Collapse Page #5

---

who was that pressure coming from?

I have absolutely no doubt that

Richard Cheney and Donald Rumsfeld

took an intense personal interest in me

and what my newsletter had published

for all the years of the Bush administration.

That's about as specific as I care to get.

There was a guy named Von Clausewitz,

who said that

war is a continuation of politics by other means.

Politics is a continuation of economics

by other means.

To understand all of this mess, you need to understand

one term, that's a big financial term,

that's real simple to understand,

it's called derivative.

A derivative is any financial instrument

which is derived from the inherent value

of something else that's tangible.

In other words, an ear of corn has value.

a barrel of oil has value.

If you have a house and a mortgage, that's fine.

When you start doing mortgage backed securities,

packaging and bundling,

that's called a derivative.

As of the start of the collapse,

which, let's peg at september of 2008,

there were derivatives with a notional value,

meaning that if you added up all the pieces of paper,

were worth 700 trillion dollars.

In other words, if they all cashed out at once,

you would need to have 700 trillion in cash,

and of course there isn't that much money.

So with all of these hedges and derivatives and puts and calls,

those are all derivatives, and all these other things they do,

All they cared about was making the minimum

monthly payment on their credit card bill.

In other words, to service the 700 trillion dollars

in notional value derivatives,

they had to pay a certain amount of cash every month,

and God forbid they should all come due.

What's happening with all of these bailouts,

which are now around

They're chasing a 700 trillion dollar

derivatives bubble down the drain.

The people who have run the monetary paradigm,

the economic paradigm,

since money was first invented, have wanted to mystify it

and to make everybody believe that only some expert

could understand the mumbo-jumbo

of the priesthood of money.

Three things only anybody needs to know about

the way money works around the world today,

One. Fiat currency.

What is money?

If I were to take a bill out of my wallet,

and I reach into my wallet, and I pull out this bill,

it's 20 dollars.

Whow, okay.

Can I eat it? Can I roll it up and chew it?

Do I get calories and vitamins?

No, I don't.

Can I fumble it up, throw it in my gas tank?

Is the car gonna go anywhere?

No, it's gonna clog the fuel injectors, maybe.

This is only a symbol.

This doesn't mean anything, it's fiat.

It's created out of thin air,

because somebody turned on a printing press.

That's all it is.

Before the great growth of population,

which occured with the advent of oil,

came this revolution

in the monetary system as well.

There was time when

the pound sterling actually meant

a pound of sterling silver.

There was only so much silver out of the ground,

it was tangible, you couldn't print silver,

it was something real.

You cannot print anymore money

than there is energy to back it up.

It's that simple.

So we have fiat currency.

Then we have something called fractional reserve banking.

If you were to bring me in a 10 dollar deposit,

I could make, uhm,

Based on just having

that 10 dollars in my drawer,

because it's all calculated on the premise

that not everybody is gonna come in

and want their cash all at once.

That's called a run on the bank.

So, they have calculated the odds,

much as, uhm, Vegas odds makers do,

and said ok, well, very little odds

under normal conditions.

When I lend now a total of 100 dollars

based on that 10 dollar deposit,

that's more money

that I create out of thin air.

Well gee, that means that,

in order to pay off whoever gets that money,

has to make more money still to feed it

at the bottom to pay the bank,

so that the bank can create still more money.

You know, I think it's probably pretty safe

at this point in time with the collapse of the US economy,

to say that pretty much everybody is understanding

how compound interest works.

the higher the interest rate on your credit card,

for those people who had,

you know, 20-25% cards,

that means they're creating that much more money,

if they don't pay cash every month.

What I have just described,

is a pyramid scheme.

We live in an infinite growth paradigm,

which requires growth forever.

It's not that Bernie Madoff was a pyramid scheme,

or Stanford was a pyramid scheme,

the whole economy is a pyramid scheme!

The whole global economy cannot be sustained,

it requires infinite growth.

But infinite growth collides with finite energy.

First law of thermodynamics,

energy can neither be created, nor destroyed.

The second law,

energy converts in only one direction,

from usable to unusable,

that's called the law of entropy, things break down.

An in every energy transaction, some energy is always lost.

So you have finite energy and you have

a financial paradigm which demands

infinite growth and we're at the point of human history

where the infinite growth paradigm

collides with something

that is more powerful than money is.

By 2006, I knew that the collapse was very imminent,

that there would be a major implosion

of the US economy.

I actually missed it by about a year,

maybe a little bit more. I thought it was

gonna happen sooner, but it happened.

And now that it is happening, these pieces

are falling exactly as everything else

had written, said, done. All the peak oil activists,

all the sustainability advocates.

Our map was proving deadly accurate.

Things don't break up,

they break down.

When a government collapses,

what happens?

The mail stops getting delivered.

Air traffic controllers don't get paid, so they

don't go to work, which means planes don't fly.

Bridges and highway inspections don't get made.

Food and drug administration inspections don't get made.

Maintenance is going to be defrayed,

Law enforcement stops working.

I mean, it's no secret now.

You see the headlines every day.

California's bancrupt, Michigan's bancrupt, Ohio...

They're shutting down services left and right.

There are tent cities springing up all over the country,

there are homeless, displaced people.

The great many billionaires, who we would call the elites,

the many very, very wealthy people are getting

crashed, burned and eaten alive.

What you don't hear, is the fact that all

over the world economies are collapsing

much faster than the US economy.

Brittain is an absolute basket case.

There is a curtain of despair

descending across Eastern Europe.

There's a revolution underway in Greece,

it's not riots, it's not civil unrest,

it's a revolution.

Drug violence right across the border in Mexico.

This is all part of the collapse.

Pakistan, Afghanistan, there's lots of violence.

The people who have run the planet to this point

and who are running the planet now, are losing control.

Rate this script:0.0 / 0 votes