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Traders Workshop

Ultimate Market Regulator Failed

Politics / Market Regulation Jun 13, 2010 - 07:36 AM GMT

By: Shelby_H_Moore

Politics

Best Financial Markets Analysis ArticleEmail sent to: Brooksley Born,

I know your fought for the regulation of OTC derivatives: http://www.marketoracle.co.uk/Article14485.html


I am for the most scientifically efficient regulation.

In 1988, Larry Summers wrote a critical research paper which implied that for the fiat (money=debt, fractional reserve, i.e. ponzi) financial system to be able to escape return to an intrinsic value of zero (as fiat systems have done in every example in history of man), that this most efficient regulator had to be suppressed:

http://www.gata.org/files/gibson.pdf

What Summers discovered was that gold is the regulator of real interest rates. The people vote and the market corrects itself. If interest rates are lower than the inflation rate, gold ALWAYS increases in fiat price (because gold pays no interest). Interest rates are the regulator of all financial activity. I want you to think outside the small box of incidences of "fraud" and think about the larger containing box of "opportunity cost". Interest rates regulate humanity's opportunity cost. If interest rates are not regulated by the market feedback mechanism (the mother of all fraud), then regulation of individual incidences "fraud" is analogous to putting a bandaid on cancer sores.

But gold failed to regulate from at least 1992 (especially 1996) forward. Why? Because CPI statistics were increasingly lies to make it appear that real interest rates were positive:

http://www.shadowstats.com/alternate_data/inflation-charts

And because Central Banks were leasing their gold to suppress the gold price. And because as the BIS confirms, up to 100 times more derivative silver (and gold) promises (effectively naked shorts) were sold than exists physical metal (more supply of "metal" means lower price):

http://silverstockreport.com/2009/OTC-silver-fraud.html

Greenspan misapplied the freemarket theory, because there is no way that markets can self-regulate if the feedback mechanism for interest rates is suppressed. I have a hard time believing that Greenspan did not know gold was being suppressed, since he stated, "central banks stand ready to sell unlimited quantities of gold".

Had your regulation of OTC derivatives pushed through, you would likely have revealed the interest rate manipulation, and caused the fiat system to self-correct earlier, which would have caused a massive recession if not depression and a skyrocketing gold and silver price.

Instead the boys kicked the can down the road, and what is coming now is horrific beyond description. What we are likely to get now is a backlash of socialism so severe (because decades of mis-allocation due to incorrect opportunity costs), that the freemarket will be crushed for decades. For example, even now the freemarket can not buy gold and vote, because mathemetically gold can only keep pace with inflation, and yet gold is taxed at 28% (and probably higher soon), so thus anyone who buys gold is going to lose at least 28% in terms of purchasing power (although this will be better than what is coming for people who don't buy gold).

Macro-economics trumps micro-management. Socialism is central decision making and freemarket is individual decision making. Capital is not money, and when money has incorrect oppportunity cost, then capital is destroyed (for a looong time). The freemarket did not fail, Summers and the boys suppressed the feedback mechanism that allows individuals to vote and regulate. The fraud was at the very top, at the macro-economic level. It was 100% socialistic (central management).

And now we are going to pay for it with horrific hyper-inflationary, greatest depression since Rome.

An interesting confirmation is the mathematical fact that when gold is money, savers gain 33,900% greater return per century:

http://www.marketoracle.co.uk/Article16212.html

God bless,

By Shelby Henry Moore III

antithesis@coolpage.com

short bio, I have published articles on FinancialSense.com, Gold-Eagle.com, SilverStockReport.com, LewRockwell.com. I am the sole or contributing programmer of numerous (some million+ user) commercial software applications, such as Corel Painter, Cool Page, WordUp,
Art-O-Matic, etc.. I have an education in engineering and math.

Disclaimer: My writings are my personal opinions, not to be construed as statements-of-fact. Do you own research. Licenses to think and communicate have never interested me too much, so I am not a licensed research, journalism, investment, legal, nor health professional. Please consult the proper authorities for all matters covered in my writings. I disclaim all liability for what you do after reading my writings. No one can predict the future, and if there is a physical world investment that never loses value, I haven't found it yet in my 44.1 years here on Niribu.

© 2010 Copyright Shelby Henry Moore III - All Rights Reserved


© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Shelby Moore (author of this article)
15 Jun 10, 10:38
Delay not escape

Correction:

"Larry Summers wrote a critical research paper which implied that for the fiat (money=debt, fractional reserve, i.e. ponzi) financial system to be able to escape return to an intrinsic value of zero (as fiat systems have done in every example in history of man), that this most efficient regulator had to be suppressed"

Should be:

"Larry Summers wrote a critical research paper which implied that for the fiat (money=debt, fractional reserve, i.e. ponzi) financial system to be able to DELAY its return to an intrinsic value of zero (as fiat systems have done in every example in history of man), that this most efficient regulator had to be suppressed"

The point is that the suppression of gold as a regulator of interest rates, is necessary to extend the ponzi system.


Paul
15 Jun 10, 15:02
Larry Summers

Larry Summers wrote a paper outlining how the final financial reckoning can be delayed a little longer while he and his kind loot the system just a little more.

There, that sound better.


paul blanch
18 Jun 10, 07:38
gold taxation

Shelby,

I've read your theory as to the eventual taxation of gold, under a new gold standard controlled by our elite bankers. Your theory unfortunately has several FATAL flaws. For instance, if just ONE country, like China, refuses to join the banking cartel and establishes their own gold standard, then the price of gold cannot and will not be controlled. What chance is there that virtually every nation in the world will allow themselves to be subjugated to the elite bankers? I say there isn't a "snowballs chance in hell". China is already disdainful of the banking elite and any effort on their part to extend their control would be met with fierce nationalistic self interest..>>.. paulb


Shelby Moore
18 Jun 10, 12:01
re: gold taxation

Paul, don't be so naive. China has been controlled by the elite for a long time, since at least the opium wars. China is one of the main battering rams driving the NWO strategy.


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