Shalom Bernanke (USA), Mario Draghi (Europe), Mervyn King (England), Zhou Xiaochuan (China), Masaak Shirakawa (Japan), etc. can CREATE money units (digits with currency names) from their CONSCIOUSNESS. Money units are now just ‘DIGITS’ (imaginary units) which are created as VIRTUAL money units…Out of Nothing…Out of Thin Air…Out of MIND stuff. This makes our money units creations from the CONSCIOUSNESS of key policymakers.

Ben Shalom Bernanke, for example, can now just call up his DESK manager at the NY Federal Reserve Building in New York and request that new money units (still called dollars) be created (Ex nihilo) to represent new CASH in his System Open Market Account (the SOMA account). Money, in other words, APPEARS from the CONSCIOUSNESS of Mr. Bernanke and his ‘group think’ FOMC committee. What should this process be called if we desire to represent REALITY today?  My name for this process would be ‘MONEY FROM HEAVEN’. Bernanke can now create money units (Ex nihilo) to distribute to any of his banking friends and associates. What a CHANGE from our historical money units and from the principles of CAPITALISM. Bernanke is now equal to historical Capitalism, Money, Monetary Policy, the Source of VALUE, the Measure of VALUE, and Giver of Solvency (to his favorite banking buddies).

4. Why does this One unelected person…who meets mostly in SECRET with his banking buddies (the FOMC committee and via phone with Tim Geithner, et al) get to CONTROL and manipulate the entire global marketplace Are you aware that this One unelected person created some $1.5 trillion of monetary digits (still called dollars) via his QE1 policy (2008-2010) to bail-out his banking buddies. Then he followed this up with what we call QE2 (2010-2011) which resulted in another $600 billion of new money digits (dollars in the computer screen) to manipulate economic activity and the greater marketplace. All this manipulation is being done with basically ONE unelected person who operates with minimal transparency or Congressional oversight. Is this Capitalism that we can believe in?

Money today is no longer a THING from nature (like copper, silver, or gold) and it also has NO objective VALUE. How can a unit (still called the ‘dollar’) created from the CONSCIOUSNESS (mind) of Bernanke, et al, be viewed as SOUND money? How can a unit derived from the private THINKING of this ONE unelected person (and his ‘group think’ committee) be viewed as a SOUND system for establishing PRICE stability and EMPLOYMENT growth…going forward? Can ONE unelected person at the Fed Building in Washington (in conjunction with his ‘group think’ committee) or the Fed Building in New York where the HFT (high frequency) computers are located determine the stability of PRICES, VALUES, and economic GROWTH for our entire economy? How can we discern the MIND of Bernanke and his plans, goals, and future money manipulations? Can anyone DISCERN the CONSCIOUSNESS (the inner thinking) of this ONE unelected person? Is QE3 coming? When? How Much? Who get’s the units (still called dollars)? Why do certain TBTF institutions get funds for ZERO interest rates and others get foreclosure notices?

5. Why is our current non-SYSTEM inherently immoral, unfair, corrupt, and bankrupt? It doesn’t take a genius in economics or monetary history to recognize that our current non-SYSTEM is destined for collapse. Since the emergence of a non-thing as our monetary unit (1971 and thereafter), we have created tremendous wealth along with tremendous DEBT and DEFICITS. The favorable aspects of a ONE person monetary system (Greenspan from 1987 to 2005) and (Bernanke from 2005 to today), is that ‘money’ could be created Ad infinitum and Ex nihilo. This process allowed unlimited borrowing and refinancing and this led to credit INFLATION and the BUBBLE economy. All this seemed good and proper until the CRASH of 2008. The benefits of fiat money units (credit cards, bank credit, and inflation) helped us create unbelievable new WEALTH (goods and services). The problem, however, is that this non-SYSTEM eventually leads to an IMPOSSIBLE debt issue which defies logic and repayment. We are NOW at that point in our economic history.

We now must understand this history and the issues which have emerged. The key concept going forward is understanding the issue and concept of CONSCIOUSNESS. Another word for this concept is the human MIND. Today, we experience a new money system which is not based on material reality. Our money is created Ex nihilo. The units we use for our measure of VALUE (digits in the computer screen) are virtual and imaginary. The process of money digit creation (monetary policy) is mostly a SECRET (non transparent) process. This process and non-System leads to value distortions, derivative instruments to manage uncertain risk, unsustainable debt for public and private enterprises, price volatility, flash crashes, algorithm manipulations of prices via HFT computers, moral hazards for governmental entities, corruption in our financial and political institutions of power, and a need to save the non-System via more hierarchical institutions (a ONE WORLD Monetary System).

Let’s conclude with these remarks:  history demonstrates that any type of money system must be based on some THING perceived as having intrinsic value (silver and/or gold are the best historical examples). Money that is created Ex nihilo by a few Central Bankers is not a SOUND or MORAL system going forward. We must now either eliminate all money from the face of this planet or restructure our system via NEW MONEY (based on gold and silver). These are our ONLY solutions going forward. The concept for 2012 and beyond is:  NEW MONEY OR NONE! Enjoy and pass this missive on to our leaders.

P.S. If you desire to understand CONSCIOUSNESS see this website:

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