Sunday, September 25, 2022

Swing Trading - Rules and Philosophy | Linda Bradford Raschke

My style is based on the 'Taylor Trading Technique', a short-term method for trading daily price movements that relies entirely on odds and percentages. It is a method as opposed to a system. Very few people can blindly follow a system, though many find it easier to be discretionary in a systematic way. 
 
 
[...] Because of the short-term nature of this technique, swing traders must adhere to some very basic rules, including: 
  • If the trade moves in your favor, carry it overnight--the odds favor follow-through. Expect to exit the next day around the objective point. An overnight gap presents an excellent opportunity to take profits. Concentrating on only one entry or one exit per day relieves the pressure. 
  • If your entry is correct, the market should move favorably almost immediately. It may come back to test and/or exceed your entry point a little, but that's OK. 
  • Do not carry a losing position overnight. Exit and play for better position the next day. 
  • A strong close indicates a strong opening the following day. 
  • If the market doesn't perform as expected, exit on the first reaction. 
  • If the market offers you a windfall of big profits, take them to the bank on the close. 
  • If you are long and the market closes flat, indicating a lower opening the following day, scratch or exit the trade. Play for better position the next day. 
  • It is always OK to scratch a trade! 
  • Use tight stops when swing trading (wider stops when trading trend). 
  • The goal always is to minimize risk and create "Freebies." 
  • When in doubt--get out! You have lost your road map and your game plan! 
  • Place your orders at the market. 
  • When the trade isn't working, exit on the first reaction. ANTICIPATE!
 
Traders Laboratory (2007) - Taylor Trading Technique

How does one anticipate entry? The following may be indicators of a buy day or a sell day:

The Count: Start searching for a buying day 2 days after a swing high or, conversely, a shorting day 2 days after a swing low. Ideally, the market will move in complete 5-day cycles. (In a strong trend, the market will move 4 days in the primary direction and only 1 in reaction. Thus, one must seek entry 1 day earlier.)
 
"Check Mark" on the Test: The potential entry is sought opposite, or contrary to, the previous day's close. If looking to buy (sell), one first wants the market to "test" the previous day's low (high), preferably early in the day, and then form a trading pattern that looks like a "check mark" (see examples). This pattern sets up and establishes a "double stop point" or strong support. If entering a market with only a "single stop point" or support formed by today's low only, exit on the same day--the trade is clearly against the trend.

Close vs. Open: The close should indicate the following day's opening. When a market opens opposite what is expected or indicated by the trend, one may first look to "fade" it--but must take profits quickly. Then look to reverse!

Support (Resistance): Is today's support (resistance) higher or lower than yesterday's?

Swing Measurements: Where is the market relative to the last swing high or low? Look for swings (up or down) of equal length, and for retracements of equal percentage.

No matter in what time frame, always look for supply at tops and support at bottoms. Penetrations should be accompanied by volume and activity. Expect trends, either up or down, to last for either 2 or 4 weeks. The following conditions are fairly reliable indicators for the start of one of these trends (I personally skip the first buy or sell swing when one occurs because the move ensuing could be quite strong): 
  • Narrowest range in the last 7 days 
  • 3 consecutive days with small range
  • The point of a wedge
  • A breakaway gap 
  • A rising ADX (14-period) above 32
Practice: Because a certain amount of confidence in any technique is required to trade it consistently, paper trading can cultivate the faith necessary to recognize and trade pattern repetition. Although the temptation to try too many different styles and patterns always exists, one must strive ultimately to trade in just one consistent manner or at least to integrate techniques into your own unique philosophy.
 
System Characteristics: Certain points about trading short-term swings deserve note. Understanding the nature of short-term systems can help you recognize the psychological aspect of trading. When consistently following a short-term system, you should expect a very high win/loss ratio. Though the objectives with this style of swing trading appear conservative, you will almost always incur "positive slippage". In all systems, winners are skewed. Even though making steady profits, 3-4 really big trades may actually make the month. It is vitally important to always "lock in" your trades. Don't give back profits when short-term trading. You may be astonished at just how big some winners may be from catching the swings "just right!"
 
[...] Finally, I want to leave you with what I believe are two Golden Rules, applicable to all traders but, of essential importance to short-term swing traders: 
  • NEVER, ever, average a loss! Sell out if you think you are wrong. Buy back when you believe you are right.
  • NEVER, NEVER, NEVER listen to anyone else's opinion! Only YOU know when your trade isn't working.
 
See also:

Thursday, September 22, 2022

The Sun and the Moon | Jack Gillen

The Sun is an energy planet. It gives and takes energy. A solar cycle is 365.25 days. It affects the stock market every 30 days, as the Sun transits through the 12 signs of the zodiac. The Sun also has an 11-year solar cycle in which Sun-spot activity peaks, followed by five and a half years of solar flares, a period of more or less calm with respect to the Sun’s surface. And during this period the Sunspot areas emit a wide range of intense radio and electromagnetic radiation of various types, affecting people and conditions of the planet Earth. This has been researched not only by astrologers but by astronomers. It has a definite effect on the stock market, commodities, and other areas related to the stock market.

As in all living matters it seems to affect mundane things like corporations and the stock market in the same way. This is to say that with regard to the birth month and the birth date, six months prior to the birth date the solar cycle is high, giving energy and pushing the related company forward [Example 1]. The Sun also is a planet associated with the ego, appearance and personality. Six months prior to the birth date, the company is brought out before the public. The birth date to six months after, the energy flow is low it becomes weaker and this affects the stock market in the same way. 

As an example, the stock market was born May 17, 1792. So the months of May through November relate to low activity, affecting the market's price and structure. As we go from December through May, we go through the high cycle, the up period of the Sun. But there are many cycles of the Sun that affect different areas of the stock market as the Sun affects each house with relation to the buying public. In each six-month period of the year we will also find a close relationship between price. movement and volume from Aquarius to Leo, or from February to the last two weeks of July. Looking at example 1, we find that the birth month and the Sun cycle six months prior to the birth month is at a high level; six months after the birth date, it is at a low level.

In Example 2 we take the Midheaven aspect to the Ascendant. We can see in Example 2 that the chart of the stock exchange starts its up level in the sign of Aquarius and its down level begins in the sign of Leo. So these are the two breaking points within a year: under Aquarius and under Leo as the Sun transits these signs. The low part of the chart, which is the Nadir, is the sign of Libra. This will generally be the low point of the year, as October would always represent low price. low volume, in which the opposite point to the Midheaven is Aries. This would be affected by the planet represented at the Midheaven. However, in April, under no afflictions, this would be a great month where records would be set in the areas of volume and prices.

As we start with Aquarius, this would run from the last two weeks of January through the first two weeks of July. However, as the cycle proceeds through Pisces, which is a weak sign, it would represent a weak month for volume. From the latter part of March through April and May, and even into June, these could be above average months for prices and volume. Now, as the Leo portion is activated from July through October, these are very weak months. You cannot expect too much in the way of prices or volume. If there is any weakness in the market it will more or less have a breakdown during these months. Not only are we in the six-month period after the birth date but we also have the effect in the Leo portion of the house when the Sun is moving downward towards the Nadir, which is the cusp of the fourth house. The Midheaven is always the cusp of the tenth house. 

So the low points in this pattern would mainly be in February through Aquarius and in August when it drops down, with a peak at the Midheaven which would be in April under the sign of Aries.

The six-month cycle tends to extend from the Aquarius portion to the Leo portion and, again, from the Leo point to the February point prices tend to follow the volume curves from these aspects, with the weaknesses in the February-March, July-August and October-November periods. Therefore, in judging the stock market as to whether it will turn up or down, it is best to look at the Sun and the aspects pertaining to the Sun. If the Sun is under heavy affliction, these periods represent a bearish market. In good aspect, it will be bullish. In the good periods moving upward toward the Midheaven, it will be higher than normal. Moving toward the lower section, it will be lower than normal. This is why there will be so many depressions, recessions, panic and fear in the stock exchange in the latter part of the year as October approaches.

 
The Sun and the Moon - The Key to Speculation. 

The Sun's aspect and influence on the market will also affect a lot of stocks because individual stocks are affected by the movement of the Dow-Jones Industrial. You have to relate a 50 percent mark-up on a bullish market and take away 50 percent of an individual stock if the market is bearish. You can only give a stock 25 percent on its own merit. This means if the market is bad and the stock shows an indication of moving up, the price ratio as far as at what price to sell should be at a 25 percent profit. There are other indications, though, at which you could go for a 50 percent profit if the earnings are extremely high. A lot of gold and silver stocks will generally do the opposite in a bad market, and go all the way up. But if the market is bad and the Sun cycle is moving into that low period, you want to go short, or short at 50 percent from its point at that degree at that time, when the market shows indications of falling backwards. The Sun is a minor influence in relation to the overall picture of the market; however, it affects the market every year and there will be a pattern to each period of the year as far as the Sun’s transit through that sign. This will also relate to individual stocks, which will show the same pattern. So do your homework. Any time you select a stock, find the month in which to buy it and the month in which to sell the month in which it is usually at its highest point. You can relate this to the Moon for its exact day for buying or selling.

The market is always influenced by the Sun pattern and it will happen year after year. From January to the last two weeks in July, market prices will trend upwards, and in the latter part of the year after the influence of Leo, the market will be down in price. This is the average trend that will always occur and it affects volume as well as prices. However, it is important to realize the influence of the Sun in the chart of the New York Stock Exchange, and the Sun’s complete cycle.

Also, any corporation will be affected by certain cycles of the Sun through these signs. It is important to backtrack about 12 years during the pattern of the Sun’s cycle in order to see the pattern on which the company is being activated as far as the solar cycle.

The period of the Sun in Aries is usually from March 20 through April 19, Taurus, April 20 through May 20; Gemini, May 21 through June 20; Cancer, June 21 through July 22; Leo, July 23 through August 22; Virgo. August 23 through September 22; Libra, September 23 through October 22: Scorpio, October 23 through November 21; Sagittarius, November 22 through December 21; Capricorn, December 22 through January 19; Aquarius, January 20 through February 15; and Pisces, February 19 through March 20. These are the twelve signs with the transit of the Sun.

Again, let me stress the importance of the aspect of the Sun during these periods. If it involves a combination that relates to panic, crashes, recession or depression, then these months will be more intensified as far as the effect. If the transit is in a trine or a good aspect then the movement will be fess severe than under normal conditions.

There is one more important point to the solar cycle which is really the result of another cycle. This is the 19-year cycle of the motion of the plane of the Moon's orbit. It is the solar eclipse cycle. Although there is partial or total eclipse each year. usually there will be an eclipse near the same degree of the zodiac once every 19 years. This is a major eclipse. This major eclipse does have an effect on changes within the stock market and these changes have been reflected year after year during these cycles. Since this eclipse involves the Moon, it represents changes in relation from a Moon-Sun characteristic.

In this cycle the Sun makes a complete circuit of the sky and reaches the same Node at the same place on the ecliptic as shown in Diagram 3. This length of time is 6585.32] solar days, which is 48 years, 11.33 days. The shortest time required for the Sun to travel from and return to the same node is 346.6 solar days, an interval known as an eclipse year. It is listed on the calendar year because of the effect of the session which is known as a slow regression of the nodes around the ecliptic. Nineteen of the eclipse years contain 6585.4 days, which is precisely 223 synodic months, This is when the Nodes themselves become important in the predictions on the stock market.

The Moon affects changes and emotions. The daily influence on the stock market is related to changes of the Moon as it transits through each sign. Its effect on individual corporations would be the same. The Moon works in association with the planet Saturn. The Moon's phase cycle is from 28 to 29.5 days. Saturn’s cycle is 28 to 29,5 years, So, where it takes Saturn 2.5 years to transit one sign, it takes the Moon 2.5 days. If the Moon shows weakness in one sign as to where a stock would drop rapidly during that time, then when Saturn is also in the sign this would cause a 2.5 year downtrend for the stock. For example. if the Moon goes into Taurus and the stock goes up or down, it will do the same when Saturn is in that sign. So ever though a lot of aspects related to the Moon are minor, such as a stock might drop one-eighth to one-half, during its transit through any one sign, it does relate 10 a longer trend with the effects of Saturn.

In judging the daily influence of the Moon's dominance over a certain stock, bear in mind the influence of a transit of the Sun. If the Sun’s movement shows a high point for the Dow-Jones averages, then the Moon as a negative factor on the Dow-Jones will not have that much influence. If they are both at a high point, then the stock would rise extremely high on that day. So use the Moon as a daily indicator together with the 30-day movement of the Sun in each sign.

There are three cycles related to the Moon. One is called a Moon return. This cycle occurs every four years, when the Moon returns to the same position. (Check the four-year cycles day by day of a stock.) Another cycle is 27.5 days by the sign itself and 28 or 29.5 days by phase. These are the cycles represented by the Moon. The pattern of the four-year cycle is more dominant in a long-term trend relating to the stock market. The Moon also has a period in which it is stagnant, or void of course. 1t is a period when the Moon is changing from one sign to another without being aspected. From research this is not a period to purchase stock as it represents changes indicating a complete reverse. It is an unstable period of the Moon.

You can also determine monthly trends by watching the Moon under each cycle. In a period of 28-29.5 days, if the Moon falls square, conjunction, or opposite to planets passing over the Midheaven, this will give you an indication of good or bad returns following the week in relation to the stock market itself. It generally relates to people's emotions. The Moon's Nodes are also prominent indicators as far as the movement around the zodiac. If an individual stock has the Moon's North Node going toward the Midheaven, this indicates it will have movement. If it falls below the Ascendant, this generally causes it to move downwards. However, again, you have to use the other planetary movements to make a complete judgment. You cannot do it by the Nodes themselves, but the Nodes would reinforce any conditions shown as a downtrend in a certain stock.

The Moon and Sun in relation to each other show a type of speed that a certain cycle is indicated to move under because the effects of the Sun, the Moon and Earth are the prominent factors relating to the movement during the year, The other planets more or less determine tong-tern trends.

The speed of the Moon is affected by the tidal deformation of the Earth which produces a gradual increase on the Moon’s orbital speed which in turn makes the Moon slowly recede, causing a fast or a slow Moon which does reflect the aspects as far as movement of a cycle. IF it’s fast, there's a lot of action in the market, or if it's slow, then a change is predicted. In Diagram 4 we have a plain view of the Moon's orbit, We show that the Earth-Moon gravitational inter-reaction generates two bulges, more or less like a plastic bubble. The Earth has an axial rotation which is faster than the orbital rotation of the Moon, and the effect of this frictional drag is that the bulges arc carried around the Earth's rotation until a balance is established between the drag and the tide generating force.

The pattern of the four year cycle is more dominant in a long-term trend relating to the stock market. The Moon also has a period which is stagnant. This is called the Moon void of course. It is a period when the Moon is changing from one side to another without being aspected. This is not a period to purchase stock as it represents changes that could go completely reverse. It is an unstable period of the Moon itself.


In Diagram 4 we have equilibrium point 1. This is nearer to the Moon than point 2, and is therefore experiencing a stronger gravitational attraction than 2. Both 1 and 2 are displaced from the central line so that the forces along with 1 and 3 and 2 and 3 converge toward the center of the Moon. These two forces may be resolved at the Moon into components that act, in one case, along the central line toward the Earth; and in the other case at right angle into the direction of the Moon's orbit. The components acting toward the century add together, whereas the components in direction of the orbit are in opposition. Because the force along 1 and 3 is larger than along 2 and 3, this means a net unbalance force acting on the Moon in the orbital direction, which has the effect of accelerating its motion, moving it into an orbit of a larger radius; modern estimates indicate a recessional speed of about 3.2 cm. per year.

For accurate calculation, there are many Moon sign books and Moon calendars, that will give you the transit of the Moon each day, which you can relate to stock predictions. In the speed of a stock, we have the one-half cycle, the one-fourth, and the three-fourths, all of which indicate changes in relation to the up and down cycle price of each stock.

 
See also:

Thursday, August 25, 2022

The Return of the Heartland | Pepe Escobar

Pepe Escobar (Aug 24, 2022) - Putin himself first spelled it out at the Munich Security Conference in 2007. Xi Jinping started to make it happen when he launched the New Silk Roads in 2013. The Empire struck back with Maidan in 2014. Russia counter-attacked coming to the aid of Syria in 2015. The Empire doubled down on Ukraine, with NATO weaponizing it non-stop for eight years. At the end of 2021, Moscow invited Washington for a serious dialogue on “indivisibility of security” in Europe. That was dismissed with a non-response response. Moscow took no time to confirm a trifecta was in the works: an imminent Kiev blitzkrieg against Donbass; Ukraine flirting with acquiring nuclear weapons; and the work of US bioweapon labs.

The heart of Europe is Germany, the heart of Asia is China, and the heart of Eurasia is Russia. In his famous article The Continental Bloc:
Berlin-Moscow-Tokyo
, published in 1941, German geographer Karl Haushofer wrote: "Eurasia cannot be suffocated while its two largest
people, the Germans and the Russians, strive in every way to avoid internecine conflict: it is an axiom of European politics.
"

[...] What Moscow is doing is talking to virtually the whole Global South, bilaterally or to groups of actors, explaining how the world-system is changing right before our eyes, with the key actors of the future configured as BRI, SCO, EAEU, BRICS+, the Greater Eurasia Partnership. And what we see is vast swathes of the Global South – or 85% of the world’s population – slowly but surely becoming ready to engage in expelling the FIRE Mafia (Finance, Insurance, Real Estate as per Michael Hudson) from their national horizons, and ultimately taking them down: a long, tortuous battle that will imply multiple setbacks.
 
"The New World Order is a battle for the meaning of the end of history. The great philosophical battle. It is time to close the page of exclusively
materialistic, energy and economic interpretations - this is not just vulgar, it is wrong. History is the history of ideas.
" Alexander Dugin, 2022

[...] The Global South though should never lose sight of the “Empire business”. The Empire of Lies excels in producing chaos and plunder, always supported by extortion, bribery of comprador elites, assassinations [...] Never underestimate a bitter, wounded, deeply humiliated Declining Empire. So fasten your seat belts: that will be the tense dynamic all the way to the 2030s. But before that, all along the watchtower, get ready for the arrival of General Winter, as his riders are fast approaching, the wind will begin to howl, and Europe will be freezing in the dead of a dark night as the FIRE Mafia puff their cigars.

Wednesday, August 24, 2022

The Magician's Sheep | George Gurdjieff

George Gurdjieff (1949) - There is an Eastern tale that speaks about a very rich magician who had a great many sheep. But at the same time this magician was very mean. He did not want to hire shepherds, nor did he want to erect a fence about the pasture where the sheep were grazing. The sheep consequently often wandered into the forest, fell into ravines and so on, and above all, they ran away, for they knew that the magician wanted their flesh and their skins, and this they did not like.
 
 
At last the magician found a remedy. He hypnotized his sheep and suggested to them, first of all, that they were immortal and that no harm was being done to them when they were skinned; that on the contrary, it would be very good for them and even pleasant; secondly he suggested that the magician was a good master who loved his flock so much that he was ready to do anything in the world for them; and in the third place, he suggested that if anything at all were going to happen to them, it was not going to happen just then, at any rate not that day, and therefore they had no need to think about it. Further, the magician suggested to his sheep that they were not sheep at all; to some of them he suggested that they were lions, to some that they were eagles, to some that they were men, to others that they were magicians. After this all his cares and worries about the sheep came to an end. They never ran away again, but quietly awaited the time when the magician would require their flesh and skins.
 
Quoted from: 

The Liberal Political Theology | Neema Parvini

Neema Parvini (2022) - From the realist perspective of [Carl] Schmitt, there is no structural difference between the liberal state, the communist state, and the fascist state — or indeed any other state. The only difference is the extent to which a regime may obscure the nature of its power or else genuinely buy into myths of neutrality. Viewed in this way, a state wedded to liberal democracy is as ‘totalitarian’ as any other since, by its very nature, it will be unable to tolerate any leaders who are not always already liberal democrats. 
 
"Liberalism is to freedom as anarchism is to anarchy." Ernst Jünger, 1977
 
Should such leaders rise, the stalwarts of liberal democracy will perceive them as ‘populists’, ‘fascists’, ‘threats to democracy’, and so on. The extent of free speech, free inquiry, free thought, and so on is a liberal delusion. In fact, the range of ‘allowable opinion’ is always exceedingly narrow and the liberal democratic state is marked by its intolerance and spectacular inability to imagine any worldview that is not its own. The dominance of liberal political theology is total. Schmitt would not have disagreed with Oswald Spengler who wrote in The Decline of the West:

"England, too, discovered the ideal of a Free Press, and discovered along with it that the press serves him who owns it. It does not spread ‘free’ opinion — it generates it. […] Without the reader’s observing it, the paper, and himself with it, changes masters. Here also money triumphs and forces the free spirits into its service. No tamer has his animals more under his power. Unleash the people as reader-mass and it will storm through the streets and hurl itself upon the target indicated, terrifying and breaking windows; a hint to the press-staff and it will become quiet and go home. The Press today is an army with carefully organized arms and branches, with journalists as officers, and readers as soldiers. But here, as in every army, the soldier obeys blindly, and war aims and operation-plans change without his knowledge. The reader neither knows, nor is allowed to know, the purposes for which he is used, nor even the role that he is to play. A more appalling caricature of freedom of thought cannot be imagined. Formerly a man did not dare to think freely. Now he dares, but cannot; his will to think is only a willingness to think to order, and this is what he feels as his liberty."

As Edward Bernays would go on to say these ‘are the invisible rulers who control the destinies of millions. […] In some department of our daily lives, in which we imagine ourselves as free agents, we are ruled by dictators exercising great power.’ The point is that viewed from the outside, liberal democracy looks just as ‘totalitarian’ as any other regime even if it relies more on subtle persuasion, nudge techniques, and other psychological tricks than coercion to obtain its results.

The Rulers and the Ruled | Gaetano Mosca

Gaetano Mosca (1896) - Among the constant facts and tendencies that are to be found in all political organisms, one is so obvious that it is apparent to the most casual eye. In all societies — from all societies that are very meagerly developed and have barely attained the dawnings of civilization, down to the most advanced and powerful societies — two classes of people appear — a class that rules and a class that is ruled.
 
[...] In reality the dominion of an organized minority, obeying a single impulse, over the unorganized majority is inevitable. The power of any minority is irresistible as against each single individual in the majority, who stands alone before the totality of the organized minority. A hundred men acting uniformly in concert, with a common understanding, will triumph over a thousand men who are not in accord and can therefore be dealt with one by one. Meanwhile it will be easier for the former to act in concert and have a mutual understanding simply because they are a hundred and not a thousand. It follows that the larger the political community, the smaller will the proportion of the governing minority to the governed majority be, and the more difficult will it be for the majority to organize for reaction against the minority.


"I can certainly call myself an anti-democrat, but I am not an anti-liberal;
indeed I am opposed to pure democracy precisely because I am a liberal.
I believe that the ruling class ought not to be monolithic and homogeneous
but ought to consist of elements which are diverse in regard to origin and
interests; when, instead, political power originates from a single source,
even if this be elections with universal suffrage, I regard it as dangerous
and liable to become oppressive. Democratic Jacobinism is an illiberal
doctrine precisely because it subordinates everything to a single force,
that of the so-called majority, on which it does not set any limits."

[...] What happens in other forms of government — namely, that an organized minority imposes its will on the disorganized majority — happens also and to perfection, whatever the appearances to the contrary, under the representative system. When we say that the voters ‘choose’ their representative, we are using a language that is very inexact. The truth is that the representative has himself elected by the voters, and, if that phrase should seem too inflexible and too harsh to fit some cases, we might qualify it by saying that his friends have him elected. In elections, as in all other manifestations of social life, those who have the will and, especially, the moral, intellectual and material means to force their will upon others take the lead over the others and command them.

[...] From our point of view there can be no antagonism between state and society. The state is to be looked upon merely as that part of society which performs the political function. Considered in this light, all questions touching interference or noninterference by the state come to assume a new aspect. Instead of asking what the limits of state activity ought to be, we try to find out what the best type of political organization is, which type, in other words, enables all the elements that have a political significance in a given society to be best utilized and specialized, best subjected to reciprocal control and to the principle of individual responsibility for the things that are done in the respective domains.

"Who says organization, says oligarchy. [...] Historical evolution mocks all the
prophylactic measures that have been adopted for the prevention of oligarchy."
Robert Michels, 1911

[...] Any political organization is both voluntary and coercive at one and the same time voluntary because it arises from the very nature of man, as was long ago noted by Aristotle, and coercive because it is a necessary fact, the human being finding himself unable to live otherwise. It is natural, therefore, and at the same time indispensable, that where there are men there should automatically be a society, and that when there is a society there should also be a state — that is to say, a minority that rules and a majority that is ruled by the ruling minority.

The Magic of Money | Hjalmar Schacht

Hjalmar Schacht (1967) - Man needs money and cannot exist without it. The diabolic magic of money is here clearly visible. It has helped mankind to make immense strides in economic development, and has at the same time enslaved him. Regression to a money-less condition, or the modern method of exchange by means of money any kind of money, but still money - these are the alternatives. Money plays the role of the sorcerer's apprentice - created to serve a master who cannot now rid himself of his indispensable sprite. It is the master now. 


Hjalmar Schacht (1877 – 1970), President of the Reichsbank.

[...] Modern paper money, the banknote, is backed by its creator, the State. It is true that John Law, the inventor of paper money, recommended a kind of cover based on landed property, but Law too saw that the principal security for paper money lay in confidence in the government, which has legal control over all kinds of things which would provide security. The failure which put an end to Law's measures was not so much caused by a paper money inflation, as by a collapse of speculative activity in the shares of the overseas enterprises he had founded. The value of his paper money was not based on these public companies, but only on their relationship with the state. Law rightly recognised that money, if it does not consist of tangible metal, is purely an internal affair of the national state. This remains true today.

For this reason there is no such thing as international currency. It is unlikely that it will ever come into being. International money would have to be granted the status of legal tender in all countries in which it circulates. In all these countries it would have to be possible to settle every state and private obligation in this currency. Any institution controlling this. currency irrespective of whether it is a bank or a government department would dominate the world an unthinkable situation. Currency is the most nationalistic factor in political life. Every central bank responsible for issuing it is dependent on the government of the country by whose laws it was instituted, and which makes its notes legal tender in the country's home territory.

The granting of credit is unthinkable without a central bank. No central bank can be allowed to act against the government of the country. The government is over the central bank, and influences its policies. It is thus also in a position to inflate the currency by taking up too much credit with the central bank. No international central bank could countenance such a situation. It cannot permit one of the governments with which it is associated to misuse its facilities unless every other government is in agreement. This however is a condition which cannot be reconciled with the fight of all against all in time of economic difficulty. No state will surrender so much of its sovereignty that its partners or competitors are given the power to prescribe its economic and financial policies. Standing over and above central bank and government, both of which are led and administered by changing personalities, there is a higher, impersonal, and substantially necessary law: the stability, the constancy of value, of money. This higher law has in the past granted the central banks an autonomous, independent position. Governments change, and can pursue good or bad currency and credit policies according to whether or not it is to the advantage of the party in power. 
 
Schacht in an Allied internment camp, 1945.
"Dr. Schacht, you should come to America. We’ve lots of money and that’s real banking".
Schacht replied, "You should come to Berlin. We don’t have money. That’s real banking".

[...] Even if common currency is regarded and desired as the crowning achievement of the European Common Market, it would be wrong to leave the relationship between the government and the central bank out of account. [...] The closer the economic ties between various countries, the easier will it become to reach agreement on currency policies. Whether these will ultimately lead to a unitary currency will always depend on the extent to which the participants are prepared to surrender their sovereignty. Here in fact is the Common Market's chief problem.

Tuesday, August 23, 2022

The Conspiracy of the Counterfeiters | Nikolai Starikov

Everything was going smoothly until 1965. Almost right after having been reelected to the post of President of France, Charles de Gaulle announced that his country would start to use real gold for international payments. According to the Bretton Woods Agreement he demanded that the USA exchange 1.5 billion dollars, kept by France, for real gold at a price of 35 dollars per ounce. It was the worst nightmare of a banker, when all creditors of his bank came to demand their ‘deposits’, as all FRS dollars were just obliging to pay the holders a certain amount of the precious metal. However, the required amount of gold had never existed, and consequently it was especially important to prevent the precedent. 
 
 Georges Pompidou, successor of President Charles de Gaulle, in 1969.
Guy de Rothschild's stooge in the Elysée.

The USA started to bias obstinate de Gaulle, who had already caused them trouble during his first presidential term, and even before that, when he was leading the Opposition in 1944-1945. Then during his second presidential term de Gaulle catastrophically endangered the mere fact of the ‘printing machine’s’ existence. Furthermore, the French President was determined, and when pressed, he withdrew from NATO and drove its formations out of his country. The USA had to exchange paper money for gold. In turn Germany, Canada and Japan made similar demands, though not in public like France, but secretly. Finally, the gap between the global amount of dollars and gold reserves in the USA was reduced even further. From 1960 until 1970 the dollar reserves kept in other countries tripled (and in 1970 came to 47 billion dollars, whereas the gold reserves of the USA came to 11.1 billion dollars at that time). It was necessary to urgently find a way out of this situation, but firstly the one who had entrenched the ‘printing machine’ must be punished. In 1967 de Gaulle returned the paper cash to the USA, and in May 1968 disturbances in France began. Demonstrations, the confrontation with the police, walkouts […] After almost a year of pressure Charles de Gaulle had to resign on 28 April, 1969. On 9 November, 1970 the ‘gravedigger’ of the dollar died due to heart failure.

The system established by the bankers was close to collapse. The gold default of the dollar concurred with the military defeat of the Americans in Vietnam. [...] Being aware that the capability of the USA to exchange dollars for gold at a fixed rate would be increasingly distrusted, they decided to get over this precipice in several steps. On 17 March, 1968 the Americans cancelled the dollar conversion into gold at a fixed rate for private traders. Central banks still could exchange dollars for gold at an official rate of 35 dollars per 1 troy ounce. At this, all ‘independent’ central banks in all countries were privately commanded to prevent such conversion by any means. On 15 August, 1971 the USA President Nixon, during his speech on the national (!) TV, incidentally announced the temporary taboo on the dollar conversion into gold at an official rate in central banks.

 Emmanuel Jean-Michel Frédéric Macron, the latest Rothschild stooge in the Elysée.
La république en marche. Allons enfants de la patrie.

That was a scandal indeed. However, it could become even greater, when it appeared that in the period up to the end of July 1971 the gold reserves of the USA descended to a threshold of less than 10 billion dollars. The affair proceeding any further could lead to complete catastrophe. On 17 December, 1971 the USA devalued the dollar by 7.89% in relation to gold. The official price of gold increased from 35 to 38 dollars per one troy ounce, but, curiously enough, the exchange of dollars for gold did not recommence. On 13 February, 1973 the dollar descended even lower in relation to gold, the rate became 42.2 dollars per 1 troy ounce. However, gold could not be acquired at this price, either. The American currency was not trusted anymore, and nobody hurried to sell their gold. The USA and Great Britain therefore had to share the benefits from the reserve currency emission with other countries.
 
The only way out of the dead end was to print more paper money, which the global financial community would agree to treat like absolute values. It must be assumed though that this money was not financially assured by anything. On 16 March, 1973 during the International Conference in Paris, a compromise was found. The gold content of the dollar was officially cancelled. It goes without saying that the International Monetary Fund (IMF) confirmed and approved this decision, which would cancel all the principles of the financial system of that time and the system of the IMF itself. The epoch of floating exchange rates began in the world.

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The Gold Price (U.S.Dollars / Troy Ounce) 1792 to date
The Gold Price (U.S.Dollars / Troy Ounce) 1257 to date

Who Ever Sets the Price of Gold and Silver | Stephen Mitford Goodson

There was an increase in trade and Rome became one of the most prosperous cities in the ancient world. [...] bronze coins represented national money and were paid into circulation by the state and each was only of value in as much as the symbols on which its numbers were recorded, were scarce or otherwise. This money was thus based on law rather than the metallic content. [...] This can be considered as an early example of the successful use of fiat money.

While fiat money is much criticised in some quarters, for example by the followers of Austrian economist Ludwig von Mises, there is nothing wrong with it, as long as it is issued by government, not by private bankers, and is carefully protected against counterfeiters. Non-fiat money, in contrast, has the serious drawback that who ever sets the prices of gold and silver, i.e. private bankers, can control the nation’s economy.

[...] in September 45 BC, Caesar found the streets and cities crowded with homeless people, who had been forced off the land by usurers and land monopolists. 300,000 people had to be fed daily at the public granary. Usury was flourishing with disastrous consequences. [..] Caesar fully understood the evils of usury and how to counter them. He recognized the profound truth that money is a national agent, created by law for a national purpose, and that no classes of men should withhold it from circulation so as to cause panics, in order that speculators could advance the rates of interest, or could buy up property at ruinous prices after such panic.

Caesar introduced the following social reforms:

  1. Restoration of property was done at the much lower valuations which held prior to the civil war (49-45 BC).
  2. Several remissions of rents were granted.
  3. Large numbers of poor citizens and discharged veterans were settled on allotments.
  4. Free housing was provided to 80,000 impoverished families.
  5. Soldiers’ pay was increased from 123 to 225 denarii.
  6. The corn dole was regulated.
  7. Provincial communities were enfranchised.
  8. Confusion in the calendar was removed by fixing it at 365¼ days from 1 January 44 BC.

His monetary reforms were as follows:

  1. State debt levels were immediately reduced by 25%.
  2. Control of the mint was transferred from the patricians (usurers) to government.
  3. Cheap metal coins were issued as the means of exchange.
  4. It was ruled that interest could not be levied at more than 1% per month.
  5. It was decreed that interest could not be charged on interest and that the total interest charged could never exceed the capital loaned (in duplum rule).
  6. Slavery was abolished as a means of settling debt.
  7. Aristocrats were forced to employ their capital and not hoard it. 
These measures enraged the aristocrats and plutocrats whose “livelihood” was now severely restricted. They therefore conspired to murder Caesar, the hero of the people. 
 
The 'Ides of March' Denarius (43/42 BC), a declaration of the Republic's 'liberation' from tyrannical Caesar.
Ironically, Brutus appears on the obverse professing he killed Julius Caesar on the Ides of March.
This is one of the most sought-after coins from the Roman world.

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Stephen Mitford Goodson (1948 - 2018) was a South African economist, author, politician and former Director of the South African Reserve Bank. He was the leader of South Africa's Abolition of Income Tax and Usury Party, and stood as a candidate for the Ubuntu Party in the 2014 General Elections.

Thursday, August 11, 2022

The Zurich Axioms | Max Gunther


Max Gunther (1985) - The fact is, nobody has the faintest idea of what is going to happen next year, next week, or even tomorrow. If you hope to get anywhere as a speculator, you must get out of the habit of listening to forecasts. It is of the utmost importance that you never take economists, market advisers, or other financial oracles seriously. 
 
[...] It is unlikely that God's plan for the universe includes making you rich. [...] To make any kind of gain in life – a gain of wealth, personal stature, whatever you define as 'gain' – you must place some of your material and/or emotional capital at risk. You must make a commitment of money, time, love, something. That is the law of the universe. [...] Of course, risk is a two-way street. But look at it this way. As an ordinary tax-hounded, inflation-raddled income earner, carrying much of the rest of the world on your back, you are in pretty sorry financial state anyhow.
 
[...] Worry is not a sickness but a sign of health. If you are not worried, you are not risking enough. [...] Always take your profit too soon. Amateurs on Wall Street do it. Amateurs in poker games do it. Amateurs everywhere do it. They stay too long and lose. [...] If you can conquer greed, that one act of self-control will make you a better speculator than 99 percent of other men and women who are scrambling after wealth. 
 
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