This article was written by J S Kim at The Underground Investor on October 19, 2010
“What you know you can’t explain, but you feel it. You’ve felt it your entire life. There’s something wrong with the world. You don’t know what it is, but it’s there, like a splinter in you mind, driving you mad” – Morpheus
By the time you finish reading this article, you may discover that you have many more questions than answers. When I decided to write this article, my objective was not to provide answers but rather to demonstrate to you that many presupposed airtight beliefs may actually be littered with holes. Rather than to provide answers that may bring curiosity to a halt with the end of this article, my objective is to have inserted many more splinters in your mind that drive you to seek more answers, to question the beliefs you already question, and to validate the truths you already know.
Today, nearly everyone seems to realize that all major stock markets in the world are Casinos rigged by the banker/government cartel for their own benefit only. Among investors, there is a remarkably higher level of awareness today of the rampant fraud inherent in the world’s leading stock markets than even that which existed a mere five years ago. Only those that are absolutely rigid in their thinking despite the presentation of a mountain of credible facts that support the contention of massive fraud being perpetrated in stock markets remain among the few unable to comprehend the truth. Albert Einstein once stated that unthinking respect for authority is the enemy of truth. Too many of society’s widespread beliefs today were borne out of unthinking respect for authority, and because of this, many of us have been living the great majority of our lives in absolute darkness. Several weeks ago, I addressed this very topic in a 6-part video series that explores this very Empire of Illusion.
I’m going to preface this article by stating that this article contains largely my opinions though I present supporting facts when possible. This article also contains many deductions, extrapolations and opinions, though the deductions are derived from logic and the extrapolations, from common sense. In this article, I aim to demonstrate that many universal truths accepted as indisputable today by society-at-large, with origins in the banking/government cartel, are 100% entirely impossible to prove with facts. Furthermore, within the context of this article, I will demonstrate that my opinions often present a stronger argument for truth than the “truths” presented by the banking/government/media complex that have been so lazily accepted by millions of people around the world.
Admittedly, my articles often contain very passionate views and strong opinions. However, passion has never been the twin soul of inflexibility. I have changed my views on many different topics over the course of my lifetime as the direct result of the accumulation of more knowledge and the greater gifts of deeper wisdom. I would hope that any intelligent man or woman would always stand ready to adjust, alter, modify and/or eventually change one’s belief system if he or she encounters compelling new information that conflicts with or sheds news perspectives on previous beliefs, even if these previous beliefs were very tightly held beliefs. When the weight of evidence shifts the balance of judgment towards the probabilities of an opposition view as likely holding the correct belief, any intelligent person should give serious consideration to altering one’s present belief to the assumption of the opposition view, even if it is a minority one, and even if it is an unpopular one.
I don’t ask any of you to believe what I say in this essay just because I state it. That would be the apex of hypocrisy in addition to being antithetical to my belief system regarding how all men and women should arrive at his or her own truth. Instead, I invite all of you to perform your own research and form your own conclusions about the hypotheses I state in this article. Furthermore, I encourage all of you never to accept a belief just because your neighbor, your brother, your sister, your mother, your father, or your co-worker holds this belief to be true. I encourage each and every one of you to challenge beliefs you hold if you hold these beliefs merely for the simple and indefensible reason that this belief has persisted among society for hundreds of years. It is neither the level of our education nor the institution that educated us that makes any of us intelligent. Rather it is the willingness to challenge our present belief system, our openness to analyzing new knowledge, and our ability to critically think for ourselves independent of authority that makes us intelligent.
The Roman Catholic Church taught for centuries a geocentric view of the world that the sun revolved around the earth. During the centuries they taught this lie as indisputable and infallible, anyone that dared challenge this belief risked imprisonment or even death. Copernicus, a scientist that lived from 1473 to 1543, was the first well-known historical figure to challenge the Church with the idea of a heliocentric universe in which the earth revolved around the sun, though he was clearly not the first person to advance this truth. To avoid persecution by the Church, Copernicus never published the heliocentric theories contained in his book, “On the Revolution of the Celestial Spheres”, when he was alive. After Copernicus’s death, Galileo took up further advancement of the theory of the heliocentric universe. For daring to challenge the Church’s authority, Galileo was declared guilty of being “vehemently suspect of heresy” and was imprisoned from 1633 until his death in 1642. It was not until 1758, more than 200 years after the death of Copernicus, that the Church finally revoked a general ban on all books that advocated a helicocentric view of the universe. However, even after lifting its ban, the Church only allowed public access to heavily censored versions of Galileo’s Dialogue and Copernicus’s De Revolutionibus. Surely if one widely accepted lie could persist as the truth among the masses for centuries as a result of those in power suppressing fact, then many similar instances are possible.
“Banking and fraud were born into our global word as Siamese brothers, inseparable since birth. And just like Siamese brothers, if ever separated, they would likely die together as well.”
Today, one may assume that banking and financial fraud is more prevalent today than in decades past given the greater visibility of this subject matter provided by the independent media and to some extent, the mainstream media. Persistent whispers of high-tech fraud in the form of High Frequency Trading programs that control the daily behavior of stock markets with SkyNet-like efficiency and headlines of covert deals made under the shadowy cover of dark pools reach the public’s ears and eyes, and the public readily believes that the levels of banking and stock market fraud are much greater today than they had been in the past. But the public fails to recognize the yin and yang of fraud. The depths of the economic lows today are only possible because the summits of the economic highs of yesterday were also built on fraud. The truth is, banking and stock market fraud was rampant all through the Bush Sr. and prosperous bull market Clinton years as well. The only difference was that because the fraud of this time was busy creating warm, giggly feelings of false prosperity, the masses believed that these times were honest times. Even Arthur Levitt, the Chairman of the Securities and Exchange Commission from 1993-2001, was smart enough to know that this was not the case. By the time the Glass-Steagall Act of 1933 was “officially” repealed in 1999 through a collaborative effort between Citigroup CEO Sandy Weill and Fed Reserve Chairman Alan Greenspan, Mr. Levitt himself stated that the repeal of the Glass-Steagall Act was nothing more than a mere formality. The reality of the banking and investment environment at this point, Mr. Levitt stated, was that the US Federal Reserve, at the behest and incessant lobbying of its member banks, had already “almost totally eroded” ALL of the protections of Glass-Steagall.
So do not mistake the illusion that is often sold to the masses as reality as actually being reality. Goldman Sachs did not just become the Rolling Stone, Matt Taibbi-bequeathed “great vampire squid wrapped around the face of humanity” this past decade. Goldman Sachs has been doing what Goldman Sachs does since it was founded in 1869. The notorious Italian-American gangster Lucky Luciano, after learning of the corruption of Wall Street, allegedly stated his remorse over his choice to become a gangster versus a bankster after spending a day on the floor of the New York Stock Exchange in the 1940s. Before being deported to Italy due to crimes he committed as a gangster, Luciano allegedly confessed, “ I suddenly realized I had joined the wrong mob.”
Banking and fraud were born into our global word as Siamese brothers, inseparable since birth. And just like Siamese brothers, if ever separated, they would likely die together as well. Below is just a very small sampling of the voluminous amounts of articles which I’ve written regarding the fraudulent state of markets over the past five years, including some very accurate predictions that were based upon an understanding of this fraud.
- “A Market Rally in Monopoly Money”, September 9, 2009
- “Can Rising Stock Markets Serve as a Sign of a Crashing Economy?” June 10, 2009
- “The Biggest Stock Market Scam of the Century, the Nuclear Option, is Being Unleashed – But Will it Succeed?” March 23, 2009
- “Recent Anomalies in U.S. Stock Markets – Proof of Free Market Intervention?” May 11, 2008
- “Will US Markets Crash Now or Later?” April 23, 2008
- “The Coming Dollar Crisis & Subsequent Gold Boom”, January 31, 2008
- “Is Hyperinflation Coming to the US, Time to Stock Up on Gold”, November 7, 2007
- “The Short-Term May be Rosy, But Beware the Financial Crisis that is Building Steam”, March 21, 2007
- “The Peak Investment Crisis”, September 9, 2006
Today a great number of people, from retail investors to investment advisers, understand that although stock prices still move on earnings statements, cash flow, forward projections, etc., none of these parameters have any credibility anymore as tools in projecting future stock price behavior. Corporations across the globe have used the allowances of massive accounting changes in their respective countries to create fantasy-land numbers that basically shelter our eyes from the truth while feeding our brains the same output from the same banker/government propaganda program – that all is okay in Wonderland.
In fact, even the great vampire squid establishment known as Goldman Sachs shockingly admitted that the great propaganda machine has been showing signs of breaking down. This month, Goldman Sachs’s David Kostin, finally admitted what not only I, but what a handful of others have been saying for many years now: “The economy is NOT the market.”
“Every business school in the world should have a class titled The Empire of Illusion 101 so business students can learn that economic theory and economic reality are creatures that reside at the opposite side of the spectrum and whose paths infrequently cross.”
For this reason, I’m going to take you down a new rabbit hole that remains relatively unexplored – the rabbit hole of the commodity world. I don’t believe that there is a single global commodity today that is sold at a free market price or even remotely determined by the free market forces of supply and demand as every economics professor from here to Timbuktu teaches in their Economics 101 class. I believe that Bankers rig the prices of all global commodities and control prices for their benefit only to the detriment of the wealth of their nations’ citizens. The price of all commodities, not just the ones most important to bankers such as precious metals, currencies, energy resources, and food, is always determined by their perceived values and not their real values.
Just reference this video, where I provide a foolproof test for people so they can understand that diamonds are just one of thousands of commodities today sold on its perceived value versus its real value that would be determined by the free market forces of supply and demand. Though the well-documented 1870 discovery of thousands of pounds of diamonds at the Orange River in South Africa stripped the diamond of its status as a precious stone, millions of people worldwide today still willingly pay a price for diamonds that reflect their erroneous belief that it is a precious stone. Just as the diamond cartel sets false artificial prices for diamonds in the world market, bankers set false prices for many of the world’s most actively traded commodities.
In every business school around the world, business professors constantly teach a new batch of naïve, impressionable young adults the Empire of Illusion. They teach students that prices of commodities are set by the free market principles of supply and demand. Practically all of us have seen the supply and demand chart that is the staple of Economics 101 classes around the world. Supply goes up, demand is constant, price falls. Supply diminishes, demand is constant, price increases. Supply is constant, demand falls, price falls. Supply is constant, demand rises, price increases. And eventually supply and demand forces will meet at a theoretical point of price equilibrium. These are all complete myths, for in the real world, bankers create artificial supply and artificial demand numbers to set real prices. Therefore, supply and demand forces, while affecting the price of commodities, do not impose the largest effect upon the final price points of commodities.
Every business school in the world should have a class titled The Empire of Illusion 101 so business students can learn that economic theory and economic reality are creatures that reside at the opposite side of the spectrum and whose paths infrequently cross. Perhaps a decent analogy to help people understand the illusion of free markets is the illusion of the political world. In the United States, The Powers That Be (TPTB) designed the two-party Republican/Democratic system to give people the illusion of hope that accompanies change and the illusion that they have some type of choice. In reality, bankers control both parties, as is clearly evidenced by the fact that there has been zero change in fiscal policy in the United States for the last 22 years during which George Bush. Sr, William Jefferson Clinton, George W. Bush, and Barack Hussein Obama all served as Presidents. Since the political system is corrupt and the same small elite group of bankers control the President regardless of his political affiliation, the process of elections is nothing more than a charade that only ensures that TPTB have a different face to present to the public that they can sell as one that represents change, if the previous President had been unpopular with the people.
Capital markets are exactly the same. The bankers have taught the world that free markets exist to present people with the illusory belief that the people just may have some control in setting prices in capital markets. However, in the end, the reality in the political markets and the commodity markets is exactly the same. Though people imagine they are in control, bankers manipulate all scenarios in these markets just as a four-star general would command his absolutely obedient foot soldiers in a military theater operation. It’s a damn shame that millions of wide-eyed students grow up believing the utter nonsense of supply-demand determinants and free markets that they learn in business schools all around the world. Bankers, through fostering massive speculation in futures markets as well as releasing potentially fake supply numbers, play an enormous role in dictating the perceived value of every commodity on earth. This is what economic professors should be teaching their students in Economics 101, but they don’t and they never will.
As I continue to uncover the mechanisms of the commodity matrix in this article, I believe this article to be one of the most important I have written in the last five years. I believe this article to be more important than even any of the dozens of articles I’ve posted on my blog that provided very specific guidance about specific sectors. Why? The answer is simple. If this article can open people’s eyes so they can experience the déjà vu of spotting the black cat in the matrix and therefore learn to see the matrix itself, ultimately the ability to see the moving parts of the big picture will allow people to connect the dots on their own and help them far more during the second phase of this global monetary crisis than any specific, short-term guidance.
Since there are literally thousands of commodities to choose from, I have chosen to discuss the Empire of Illusion with five commodities only: Gold, Oil, Food, Money and Education. Let’s start with gold.
Gold – Price Suppression Schemes Galore?
By official IMF reports, the United States is supposedly the largest holder of gold reserves in the world, at 8,133 tonnes. I say “supposedly”, because the Federal Reserve has not allowed the US’s reported gold reserves to be confirmed by an independent third-party audit since January 20, 1953. Thus, nobody really knows how much physical gold the US owns, except those that blindly accept the government’s word as the truth. There are many additional reasons why the official US gold reserve tonnage remains in doubt besides the lack of confirmation of the IMF reported number in more than 58 years. During the 58-year period since the last audit, leaked US Central Bank documents uncovered by GATA have confirmed numerous speculations that the Federal Reserve has dumped US gold reserves in the form of Central Bank swaps and/or through lease arrangements with global bullion banks. Just how much of this gold may have disappeared from US bank vaults to achieve the suppression of gold prices is anyone’s guess as is the amount of these gold swaps and leases that have actually been returned to the US.
Of course, the true numbers of US gold reserves are not the only numbers brought into question. It seems that all Central Bankers, no matter what their race, have a genetic propensity to lie. In April, 2009, the Chinese Central Bank announced in April, 2009 that it’s gold reserves were really twice its prior “officially reported number” for the past five years. And in June 2010, Saudi Arabia followed suit when it announced that, due to an “accounting error” its gold reserves had, like China, more than doubled overnight. If anyone believes that China is really disclosing the true amount of their gold reserves to the world today, then let me dispel your naïvete with a quote by former US Federal Reserve Vice Chairman Alan Blinder: “The last duty of a central banker is to tell the public the truth.“ So it’s not just China and the US’s gold reserves that I question, but I question the validity of gold reserve numbers from every key Central Bank in the world. Ask the Bundesbank of Germany if they can prove they have custody of their reserves in their own country and you will likely not receive a straight answer to this relatively simple question either.
And what about the demand side of the equation? At a CFTC hearing in April, 2010, in a well-covered story, Jeffrey Christian of CPM Group confirmed that what is loosely called the London “physical market” trades up to a hundred times more paper gold than there is physical metal supply to back those trades. So even demand numbers in the gold market have been proven to have little integrity. The not-so-invisible hand of banker fraud is clearly at play in heavily determining the price of gold. Finally, many of the same price suppression schemes that bankers have utilized against gold have also been utilized against silver, though I am not going to broach that subject here for lack of space and time.
Oil – Is it Even a Scarce Resource?
With oil, I believe that the banking/oil cartel utilizes the same perceived and artificially low supply scam as the diamond cartel to effectively create deliberate wild fluctuations in oil prices that they can capitalize on to amass great fortunes. Over my investment career, I have written both articles declaring my belief for the peak oil theory as well as articles in which I rejected the peak oil theory after becoming privy to additional knowledge of which I had previously been unaware. I stand today, after further research, firmly no longer a believer in the peak oil theory. Yes, I am aware of the reported figures about dwindling production in Mexico’s largest oilfield, Cantarell. Yes I am aware of rapidly dwindling oil production numbers for global oil production numbers as well. Yes, I am aware that the predominant number of people in this world believes in the Peak Oil Theory (which alone is reason for me to start questioning it). And yes, I am aware that many will think that it is ludicrous to challenge the Peak Oil Theory. But should the concept of challenging a “universal truth” that we have been told, even instructed to believe, ever be considered ludicrous? For that is all I am suggesting here. I will present facts of an alternative theory regarding the possible abundance of oil that merit consideration and I merely challenge you to consider the possibility that it could be true.
When there is a belief as widely accepted as the Peak Oil Theory, one must always question the source of this belief. In addition to my blogs over the past five years that have explored the fact that virtually every key economic indicator statistic produced by governments are blatantly false, there are many others that have also done a fine job of establishing this fact (just perform a quick perusal of the website ZeroHedge if you are ignorant of this fact). Why do governments produce economic lies? Because they have a better chance of maintaining power if they can successfully con the public into believing the “rosy” economic lies they produce. Why does the diamond cartel produce phony diamond supply statistics every year to mercilessly jack up diamond prices on unthinking, lovestruck men every year? Because producing phony supply statistics allows the diamond cartel to charge artificially high prices for diamond. In other words, the producers of these lies are also the greatest beneficiaries of these lies. So who benefits from the production of phony oil supply statistics, higher oil prices and a fear of peak oil? The oil cartel and bankers.
Understanding the shadowy world of bankers requires one to think like a detective in pursuit of a criminal. Identify a motive for why supply numbers for various key commodities may have been falsely manufactured and you will find the likely culprit behind these manufactured numbers. I have already illustrated to you earlier in this article that bankers have lied to the world about the fundamentals of stock markets and the real determinants of stock price behavior. I have also illustrated to you that bankers have lied to the world about the real determinants of gold and silver prices. I will reveal later, a quote from a Vice Chairman of a Central Bank that reveals his belief that it is not just the prerogative, but also the duty of a Central Banker, to lie to the public. So knowing this, why would anyone believe that bankers would tell us the truth about the real determinants of the price of a barrel of oil?
When oil incredibly soared from $51.20 on January 17, 2007 to $147.20 a barrel in 7 months, and then incredibly crashed to $35.35 a barrel just 5 months later, and then incredibly soared to $81.19 a barrel just 10 months later, I challenge anyone to produce figures of changing supply and demand determinants than can logically explain these massive swings in price over such a condensed period of time. Of course, the textbook media answer provided for these wild swings in price was that enormous global demand caused oil to soar in 2007, a crashing economy in 2008 caused a nosedive in 2008, and economic recovery caused soaring prices once again in 2010.
I contend that the real answer is that Wall Street firms engineer massive manipulation of oil futures market contracts to create a significant portion of these wild swings, if not the majority portion of these wild swings, even though “official studies” only attribute a nominal amount, perhaps 10% to 30%, of these wild fluctuations to speculation. Global oil prices, like global gold prices, are completely determined by a paper futures market today. So it is not the producers of oil that cause oil to rollercoaster from $50 to $150 to $35 to $80, and it is not speculators that produce the wild swings in supply and demand estimates that create these rollercoaster rides. Rather it is the bankers that control these paper markets and that control the supply and demand numbers that create these wild swings in price.
When I first started discussing enormous fraud in the pricing behavior of gold markets six years ago, people used to regularly ridicule me for my beliefs, especially whenever I publicly blogged about my beliefs. Back then, my beliefs were grounded in my own research as well as the very substantial mountain of evidence provided by GATA that had not yet made its way into the general consciousness of the mainstream public. Today, public beliefs about gold price suppression schemes have evolved 180 degrees. Now deniers of gold price suppression schemes, not I, are the ones viewed as naïve. I believe the same realizations will eventually happen with all commodities, not just gold. Does anyone else but myself notice that when oil prices are skyrocketing, peak oil theories are widely discussed as the instigator for higher oil prices. However, during times when bankers decide to move the price of oil much lower, why does peak oil almost never factor into the discussions of oil prices?
“Proposing that we know for certain that the process to form oil takes hundreds of thousands or millions of years seems far more absurd to me than the alternate theory of abiotic oil, where scientific evidence supports that the carbon found in the building blocks of oil are not formed from the decomposition of fossilized remains.”
- William Engdahl, an economic researcher, historian and freelance journalist for some 35 years, states,
“The whole peak oil theory rests on the idea that oil is a fossil fuel, which is accepted as religious dogma by almost every geology department in most of the world. The problem is, oil is not a fossil fuel, it’s not from the detritus of dead dinosaurs or from algae from under the ocean or bird fossils or whatever fossils you want to take. It’s not a biological product.”
If this is true, then what is oil? There is another theory about oil’s origins that very few people are aware of called the abiotic theory of oil that actually has a lot more scientific credibility than the much more speculative “fossil fuel” theory of oil. Mr. Giora Proskurowski, a scientist with the School of Oceanography at the University of Washington in Seattle, recently headed a study that produced some very interesting conclusions. Oil, Proskurowski stated, may actually be a natural product that the Earth’s mantle constantly generates and whose source may be living organisms as small as plankton rather than decaying ancient forests and dead dinosaurs. The advocates of this alternative abiotic theory of oil production believe that oil seeps up through bedrock cracks and is deposited, rather than originated, in sedimentary rock as the fossil fuel theory of oil claims.
As proof of the increasing credibility of the abiotic theory of oil production, scientists point to the Lost City, a hypothermal field 2,100 feet below sea level located along the Mid-Atlantic Ridge at the center of the Atlantic Ocean noted for its strange 90 to 200 foot white towers that bubble from its vents. In 2003 and 2005, Mr. Proskurowski and his team descended in a submarine to collect samples of the liquid that bubbles from the Lost City sea vents. Upon analysis, Proskurowski and his team discovered that the liquid that contained natural gas and the building blocks for oil, hydrocarbons. However, the hydrocarbons from the Lost City sea vents contained carbon-13 isotopes. They found no evidence of carbon-12, the carbon isotope typically associated with biological origin. Proskurowski and his team postulated that the hydrocarbons found in the Lost City sea vents were formed from the mantle of the Earth through an abiotic process of Fischer-Tropsh (FTT) reactions, and not from biological material that had settled on the ocean floor.
During the German Nazi regime, Nazi scientists developed FTT equations that could produce synthetic oil from coal and contributed to the world’s understanding of an abiotic process of oil production. Proskurowski also discovered that the methane in Lost City contained no carbon-14, which also lent enormous credence to the scientists’ hypothesis that the carbon source for the hydrocarbons of the Lost City vents came from within the earth’s mantle, far away from organisms that might have had contact with the global carbon cycle at the surface. In other words, the Lost City vents contained organic material formed by inorganic processes, the exact antithesis of how the fossil fuel theory postulates that oil is formed. Before Proskurowski’s study, Cornell University physicist Thomas Gold had argued in his book “The Deep Hot Biosphere: The Myth of Fossil Fuels” that micro-organisms found in oil were possibly produced in the mantle of the earth.
Again, as I stated before, before one can ever trust information that is so widely accepted, one has to find its source. The problem today is that the vast majority of people are just too lazy to ever question the source even though when one finds the source, the source often has multiple ulterior motives for producing its information. As a consequence of this intelligence inertia, the public-at-large has become extremely prone to blindly and very dangerously accepting any information as fact as long as it is printed in a “credible newspaper” or it is spoken on a “credible television news station.” In 1956, M. King Hubbert coined the term “peak oil”. In 1975 Hubbert himself predicted a worldwide crisis in oil by 1999 or 2000. Even though this did not occur, this did not discredit the peak oil theory whatsoever.
Of course, the question that immediately surfaces is this. Why would the banking cartel want you to believe that the oil is a fossil fuel if it is not? Here is the answer. If bankers could successfully sell the world the idea that oil was a byproduct of a process that involved hundreds of thousands or millions of years of anaerobic decomposition of buried dead organisms, then it would become infinitely easier to sell the world on the idea of peak oil and manipulate the price of oil. It is extremely difficult to manipulate the price of a commodity if everyone believes that its supply is abundant. So step back for a second, take a deep breath and let’s consider the logical arguments for/against the fossil fuel theory of oil production and for/against the abiotic theory of oil production. Is not a theory that proposes that the process to form oil would take not decades, not centuries, but MILLIONS of years through the decomposition of fossilized remains a theory that resides on the furthest edge of the spectrum of speculation? After all, testing this theory would take millions of years for this is how long this theory’s process presupposes is the necessary timetable for the formation of oil. Proposing that we know for certain that the process to form oil takes hundreds of thousands or millions of years seems far more absurd to me than the alternate theory of abiotic oil, where scientific evidence supports that the carbon found in the building blocks of oil are not formed from the decomposition of fossilized remains.
In regard to oil, F. William Engdahl continues, “It’s a controlled market — this is not a free market! Energy is probably the most controlled market in the world, food being second.” However, with this point, I respectfully disagree with Mr. Engdahl. In my opinion, money is the most controlled market in the world, with food and energy tied for second.
When considering the possibility that the banking cartel had created a lie about the real oil supply and was responsible for a potentially fake fossil fuel theory, my thoughts inevitably led me to questions regarding the US – Iraqi war. In fact, the US military’s invention in Iraq and the Bush administration’s invention of WMDs to justify military intervention almost seem to validate the Peak Oil theory. After all, why would America need to capture strategic control over the Middle East’s oil supply if oil was not a scarce resource but replenished quite abundantly by an abiotic process? I struggled with this question until I asked myself the following two questions, two questions that should always be asked before accepting the validity of any theory propagated by an authoritative source:
(1) Who is the source of this information?, and
(2) If the information is a lie, who benefits from the lie?
To question (1), most people already know that the Peak Oil Theory originated with M. King Hubbert. But can most people answer the question, “Who was M. King Hubbert?” M. King Hubbert was a geoscientist who worked at the Shell research lab in Houston, Texas. His biography provided by Wikipedia, is as follows:
“M.King Hubbert worked as an assistant geologist for the Amerada Petroleum Company for two years while pursuing his Ph.D., additionally teaching geophysics at Columbia University. He also served as a senior analyst at the Board of Economic Warfare. He joined the Shell Oil Company in 1943, retiring from that firm in 1964. After he retired from Shell, he became a senior research geophysicist for the United States Geological Survey until his retirement in 1976. He also held positions as a professor of geology and geophysics at Stanford University from 1963 to 1968, and as a professor at UC Berkeley from 1973 to 1976.”
A few months back, I produced a video series about the principles of ideological subversion that emphasized the essential role of education in the widespread acceptance of false ideas into the mainstream belief system. Hubbert certainly fits the bill here as he was granted numerous opportunities to spread his Peak Oil theories to the masses through his professorships at the top US universities of Columbia, Stanford and UC Berkeley. After Hubbert’s death, Matt Simmons, a Houston oil banker and decades-long friend of former US Vice President Dick Cheney, was able to leverage Hubbert’s peak oil theory to crystallize a global belief in the limited global supply of oil before he eventually turned whistleblower on British Petroleum during the BP Gulf of Mexico oil disaster, and was discredited himself before dying under questionable circumstances in 2010. Simmons was George W. Bush’s energy adviser, a member of the National Petroleum Council and also a member of the secretive, powerful Council on Foreign Relations.
Thus we’ve established that the oil industry and bankers were the source of the Peak Oil theory as well as the impetus behind propelling the theory into prominent global attention. Now let’s turn our attention to question (2). Who benefited the most from the Peak Oil theory and the War in Iraq? Again, the top beneficiaries of the Peak Oil theory and the War in Iraq were, and still are, oil producers and bankers. Why are bankers at the top of the list of beneficiaries of the war, you ask? It’s a simple equation. The US Federal Reserve creates money to fund the war and lends it to the American government. The American government in turn must pay interest on the money they borrow from the Central Bank to fund the war. The greater the war appropriations, the greater the profits are for bankers.
As I’ve only researched the abiotic theory a little over a month in preparation for this article, I am certainly not an expert on this theory. However, I think I’ve raised enough questions that should raise reasonable doubts regarding the possibility that bankers may just be providing false oil supply numbers to manipulate the oil price for personal gain. With that thought in mind, let’s turn our attention to agriculture.
Food & Money – The Two Commodities Bankers Use to Induce Subservience in the Masses
The price of the world’s food staples, such as rice, corn, wheat and soybeans have recently been soaring. In April, 2010, the media reported that “As rice prices soar toward $1,000 a ton, governments across Asia brace for possible unrest as the region’s staple food becomes less affordable and less available.” Paul Risley, the United Nations World Food Program’s spokesman in Asia, says some of the 28 million “poorest of the poor” it feeds could go hungry because the agency cannot afford to buy many of the world’s staple grains.
Meanwhile, corn, the staple food of Central America and Mexico, also has soared in price in recent weeks. The US Department of Agriculture, in releasing its monthly crop report last Friday, revised its forecast for the US corn crop downwards by 12.6 million tonnes, or 3.9 per cent, to 321.7 million tonnes. According to CBH Group’s wheat trading manager, Chris Brown, the USDA’s revision was the largest monthly revision for corn crop supplies ever. “Never before has the USDA moved the corn yield down by such an amount,” Mr. Brown said. In addition, prices of other staple crops such as wheat and soybeans have also been rising with tremendous rapidity in recent weeks.
On May 6, 2009, I wrote an article on my blog, the Underground Investor, called “Hundreds of Millions May Face Starvation in the next 5-10 Years” to call attention to the ongoing plans of Central Bankers all around the world to severely devalue global currencies.
Back then, I wrote:
“Of the current 6.5 billion people in this world, 50%, or 3.25 billion, live on a daily wage of $2 that has not changed in years, despite the fact that significant erosion in the purchasing power of these $2 over the past decade. In turn, the billions of people that subsist on $2 a day spend $1 on food daily. Simple math dictates that if the price of basic diet staples in the developing world (rice, corn, wheat, etc. but specifically rice) rises to $2 or $3 a day or more, more than 3 billion people will no longer just be hungry, but will begin to die from starvation.”
Though I wrote the above 18 months ago, that article was wholly ignored by all the media sources that regularly reprint my articles. Today, the situation I warned of above, is in essence what is beginning to materialize. Though mass starvation has not yet happened today, it could become a serious problem in the next five years at the rate Central Banks are devaluing the world’s major currencies. Today, the Food and Agriculture Organization of the United Nations estimates that 925 million people go hungry every single day. This alarming number is essentially the number of people on the fringe of survival and a fair estimate of the at-risk-for-starvation population if prices of the world’s basic food staples continue to soar. Today, the major media has just started to label the global monetary crisis as a “currency war” with recently dated origins. But that simply is not reality. The currency war between East and West has been occurring behind the scenes for a minimum of several years now. Nothing as severe as a global monetary crisis develops overnight and the world’s leading economies have been aware of this currency crisis for many years now.
So what is the real cause of soaring food prices? In Thailand, the leading rice-exporting country in the world, Korbsook Iamsuri, the secretary-general of the country’s rice exporters association, stated, “Don’t forget that we grow twice as much as we need domestically, that’s why we have so much to export. And all of a sudden everything’s gone, so I do not believe that that is the actual situation we’re facing.” Mr. Iamsuri blamed much of the soaring rice prices on farmers’ hoarding behavior which he stated was creating an artificial supply squeeze. Yes, it is not just the banker’s fault that food prices are rising so rapidly. Drought, flooding, inclement weather conditions, greed-driven hoarding behavior of traders and producers, rising input prices spurred by rising oil prices, and crop failure in some regions of the world all contribute to rising food prices. However, some of these other determinants of rising food prices, like rising oil prices and hoarding behavior, are also indirectly attributable to banking monetary policies. But what about the supply numbers of staple crops? Are they trustworthy? Since we have learned that government supply statistics regarding the commodities of gold and oil are 100% unverifiable, should we blindly believe the “official” government statistics regarding crop supplies? I suggest that we should not.
Remember the two questions that we should always ask before accepting the validity of any theory propagated by an authoritative source:
(1) Who is the source of this information?, and
(2) If the information is a lie, who benefits from the lie
Today, global rice stocks have been reported at a two-decade low. And corn prices surged again on Friday after a new report from the United States Agriculture Department claimed that this year’s corn crop would be smaller than expected. December corn futures on the Chicago Board of Trade reached a high of $5.84 a bushel in trading on Tuesday, October 12, an astonishing 70% increase in prices from the $3.43 a bushel price just 3 ½ months earlier. Even though CBH Group’s wheat trading manager, Chris Brown, made the USDA forecast for the coming corn harvest sound catastrophic – “Never before has the USDA moved the corn yield down by such an amount” – the REALITY of that soundbite designed to move corn prices higher, is much less dramatic. The USDA forecast, on a year-over-year basis, only forecast a 3% drop from the prior-year record level corn harvest. Thus, the true question becomes, “How can a projected 3% drop from a RECORD crop yield produce a 70% spike in the price of corn futures in about 100 days?
Again, if we look at the sources of food supply numbers, we uncover some answers. Industry trade organizations release the overwhelming number of estimates that warn of short or waning food supplies. And with all other commodities we’ve discussed in this article, if these supply estimates are untruthful, the industry and bankers are the parties that benefit from these numbers the most. I am not saying unequivocally that numbers regarding the world’s food supplies are lies, but I am saying that we need to consider this possibility. Many of the numbers that move the prices of the world’s agricultural commodities are based upon estimates of future yields, that when realized, reveal the estimates to be wildly incorrect. Furthermore, not only do bankers profit tremendously from volatile price swings in the world’s leading crops through participation in agricultural futures markets, but bankers also tremendously benefit in a secondary manner that is hidden from the public. If the public believes that soaring food prices are simply due to bad weather, bad yields and alternate uses of food (i.e. corn produced for ethanol), by drawing attention TO these factors as the major cause of rising food prices, bankers successfully draw attention AWAY from what I believe is, and will continue to be, the largest component of higher food prices by an overwhelming margin- the Central Banking monetary policies of devaluing global currencies.
If bankers, through a massive propaganda campaign, can get people to forget about the fact that food prices are soaring because they are devaluing all major global fiat currencies, then they are likely to avoid blame in what I see as an impending and inevitable global food crisis. Yes, I know that bankers are not the ONLY reason food prices are soaring and I’ve stated other factors that contribute to rising food prices above. But even when they aren’t directly responsible for rising food prices, they often are still indirectly responsible. For example, the greedy hoarding behavior of commodity traders or farmers is almost entirely driven by the recognition that food prices in the future will be much higher due to the Central Bank’s current campaign of massive currency devaluation. Without the reality of currency debasement, the different players involved in setting global food prices (which also includes bankers) would not be hoarding food supplies right now that could instead be feeding people at cheaper prices. And Central Banking currency devaluation policies encourage hoarding not just with agricultural commodities, but with many other commodities as well. For example, when oil traders anticipated huge swings higher in oil prices, they have been known to rent massive supertankers to buy and store oil cheaply in order to sell it at much higher prices later.
Currencies – Debt or Asset?
Since I’ve written about the commodity of currencies prolifically for more than five years now in the public realm, and because most people already recognize that 98% of paper money does not exist but as a digital representation in our physical world, I am going to keep my commentary about fiat currencies quite sparse. By definition, a Central Bank exists to manipulate currency valuations and to prevent free markets from operating. The two statements that I reprinted below are the only two statements you need to read to understand that bankers have created our current global monetary system for the sole purpose of manipulating and controlling the wealth of nations.
“If all the bank loans were paid, no one could have a bank deposit, and there would not be a dollar of coin or currency in circulation. This is a staggering thought. We are completely dependent on the commercial Banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the Banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless position is almost incredible, but there it is. It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied very soon.” – Robert H. Hemphill, Credit Manager of the Federal Reserve Bank of Atlanta, 1935.
In 1942, Federal Reserve Chairman Marriner Eccles testified before the House Committee on Banking and Currency, that “if there were no debts in our money system, there wouldn’t be any money.”
As the above statements were respectively issued in 1935 and 1942, it is obvious that the goal of bankers, for decades and centuries now, has been to destroy and control people through the issuance of money as debt. If, after reading the above statements, you are still fuzzy over the rationale why Central Bankers have 100% complete control over the purchasing power and store of value of those digital credits in your bank account, you may watch this video about the harmful effects of currency debasement to lend some clarity to that issue.
Formal Education – Essential…for Brainwashing Only
I will appropriately conclude this article about the banker-created Empire of Illusion with a discussion of how even the institution of education has been transformed into a commodity. This month, Bloomberg Businessweek reported that “a third of the top 30 U.S. business schools became less selective when admitting applicants to their full-time MBA programs in 2010.” Consequently, with education, when the going gets tough, the tough get, well, they get easier. Academic institutions are now willing to compromise their reputation and standards and admit less qualified candidates in an effort to keep their bottom-line numbers intact.
If you are a recent high school graduate considering entering university today, a young college graduate considering entering an MBA program today, or a parent with a child that is facing either of these two scenarios, as you conclude this article, it should be clearly apparent by now that:
(1) A young adult will never learn the mechanisms behind how the real business world operates within the confines of a traditional academic institution, and
(2) Given today’s economic environment, postponing or never pursing a formal academic degree may be the smartest choice one can make.
The Final World
I have always said, both privately and even publicly on my company’s website, that understanding fraud will contribute much more insight to the world of investing than the study of any “official” numbers and statistics released by corporations and governments. Today, more than ever, I believe that an understanding of the fraud and rigging games of bankers is not only essential to anyone interested in investing in capital markets today, but that it is also 100% necessary to survive the growing global monetary crisis during the next 5 to 10 years.