Monday, 30 December 2013

Bloomberg does Bitcoins on video

An introduction to the cryptocoin that has everyone talking (and speculating).  Enjoy.

Tuesday, 26 November 2013

Was the US-Iran deal all about petrodollars?

An historic agreement between Iran and the US.  There are plenty of conspiracy related economics issues to get our teeth into here.

Thought for the day "Did the deal mean that Iran agreed to all future oil sales going though in dollars to protect the dollar as the world's reserve currency?"

This is no doubt Syria related.  Some over in Saudi Arabia are going to be a little peeved.

Bitcoin backlash II "ROBBERY" - conspiracy continues

It is hard to short Bitcoin - this is a shame.  Even so, the conspiracy rolls on - or does it?  The latest attempt to destabilise the cryptocurrency is the latest robbery story.

Because it is hard to trade sophisticated shorting teams are unlikely to have got their act together to start a bear raid but planting "negative stories" is a good start.

In theory one would just have to buy a shed load of Bitcoins and then sell the lot coordinated with planted news stories to set off a stream of panic sellers and then just buy back the lot at a much cheaper price and repeat.

If you buy bitcoins and "lose them" they are gone for good.

Million-dollar robbery rocks Bitcoin exchange[network news]

 Bitcoin Internet Payment Services, a Denmark-based exchange billing itself as Europe's biggest, was robbed of bitcoins worth more than $1 million in a theft that took place over the course of the past several days.

Bitcoins are a decentralized digital currency generated by computers “mining” for the solutions to complex math problems, and authenticated on a peer-to-peer basis – not by a central banking authority. It’s the third major heist this month – about $1.4 million worth was stolen several weeks ago from an anonymous Australian who ran an online wallet service known as, and a Chinese exchange abruptly vanished two weeks ago, taking more than $4 million with it.

Smaller thefts, which affected consumer exchanges in the Czech Republic and Poland, have also taken place this month.
 In the latest incident, BIPS was apparently targeted by a distributed denial-of-service attack earlier this month. A follow-up attack, according to bitcoin news site Coindesk, subsequently knocked out key security systems and allowed the thieves to make off with 1,295 BTC.
In response to the incident, BIPS said in a statement that it was forced to pull the consumer payments functionality of its services off-line, and warned users that they would have to transfer any balances to a different wallet service.
 “BIPS will temporarily close down the wallet initiative to focus on real-time merchant processing business which does not include storing of Bitcoins,” the statement said, adding that BIPS will attempt to re-open its consumer wallet service with improved security measures in the future.
 BIPS customers aren’t happy with the exchange’s response to the incident. Many have taken to the Bitcointalk forums to accuse BIPS’ leadership of carelessness – and, in several cases, hinted at actual malfeasance. One user, who says he or she lost 90 BTC (about $71,000, at the time of this writing), has created an online form so that others can sign up to be part of possible legal action against BIPS.
Bitcoins, thanks to their general anonymity and lack of centralized regulation, have become popular among illegal users, who can use it as a convenient medium of exchange for illicit goods or services. Huge price spikes have driven the value of a bitcoin to more than $750, making the crypto-currency an attractive target for unscrupulous hackers.

Email Jon Gold at and follow him on Twitter at @NWWJonGold.

Thursday, 21 November 2013

Bitcoin's imminent collapse - conspiracy?

Conspiracy economics likes nothing better than a good cryptocurrency like Bitcoin but now of course now it has gone mainstream and exponential one has to look for how the collapse will happen.

To believe the US government or any government of world order cannot manipulate the currency is to be naive.  

The "buggish on bitcoin" is a good start to the beginning of the end.  Of course, the conspiracy here is that Moneyweek are "goldbugs" who have every incentive to get rich people in risky countries to buy gold to hide in a toilet rather than a cryptocurrency like bitcoin.

The point about the FED putting their vast resources into "mining" means they could mine the hell out of bitcoins to destabilise the market.  Or could they?

An amusing description of Bitcoin.  What is money after all - simply trust (backed up at times with big guns).

Why I’m ‘buggish’ on bitcoin [Moneyweek]

“What is bitcoin?” she asked.

“It’s a new virtual currency. You know, it was created by someone on the internet. You can use it to buy things.”

“Who created it?”

“Nobody knows. He is said to have been a Japanese programmer.”

“Do you have a bitcoin? Could I see it?”

“No, it only exists in cyberspace.”

“Where does it come from?”

“You have to find it in cyberspace, using a computer program, which limits the supply.”

“Oh. Well, I guess everyone with a computer is looking for them. How much is the new money worth?”

“It depends. It trades freely in cyberspace.”

“But what makes it valuable?”

“Nothing, except that people are using it. We’re going to begin using it in our business.”

“But why would a merchant trade his valuable merchandise for something that has no value?”

“Well, that’s what we do with the dollar.”

“But the government guarantees the value of the dollar. They may not always do a good job of it. But at least they stand behind it. Who’s guaranteeing the value of the bitcoin?”

“You mean, nobody knows where it came from. Nobody has ever seen it. Nobody knows what it is worth. Nobody knows where to find it. And nobody stands behind it. Seems crazy to me.”


"Self-securitization" - shadow banking's dirty secret

Zero-Hedge are good.  I particularly like the phrase "...usually involving a 20 year old evil French mastermind working for Goldman...."

The current article gives a good if not well presented description of the ability of central banks to create money out of thin air and then trade it with other banks who are doing something similar.

None of this debt is backed with anything.  A salutatory tale.

Solution?  Stay tuned.

The Unspoken, Festering Secret At The Heart Of Shadow Banking: "Self-Securitization" ... With Central Banks [Zero-hedge]

By now everyone has heard of securitization: the process whereby banks take risky assets on their books, package, tranche them, and then re-sell them to yield chasing fiduciaries of widows and orphans. The conversion process can be nebulous, usually involving a 20 year-old evil French mastermind working for Goldman, and a billionaire hedge fund manager, who select the worthless securities put into the weakest tranche, just so the abovementioned two parties can short it while misrepresenting their conflicts of interest, and make a boatload of money when the whole securitized structure implodes. The process usually takes place "off balance sheet" via Special Purpose Vehicles so it is completely unregulated, and as such allows massive leverage.

According to many, the hidden leverage embedded in the securitization pipeline is what catalyzed the 2008 near-death experience of the financial markets.

All of this is well-known to most. 

What however is certainly not known, because until a few days ago the concept did not technicall exist, is what emerged deep from the bowels of the FSB's 2013 "Global Shadow Banking report", and what is barely even defined anywhere in popular literature, which thus we have defined as the "unspoken, festering secret at the heart of shadow banking." 

Presenting self-securitization.

What is "self-securitization"? Go ahead and Google it: there doesn't exist any technical definition of this heretofore unheard of phrase.

"Revolution" according the Telegraph

Revolution cannot be too far away if the Telegraph is blogging about it.  I like Ambrose Evans-Pritchard for some reason.

Of course the Russell Brand rant has got some impressive publicity in support of a revolution based on little fundamental understanding of pretty much anything.  With Paxman playing the straight man well the beards are on the march.

This article looks at Gini coefficients - inequality is high and rising.  This might explain why the rich in China and Russia and buying as much gold and bitcoins as they can get their digital hands on although only one of these asset classes is rising exponentially and it is not shiny.

There is talk of revolution in the air [Telegraph]

 Pre-revolutionary grievances are simmering in half the world, openly in France and Italy, less openly in Russia and China


Tuesday, 5 November 2013

"Next economic catastrophe approaches"

At "conspiracy economics" we like nothing better than a good "we are all doomed story".  We are here to document these stories for only then, once doom has descended, will be be able to look back (assuming the Internet survives the said doom-event), and tally the winners and losers in the economic prediction game.

Kingsworldnews are particularly good at this.  At the moment it is generally QE and tapering related.

There are serious economic issues at stake here.  Can we really just continue to print money without debasing the currency?  Perhaps debasing the currency is exactly what is being attempted?  Inflating away the Wests debts with a quick bout of hyperinflation.  Who loses?  Creditor nations?  Who wins, debtor nations.

Best way to survive?  Hold assets and not cash.  Who is a prime suspect?  Yep, Gold and Bitcoins.  Here we are again.  Who has a nice advert placed within this post?  Yep, "Cayden resources" who are...... a gold mining company. 

The article is worth reading.  Jumping to the conclusions.......

World Reaches Tipping Point as Next Catastrophe Approaches [outside link]

 The reason why all of this so incredibly important is that everything is now in place for another crisis as we approach the February debt ceiling limit.  As a consequence, it is extremely critical that investors understand that they should absolutely not be holding dollars or Treasury paper.  They are incredibly overvalued and therefore they will be the ultimate losers here.  Physical gold and silver are the place to be, and can continue to be picked up at prices that reflect severe undervaluation.
Just before Nixon closed the “Gold Window” in the 1971 dollar crisis, Treasury Secretary John Connolly, speaking to the world, said "The dollar is our currency, but your problem.”  To paraphrase him today, he could be saying “Treasury paper is our debt, but your problem.”

Monday, 4 November 2013

Who are the "white dragon society"?

For NWO fans out there the White Dragon Society will occasionally pop up on your screens.  But what and who are they?  Look no further.  My bold.

Expanding into the universe sounds like a good plan given the lack of space back down here on earth.

Note, the white dragon society raises the immortal terms "free energy" - that is a post for another day.

Be interesting to know how one becomes meritocratically selected to be part of the agency.

White Dragon Society [outside link]

The White Dragon Society proposes using humanity’s savings to end war, end poverty and stop environmental destruction. After that, humanity can be set on a path of exponential expansion into the universe. Our savings and our future planning can be devoted to such attainable goals as increased longevity, improved human abilities, free energy, the creation of new eco-systems, the expansion of life in all its forms and anything else scientifically possible and morally permissible that we can dream of.

The White Dragon Foundation has been set up in order to attain these goals. It will carry them out by means of a meritocratically staffed international economic planning agency.

There are indications coming from all over that the Old World Order is waging an all out offensive on all fronts in order to maintain its grip on global power.

The world now faces a clear choice between the genocidal, racist religious fanatics who want to murder 5 billion people and a group that wants to end poverty, end war, stop environmental destruction and start a Golden Age.

Quote of the day

"The central irony of financial crisis is that while it is caused by too much confidence, too much borrowing and lending and too much spending, it can only be resolved with more confidence, more borrowing and lending, and more spending." (Larry Summers, October 24th 2011) [Reuters]

Saturday, 26 October 2013

Friday, 25 October 2013

The gold propaganda machine - playing on the weakness of the masses?

Gold is a classic topic for conspiracy economics - it has it all.  Big government, shady deals, smuggling, mines in dangerous places, gold standards, money, quantitative easing - it has it all.

My concern is that a large number of  blogs and commentators (not unlike this one.....) are pushing the story that gold and silver and massively undervalued and that revolution is  coming, the dollar will collapse and the only solution is to bury a few bars for gold in the back garden (as the government might steal it lest it is kept in the house or in a bank vault).

One thing that I have noticed about a lot of these scare sites (a lot are listed in the blogroll of this blog) are then peppered with "buy gold here" adverts from which they will of course make a cut. 

Thinking about it, watch out for a gold buying advert on this site soon.

A lot of the scare/conspiracy stories are of course just that.  Armstrong economics take a swipe at the gold bulls.  His site is devoid of gold adverts (like this one ..... for now)

Is QE fundamentally undermining the dollar?  Are competitive devaluations going to lead to high inflation and higher interest rates?  Perhaps and perhaps gold is a good investment (physical and not paper of course....).

It is always wise to look at both sides and Armstrong provides a good rant on the subject.

The whole article is worth reading but he concludes:

Gold & Perpetual Propaganda [Armstrong economics]


Are you trying to survive and make money? Or are you just spreading propaganda that is created by gold promoters to get people into a zealot state that they will continue to buy even when they lose money? Gold is a market and it rises and falls like everything else. It is trading NO DIFFERENT from the rest of the commodity sector. Everything is linked and everything has its cycle and time. Why should gold rally when the MAJORITY of people see nothing wrong? Until the majority of people question government, which is coming, then and only then will gold rally on a sustainable basis. It did not even exceed the 1980 high adjusted with the bogus CPI numbers that stand at $2300 today. When gold exceeds that number – THEN AND ONLY THEN is real bull market underway.

If you stop fighting the trend and embrace how markets trade, what is so wrong with waiting to buy the low? You just may make more money that way than donating to those spreading propaganda for their own self-interest. How can someone be an analyst when his livelihood depends upon selling you that which he claims to be an independent analyst?

Thursday, 24 October 2013

"Step aside" - equity crash on its way - Mark Spitznagel predicts

210 seconds on why to sit on the slide lines ahead of a 40% fall in the market within a year.

Mark Spitznagel waxes lyrical.

Weak on detail but big on "gloom".  Entirely Missable.

Greek devastation and Europes lost decade

The Telegraph's Ambrose is impressively dismal on Europe's economic outlook.

Conspiracy economic blog likes nothing better than a thoroughly bleak story on the future of the world economy but it is better when there is a solid underpinning in fact.  This time the story comes from the UK right-wing paper the Daily Telegraph.

What is impressive is that Ambrose manages to take a fairly innocuous looking report from Citi bank and spinning a "Europe's lost decade" story out of it.  Nice work.  My bold.

Having said that, if Citi bank state that unemployment will rise to 32% and debt to 201% of GDP maybe he has a point.

Citi forecasts Greek devastation, unstoppable debt spirals in Italy and Portugal [Telegraph]


If Citigroup is broadly correct, Europe faces a lost decade that is far worse than anything suffered by Japan, which will render the region marginal in coming world affairs, and is likely to have non-linear political consequences. The lesson of the 1930s is that you have to discredit both the moderate Left and Right in turn before voters turn to extreme parties en masse.

I cannot see how perma-slump and rising unemployment can continue through to 2017 without patience snapping. But such judgements are entirely political, and therefore intuitive. You have to speak the languages of these countries and know them very well to have any useful insights.

Citi's team is headed by ardent euro-federalist Willem Buiter, and most of his team are from eurozone countries, so this is not an Anglo-Saxon report.

Of course, there is always the possibility that they are completely wrong. They had better be wrong.

Shadow banking crisis - Chris Martenson talks about a "bubble in search of a pin"

A decent explanation of the shadow banking crisis and the Federal reserve.

What happens if interests start to rise too fast?

What happened to the QE money?  Banks accumulate cash, bubbles form in the equity market?  Is the money getting where it is needed.

Where does the next crash come from?  The hypothesis is that the current situation is "a bubble in search of a pin".

We cannot avoid reality forever and only then can the major strucural reforms be undertaken.

Worth watching but a little wonky.

Thursday, 17 October 2013

Conspiracy economics quote of the day

A new world order should be put in place, according to which all nations, big or small, poor or rich, can have their key interests respected and protected on an equal footing. To that end, several corner stones should be laid to underpin a de-Americanised world.

What are the corner stones and how many have been laid?

Next stop on the road to economic armageddon - "Hyperinflation"

The shutdown is over, for now. Hyperinflation is the next bogeyman on the block.

 The logic is simple.  Endless printing of money should lead to inflation right?  Not happened yet, but in theory it should.  Plus, deflation is such bad news that inflation is the least of our worries.

Perhaps not.  John Williams ( says that the weakening dollar will lead to the first signs of hyperinflation.

This is a sensible discussion and worth reading to get some basic economics underpinning the current situation.

Conclusion:  Of course, you guessed in conspiracy fans, start buying gold and silver and hard assets.  The price of $100,000 an ounce is mentioned.  This makes gold look very cheap.....

Perhaps the big conspiracy is convincing people to buy shiny metal by scaremongering about shutdowns, ceilings, quantitative easing and the falling dollar.

The 90% club - gold miners fall off a cliff

Any good conspiracy economics blog will have "gold" in there somewhere.  If readers have watched the HiddenSecretofMoney videos and believed the hype then you would be rushing out to buy gold by the bucket (or matchbox) load.

The relationship between gold investing, the gold price and the price of gold miners is an interesting one.

Should an investor buy physical gold, paper gold or shares in a gold mining stock.

Hinde capital have a nice piece updating the membership of the 90% club which consists of those gold mining companies who's shares have fallen at least 90%.  There are a lot of them.

It is a simple econ101 article about supply and demand and the fact that if the cost of production are greater than revenues from selling the product produced (mined in this case) then the only rational move is to shut down operations.

The relationship with the price of gold is more complicated.  In theory, a fall in production of gold limits supply and should lead to an increase in the price of gold.  Of course, then the mothballed mines will open again and the price will return to its previous levels (although this all takes time).

Buying shares in large low cost gold miners would appear to have legs as an investment strategy.  A few gold-eagles buried in the back garden might be a sensible investment against a global collapse.

[Warning: Never ever take investment advice from this blog or any other blog for that matter but especially this one :-)]

Hinde Capital article below:

The growing 90% club and why gold production is going to go to zero


If gold prices stay at the current levels for a prolonged period of time, do not be surprised if gold production falls much closer to zero. From an investor’s perspective it is a treacherous minefield. Of course, there are companies who really do have high grade ore reserves who can really claim to mine at $800/ ounce but these are very rare, maybe less than 5% of the 2000 quoted companies. The Northern Miner writes that out of their survey of 1400 Toronto listed firms, 721 currently have less than $200k cash in the treasury.

While the big caps that make up the GDX index are unlikely to go out of business in the short term and may offer some trading opportunities for a bounce here, the very nature of this desperate business remains. Huge capital is required a long time before there is even the sniff of future cash flow.  All companies can go to zero but mining companies get there much faster than most. Strangely it might well be the demise of 1000 mining companies over the next year that is the most bullish reason for the survivors.

If gold production really does fall off a cliff, the standard laws of supply and demand should be a huge positive factor for the price of gold.   The sentiment in the gold market is horrendous led by the media and the price action. It is down 25% on the year. If you were looking for an asset class with a high margin of safety, (production cost) that was universally hated with no speculative long positions for a long term value portfolio allocation, you could do a lot worse than gold bullion at $1250 ounce.


Wednesday, 16 October 2013

The History of money or "The biggest scam in the history of mankind"

This is a good economics 101 lesson on the monetary system in the US and how we have a debt fuelled economy and why the debt ceiling must rise.

The interesting observation is the "stock owners" of the US federal reserve (whoever they may be....see previous post).

This is a 30 minute episode but for any non-economists out there it is interesting viewing.

There is a "gold and silver matters" issue so it is important to know where the presenter is coming from but there are also some great quotes.

We are all slaves to the bankers - aren't we?

Watch this and become "1 in a million" who, according to Keynes understands how banking works.

Conspiracy economics quote of the day

"Things fall apart, the centre cannot hold mere anarchy is loosed upon the world.
The best lack all conviction
whilst the worst are full of passionate intensity"
- WB Yeats

The "Weathy Elite" pulling the strings of the global economy

No conspiracy economics blog can be taken seriously without a marker post on the NWO and the global elite.

There is no shortage of blogs, books, Youtube videos and so-called experts on this subject so I will just link to a post on the "Burning Platform" from January this year that gives a nice summary.

This is a central tenet of the new world order conspiracy movement.  Hence, this blog needs to look carefully at what underpins this classic conspiracy and of course it links to class war.  The wealthy elite conspiracy is closer to mainstream economic analysis than most and it has gained serious traction given the rise and rise of Max Keiser and others (more on Max later).

In this post the author provides solid proof that "a core group of wealthy elitists is pulling the strings".

The beauty of this conspiracy is that it brings together so many threads - Bilderberg meetings, G20, Freemasons, Illuminati, the works. 

Did anyone think it was really any other way?

The guys who run the world [Outside link]

Who Runs The World? Solid Proof That A Core Group Of Wealthy Elitists Are Pulling The Strings. Does a shadowy group of obscenely wealthy elitists control the world? Do men and women with enormous amounts of money really run the world from behind the scenes? The answer might surprise you.
 So far so good.  So how weathly are these people.  Very by the looks of it:

When I am talking about the ultra-wealthy, I am not just talking about people that have a few million dollars. As you will see later in this article, the ultra-wealthy have enough money sitting in offshore banks to buy all of the goods and services produced in the United States during the course of an entire year and still be able to pay off the entire U.S. national debt. That is an amount of money so large that it is almost incomprehensible.
That figure is so large that I find it almost incomprehensive. 

So what do these ultra-wealthy people own?  No surprises here - the banks.

But the ultra-wealthy don’t just sit on all of that wealth. They use some of it to dominate the affairs of the nations. The ultra-wealthy own virtually every major bank and every major corporation on the planet. They use a vast network of secret societies, think tanks and charitable organizations to advance their agendas and to keep their members in line.
 Of course the banks are not enough.  Next has to be the media and perhaps more surprisingly also a number of the worlds institutions.

They control how we view the world through their ownership of the media and their dominance over our education system. They fund the campaigns of most of our politicians and they exert a tremendous amount of influence over international organizations such as the United Nations, the IMF, the World Bank and the WTO. When you step back and take a look at the big picture, there is little doubt about who runs the world. It is just that most people don’t want to admit the truth.
This blog post lists the top 25 banks at the centre of the global elite conspiracy.

It is worthwhile including the famous Rockefeller quotation to give an idea of the smoke that is often used to shout "fire".

So who runs the world?

They do. In fact, they even admit as much.

David Rockefeller wrote the following in his 2003 book entitled “Memoirs”…
“For more than a century, ideological extremists at either end of the political spectrum have seized upon well-publicized incidents such as my encounter with Castro to attack the Rockefeller family for the inordinate influence they claim we wield over American political and economic institutions. Some even believe we are part of a secret cabal working against the best interests of the United States, characterizing my family and me as ‘internationalists’ and of conspiring with others around the world to build a more integrated global political and economic structure — one world, if you will. If that is the charge, I stand guilty, and I am proud of it.”

"Repo implosion" - bankster panic?

Big banks under threat from chaos on the derivatives market? Have big banks over leveraged again? The question revolves around banks exposure to the derivative markets and this is linked to short-term treasury bills which have remained well priced due to QE activity.

This and more is discussed in an article on LarouchePac.  

The article on the "repo implosion" can be found here.

 Danger of a 'Repo Implosion' Grows for Wall Street [Outside link]

One of the better lines refers to a "bankster panic".  A fine turn of phrase.  The danger of course is that if the repo market does freeze it will take the banking system down with it.  Nobody wants to touch 1-month bills related to the US shutdown.

The prediction - an increase in money printing through QE.  The result - debasement and an increase in the price of gold........(perhaps).
We should now have a look at the authors of this article.  It is useful and somewhat illuminating to have a look at what LarouchePac is and does and who it is funded by.   There is no doubt that LarouchePac is a mine of top quality "conspiracy economics" material that will need future dissection.

Larouche Pac is run by Lydon LaRouche who describes himself as:

Mr. LaRouche is an American patriot. As a veteran of WWII he personally experienced the British Empire's brutality and ideology up close while serving in India and as a result is committed to the extinction of that empire policy. He continues as one of the few remaining staunch patriots who lives in the tradition of FDR and the American System of Political Economy. In this context, and in his capacity as a consultant after the war, he pioneered a revolution in economics based on a discovery he made called the LaRouche-Riemann method, with which he has since made several successful economic forecasts. The most recent of these, announced at a July 25, 2007 international webcast, warned, "there is no possibility of a non collapse of the present financial system," and that "only a fundamental and sudden change in the world monetary financial system will prevent a general immediate chain reaction type of collapse, at what speed we don't know, but it will go on and it will be unstoppable," a warning playing out right now. As a result of this foresight, Mr. LaRouche is unique in his ability to both craft policy solutions, and to organize national and international efforts to get those policies through. Below are a few resources which give you just a glimmer of this role.

I particularly like the quote "there is no possibility of a non collapse of the present financial system".  It has a ring to it that "there will be a certain collapse of the present financial system" does not have.

The science behind LarouchePac sounds pretty radical and not something I have come across as an academic economist.  My bold.

 Early in 2006 Lyndon LaRouche initiated the creation of a research team nicknamed the "Basement" which was challenged to come to know and then enrich the LaRouche-Riemann method of economic forecasting. The team focuses on continuing a tradition of science typified by Plato, Gottfried Leibniz, Johannes Kepler, Karl Gauss, Bernhard Riemann, Max Planck, and Vladimir Vernadsky. Namely, building on a Promethean outlook of mankind, with the emphasis of mind as the subject of both science and art. The project began with the study of Kepler's New Astronomy, which laid the scientific foundations for an expanded study of the LaRouche-Riemann Science of Physical Economics, and progressed along a strict curriculum LaRouche called the Narrow Path. Now, that team has expanded both in number, and in areas of research, probing various elements and aspects of the Science of Physical Economy, and delivering in-depth reports, videos, and writings for the shaping of economic policy.
There is a lot more to read and absorb but appears to be a vertible gold mine of conspiracy economics material.

Added to the blogroll.

Tuesday, 15 October 2013

Bloomberg does "de-Americanization"

The media are going to town to "de-Americanization".  I must admit, as a China specialist, it does have a nice ring to it and clearly strikes a cord with the public  (and the media) worldwide.

China would not issue such a statement lightly.  The West has underestimated China's ability to play a political long game for many years.  China looks ahead decades and not as in the West, until the next rigged election.

This is another warm up post before we get to the main event.


Welcome to the conspirarcy economics twitter feed

Conspiracy economics has now entered the twitterarena.

As the by-line states, if you are "Interested in bubbles, the global financial crisis, globalist bankers, the new world order, gold bugs, Bilderberg, G20, masters of the universe, real inflation, bitcoins, austerity, debt mountains, currency wars, petrodollars, oil wars, water wars, class war, war-wars, climate change, peak oil and peak everything - then this is the blog for you"

Monday, 14 October 2013

Bye bye dollar, bye bye US power

The Telegraph do "the end of the dollar".  China's mention of "de-Amercianization" of the global economy has got the media hacks running for their history books.

A glance at those same books will reveal that the Portuguese, Spanish and British managed about as long as the dollar has managed to eek out. 

It looks the Dollar's time in the sun could be up.

So what is the solution - that will be a later post but China's ever increasing pile of gold may hold a clue.

 The sun is setting on dollar supremacy, and with it, American power [Telegraph]

All great empires – from the Greek, to the Roman, the Spanish and the British - have at their heart a dominant means of exchange which is very much part of their political and social hegemony. Once upon a time, it was Roman coinage which was the world's pre-eminent currency. In more recent times it was the British pound. Today, it's the US dollar to which international investors flock as a safe haven for their money. Highly liquid and apparently reliable – until recently at least – nothing else comes even remotely close to the greenback's dominant position in the international monetary system.
 Yet rarely before has international dissatisfaction with the dollar's role as reserve currency to the world been as great as it is now. The most visible anger comes from China, with more than $3 trillion of dollar foreign exchange reserves, $1.3 trillion of them held in US Treasuries. For ordinary Chinese, it has come as a revelation to discover they own so much American debt. That they own it in a country which because of political brinkmanship may actually default has provoked understandable fury. 

"It is perhaps a good time for the befuddled world to start considering building a de-Americanised world", China's official government news agency has said.

Tweeter fiasco shows the madness of crowds and bad spelling

The economist on Oct. 12th reported on the insane behaviour of investors who chased shares in Tweeter up 1,800%

Why? Because it is spelt a little like Twitter and may have a similar sounding ticker.

The regulator stepped in but not before many mug punters lost vast sums.

This is clearly irational behaviour. Sadly existing holders were probably too slow to exit the bankrupt retailer. Likewise, those wishing to short the price back to reality would have had difficulty borrowing the stock to sell short. This is inefficient.

What did investors think they were doing? If it looks too good to be true that is because it is.

What is highly likely is that when Twitter does float it will be overpriced with a future growth of revenue expectations that will prove impossible to meet.

 Sound the retweet [Economist]

 For want of a letter, a fortune was lost. Shares in Tweeter, a bankrupt electronics retailer, briefly soared 1,800% on October 4th because some investors mistook its ticker symbol TWTRQ for TWTR, the shorthand chosen by Twitter ahead of the microblogging service’s planned stockmarket flotation. Trading was halted after the regulator stepped in. But those who bought at the peak price will be regretting their foolishness.

No safe haven

 Marc Faber discusses the lack of safe investments on Bloomberg.

"There is no safe haven. Bank deposits are not safe, which used to be safe. Money in treasury bills is not 100% safe because there is inflation in the system and you hardly get any interest. Bonds are not very safe anymore because eventually interest rates will go up. Equities in the US are relatively expensive by any valuation metrics you might use. I don't see anything particularly safe. The best you can hope for is that you have a diversified portfolio of different assets and that they don't all collapse at the same time."

H/T: Zerohedge

Saturday, 12 October 2013

Shut down quote of the day

How to best sum up the current US debt crisis.

"If you came home today and found the main soil pipe had broken and filled your house up to the ceiling with @&£! would you raise the ceiling or remove the @&£!"

This is one to think about conspiracy fans.

Putin quote of the day

Attributed to Putin but likely to be something completely made up. Amusing nonetheless.

 "Negotiating with Obama is like playing chess with a pigeon, it knocks over all the pieces, @&£!s on the board, then struts around like it won something"


Friday, 11 October 2013

Green misinformation

Fracking myths debunked and an explanation of why banannas may be lethal.


Tuesday, 8 October 2013

Conspiracy economics quote of the day

Hot on the heels of "numbers of the day" and "question of the day" comes "conspiracy economics quote of the day".

This time we head to the Cobden Centre which I have added to the blogroll on the right hand side.

The Cobden Centre (for honest money and social progress) is an Austrian economics website with a large number of contributors. 

The Cobden Centre's supports Richard Cobden's view that "Peace will come to earth when the people have more to do with each other and governments less".

Today's quote comes a post by Time Price over at the Cobden Centre.

This got today's quote of the day for calling the Federal Reserce a "private banking cartel".

This opens up a whole can of "conspiracy economics" worms.

The four words that define western economic policy [Cobden Centre]

The post is a nice summary of the Austrian position regarding the current US debt crisis.

In Austrian business cycle theory, the central bank is the culprit responsible for every boom and bust, firstly in fuelling excessive bank credit growth and maintaining interest rates at overly stimulative lows; then in prolonging the inevitable recession by propping up asset prices, bailing out insolvent banks, and attempting to stimulate the economy via the mechanism of deficit spending. It is difficult to see why the theory is so problematic given that the US Federal Reserve, for example, is not an agency of the US government per se but rather a private banking cartel. When push comes to shove, whose interests will the Fed ultimately protect – those of the banks, or those of the rest of the productive population?

Conspiracy economics numbers of the day

And the number for today is (thanks to the Daily Telegraph):

The average American earns over $70,000 a year. 

Every American is liable for $131,368 of public debt, plus a further $1,031,131 to pay for all those unfunded promises their government has made.

Discuss. You might want to consider the position of Japan and the Eurozone.  The US is not alone.

It is possible that the US could manage this debt.  WITH zero interest rates.

The Telegraph rightly point out that any increase in interest rates to anything like average rates in the past will lead to a whole world of pain.

The taps will not be turned off any time soon.

 Sooner or later the US government is going to default on its debt [Daily telegraph]


Conspiracy economics question of the day

"A soaring price of gold will lead to a further decline in confidence in fiat currency".


You might want to bring into your answer the behaviour of the large financial institutions and their buy and sell recommendations on commodities including gold.

A link to a global economic recovery and the impact on the price of gold would also be useful as would an understanding of the impact of QE, printing money and possible tapering.

Is it OK to call someone a conspiracy theorist?

This is a good question - the connotations associated with discussing what could be considered part of a "conspiracy" are that you are not of sound mind and worse.

Of course, starting a blog called "conspiracy economics" opens one up to similar criticisms even though this blog is here to document and not "start" any conspiracies.

Perhaps this blog does "seek the truth".  This is looking bad now.  This blog is skeptical but skeptical of what?  Everything I guess just about covers it.

The BBC ask this question in relation to the rise and rise of Home Office minister Norman Baker.

Is it OK to call someone a conspiracy theorist? [BBC]

 Asked how he felt about being called a "conspiracy theorist", Baker replied that people "tend to use the term when they want to insult people".For many of those who populate online forums dedicated to debunking the official account of 9/11 or the Kennedy assassination, the phrase is indeed pejorative, deployed by conspirators and the mainstream media to obfuscate the truth.

"Tinfoil hat-wearer" represents a more extreme term of abuse.Typically, a member of such communities will describe themselves more neutrally as a "researcher" or "sceptic", according to Alasdair Spark of the University of Winchester's Centre for Conspiracy Culture. However, it isn't only self-styled "truth-seekers" who dislike the term. "A lot of investigative journalists are dismissed as 'conspiracy theorists,'" says David Clarke of Sheffield Hallam University, who studies UFO culture from a critical perspective.

The term is used to damn legitimate investigators by association with eccentric narratives, he believes. Others, however, say it accurately fits a mindset that sees a conspiracy behind every disaster or major world event, where history is driven not by random events or socio-economic forces but by a never-ending succession of cabals and plots. 




The crisis of fiat money

One of the best "conspiracy economics" related topics is the so-called "Crisis of fiat money".

This is the related to the bitcoin and gold posts and comes back to the fundamental underpinnings of paper money backed by nothing but government guarantees that are increasing being seen as worthless.

Enter the "crisis of fiat money".

It comes down to the simple issue of QE and the idea that printing stacks and stacks of money does not have a downside at some point in the future.  The QE experiment is exactly that - an experiment based on relatively poor theory.  The problem of course is that there is no counterfactual.  With no QE where would be?  It could be a lot worse.

What is currency debasement?  Are currencies being debased?

So how to profit from the upcoming crisis (if indeed there is one).  This is something we will cover - you can be sure someone is already benefiting and it is not average Joe.

If there is a total loss of confidence in the dollar (not helped by the shutdown) where is the best place to invest?  Is it gold, silver or bitcoins as many suggest on teh libertarian websites?

We will be tracking the money going into commodities during the future of this blog.

This argument is summed up nicely by Paul Singer over on Zerohedge.

Crisis of fiat money [Zerohedge]
 Next, Singer discusses about what is fundamentally at flaw - the current unsustainable monetary system - which itself is broken courtesy of what is now rampant, runaway currency debasement. The reason for the is that as a result of the terminal breakage of fiat's links with hard assets following Nixon's shuttering of the gold-dollar convertibility, "and after that it fell to central bankers, to the Fed, to maintain the demeanor, the policies, the words to give an impression of sobriety. And in the absence of any discipline in the numbers, because there is no discipline in the printing of the USD, that impression of sobriety is all that is standing between the holders of dollars and long-term holders of claims in dollars or any currency, and the oblivion of the purchasing power of their wealth."
Singer points out what most critics of the Fed are well aware of: that it was the Fed's low rate policy for a couple of years after the dot com bubble that resulted in the heads of the major financial institutions "kind of losing their heads in terms of their own balance sheets", the epic real estate and credit bubble and the great financial crisis of 2008; and fast forward 5 years later with the Fed once again keeping money sloshing around at effectively punitive rates (thanks to ZIRP and QE), and as a result "the conditions for a loss of confidence are here and now."

US Shutdown in lego

Nice explanation and a fine use of over priced coloured plastic pieces.

The Government Shutdown, Told in Lego [Atlanatic Wire]

Confused about the back-and-forth between the House and Senate over the budget shutdown that threatens the entire American economy? Allow us to explain, using the Legos on our desk.

Monday, 7 October 2013

Game theory, Dead Hand and the US shutdown

Game theory can be used to explain a lot of cold war political showdowns.

This recent article in the New Yorker offers hope of a shutdown solution by invoking the Soviet "dead hand "strategy during the nuclear cold war standoff.

I like the summary of the use of game theory to explain previous political events.  I do not believe the suggestions in the article to solve the shutdown solution hold water.

How Cold War Game Theory Can Resolve the Shutdown [outside link]


And so there’s one last question for Washington this week: What can cool down the right-wing hotheads and extremists? Perhaps a rigid agreement that Obamacare could be defunded if an independent panel of economists agreed at some point that it had slowed economic growth by two per cent or more? Or perhaps a strengthened version of the sequester promise that Washington accepted last time (a supposed mini-doomsday machine that was detonated): if debt passes a certain level, massive cuts to Social Security and welfare benefits could go into effect.

Perhaps, in fact, there is an asymmetry that Obama can take advantage of after all. Ted Cruz and the other members of the suicide caucus say they honestly believe that the Affordable Care Act will destroy the country. So promise to give them whatever they want if it really does. If Obamacare ends up not having much of an effect, then nothing will change—we’ll just have lived for a little while with a little more risk, which is something that, during the Cold War, worked out just fine.


"The Silk Road shutdown" - proof of concept for Bitcoins

Although I have not yet managed to do my "bitcoin" starter pack most readers that stumble across "conspiracy economics" will know about the digital currency that is "bitcoin".

Some call it a cryptocurrency - more on that in a future post.  It is certainly a non-fiat currency.

The guys over at  "CoinDesk: The voice of digit currency" have a nice article on their experience on Silk Road.

Silk Road for readers not yet familar with Bitcoins was a recently shutdown webiste that was accessed through the anonymous Tor network.

Once connected it was simple a site where goods and services were bought and sold using Bitcoins.  Where is the harm in that you might ask?

Here is where the problems began given those very same products were class A drugs and other illicit goods.  Estimates are that $1.2 billion's worth of transactions took place over the two years of the silk road's existence.

So far, so interesting but where is the economics.  This is where it gets interesting.  Those $1.2 billion worth of transactions went through using bitcoins - it had become a legitimate currency of exchange.

Of course since mankind first started trading many things have been used for money.  Gold, silver, seashells and many other "rare" items.

Bitcoins are mined (a process I will blog about another time) and are limited in supply.  Most importantly they are not backed by any government.  They are not backed by gold (what is these days) and they are tradable and can be broken into smaller units.  It has all the attributes of a currency and it works.

Silk Road was a big player and the shutdown caused a huge sell off of bitcoins (although they bounced back quickly).  Early predictions were that Bitcoins were finished.  Now the dust has settled other retailers that take Bitcoins continue to do so.

The FEDs own 26,000 of them ($137 per coin) - what will it spend them on?

However, the currency lives on. 

John Law's post over on CoinDesk is worth reading.

Sex, drugs and racks of beef [Outside link]


Friday, 4 October 2013

Light shines on the dark web

I will soon be posting a "Bitcoins" primer - this is a fantastic experiment in free banking.  A currency not backed by government.

Not surprisingly the clamp down has started with the shut down of "The Silk Road".

What is the dark web exactly?

DARK WEB [Outside link]

A dark Internet or dark address refers to any or all unreachable network hosts on the Internet. It is also called dark address space.
The dark Internet should not be confused with either deep web or darknet. Whereas deep web and darknet stand for hard-to-find websites and secretive networks that sometimes span across the Internet, the dark Internet is any portion of the Internet that can no longer be accessed through conventional means.

A recent post on "The Verge" discusses how the dark web lives on.

The FBI busted Silk Road, but not the 'dark web' behind it [Outside Link]

Silk Road, the underground website where dealers sold illegal drugs, was supposed to be safe. The site was nestled deep in the dark web, accessible only through the anonymizing network Tor. All transactions were done in the anonymizing virtual currency Bitcoin. Its owner-operator, Dread Pirate Roberts, was said to be a criminal mastermind and technical wunderkind who never left a trail. It was all very hackerish and clandestine.

Here is a link to the TOR project.

TOR PROJECT [Outside link]

Tor was originally designed, implemented, and deployed as a third-generation onion routing project of the U.S. Naval Research Laboratory. It was originally developed with the U.S. Navy in mind, for the primary purpose of protecting government communications. Today, it is used every day for a wide variety of purposes by normal people, the military, journalists, law enforcement officers, activists, and many others.
 What is interest is what the first article points out:

And yet, today the FBI shut down the site and arrested Dread Pirate Roberts. "This is supposed to be some invisible black market bazaar. We made it visible," an FBI spokesperson told Forbes after the bust. "No one is beyond the reach of the FBI. We will find you."

There is no place to hide.  However, according to TOR it is not broken but merely that the Silk Road owner made mistakes.  From the same article.

 "Tor is not broken," Karen Reilly, development director at the Tor Project, said in an email. "According to the criminal complaint, the accused was found through mistakes in operational security. Tor can not protect you if you use your legal name on a public forum, use a VPN with logs that are subject to a subpoena, or use any other services that collect personal information that is freely given or collected in the background."

What is clear is that TOR is used by a lot of people and not just criminals.  These people include journalists, activists and not doubt law enforcement officers.

More light will be shed on the dark web.

Thursday, 3 October 2013

Krugman: The Economics and Politics of Chaos

Paul Krugman plays an important role in countering certain aspects of the mainstream press.  He is an excellent economist and commentator and his finger on the pulse.

Yet he remains controversial enough to make it as a regular on this blog.

His latest post has a "conspriacy economics" worthy title - any economist who talks about the economics of chaos gets a front row seat.

Bringing in "class war" is also inspired especially in the New York Times.

The Economics and Politics of Chaos [Outside link]


There’s a definite class-war aspect to this fight, pitting the interests of the 0.1 percent against those of lower-income families. But at this point the 0.1 percent, by and large, are pleading with the GOP to knock it off. So while class war may have been where this started, the monster has long since escaped from its cage; even Karl Rove, more or less the designated defender of upper-class privileges, is whining that the party won’t listen to him.


Coming back to the class warfare issue: my working theory is that wealthy individuals bought themselves a radical right party, believing — correctly — that it would cut their taxes and remove regulations, but failed to realize that eventually the craziness would take on a life of its own, and that the monster they created would turn on its creators as well as the little people.

 And nobody knows how it ends.

What more is there to say.  Paul Krugman ends with the quote "And nobody knows how it ends".

That is what we are here to document.  The end of economic times or at least how the non-mainstream commentor's view the end of times.

Shutdown economics: Has conspiracy written all over...

Within days of the birth of conspiracy economics we get the perfect event. The US shutdown.

The US shutdown has very serious economic and political implications and consequences. So how did we get here and perhaps more importantly why?

What is the "conspiarcy"? Surely there must be one - or more importantly for this blog there must be a lot of people who think there is one.

But who is conspiring against whom?

 The global banksters are in the frame as usual but there must be more to it than that.

There will be plenty of shutdown stories in the next few days.

What we need to document here is not what is the story that we are fed from the mainstream and non-mainstream press but what is beneath the story.

We need to scratch the underbelly of the US shutdown and see what seeps out of the festering wound.


Wednesday, 2 October 2013

Peak Government

Interesting post over on ZeroHedge looking at the question:

Have We Reached Peak Government? [External link]

Have we reached Peak Government? That is, a structural point beyond which government can no longer grow sustainably?


So the question of Peak Government is ultimately a question of Peak Debt: how much money can the government borrow to sustain its current spending? Can public and private debt expand at rates four or five times that of the underlying economy? If so, for how long?

If we are not yet at Peak Debt, we are getting close, and that means we are also getting close to Peak Government.

Taming the leviathan is a complex problem. Does it make sense to talk about peak government? Certainly those in China and previously in Stalanist Russia might have something to say on how long governments can keep growing. What happens when we reach or pass peak government? Does the world collapse into anarchy?

Does it make sense to talk about sustainable growth in government - I guess this is a legitimate question. If increased tax revenues can support additional government expenditures then growth of government is fine assuming they manage to do something vaguely productive.

Tuesday, 1 October 2013

Conspiracy economics blog roll and links disclaimer

This website will bring together websites and blogs from across the internet of every political, economic and religious persuasion.

If they have something to say on the future of the economic system however optimistic or apocolyptic then it likely to find a link on this website.

The views on these links in no way reflect my own views.

Welcome to conspiracy economics

Welcome to the new "conspiracy economics" blog.  The purpose of this blog is to doucment the latest economic conspiracies from around the web.

The global economy is in the middle of a turbulent period with central bankers pushing unconventional policies in a last ditch effort to save the capitalist system as we know it.

This blog has no political axe to grind or wield.

This small piece of the webosphere is here as a resource for mainstream and no-mainstream economists and students of all colours of economics to read about the wierd and wonderful economic conspiracy stories out there.

Remember - some conspiracy stories turn out not to be stories at all.

The first post on this blog has to include the famous one dollar image. If you know why, then you are in the right place.  If you do not, stay around and hopefully learn a few things that are not worth learning but may one day make a difference to your health (financial or otherwise).