Low cost final rat race

images6JDTFNTWThe low cost model is spreading to virtually all sectors of the world economy. Food production, retail, furniture, clothing, air travel and many other activities are now largely in the hands of multinationals operating according to that model (including through their suppliers, subcontractors and distributors).

The effect is particularly dramatic and quite literally toxic in agriculture and retail. Many hard pressed consumers now look for the cheapest of the cheap when buying their food.

Doing so they not only weaken their health but support intensive agriculture and its attendant destruction of ecosystems and local communities. They support massive sea and road transportation. They encourage companies with no concern whatsoever for the welfare of the people working for them, often on precarious contractual terms not far from slavery.

But many consumers are themselves victims of the effects of globalisation and generalised obsession with “productivity”: less jobs, harder work and lower real incomes for almost everyone, and ever more money for a very small “elite”.

Crucially a lot of people regarding themselves as middle or upper middle class feel the pinch, fear for their future and that of their children. They too now often rush to hard discounters to get ultra cheap chicken wings, potatoes, wine and other products (see for instance http://www.dailymail.co.uk/news/article-2736246/We-Lidl-class-Store-s-11-99-bubbly-woos-new-shoppers.html )

Like most people today they are too busy and distracted to be able to visualise mentally the hall with ten thousands chickens, each with the equivalent of an A4 sheet to survive on, all stuffed with antibiotics and other chemicals. When you eat the flesh of one of those birds, what happens is that your body-mind-soul system receives messages of fear and utter misery encrypted in the cells on the poor creature out of its animal concentration camp. And these messages do you no good at all. Physically, mentally, and spiritually.

Industrially grown potatoes also carry disharmonious vibes as the soil they came from was turned over by big machines destroying its rich ecosystem of worms and other creatures, before being spread with large amounts of chemicals. Not to mention the use of GM varieties. As for cheap industrial wine, this is more a chemical drink than real wine. No need to go into the details.

In short, rushing to the supermarket to buy cheap food plays in the hands of a profoundly predatory system of which the unaware buyer is one of the first victims.

But, many will say, we have no choice; our budget for food is now so limited. Of course it is under pressure from lower real incomes and from competing demands: housing, cars, electronic gadgets, holidays, and all sorts of things to keep up the appearance, to try to stay on the pathetic social ladder.

Mankind has fallen in the huge trap of materialism, and the rise of the low cost model signals it is entering the last stage of evolution towards generalised slavery and disharmony.

But, as explained at length in previous posts and in the book The Subtle Dance, this sombre “reality” is only is a thin layer within a much broader reality, most of it not directly accessible to our five senses.

Once you begin to see through the veil of material so-called reality, your whole outlook on existence changes radically and you are no longer a lonely rat rushing in a dead end.

Be lucid and take heart.



Copyright © Leo Foresta 2014


Cause and effect

The consequences of what we take for granted.

This video is just a reminder:

Fear not, align actions with thoughts.



Illuminating interview on banking

“… no bank is absolutely safe …….….it is clear that banks have been egregiously mismanaged quite generally over a long time, and the only people who have done well out of them have been their top employees, which has been grotesque, and it is a genuine question whether these institutions as they are currently organised serve the interest of their shareholders…”

Martin Wolf, Chief Economic Editor of the Financial Times (and regular attendant of  Bilderberg meetings) during a BBC interview related to Barclays.

This interview is unusually candid from members of the establishment. If you are still unclear as to what the banking game is all about, listen to it attentively:


Fear not, sip your tea.



Copyright © Leo Foresta 2013

Signs of awareness

It’s interesting to look at comments on articles in the mainstream press and spot the multiple signs of growing (if still partial) awareness.

Here is an example among many concerning the economy.

It’s from the Financial Times; the article is entitled US Jobs data: hints for the global economy

Nothing surprising in the article itself, but here is the comment (signed by “Is it that easy?”):

An excellent summation as always.

However, artificial job creation due to monetary means (e.g. housing, autos and other consumption) will by definition not exist when artificial means are withdrawn – just ask construction workers post 2007 or tech & telecom workers post 2000.

Combined with marginal buyers of assets at these artificial levels getting hammered and political pressure to fund govt/political obligations, the Fed will not normalise so we are left in a bizarre, distorted world, shovelling ever greater income and wealth to the wealthiest and stealing from our children.

Looking at job numbers and other metrics on asset prices, growth etc when we are in a deluded, artificial world doesn’t help much…what would it look like when normalised?

Fear not, keep watching behind the smokescreen of official propaganda.



Copyright © Leo Foresta 2013

Time to grasp how the global economy ticks

The racket in Cyprus is a milestone in the financial and economic crisis.

But neither formal training in economics nor comments in mainstream media offer real clues to understand the crux of what is happening.

Not surprising.

“They” do not wish the “plebs” to have any clarity of mind about what is going on.

They are the few super rich at the top and their close servants, while the plebs include lots of people who regard themselves as reasonably prosperous middle class.

“Macro” economics as taught in universities and discussed by politicians and the controlled press focuses on the national level. It is centred on national statistics, on such concepts as Gross Domestic Product (GDP), national debt, balance of trade, etc.

This national obsession prevents a complete vision of the situation, because international flows of materials, products, services, people and money have become so significant in relation to domestic activities that only the global level makes sense.

Think of the world economy as one autarchic system with two sides. On one side you have all ultimate buyers of goods and services; on the other side you have all producers of these goods and services.

Buyers are private individuals and governments (local, national, regional, supranational).

Producers include all private firms (from the self employed to multinationals) and governments.

Governments appear on both sides. For instance, a ministry of defence uses public funds to buy military “services”. These services are provided by the army which is supervised by the ministry of defence staff who provide a coordination service to the government buying military services.

Similar reasoning can be applied to health, education, justice, arts and culture, etc.

What is the money value of the global flow of goods and services from producers to buyers?

When national statistics of all countries are consolidated into one entity, a global GDP can be computed. Currently global GDP is estimated at some $ 70 trillion, which represents the market value of all goods and services produced annually in the world.

Not all these goods and services are sold within the accounting year in which they are produced. As for an individual business, sales do not exactly match production. They differ by the amount of stock variation and, in the case of the global economy, by the amount of investments (i.e. new buildings, machines, software…) which will be used up (“depreciated” or “amortised” in accounting parlance) over several years.

Over the last few years global GDP has consisted of around 25% investments and 75% goods and services produced and sold. Stock variation has been positive in some years and negative in the years after, so can be taken at around zero on average.

Therefore if we regard the producing side of the global economy as one mega business entity, the (consolidated) sales of that business are currently around 75% of $ 70 trillion, i.e. $ 52.5 trillion.

This mega business employs people, consumes natural resources and generates collateral impacts on people and nature.

Employing people has a financial cost for the mega business. A rough estimate is in the order of $ 25 trillion.

As far as natural resources are concerned, these entail financial payments by the mega business only if the resources are controlled by someone. In fact many natural resources are free from such control.

For instance when a fish is caught at sea, it is totally free. What you pay to buy the fish are the labour, fuel and boat depreciation costs of the fisherman, the labour, energy and depreciation costs of the various intermediaries along the chain between fisherman and final customer and the profit margins of all actors in that chain.

When you buy a gallon of petrol, what you pay are the labour, energy, depreciation …and profit margins of the distributor, refiner and oil explorer and the royalties paid to the people who have control over the petroleum in the ground (for instance ruling families in producing countries).

The amount of royalties paid by the mega business to individuals controlling natural resources can be estimated very roughly around $ 2 trillion.

Collateral impacts on people and nature usually do not entail any financial payment by the mega business. In rare cases of highly visible dramatic events (such as the Gulf of Mexico BP oil leak) significant payments can be involved. But their weight is very limited in the global picture. A total of around $ 70 billion pa for such payments is almost certainly overestimated.

In sum, for a level of sales of $ 52.5 trillion the mega business pays around 25 trillion (48% of sales) for labour, around 2 trillion (4% of sales) for royalties in respect of natural resources and less than 0.1 trillion (0% of sales) for compensation in respect of societal and natural impacts. In all some 27 trillion (52% of sales).

The business also has to pay taxes, mainly VAT, other sales taxes and corporation tax. Taken all together these taxes can be estimated at roughly 10% of sales.

The final balance (38% of sales) is remuneration of financial investors in the form of interests and profits (either distributed as dividends or retained in the business on behalf of shareholders).

It should be noted that the banks and other institutions which finance the mega business are only intermediaries between the latter and the ultimate owners of bank accounts, shares, pension funds… Financial wealth of ultimate owners is mostly concentrated in the hands of a tiny minority, around 70 million people or so (i.e.  1% of world population).

For sake of approximate quantification let us say that out of 38% for financial interests and profits about 35% benefit 1% of the population.

But of course the same group of people also picks up the largest salaries and practically all royalties for control of natural resources. So to the 35% for financial interests and profits we have to add say 10% for their (disproportionate) share in  payments to employees of the mega entity and 3-4% for natural resources.

In other words the financially privileged 1% of the population receives in one form or another the equivalent of some 45-50% of consolidated sales in the whole economy (whereas the bottom 70% get around 5%).

Two other striking features of the Profit & Loss account structure at global level are the comparatively moderate cost of natural resources and negligible cost of impacts.

In their light it is easy to understand why business as a whole cares little about natural resources, prefers to use machines than people, and simply doesn’t give a damn about societal, health and environmental impacts.

But let’s now look at the crucial role of finance in the whole game.

Payments made by the mega entity are covered by a money flow arising from sales and by another money flow provided by investors.

In both cases, banks (and other financial institutions) are intervening not only as intermediaries to move existing money between parties but also as creators of new money which can be added to the flows. Such creation of new money (mirroring the creation of new debt) provides an on-going stimulus to the whole cycle, as long as people involved in the cycle have full confidence in the system.

And that is where things have changed radically since the financial crisis of 2007-2008 and are going to evolve even more dramatically as a result of the racket in Cyprus, which is going to precipitate the fall of the formal economy.

It is crystal clear that the global crisis, with its intertwined financial, societal and environmental dimensions, simply cannot be resolved in the dominant materialist mode of thinking.

But, looking through spiritual lenses, all this, worrying as it may seem, is only an episode in the 3D video we see on the internal screens of our minds (and each of us sees a different version). Only an episode in the illusory show many take for reality.

Fear not, take your money out of banks and radiate gratitude and kindness.



Copyright © Leo Foresta 2013

London is Cyprus on a bigger scale

Ordinary Cypriots with bank deposits above €100 k are racketed by EU authorities because Cyprus has a disproportionally large banking sector in relation to the size of its economy.

Cyprus is small and weighs little in Europe and the world, but what about London?

London accounts for about 27% of the UK’s GDP. The latter is $ 2.5 trillion, so the economy of London is around $ 0.7 trillion.

Global financial assets (bank deposits, bonds and shares) are about 3 times the world GDP. The latter is $ 70 trillion, so global financial assets are in order of $ 210 trillion, of which say 15% at least must be held in London which is the world’s second financial centre.

So London based financial assets must be over $ 32 trillion, over 45 times London’s GDP, compared to an average ratio of 3 for the world.

Figures clearly show that the London’s financial sector is totally disproportionate in relation to the size of London’s (and the UK’s) economy.

As similar causes tend to produce similar effects, I let you imagine the script for future instalments in the world wide financial saga. You might also wish to refer to a previous post entitled Why the financial pyramid is finally collapsing.

Fear not, look at financial developments in the light of your spiritual approach.



Copyright © Leo Foresta 2013

From Cyprus drama to cash based informal economy

EU leaders are prepared to confiscate around 10% of money in bank deposits. A move without any precedent in civilised countries.

This incredible, desperate move shows how sick the whole system has become.

Ordinary citizens in Cyprus, Greece, Spain, Portugal, Ireland, Italy and elsewhere must be wondering what to do now that the unthinkable has happened and that no money is safe in any bank.

Many will withdraw large amounts before this becomes very difficult or impossible. What will they do with the cash? Keep it under the mattress or somewhere safer. Buy gold. Buy stuff.

In any case this will stimulate the cash based informal economy.

The informal economy has often been presented as “black” or “grey”, shady in any case, with hints of criminality. Of course some criminal activities are cash based. Then big chunks of the official economy are criminal too, on a massive scale: in banking, in big pharma, in agro business ….etc..

There are very positive aspects to the informal economy: when you buy cash healthy food from small local suppliers at a market stall, when you pay cash your trusted alternative healer, …

Contrary to “sheeple” subservient to the system, people with a firm alternative worldview are prepared for the period of great turbulence which the proposed official EU racket on ordinary folks’ money is now about to trigger.

They are prepared because they grasp the basic functioning of the corrupt system, and more importantly because their spiritual outlook allows them to avoid panic, tame fear and create bonds of trust with other people.

Fear not, be kind with innocent bank employees.



Copyright © Leo Foresta 2013

Balance sheet alchemy

The euro was launched in January 1999.

You can see below how the European Central Bank’s balance sheet changed since.

ECB Balance Sheet 2012 v 1999

This is no mere technicality for experts. It’s the core mechanism supporting the social arrangement around which today’s society revolves: money.

Over 14 years the European Central Bank put close to 1 trillion euros into the accounts of commercial banks. These accounts increased tenfold in the period, from 106 to 1,057 billions.

This was achieved first through cheap loans granted by the ECB to commercial banks. The banks were able to leverage these generous injections of primary cash and create many trillions of secondary money by extending loans to their own customers and by buying shares, bonds and other “products” from the financial markets.

Loans granted by commercial banks went for a large part into property markets, which caused enormous increases in house prices and also went massively to financial institutions, which used the money to take extra positions in financial markets, causing booms and busts in various areas of these markets.

A relatively modest portion of the new money trickled down into the “real” economy (apart from property) where ordinary folks buy cars and other mundane stuff on credit. Some went to companies, more often the larger ones. Among the latter, the now famous private equity groups, whose business is to buy companies mainly with borrowed money to achieve maximum return.

After the financial crisis of September 2008, the ECB, like other central banks, was forced to extend even more credit on even cheaper terms to commercial banks to save them from total illiquidity.

And more recently, from 2011, the ECB was forced to start buying sovereign bonds to prevent excessive rise in interest rates on debt from countries in trouble.

No doubt it will continue this sort of policy in the hope of saving the euro, supporting financial and property markets and preventing the economy from going into severe contraction.

This, of course, amounts to giving ever larger doses of the drug that triggered the patient’s illness.

To keep abreast of monetary developments visible on the ECB balance sheet, check regularly the section “weekly financial statements” on the ECB web site


Fear not, remember all this is very small beer in the universe.



Copyright © Leo Foresta 2012

QE is their only card

Faced with a weak economy, central banks in the US, UK, Eurozone, Japan and other countries are engaging in further rounds of “Quantitative Easing” (QE).

This means they buy bonds in financial markets with new money that they just create for the purpose. The effect is to keep interest rates down and to inject cash in the economy.

The logic of the exercise was explained in detail by the US central bank (“the Fed”) when it embarked on such programmes in November 2010: http://www.newyorkfed.org/education/lsap/index.html

And the same logic is invoked again these days.

The Fed says it’s doing this to reduce unemployment by supporting demand for goods and services through more money flowing in the economy and cheaper credit for potential buyers.

Most experts doubt that this will work, pointing out that there is already a vast amount of money in circulation, and that what hampers demand is a general lack of confidence.

In fact new money created by central banks when buying bonds goes straight in the pockets of investors.

The latter use this money to acquire investible assets such as bonds, shares, derivative financial products, property and commodities, which pushes these markets up.

But very little new money actually trickles down into the “real economy”, i.e. purchases of (new) goods and services produced by the workforce.

In other words QE contributes to asset inflation while having hardly any effect on jobs.

The true reason for carrying out QE is not to protect jobs but to keep heavily indebted governments, banks and property owners afloat, thereby preventing massive defaults on debts which might bring down the global financial system.

While central banks in cahoots with governments are playing this big trick, companies keep squeezing their workforce. With the consequence that large sections of the middle classes (from whom comes most of the demand in the economy) are now poorer and feeling vulnerable.

No good news for demand; more weakness in the economy triggering yet more restructuring by companies.

The global economy looks on the brink of a downward spiral, but governments and central banks have no other card up their sleeves than QE.

As said over and over again on this blog, there are no technical “solutions” to the apparent global crisis as long as most people have their minds trapped in the materialist mode of thinking.

But a subtle change is happening beneath the surface, which a minority of intuitive individuals can already perceive.

Fear not, sharpen your intuitive capacity.



Copyright © Leo Foresta 2012

Winners and losers

Here is a very clear talk on “who is winning and who is losing” by independent Senator Bernie Sanders of Vermont.

While he focuses on the US, the essence of his talk also applies to the UK, to most of continental Europe, and to many other countries.

The shocking situation described here is only the logical consequence of the materialist world view, and its attendant fear, greed, competition and glorification of power.

Fear not, keep being informed.



Copyright © Leo Foresta 2012

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