VIX nearing the 2006 Low

Modern Money Mechanics | The Alchemy of Global Neo-Feudalism

"Modern Money Mechanics" was a booklet published
and distributed by the Federal Reserve Bank of
Chicago, originally written by Dorothy M. Nichols
in May 1961. Described as a "workbook on bank re-
serves and deposit expansion", the text offers a
detailed description of the basic process of money
creation out of absolutely nothing in today’s glo-
bally established fractional reserve banking schemes
such as the Federal Reserve System and the European
Central Bank (see also HERE).

Most academic texts teach that money is created first by someone making a deposit and then the bank waits for someone to come along and borrow it. 

However, that is not true: Modern Money Mechanics explains how money is created the instant it is borrowed. In other words, debt creates money. All the so called ‘Western’ governments create bonds (= public debt), give them to private bankster-cartels called ‘independent central banks’ or 'commercial banks' which use that debt to create money. There is no other value attached to it. It is the act of borrowing which causes it to spring into existence. Also all other banks are creating money based on a borrower’s promise to pay (the IOU = I Owe You). They create money by ‘monetizing’ the public and private debts of businesses and individuals.

In his book ‘The Creature from Jekyll Island’ G. Edward Griffin elaborates on this in the example of the US:

» The entire function of this machine is to convert debt into money.  It’s just that simple.  First, the Fed takes all the government bonds which the public does not buy and writes a check to Congress in exchange for them.  (It acquires other debt obligations as well, but government bonds comprise most of its inventory.) There is no money to back up this check. These fiat dollars are created on the spot for that purpose. By calling those bonds “reserves,” the Fed then uses them as the base for creating 9 additional dollars for every dollar created for the bonds themselves. The money created for the bonds is spent by the government, whereas the money created on top of those bonds is the source of all the bank loans made to the nation’s businesses and individuals. The result of this process is the same as creating money on a printing press, but the illusion is based on an accounting trick rather than a printing trick. 

The bottom line is that Congress and the banking cartel have entered into a partnership in which the cartel has the privilege of collecting interest on money which it creates out of nothing, a perpetual override on money which it creates out of nothing, a perpetual override on every American dollar that exists in the world. Congress, on the other hand, has access to unlimited funding without having to tell the voters their taxes are being raised through the process of inflation. If you understand this paragraph, you understand the Federal Reserve System.

[…] The federal government adds ink to a piece of paper, creates impressive designs around the edges, and calls it a bond or Treasury note. It is merely a promise to pay a specified sum at a specified interest on a specific date […] this debt eventually becomes the foundation for almost the entire nation’s money supply.  In reality, the government has created cash, but it doesn’t yet look like cash. To convert these IOUs into paper bills and checkbook money is the function of the Federal Reserve System.

An instrument of government debt is considered an asset because it is assumed the government will keep its promise to pay […] so the Federal Reserve now has an ‘asset’ which can be used to offset a liability. It then creates liability by adding ink to yet another piece of paper […] the “Federal Reserve Check” […]

There is no money in any account to cover this check. Anyone else doing that would be sent to prison. It is legal for the Fed, however, because Congress wants the money, and this is the easiest way to get it […] The process is mysteriously wrapped up in the banking system […] The Federal Reserve check is then deposited in one of the Federal Reserve Banks […] These checks become the means by which the first wave of fiat money floods into the economy. «

Update: SP500 and VIX - Intermediate Term Delta Projections

Apparently there was an inversion in the ITD. So in early June a low in the VIX and a high in stocks
should be expected. Source: Time-Price-Research (Tuesday, February 18, 2014)

Updated Delta count for S&P 500: (Friday, May 23, 2014)

Also the LOW in the SoLunar Tides on June 1 points to a HIGH in equities on that date

Trading with Nothing for Something | Islamic Perspectives on Fiat Money

Money must have intrinsic value ... Fiat currency and
banking are acts of crime ... (HERE)

 

Asatizah of Al-Munawwar (2013) - The Dazzling Proof for the Return of Our Pure Money. 

The Judgment on Fiat Currency.

"[...] Money must have intrinsic value due to it being the measure and store of the value of things. A form of 'money' that is open to total artificial manipulation and subjective valuation will not be able to perform these two functions of money.

[...] Fiat currency and banking are acts of crime, in fact, among the worst crimes in human history. Banking institutions must be held accountable for the continuous campaigns of wars and colonialism – today, corporate colonialism – which are undeniably their biggest and lucrative money-making opportunities. They have left behind clear fingerprints and traces for the world to see. They are also directly responsible for the impoverishment of countries shackled by unpayable debts owed to internationally recognized bloodsucking money lenders and financiers.  

[...] The monetary system based on fiat currency ensures that the amount of debts created will always be far more than the actual money supply, which means that many will never be able to repay the original sum, what more the interest. Many will be forced to default, declare bankruptcy and watch as their possessions are confiscated before their eyes. This does not happen to individuals only, but also to countries and nations which are forced to sell their resources for a measly price due to their inability to repay their international debts.

Muhammad Mahathir - Malaysian Prime Minister (2008):
» Quantitative Easing is a privilege for the rich nations only. When Greece lost money, it could not print currency notes or issue cheques to pay debts.Greece needs to borrow money from European countries to repay loans. Again no currency notes would be involved. The amount lent would be credited to the Central Bank of Greece which then would issue cheques to the commercial banks... Rightly both the United States and United Kingdom should be bankrupt. To recover they should be selling all their banks, industries and other assets at fire-sale prices. That was what the Asian countries were forced to do after the currency traders forced many of them almost into bankruptcy. But the bankrupt powerful countries of the West don’t have to do that. They carry out Quantitative Easing, print money and refinance their banks and bankrupt industries. And they talk about transparency in business practice. «

 

[...] One-third of the world's population now lives in a state of poverty. This is not due to the lack of natural resources or intellectuals, but due to the mischief of the robbers, i.e., the international bankers who went around the world selling their loans while hiding behind the pretext of offering technological progress and modernity to the 'backward' countries.

[...] The criminal act of banking (lending other people’s money on interest without their consent and earning through that without any risk of loss or without any labor involved) cannot be separated from fiat currency. Without fiat currency, banks today will not be able to function as how they are functioning. From the very beginning, it was the introduction of promissory notes (which have now devolved to fiat currency) that allowed the banks to engage in this misuse of the money that was entrusted to their safe-keeping by the unsuspecting masses. Both the practice of banking and the use of fiat currency are based strongly on Riba [usury].

[...] Fiat currency today cannot be a measure of value or a store of value as it constantly loses its illusory 'value' due to it not having natural or intrinsic value. In reality, it is nothing presented as something. This is why fiat money and chronic inflation are not separable; both are the results of each other. Nothingness will only return to nothingness and history is a witness to this.

Imran N. Hosein  (2013) - The International Monetary System:
» When the poor are permanently poor, and the rich permanently rich, that is oppression! All around the world today that oppression exists, and is constantly increasing - the poor grow poorer and the rich richer. Riba [usury] is the cause! A predatory global elite, centered in the West, but also around the world, is constantly sucking the wealth of mankind and impoverishing the masses through riba. Their ultimate objective is to utterly enslave all of mankind in a new sophisticated slavery.Political, legislative, judicial and legal systems, the media etc.,  are all created by the oppressor, and all function to preserve the system of economic oppression. Television is used to transport the masses to fantasy-land so that they remain unaware while riba is used to enslave them. «

 

[...] When inflation occurs, the purchasing power of the money we hold (fiat currency) falls, that is to say, the money that we use today buys lesser and lesser constantly. As time passes, the purchasing power of money only falls, hence people can only buy lesser with the money they have.

 [...] This fall in its purchasing power does not happen based on real situations where the money supply circulating in the nation naturally exceeds the goods and services available in the same nation. The resultant increase in the price of goods and services is due to the artificial creation of money out of nothing. This artificial creation of money out of thin air - one of it - is due to what bankers call Fractional Reserve Banking. This has never ceased to happen since banking took control of the money supply of a country and as a result, the price of goods and services are deliberately forced to be raised and as an inevitable result, the value of the money in our possession (purchasing power) keeps falling. This is intended rip off [Al-Bakh].

Riba-nomics

 

[...] Therefore, trading with fiat as a means of exchange, in reality, is trading with nothing for something. There is no equality; it is zulm [oppression], a clear act of injustice especially from the part of the issuer of the money.

[...] We do not need to bring down, attack or destroy the banking industry. The usurers will themselves bring the banks down since usury is baatil [falsehood], and baatil is bound to perish. What we have to do is to bring the haq [truth] and haq does not need the majority to give it any extra strength.

[...] Many shops and traders around the world have started to accept the Dinar [gold] and Dirham [silver] as payment. Some have also started using it as their mahar and some have went a step further by signing business contracts with the Dinar and Dirham being the capital as well as the profit.”

Tarek El Diwany, 2014: » An economically educated person should ask why a man would go to prison for creating money at home, while the bankers do it for a living. Still the question goes unanswered. Why does the crime of counterfeiting become a respectable profession through the act of incorporation as a limited company? Can you give me one example in Shari’ah where something that is haram [forbidden] becomes halal [legal] by the granting of a commercial license? « 

March 18, 2014 | A Pivot of History & the Ascent of a Multi-Polar World System

March 18, 2014 – Address of Russian President Vladimir Putin to State Duma deputies, Federation Council members, heads of Russian regions, Representatives of the Republic of Crimea and Sevastopol, civil society representatives in the Kremlin, and to “The West”:

After the dissolution of bipolarity on the planet, we no longer have stability. Key international institutions are not getting any stronger; on the contrary, in many cases, they are sadly degrading. Our western partners, led by the United States of America, prefer not to be guided by international law in their practical policies, but by the rule of the gun. They have come to believe in their exclusivity and exceptionalism, that they can decide the destinies of the world, that only they can ever be right. They act as they please: here and there, they use force against sovereign states, building coalitions based on the principle “If you are not with us, you are against us.” To make this aggression look legitimate, they force the necessary resolutions from international organisations, and if for some reason this does not work, they simply ignore the UN Security Council and the UN overall.

Vladimir Putin: Against the equality of good and evil.

 

[…] I understand those who came out on Maidan with peaceful slogans against corruption, inefficient state management and poverty […] However, those who stood behind the latest events in Ukraine […] resorted to terror, murder and riots. Nationalists, neo-Nazis, Russophobes and anti-Semites executed this coup […] We understand what is happening; we understand that these actions were aimed against Ukraine and Russia and against Eurasian integration […] We have every reason to assume that the infamous policy of containment, led in the 18th, 19th and 20th centuries, continues today. They are constantly trying to sweep us into a corner because we have an independent position, because we maintain it and because we call things like they are and do not engage in hypocrisy. But there is a limit to everything. And with Ukraine, our western partners have crossed the line.

[…] It is at historic turning points such as these that a nation demonstrates its maturity and strength of spirit. The Russian people showed this maturity and strength through their united support for their compatriots. Russia’s foreign policy position on this matter drew its firmness from the will of millions of our people, our national unity and the support of our country’s main political and public forces […] Obviously, we will encounter external opposition, but this is a decision that we need to make for ourselves. Are we ready to consistently defend our national interests, or will we forever give in, retreat to who knows where? […] Russia will also have to make a difficult decision now, taking into account the various domestic and external considerations. What do people here in Russia think? Here, like in any democratic country, people have different points of view, but I want to make the point that the absolute majority of our people clearly do support what is happening.

In his 2013 annual Presidential address to the Federal Assembly, Vladimir Putin clearly expressed:

[…] Today, many nations are revising their moral values and ethical norms, eroding ethnic traditions and differences between peoples and cultures. Society is now required not only to recognise everyone’s right to the freedom of consciousness, political views and privacy, but also to accept without question the equality of good and evil, strange as it seems, concepts that are opposite in meaning. This destruction of traditional values from above not only leads to negative consequences for society, but is also essentially anti-democratic, since it is carried out on the basis of abstract, speculative ideas, contrary to the will of the majority, which does not accept the changes occurring or the proposed revision of values. We know that there are more and more people in the world who support our position on defending traditional values that have made up the spiritual and moral foundation of civilisation in every nation for thousands of years: the values of traditional families, real human life, including religious life, not just material existence but also spirituality, the values of humanism and global diversity. Of course, this is a conservative position. But speaking in the words of Nikolai Berdyaev, the point of conservatism is not that it prevents movement forward and upward, but that it prevents movement backward and downward, into chaotic darkness and a return to a primitive state.

The President of Russia is leading the global resistance against the Empire of Wall Street and the City of London. He stopped their genocidal depredation in Russia. This is why they hate him, why they attempt to kill him, why the corporate media is cheering thugs of the ilk of Yulia Tymoshenko and Mikhail Khodorkovsky as if they were heroes of democracy. Since 250 years the imperial West is waging wars, destroying nation after nation, producing failed states, terrorism, chaos and millions of casualties. This was the second NATO-coup in Ukraine within a decade. The road to Moscow leads through Kiev. But this time around Vladimir Putin’s Russia was prepared, and not alone: After the latest coup in Ukraine, Crimea hastily joined Russia on March 18, 2014 before becoming subjected to IMF-looting or another ‘civil war’ orchestrated by NATO. The unification of Crimea and Russia is backed by the Shanghai Cooperation Organization (SCO). This military and economic alliance was founded in 1996 responding to globalizing NATO-savagery. Today the SCO comprises 6 member states, 5 observer states, 3 dialogue partners, and 3 guest attendances of 5 non-Western civilizations (Russian, Chinese, Muslim, Hindu, Buddhist - 4 nuclear powers among them) from the South China Sea to the Baltic Sea and from the Persian Gulf to the Bay of Bengal. In terms of potential, production, infrastructure, economic growth and prosperity, this is the most successful and promising alliance in recorded history. This is not an empire. It is an alliance of sovereign states and their relations are governed by international law. This is the very opposite to the poisonous 'one-world'-gospel of the globalists and the 'clash-of-civilization'-ideology of the liberals. 

Pro-Russian protesters with banner reading “Odessa for referendum!”
in the center of Odessa, March 23, 2014.

 

China knows very well it is next in NATO’s line for 'freedom' and 'democracy' and that without the SCO and Russia’s energy supply it would fall prey to the Empire. Therefore China supports Russia, Syria, Iran, Sudan, Pakistan, Afghanistan and a new multi-polar world-system. The fascist regime in Kiev has no legitimacy at all, and won’t last. The EU has no means to sanction Russia. The EU is not a superpower. The EU is not the White Knight and won't rescue anybody. The EU is but a deeply corrupted, pitiful and bankrupt US protectorate on the brink of collapse and revolution itself. However, in this latest freedom-and-democracy-scam the EU is once again the colonial aid of the international banking cartel. And once again they came to loot: Ukraine's gold was flown out to London or New York two weeks ago. last week the EU showed up in Kiev offering a multi-billion Euro-credit. Conjured by Mr. Draghi out of nothing. To support the Ukraine. Nobody takes this. The Ukrainians will overthrow Euro-fascism and join the Eurasian Customs Union. Or split up the country. Any sanctions will only strengthen the Eurasian integration and increase unemployment and misery in the EU.

The US will keep playing India as the continental dagger against China and Pakistan until an Indian Putin will emerge and integrate the country in the SCO. Venezuela is fighting imperialism since 1998. Without nuclear defence capabilities and no strong allies in the region, the people of Venezuela may soon perish and see its oil, gas and gold once again stolen and become degraded into poverty. However, with more than 60 % of the world’s population, the momentum towards a new international system, future world trade and economy are intimately related with the SCO and the BRICS. All of them are building up gold reserves and are about to create an independent currency, a BRICS-bank and a BRICS currency reserve pool. Already the SCO and the BRICS could destabilize the Euro and the US dollar by dumping them into the exchange markets. The FED and the ECB would not be able to arrange currency swaps with other countries large enough to buy up the dumped currency, and the exchange values would fall. Such an action could be the response to more hostile NATO activities.

If this is now indeed the “beginning of the end” for the globalist’s Empire, this is still only the very beginning of a long and most dangerous process: The next big NATO war will be the end-game for absolute rule of a cynical world hegemon over the 99% of the global rest. Some Empires die peacefully, destroyed by economic ruin, over-stretch and social implosion; others prefer to doom in an orgy of violence.

Moon and Stocks - The Four Lunar Month Cycle

Markets repeat directly or inversely somewhere between (+/- 2 days) the 4 Lunar Month Cycle (118.12 Days)
and the average synodic period of Mercury (116.88 Days). More on the Delta Phenomenon HERE - Please note:
Inversions of polarity oftentimes occur +/- 2 weeks around equinoxes and solstices (HERE)

Sunspots and Stocks - The Short-Term

Everything in the universe is constantly bathing in fluctuating electro-magnetic forces and fields that affect virtually every circuit in biological systems. Human physiological rhythms and global behaviors are not only synchronized with solar and geomagnetic activity, but disruptions in these fields can also create adverse effects on human health and behavior. Changes in geomagnetic activity are correlated with altered blood pressure, heart rate, melatonin levels, and increased occurrence of cancer, balance of hormonal system, reproductive system, cardiac and neurological disease, hospital admissions and mortality, as well as depression, fatigue, mental confusion, and traffic accidents. 

'Daily Sunspot Numbers' and 'F10.7 Flux' e.g. @ NASA's OMNIWeb

An important finding is that of all the bodily systems studied thus far, changes in solar activity and consequently geomagnetic conditions most strongly affect the rhythms of the heart. Of course electromagnetic fields generated by power supply systems, telecommunications, appliances, computers and other technology are extremely powerful and have similar effects on organisms.

In the late 1990s Jeffrey Owen Katz and Donna McCormick examined the effects of sunspots especially on the S&P 500 and Minnesota Wheat. They developed several profitable trading strategies generating entries and exits based on solar activity alone. However, they concluded: "We personally do not believe solar influences directly determine the market. We do suspect that they act as triggers for events that are predisposed to occur, or as synchronizers of already-present market rhythms with similar periodicities." Well ...

Sunspots and Stocks | The Big Picture

Most people think the Sun rests at the centre of the solar system, and
that the planets orbit it. This is almost correct, but not quite (HERE).

Historically, most cultures believed that their collective behavior was influenced by the Sun and extraterrestrial cycles. Since 1755, when continuous recording of solar sunspot activity began, a lot of research has been focused on possible impacts of the solar cycle on the climate, weather, agriculture, and consequently also on the financial markets. In the larger social realm, increased violence, crime rate, upheaval, revolutions, and the frequency of military attacks and the intensity of warfare have been linked to the solar cycle and the resulting disturbances in the geomagnetic field (HERE). 

The tidal and electro-magnetic forces exerted on the Sun by the motions of the other planets – primarily by Jupiter and Saturn - are the cause for the cyclic solar activity. Outside of the Sun, Jupiter and Saturn combined contain 92% of the total planetary mass and 86% of the angular momentum. The Sun's radius is 0.0044 astronomical units, while Jupiter and Saturn can move the barycenter as much ~2.2 solar radii away from the center of the Sun. The total angular momentum in the Solar System is constant, while the angular momentum of each individual part of the system referred to the Center of Mass is variable. When Jupiter and Saturn are in conjunction with the Sun, the barycenter is far outside of the Sun. But when both of them are on opposite sides, the barycenter is inside the Sun. Jupiter's magnetosphere extends well beyond Saturn's orbit. If it were not for the presence of the solar field itself, Jupiter's magnetosphere would reach the centre of the solar system. Saturn also has a large magnetosphere, approximately about one-fifth of Jupiter's. The variation in the Sun's motion about the Center of Mass is charcterized by a periodicity of 178.770 years: Every 16 loops about the barycenter the Sun repeats a very similar path. The slight time derivative or torque to this 178.770 year cycle, a time dependant periodic function of +/- 1.05 years is called the torque cycle, determined by nine subsequent synodic periods of Jupiter and Saturn (9 * 19.858 years = 178.720 years) and used by Theodor Landscheidt to forecast sunspot cycles. 

Mikhail Gorbanev (2012): Probably, the earliest recorded hypothesis about the relation between the
solar and business activity was presented in a paper by German astronomer Wilhelm Herschel in 1801,
calling attention to an apparent relationship between sunspot activity and the price of wheat. In
1875 British economist and statistician William Stanley Jevons suggested that there was a relation-
ship between sunspots and business cycle crises. He reasoned that sunspots affect Earth's weather,
which, in turn, influences crops and, therefore, the economy. In 1934 Argentinian Carlos Garcia-
Mata and Felix I. Shaffner revisited the evidence about the links between solar activity and business
cycle in the US. They did not find support for Jevon’s theory about cyclical solar activity affecting
crops. However, they uncovered a statistically significant correlation between the fluctuations in
non-agricultural business activity in the US and the solar cycle.

Mikhail Gorbanev (2012): Solar maximums are good predictors of US recession, effectively predicting at
least 8 out of 13 recessions between 1935 and 2012. Recessions occurred in the months around and after
the solar maximums much more often than in other periods. Out of 13 recessions in this period, 8 started
in the 2 years around solar maximums, counting from 3 months before until 20 months after them. What
about the remaining 4 recessions that occurred in 1935-2012, including the Great Recession of 2008-09?
The brief recession of 1945 was likely caused by reduction of the US government supply and military orders
in the end of the WWII. And the similar causes likely triggered the recession of 1953-54 after the end of
Korean War (historically, the recessions quite often happened after the end of major wars). The painful
recession of 1974-75 was caused by the oil price shock. And the Great Recession of 2008-09 was triggered
by the collapse of sub-prime lending in the US, which exposed massive overvaluation of the housing stock
and flaws in mortgage lending and securitization practices.

Mikhail Gorbanev (2012): In the 64 years from 1948 to 2012, all 6 periods of sunspot maximums overlapped
with minimums of the US unemployment rate. Moreover, each time the dynamics of unemployment changed
from the declining trend to a rapid increase, with the unemployment rate peaking 2-3 years after the sunspot
maximums.

George Bayer Forecasts - Food for thought

Nobody is perfect: Monthly forecasts of George Bayer from December 1936 to March 1937

SP500 and VIX - Intermediate Term Delta Projections

See also HERE

Looks like the February 5 Low was a 10 Week Cycle Low

Long-Term Charts: US-Stocks (1789 to date) | Commodities (1770 to date) | Gold (1792 to date) | Elliott Waves in DJI (1920 to date) - Kress Cycles

Credits: H/t @Macro_Tourist through Tyler Durden on 02/08/2014 @ www.zerohedge.com

Credits: H/t @Macro_Tourist through Tyler Durden on 02/08/2014 @ www.zerohedge.com

Credits: H/t @Macro_Tourist through Tyler Durden on 02/08/2014 @ www.zerohedge.com

Credits: Clif Droke @ www.safehaven.com - see also HERE & HERE & HERE & HERE