The World at Large

----- Forwarded Message ----
From: tom woodfin
To: LJ
Sent: Sunday, January 25, 2009 11:25:07 AM
Subject: the world at large

heres a scenario for you:
the philippines, a look into the future. here we have a nation that has been there, done that, theres nothing these guys dont know about banking crisies, the philippines wrote the handbook on these things! infact it seems they've screwed up so many times that theyre almost insulated from whats going on. unfortunately thats 'almost' because the real crisis that people are still so slow to catch on is one of paper money. and when that comes tumbling down it will certainly be interesting to see how things play out. the invention of paper money I'm now convinced was entirely created in the self interest of a group of bankers looking to hold the world to ransom. this invention of paper money has been exported to the rest of the world. currencies so far have had to keep up with this falling dollar, so when the states prints money the rest of the world follows suit. its empiricism at its most feindish;

the empires of old used armies to march upon distant lands claiming them by force. it became obvious this tactic had its flaws, so instead the united states decided their empire would take on a different form. things are easier to fight if you can see what your fighting. people see soldiers invading, a natrual reaction would be to fight that invasion (depending on the potency of their artillery) but nobody is less likely to rebel than the guy who thinks he's free. the creation of paper money works as follows but first we'll start with some supply demand economics;

the most important thing to remember is that something is worth whatever people are prepared to pay for it. i have $10, you have $10, everybody has $10, the price of a banana costs $1. when everybody has $10 there seems to be no problem. if there are enough bananas everybody can have one, if the banana crop was ruined this year, the supply of bananas is short, the price rises, it goes to whoevers prepared to pay the most for that banana. if there are more bananas than expected one year there is an oversupply, because people don't want that many bananas, to sell them the price gets lower. this is basic supply/demand economics, a natrual balance, the rarer something is that people want then the more expensive it is. the more abundant something is that people don't want the cheaper it is. a diamond is very rare and very sought after, therefore very expensive. a grain of sand is extremely abundant and not really that sought after. so its pretty much free.

this system works ok until you start tampering with the money supply. back to bananas. a banana costs $1 when everyone has $10. suddenly from nowhere new money is created and given to a chosen few, now these chosen few with no extra effort have $1000. suddenly these few are prepared to pay $10 a banana to ensure they get their banana because they have more money. the price of bananas rises. its creating a flase demand. these people dont want bananas anymore than the next person, they can simply afford to pay more for them and so the price goes to whatever people are prepared to pay. its pretty clear we can see this happened in the housing bubble. new money came on the market, people paid more because they had access to more money. the price went up. way (way) beyond what it was worth. but it wasnt the houses getting more expensive. a house is what it is, it was the money getting cheaper, more abundant that sent the price up.
the problem with this particular example was that when all this money became available to the banks and the loans were made to people to buy houses by the banks, these risky loans (given to people who probably could not pay them back, but hey it didnt matter because "it was different this time") that garbage debt was chopped up, sliced, diced, repackaged, and given a seal of approval by the ratings agencies. not too dissimilar from a meat such as spam. all the odds and ends of meat, hooves, arseholes, scraps that get scraped from the floor of the abatoire then get churned up compressed repackaged and sold to people as spam in a nice little tin at a very low price.
these loan packages were sold to investors, pension funds, schools, you name it, as high grade investment tools. it was like calling a tin of spam a fresh cut slice of tenderloin.
now of course its all coming home to roost and these loans that were made to people who couldnt pay them back are, suprise suprise not being paid back. this is extremely cunning - the banks had access to free money, which they then lent to the people under the condition 'if you do not repay this loand i can claim an asset of your, ie. your house. so in otherwords they can get something for nothing. own the house and you own the people. but at the moment its like saying one of our cattle was infected with something dreadful, however we didnt know and we scraped together the odds and ends of ALL the cattle to sell on as spam. so we have no idea which tins are infected and which arent. these debt packages are so complex that nobody knows whos owed what. and therefore nobody gets paid. and people who dont get paid, dont spend money, unless they borrow some.

heres where it gets really interesting. in a bumbling bid to try and rectify the situation and not expose the sham, governemnts are trying throw unprecedented amounts of money into the mix, to keep this financial corpse from rotting, or at least mask the smell. where do they get this money from? glad you asked, they either borrow it, or they print it.
here is an important principle; debt is a claim on future labour. what your basically doing is saying I havent worked to earn the money yet, but when I do, the money I WILL earn from my future work, will go back to you. with interest. interest? thats right, I will give you back more money than I borrowed from you. where does that extra money come from? (and this is tough to get your head around) well it has to be created from thin air. diluting the value of all the other notes around it.

the UK have run themselves into one hell of a mess. theyve borrowed money to buy things that feel nice. if they wanted a new tv they bought it, on credit, new holiday, no problem, credit, new house, new kitchen? sure why not, just take out a loan. now these things are not going to create any future wealth. they are merely indulgences. so where does the money come to pay for these things? theyve not been worked for and earned. well. either it doesnt. or it comes from thin air (printed) the 'thin air' option destroys the value of the pound as lots of new money becomes available, the 'doesn't' option destroys the value of the pound as nobody will trust lending money to the UK ever again. its the perfect check mate. there is one other option;
the people. if we rememeber, debt is a claim on FUTURE human labour. so the UK government can say, ok, we'll tax the people for this horrendous debt we've run up. and now we return to the philippines.

the philippines ran into horrendous problems with its banking crisis. it was by far the worst in asia. the governemnt borrowed and borrowed to bail out their banks for their reckless decisions to force lend onto people who were high risk. now the government is paying back that debt with taxpayer money, taxpayer money that should be going on schools, hospitals, roads, basically back to the taxpayer. but its not. its been creamed by the banking elites, and thus you get what the philippines is today; a woeful lack of education, terrible infastructure, dangerous medical care, rampant corruption. but this is how they want it. the people can be manipulated, stolen from, and abused. but at the end of the day when you've just worked 12 hours in a sweatshop, who has the energy to rebel? havent they got enough probelms? who even knows what theyre rebelling against? theres food on the table, you might have a bit of extra cash for a tv, theres no invading armies in sight. its the most cunning form of slavery. and everybody believes in it which is what gives it its validity. generations of british children will be paying for the mistakes made by their govenrment.

as you said to me once, it only takes a few people to stop believing in it and it stops being true. this is what we could be facing. and these things according to history don't usually go down without a fight. the war engineered i imagine will be between creditors and debtors, asia is owed money by the west. the west cannot pay with money that means anything. UNLESS it enslaves its people and reduces them to the kind of poverty we've seen in asia for so long. this may take a big fight and circus to implement though. I dont know who it will involve, where it will take place, what it means for us, but you can be sure that theres no way in hell I'm going off to fight and die for the UK government. times like these are tense becuase everybodys in the shit. and when you put rats in a box eventually they fight. there are so many reasons the world could go to war, and so many reasons it seems inevitable. but when it happens I'll be as far away from all the bullshit as possible. riding it out, probably planting potatoes on a hectre of my own land in bohol.

and that pretty much concludes economics class for today, it helped me get a few things clearer in my head too,

heres a website you may find interesting;

http://www.ratracerebellion.com/jobs-education.htm

directory of online work I think, I'm looking into it now for me and my family and firends.
the english school is going well, we're picking up students and going on marketing campaigns, i recently got a client in mactan, hadsan beach resort, I cycle there on a morning, or at least down to the ferry port where i get off close to the old bridge and cycle across mactan. its by far the quickest way to get there, I can do the whole thing in under an hour. and when i get there white sand, blue water, free lunch and 760 pesos an hour to teach a group of four. seems like a good deal to me.

not all my emails can be this long but i figured it had been a while and you needed some written analogies to refer back to in understanding this complex mess as it unfolds.

take care dude, cebu misses you.

Tom