Friday, November 30, 2012

Industrial Deception and Fractional Reserve Banking Misconception

For most of my career I worked in "Financial Services" (what an oxymoron that one is). Of course, what we we sold was in the interests of the financial system and the industrial revolution's elite. The idea that any significant percentage of The People could be made financially secure by investing in our current system was one of The Great Lies.

(Nearly) Everything, or every concept, in our financial system is either designed (if you tend toward conspiracy theories) or has evolved by phenomenon (my way of thinking) to enslave (most of) The People.

And now many people 50 and up have no "retirement savings".

The pension system is a perfect example: The beneficiaries of pensions extort that money from younger workers. Why else would pensions exist? If the older worker's production was such that it could support and sustain them for 20 or 30 years of idleness, their pay would reflect that fact and they would save that money for that time in their life. Anyone with even rudimentary math skills (but in America that is roughly 2% of the population) understands the certainty of this, and anyone with just a modicum of common sense can make the connection that government workers have enslaved non-government workers to fund the public employee pensions.

In my capacity as a Wall Street broker/salesmen I had a bird's eye view of the financial circumstances of the non-elite 1%. See, Billionaire's are not the 1%. The 1% are working stiff professionals with $350k plus incomes with a couple of million $$ net worths. And in my experience, I can think of very few that were not completely enslaved by their mortgages, car leases, property taxes, and insurance bills. Invariably they were one job loss, a divorce, an illness or injury away from penury - despite having lifetime earnings of $10 to $30 million-freaking-dollars.

There was no difference in the security level of these high earners and more pedestrian earners.

We were trained to dress well, use the right fork, put our napkins in our lap and request fresh pepper on our salad so that we might go forth and sell the 1% financial solutions to give them "financial security and peace of mind". In my 25 years I don't think I, or anybody else working in the industry, succeeded in giving our customers any such thing - and not that it was our fault. It was not. That's just the system.

The truth was that the "financial security" we were selling could not be had by anything that the vast majority could buy. In fact, security would lie in the direction of not buying. Not buying a house with high property taxes or an extra bathroom. Not buying a ski house. Not buying an expensive car. Not buying expensive jewelry/clothes/vacations. Not eating out. Not paying $20 for a martini.

People sold their freedom for the chachkas (link provided for the Yiddish challenged) mentioned above - The Great Chachka Enslavement.

While personal freedom is to be had with a modest house and an old car, or better yet - no car - the system cannot tolerate this, and hence the system cannot abide your personal freedom. Accordingly, it has evolved to enslave you for its own purposes:

The Industrial Deception and the Fractional Reserve Misconception.

The system needs you to be in debt, and it requires this for 2 very basic reasons: First, money is created in our system by being lent into existence - no lending = no money supply. (Since going off of the Gold standard World GDP has increased by 5 or 6 fold - and total debt has increased by 65 fold. Is there any wonder that Americans consume anti-depressants and anti-anxiety medications the way they do?) Second, the system needs you to work yourself to death. If you don't the 1% will not be able to enjoy those private jets, and today's elderly (but not you when you are old) will not have 25 years in idle retirement with nearly free healthcare and a monthly stipend coming in - far in excess to anything that they contributed to. (And people under 30 voted overwhelmingly for Obama? The younger generation either has rocks in its head or it is complete unable to run a few, short, and simple financial calculations... but they can text with both thumbs so they got that working for them.)

All of that money creation has had 2 entries (like everything else financial) on the Balance Sheet of Life. Your debt is somebody else's asset. Same with the government's debt. That huge deficit? You owe it and the 1% owns it.

Do you get that? The deficit has been run up in order to buy your vote through elections cycles over the past 40 years, only you didn't actually get anything for selling your vote. What you got was enslaved.

I am sure you are starting to see what I am asserting here: The government's debt has enslaved you. Your home and mortgage has enslaved you. Your car, your refrigerator, your dish washer, clothes washer, dryer, the toaster, the f***ing blender, et al, have conspired to enslave you. Your engagement ring. Your expensive wedding and even more expensive divorce... the grand sum of all of these inputs is that you are financially insecure, anxious, sleep deprived, and fat. Did I mention your family circumstances? Either you don't have kids, or you are raising kids in a broken home, or you resent your spouse for working so many hours to meet that mortgage and those car payments, and providing for you and the kids you do have - and in almost every circumstance you do not really have any money or any sort of financial security.

But you want your kids to go to college, get a "good job", and repeat this ferkakta process?

Is (formal) "education" the answer? It is for those with professional licenses (engineers, lawyers, physicians, dentists) and regulations that create barriers to entry.

(Take my favorite - fill and drill dentists. How long do you think it would take someone to become a "Dental Hygienist" in reality. A week? 2? How long before any relatively bright person could drill and fill a cavity? A few weeks, TOPS. Yet in 48 states a person cannot even open their own "Dental Hygienist" practice. They must be overseen by a "Doctor".

The result is over 100 million American's receiving absolutely no dental care because the Dental lobby has succeeded in complicating the subject in order to keep their incomes high. We urbanites look down our long noses at people with holes where teeth should be, and what is keeping those teeth from being there are the very people that claim to care about our dental health.

The U.S. Army will take a high school graduate and within 16 weeks he is a trained medic capable of all manner of field surgeries - emergency traches, spine stabilization, vents, wound care - with bullets and shrapnel flying around.... but it takes 12 years to train a guy to repair your torn ACL? 12 years??!! To do minor carpentry and elementary seamstress work?

Did I mention healthcare professionals kill more people than they save? After all, seat belts cause people to drive with less care. Want people to drive really, really safely? Put a dagger pointing at their chest on the steering wheel - in the aggregate you will save far more lives and prevent far more injuries, as sensible people would drive only when necessary and when they drove they would do it with great care. Wanna bet the same would be true in a deregulated healthcare environment? Making healthcare affordable is as easy as 1,2,3. Eliminate health insurance. Of course, the system does not want affordable healthcare any more than it wants affordable housing.)

But outside of professionals... do retail managers "need" a $200k education, and 4 years of not earning? Police officers?  Kindergarten teachers? Nope. But they are getting it - and they are getting it good. And hard.

And everybody is broke. Anxious. In debt. On medication. Fat.

It ain't a coincidence.

You can think for yourself. It takes courage and b@!!$ but you can think. And act.

I have a friend of mine, "C". "C" has no formal education past 8th grade. He went to work at 14, and saved every dime. He never drank or smoked. Never gambled. Never owned a car. Never wasted money on gold teeth or tattoos. By 20 he had enough money saved to buy some land, and enough experience to "G.C." the construction of his own house. Though he never had a steady "job" (he worked at odd jobs, construction, and farm work), he bought the land for cash with money he had saved by working the previous 6 years. He bought the building materials for cash, and he built himself a home. He was 23 when he and his wife finished the home and already had 2 children.

He is 55 now and has never been in debt. Although he has 11 children (and 45 grandchildren), "C" has a net worth in excess of $500,000 and his monthly need for cash is less than $2,000 because he lives in a rural setting with very low property taxes, he grows and raises most of his food, and he refuses to buy insurance of any kind. He did all of this while living his entire life off-grid.

No one in his family has ever been arrested; ever used drugs; ever took an anti-depressant. ever been divorced; ever died in a car accident or by violence.

Maybe you don't want to live like "C". You don't have to, but you can take instruction from people that have arranged their lives differently. "Steal" their good ideas, if you will.

"Doing the same thing over and over again and expecting different results is the definition of insanity" - Ben Franklin

American policy waged a war on poverty in the 20th century - and now has 1/6 of its citizens receiving food assistance from the government.

American policy was to keep the Oil flowing out of the Middle East/North Africa at all costs - and now its economy cannot function in the absence of 240 million automobiles and far flung suburban sprawl... all the while destroying the environment with those hunks of metal and obnoxious McMansions.

American policy was to recreate the European "Safety Nets" that have left all of us unsafe, insecure, and broke.

American policy was to make everything fair and now we have an entrenched and permanent underclass and an out and out WAR between the sexes.

American policy was to "educate" (indoctrinate?) our young people with college for all. So we credentialized "Play Ground Supervisor", "Massage Therapists", "Political Scientists" (SNICKER!!!!), and, my personal favorite, "Women's Studies Professors" HAHAHAHAHAHAHAHAHAHAHAHA
HAHAHAHAHAHAHAHAHAHAHAHAHAHAHHAHAHAHAHALOLOLOLOLOLOLOLOLOLOLOL!!! Eh... Heh... Sorry. That got away from me), and now we have over $1 TRILLION in student debt that will never, ever be repaid.

There is a better way.


Anonymous said...



DaShui said...

I think that quote"doing the same thing over again" comes from A.A..

guy11976 said...

You are right. L was like my father and mother who were both born into families with wealth in another country. Neither ever owned a car, a stock, a bond, a house or plot of land.
My father said he did not need to live with things, at 16 he made that choice, to forgo physical things and and embrace the metaphysical.
My father knew more about art history than Columbia college Professors and used to tell me that formal education stunted your growth.
While teaching, I knew that my course was not the end but a means to encourage students to be curious to keep on learning. I am pleased you show that ability.
Very great but subversive essay. The next one should be how to change on our values and change the system without the house of cards coming down.

Greg T. Jeffers said...


I don't think the house of cards needs any individual's concern.

I don't think my friend "L" or the members of his "community" concern themselves at all with politics, economics, or finance.

Freedom comes by just putting that baggage down... and I will be posting something about how to do that exactly in my next blog.

Greg T. Jeffers said...


That quote is one of Franklin's most famous quips. Ben Franklin was not just a Great Statesmen - he was one of the world's most prominent scientists in his time.

His quote was pertaining to the outcome of his experiments.

PioneerPreppy said...

Couple of problems here Greg. Maybe I am jumping ahead of you as I have done before but coming from someone who went "Galt" himself and tried the non-political route I can say the system won't let you anymore.

Certainly I believe in the theory of "L"s life. I saved, bounced around in jobs, drove old cars and got completely out of debt. I did dabble in some investment which I still have but I never became a slave to a mortgage, car payment, insurance etc. Have never needed any drugs, prescription or otherwise etc. Settled in a very modest property tax county and have managed to resist the wife's appeal for a new home so far. We have not had an loan, credit card debt or insurance payment other than what is required by law in decades.

Yet that scenario no longer protects a person. New regulations, wealth redistribution techniques and declining dollar values are destroying those who wished to live that life. Once upon a time you could glide under the radar but the lefty/feminist/progressives keep lowering the radar screen. Look at the silliness they are now doing with the so called rich which is now a simple couple making 250K a year? Even my modest existence is now gaining their scrutiny due to land values and other inflated values. They gave me a choice several years ago when this started. Keep 250K in the bank that they can access and can't be used or pay 25 bucks a month car insurance and it has just grown from there.

There is no Galt's Gulch to escape to any longer. Now theya re eyeballing my wood furnace and lifestock for carbon fart taxing.

The can be no more non-political living the time has come to begin the fight back.

dennis said...

"Henry and the great society" showed up in the mail. Thanks for the review. Then today I got a bill for my internet. It went from 25 to 40 dollars...I'll miss your blog!

Greg T. Jeffers said...


You shall be missed!

Still, cutting any bill that repeats itself (any monthly bill) is one more step to weaning yourself off - and starving the beast.

Stuart Staniford said...

Greg - you are starting to sound like Ran Prieur :-)

Greg T. Jeffers said...


I just read Ran's blog discussion about personal economics.

Sounds an awful lot like me. If it were not for my wife I would have almost no "stuff". I find it painful to spend money on consumer anything, so she handles that. She comes from an old school Japanese family and is frugal in the extreme when compared to Americans... she's just not as bad as me.

I look forward to reading more of Ran's stuff.

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