"There is no means of avoiding a final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion or later as a final and total catastrophe of the currency system involved."
- Ludwig von Mises

Thursday, September 16, 2010


“Unfortunately, no one can be told what the Matrix is. You have to see it for yourself.”

- Morpheus, The Matrix

The world’s monetary system, the thing that allows us to live the modern industrial lifestyle many of us enjoy, the thing that also allows nations to silently plunder other nations or its own populace, and for banks to quietly strip a society’s wealth, the thing that has also financed some of the most fantastic technologies mankind has ever created, is going through a metamorphosis right now.

Historically, monetary systems have always gone through a birth, maturation, and decline process. They are always re-adjusted, re-invented, or just retired. Sometimes by choice, and other times, by an inevitable collapse brought on by the real world’s limitations – the world of resources, of demographics, and of wars.

Among other things, monetary systems are engineered to allocate resources, to store wealth, to provide a universally accepted means of exchange, and oftentimes, to maintain the status quo power structure. Modern central banks and the governments they theoretically answer to are the great stewards of today’s global monetary system.

I first learned about central banking when I was in Law School in the mid 1990s. I knew by my second year that I did not want to practice law, so I focused my curriculum on business/corporate oriented classes. And having an interest on the global issues of the day, I chose to write my paper on the emerging European Monetary Union. Bad enough I was racking my brains with complex legal theories, I unwittingly added central banking to my already full plate.

It was very difficult, I admit. But it also exposed me to such books as William Greider’s “Secrets of the Temple” and G. Edward Griffin’s “The Creature from Jekyll Island.” It was an entire new world to me. Looking back, it was like the movie – The Matrix. That “new world” always existed, always affected my life, yet was invisible at the same time. Most don’t know how it works, or how it affects them – they just carry on and accept what little they know about it.

I decided to start this blog, not that the world needs another doom and gloom financial blog, there are plenty of those. But I decided to start this blog to chronicle the upcoming socioeconogeopolitical upheaval that occurs when a global monetary system nears its end. This blog will cover current global events and important economic theories that shed light on the current global financial crisis.

I will not be covering detailed stories on such topics as banking reform, high frequency trading, consumer protection reform, etc… unless those topics tie in with my focus. There are plenty of great blogs on those topics. But rather, I will be covering how nations are reacting to this monetary crisis, how it began, and how it will likely resolve itself. By no means is this a normal cyclical recession. It is the end of a monetary era.

In an upcoming post, I will flesh out my thesis that this blog will revolve around. Great changes are afoot. This will be bigger than the collapse of the U.S.S.R. Few nations will be spared the consequences. There will also be a tremendous amount of wealth destruction and wealth transfer. And the conventional pundits and power elites will once again say: “no one saw this coming.”

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