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Interesting thought provoking article from Elaine - 1931-1933: Our Future
It always enriches us to go into the past to see the road before us. The future is always illuminated by the past. But we can't look directly at the past anymore than we can directly look at the future. We see all in a mirror which distorts things or dims the vision. Understanding how to make a good mirror and burnish it brightly is key to viewing the future with the greatest clarity. Many people like to see the past in a carnival mirror because it fits preconceptions. We must strive to avoid this! Now, onto today's attempt at seeing the past:
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The present collapse of international banking is running on a track that was laid long ago. Far from having a better operating, better designed system, the creators of the present mess merely tore up the FDR/Truman/Eisenhower tracks and set the new rails so they would smoothly glide all transport onto the old track system.
Throughout the 1929-1939 banking/trade/political collapse, each year had special features. These were and still are very much time-related. Just as German trains adhere to strict schedules, so does this economic banking train. The beginning of this process of crashing the economic gravy train began last summer. By October, the collapse of the banking system was painfully obvious. All sorts of goofy schemes were used to fix the unfixable. Each step was greeted with undisguised joy by investment bankers. Each step made the future worse.
During the first winter of this melt-down, everyone was hoping this would be a mild recession. Everyone prayed that the fixes were working. Then they failed. The status quo could not hold. Exactly one year after the beginning of the collapse, things suddenly got much worse. Just like in 1931. In 1931, the banking system was still seemingly working. The fall in worker's wages which preceded all of this, continued. Everyone thought, all we needed was to increase 'productivity' and 'profits' and all would be well.
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Back to the Great Depression:
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Unlike today, note how the international credit system back then was dependent on the location of physical gold. The movement of this gold which was the basis of all banking, was very difficult. The very difficulties slowed down events. We must remember, the Goddesses of Inflation and Depression both can fly as fast as thought. Using gold to define the value of money slows this all down, tremendously. The very cumbersomeness of gold is the limit on the magical powers of these goddesses who are really numbers.
We must remember, nature is mirrored by numbers. Numbers are NOT nature, they are a simulacrum of Nature. By taking paper money's numbers and translating this into gold, this physical action worked as a brake. The brakes gave way when too much money was lent to pay for WWI's bloody horrors and then reparations finished off the value of gold to numbers simulacrum. This then collapsed. In other words, it became physically impossible to shuffle physical gold around the planet to keep up with the messes created by the collapse in the monetary value of the numbers printed on pieces of paper! Whew.
The race to cut interest rates was on. The hope was, this would restart lending. Sounds terribly familiar, doesn't it?
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(continued)
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The present collapse of international banking is running on a track that was laid long ago. Far from having a better operating, better designed system, the creators of the present mess merely tore up the FDR/Truman/Eisenhower tracks and set the new rails so they would smoothly glide all transport onto the old track system.
Throughout the 1929-1939 banking/trade/political collapse, each year had special features. These were and still are very much time-related. Just as German trains adhere to strict schedules, so does this economic banking train. The beginning of this process of crashing the economic gravy train began last summer. By October, the collapse of the banking system was painfully obvious. All sorts of goofy schemes were used to fix the unfixable. Each step was greeted with undisguised joy by investment bankers. Each step made the future worse.
During the first winter of this melt-down, everyone was hoping this would be a mild recession. Everyone prayed that the fixes were working. Then they failed. The status quo could not hold. Exactly one year after the beginning of the collapse, things suddenly got much worse. Just like in 1931. In 1931, the banking system was still seemingly working. The fall in worker's wages which preceded all of this, continued. Everyone thought, all we needed was to increase 'productivity' and 'profits' and all would be well.
.
.
.
Back to the Great Depression:
Panic swept financial Europe on September 19, 1931, [Elaine: 9/19/31 is another interesting magic number!] two years after the start of the stock market Crash in the U.S. As rumors of English abandonment of the gold standard circulated, Amsterdam and other financial centers hastily attempted to bail out. The huge Paris and N.Y. credits were quickly used up and heavy gold shipments again were made to support the foundering pound sterling. England increased taxes 25% and decreased the dole 10% as part of a big austerity drive - but even this was not enough.
England finally abandoned the gold standard on September 20, 1931. The unrealistically high value at which the pound had been pegged had boosted domestic consumption and imports and had undermined the competitiveness of her exports, causing funds to drain out of the country. France, on the other hand, had stabilized the franc at only 20% of its pre WW I level. Great acceleration towards the end is a common property of financial crises - most of which can seem manageable for months or years before the period of acceleration begins. While the impending crises themselves are often easily discernible by perceptive observers, predicting the onset of acceleration can be very difficult.
The great acceleration effect is the 'off the cliff' momentum of all systems that are in a negative flow. Nature has many, many systematic crashes. Like a wave that builds higher and higher until the top comes cascading downwards or snow building up until it suddenly gives way in an avalanche or pressure building in the San Andreas fault system suddenly released: catastrophic failures are not unnatural. They are endemic to all natural systems.England finally abandoned the gold standard on September 20, 1931. The unrealistically high value at which the pound had been pegged had boosted domestic consumption and imports and had undermined the competitiveness of her exports, causing funds to drain out of the country. France, on the other hand, had stabilized the franc at only 20% of its pre WW I level. Great acceleration towards the end is a common property of financial crises - most of which can seem manageable for months or years before the period of acceleration begins. While the impending crises themselves are often easily discernible by perceptive observers, predicting the onset of acceleration can be very difficult.
.
.
.
.
Unlike today, note how the international credit system back then was dependent on the location of physical gold. The movement of this gold which was the basis of all banking, was very difficult. The very difficulties slowed down events. We must remember, the Goddesses of Inflation and Depression both can fly as fast as thought. Using gold to define the value of money slows this all down, tremendously. The very cumbersomeness of gold is the limit on the magical powers of these goddesses who are really numbers.
We must remember, nature is mirrored by numbers. Numbers are NOT nature, they are a simulacrum of Nature. By taking paper money's numbers and translating this into gold, this physical action worked as a brake. The brakes gave way when too much money was lent to pay for WWI's bloody horrors and then reparations finished off the value of gold to numbers simulacrum. This then collapsed. In other words, it became physically impossible to shuffle physical gold around the planet to keep up with the messes created by the collapse in the monetary value of the numbers printed on pieces of paper! Whew.
The race to cut interest rates was on. The hope was, this would restart lending. Sounds terribly familiar, doesn't it?
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.
.
(continued)
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