The Government Economy Con-Game = "Derivatives"
by Walter Burien - 03/15/08 - http://CAFR1.com
One way Government now "creates wealth" out of thin air is by covertly taking it "all" as a monopoly from everyone else. The ever-growing 516 trillion dollar international derivative market is a key tool used by Government to do just that. Read the article linked below, but before you do, please read my comments below the link first:
The fiat US-dollar not being backed by any hard commodity value gave government the opportunity to takeover the domestic and International market place wealth of all others for the last fifty years by perpetual printing of those dollars as the entire populations productivity value was drained through the use; conversion; and taxing of those dollars.
Government now owns it all (equity; stock market; debt market; insurance; banking; etc.) by investment. Read through my site CAFR1.com
The game though in the last fifty years has transitioned into an international game "outside" of the dollar. So, to control the World economy a new strangle-hold needed to be created that encompassed all currencies; commodities; or anything of value. The answer: Derivatives!
The article linked above shows the growth of the derivative market but the driving force is not disclosed. The first question in logic you must ask yourself is; Who is the primary player? Here the answer is our own government in composite totals between local and federal creating the biggest monopoly the world has ever seen is "the player" of no equal. For your convenience here is a copy of Note D from the 2002 PA State CAFR and I note that the figures are in thousands (add 3 zeros): http://cafr1.com/Pictures/PA2002D75.jpg Do the math.This is just one (1) government entity, one of thousands that directly or indirectly plan strategy with the "collective" of all other government investment managers.
OK, what are they doing here?? Now you must ask yourself; What is the advantage of a derivative?
Being that I want you to understand, I will keep it simple here and to the point:
A derivative is a contract bet for "future" pricing in which the buyer and seller to the bet agrees to be held financially accountable for the outcome of the bet. This could be pricing days, months, or years ahead. The bet may apply to: a stock, bond, commodity, currency, interest rate, liability on an insurance policy, building project, mortgage, etc.
In principle and in an open free market where players involved in these items wish to use derivatives to lock in prices or limit liability on the sale or purchase of the underlying item, derivatives are a useful tool to stabilize unknown price liability. Very little money is used to trade the derivative (1% or 2%) of the value as a good faith deposit towards price swings of the underlying item to lock in the price for the future.
EXAMPLE: Gold is at $950 / oz and you think it will collapse to $550 / oz twelve month out from today and the derivative on the commodity market one year out; June 2009 Gold is priced today at $1050 / oz on a 100 oz derivative contract (the market thinks it will be higher one year out)
You are a small player so you SELL One (1) June 2009 Gold contract at $1050 when hit as a paper commitment to to deliver 100 oz come June of 2009. Keep in mind this is a "paper" commitment, you do not have to fulfill the commitment until June 2009 but even though you may not own 1 oz of gold, your bet is for lower prices so you SELL and someone on paper who you sold to bought that contract agreeing on paper to pay $1050 come June 2009.
Well, hypothetically let's say a research company next week announces they have developed a process to extract gold from sea water whereby millions of ounces of gold can be extracted a day for a cost of $5 / oz. Ouch! SELL, SELL, SELL! Gold now collapses to $50 / oz over the next thirty days.
Well, big smile on your face, you have a commitment from a bet a few weeks ago from a buyer at $1050 so you now BUY One (1) June 2008 Gold on the derivative exchange at $50 with someone now willing to sell one at $50 (thinks the price is going to $5 due to the seawater extraction discovery) and you now have canceled out your commitment to deliver come June of 2009 locking in $1000 / oz on the trade. This on a contract size of 100 onces equals in cash profit $100,000 and your good faith margin deposit to make that trade was only $2000. Hmmm, Las Vegas a million times over!
If on the example above you were a big trader and had clear inside information on the exact date of the upcoming announcement per Gold extraction from the sea, and filtered in 400,000 contracts between the NY, Chicago, London, Zürich, and Hong Kong derivative gold exchanges, and also went short derivatives on all international Gold mining stocks, and International currencies backed by gold, then do the math. You are now deciding from pocket change on if to buy that small island called Hawaii or that small state called Texas.
Here is the problem folks: Our Government at the top knows "what is going to happen" in the near future. They control the reports released; interest rates assigned; if or if not a war will take place; or as a few did - if an event such as 911 will occur.
Additionally through the SEC (for stocks) and the CFTC (for commodities and currencies) government knows every position held by all players domestic and Internationally. With that knowledge and armed with the historical knowledge from decades of what price swings or information presented will "suck in" food to feed on (players they can strip bare of their wealth), the price swings are manipulated with extreme swings to do just that. Government bottom-line end results are in the black on their trillion dollar composite investment funds by overbearing consistency prove this to be true. Commodity prices on any item such as Crude oil, the Dollar, Gold, or interest rates the can be artificially raised or lowered quickly back and forth with the use of derivatives.
Many of these investment funds are now managed outside of the US (off-shore) with trillion dollar US Government account balances that are not even visible for ease of inspection per their trading activity.. Do the lower level government employees know this? No, for most they do not.
Last year the Chinese Government cut off further US Government investments in China (US Government investment funds, especially on their derivatives market were taking over) India on the same day put restrictions on US Government investments in their derivatives market for the same reason also. The following day the US Stock Market was down 650 points. (Some thought the game was over, but it was not)
But don't worry about the US Stock market foolks,(whoops, sic: folks) US Government local and federal owns the primary corporations in the US Market by composite stock ownership. Private sector ownership is insignificant in comparison. Salute Comrades!
The Oil Companies; Pharmaceutical Companies; the War Industry Companies; the Insurance Companies; and the Banks government now owns by investment..
REALITY CHECK: When you own the cookie jar, you determine the price of the cookies, what cookies are eaten and what cookies are discarded... Do you think one of those Fortune 500 Companies are going to buck government and find themselves in the trash can the following day? Me thinks not.
Now you know why the stock, currency, and commodity markets have done what they have done over the last decade or two. You also now know the driving force (motive) behind every upper-level government policy and decision.
Keep in mind that on those down swings, Government is the #1 derivative player of no equal so they make the money on the downswings and they make the money on the upswings. The EXCHANGES guarantee the bets, the houses clearing trades through the exchanges will collect the bets if need be, and the Government who is taking the mother-load of the profits will make sure both do what is necessary to collect on the bets if money is due.
On the bet whether you are an individual, company, or country, they will seize your property, money, or business to satisfy the bet if it results in a loss to you and a balance for payment is left outstanding to them. After all, it does influence Government's bottom line return on their investments. Want to look at the profits from just one government investment fund? Then CLICK HERE.
Two months ago CALPERS (The CA Gov Pension Fund team) announced they were expanding their derivative management team by 450 individuals. Business must be good! Follow the trail off-shore through CALPERS International since 1982 and things will get real interesting for you.
Will this 500 trillion dollar derivative bubble pop? Well, if a free and open market was in place at this time, and being that there are ten times the value in derivatives out there with most truly not backed with the real item, a collapse would occur tomorrow resulting with many of the players being cast on the street with a cup in their hand hoping to get a meal for the day. (those that did not jump off the roof to the street below that is)
But alas, being that government owns the cookie jar, what their plans are for the future, only time will tell. My guess is they will maintain their book value of investments as they continue with the conquest of everyone else's wealth. Massive moves up and down will occur in some markets though as they "milk the cow" of the international derivative market place.
US Government through the use of their investment funds as they developed have evolved themselves and this country into a landscape in reality more foreign looking than the face of the moon over what our founding fathers anticipated for us centuries ago.
Is this a bad thing? Not for the top players, they have been laughing all the way to the bank as the public is masterfully entertained, being schooled like minnows in a pond at every turn of the page. END RESULT??? They own the cookie jar now so, the object is to make a bigger cookie jar for the cooperative players in the game and to starve off all the rest into submission.
To have a NWO (New World Order) under your control, derivatives are an important step to knock-out all opposition by taking their wealth and they will come in-line for management soon enough and then be accepted into the ranks of the inside players..
Not a peep on TV per the core of this game? Well, Silence is Golden it seems.
Who wants to make a movie on the above? I do! Call me if you can make it happen! If you know someone who can make it happen, call them first. I "bet" if done well, it will be a top seller! (if we can get it aired that is) Mel, where are you now????
Walter J. Burien, Jr.
P. O. Box 2112
Saint Johns, AZ 85936
Pension funds pay a salary and benefits at retirement. Any local government can be restructured to meet their annual budget needs "Without" taxes. TRF (Tax Retirement Funds) paying for every City, County, State’s annual budgetary needs! This now makes the people the true owners with government being the true service provider. Government has already shown that a TRF works by example through the management of their own combined multi-trillion dollar pension funds! CAFR1 says: Make it law and make it so!
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