Debts, jobs, nature

As the materialist system is nearing meltdown, a crystal clear understanding of what is presently going on in the world is extremely useful to anyone intent on full spiritual transformation.

Let’s start with debts, currently public obsession number one. Not without reasons.

Debts are the flip side of money. Every penny in circulation is created ex nihilo by a bank or central bank through a book-keeping entry involving a debt for exactly the same amount.

While a debt is generally held by the same debtor for most of its duration, the corresponding money flows between many players in the economy.

If there isn’t enough traction in economic activity, a significant number of debtors fail to make sufficient revenues to be able to service and repay their debts. To avoid this, monetary authorities ease credit conditions, and therefore create more money to sustain activity.

As an ever greater amount of debts requires ever more activity for debtors to be able to service and repay their debts, and as easier credit is practically always used to stimulate activity, a perpetual spiral is created.

In fact, it amounts to a Ponzy scheme at global level. Like any such scheme (where participants are paid with money just brought in by new entrants) it has to end badly (when the flow of new entrants dries up).

At some point creditors become worried, confidence in the system erodes, people consume and invest less, growth in the economy is slowed or stopped, resulting in some of the debts becoming impossible to repay.

That is presently happening in the economy of developed countries (and soon enough in other countries).

Now jobs.

Because today’s economy produces largely standardised products and services on a very large scale, using vast amounts of energy and sophisticated technology, it only requires the labour of a limited fraction of the total population.

Out of the 7 billion people on earth, roughly 1 billion workers are enough to deliver about 95% of world GDP. And companies are constantly doing their utmost to squeeze payrolls because labour is by far the largest cost factor in the economy as a whole.

It is therefore evident that the trend can only be towards more unemployment and more badly paid employees.

Last but not least, nature.

Although money is a pure abstraction, economic activities involve land, plants, animals, minerals, oceans, eco-systems, processes, chemicals, wastes, high frequency electro-magnetic and radioactive emissions,… etc.

Activities in the mainstream economy cause major interferences with natural equilibriums.

The overused word environment conveys an idea of décor somehow external to us humans. This is totally misleading: we are part of nature, we are constantly in subtle interactions with every other creature on the planet and beyond.

The great ocean plastic vortex, the mass torturing of cows, pigs and chickens, the killing of soils in intensive farming …all these large scale horrors resulting from a total lack of respect for nature directly affect our minds, bodies, and souls.

There are not just about the environment; they concern a complete system to which we belong. Materialists have tried to cut off our subtle links with nature, but that is impossible.

With a bit of intellectual honesty, none of the above is particularly difficult to understand.

All it takes is to free oneself from mainstream materialist propaganda. Which is the first step towards spiritual transformation, the only effective way to respond to the global crisis.

For reference on the economy, here is a recent piece from the Financial Times: “A diabolical mix of US wages and European austerity”

http://www.ft.com/intl/cms/s/0/7b84f1c8-a977-11e1-9772-00144feabdc0.html#axzz1wRRjvVfG

Fear not, stay calm and attentive.

Love,

Leo

Copyright © Leo Foresta 2012

Essilor shines in the market

Essilor is the world leader of corrective lenses.

This morning its share price was up 26% since the beginning of the year, after a great performance in 2011. In ten years it went up threefold. Not bad, eh.

Essilor’s business may appear relatively innocent compared to that of, say, Big Pharma or the agro-food sector.

And it certainly is much less harmful than corrective eye surgery.

But the fact is that it thrives on people becoming ever more stressed and anxious.

Why?

This was explained in some detail in a previous post: https://leoforesta.com/2012/02/11/medical-technology-is-great-for-gdp/

In short, the more deep seated fear, the more tension in the muscles controlling eye globes, the more pronounced the resulting optical faults.

Essilor’s success looks like a reflection of humanity’s profound unease.

Therefore, no regret at all about not being one of their “happy” shareholders (many of whom wear glasses or contact lenses themselves).

Fear not, and go for natural restoration of vision.

Love,

Leo

Copyright © Leo Foresta 2012

Debt pile only one view of the abyss

Events in the hologram show most people take for reality are turning more extraordinary than ever.

Debts, public and private, are now so large that they are becoming hard to service and replace, let alone pay back. This is not just in the Eurozone, but also in the US, UK, Japan, and many other countries.

China, the main source of hope for future world economic growth, has not only its own (internal) debt pile, but more importantly a colossal environmental liability.

The country’s soils, rivers, water tabs are destroyed and poisoned. Agricultural production has started to decline in quantity, not to mention its dramatically degraded quality.

To try and make up for this, the Chinese authorities buy land all over the world. Inevitably, this land will be damaged by chemistry-based intensive agriculture.

In Japan, the crisis at Fukushima is far from over. Millions of Japanese are much more affected than authorities will admit.

All nuclear production of electricity (previously 30% of the mix) is now stopped, replaced by the output of gas fired plants, requiring massive imports of gas which bring the country’s trade balance in the red.

Amazingly, the yen is still, for now, regarded as a safe currency.

We could go on; for example, also talk about the millions of tonnes of plastic bits in the oceans, the increasingly destructive exploitation of the last hydrocarbon reserves (tar sands, shale gas,…), GM crops, the effects of electromagnetic pollution, and so many other issues.

All of them interrelated.

Only the crudest intellectual dishonesty prevents the establishment from conceding that their materialist approach is crumbling. In fact, it has lost any kind of credibility in the eyes of lucid folks.

As yet though, only a minority are totally lucid, and spiritually advanced enough to stop clinging to a dying system.

The change of paradigm, inevitable as it is, does require courage and clear understanding. The latter implies not only intellectual grasp of events as they appear in the hologram of pseudo reality, but also intuitive recognition of the broader picture of existence.

This is why we share our thoughts on this blog.

Fear not, accept the clear messages of nature.

Love,

Leo

Copyright © Leo Foresta 2012

Over $100 million for « The Scream »

« The Scream » by Edvard Munch is unquestionably a piece of art.

But it is profoundly disharmonious. One might say a reflection of the times.

No sane person would want such a picture hanging in his home. It would fill the place with negative vibes.

Some rich people don’t see things that way though.

Here is the recent auction at Sotheby’s:

And this was the auction at Christie’s in 2010 where Picasso’s “Nude, green leaves and bust” sold for a slightly lower price.

Funny, I find the Picasso nicer, if still not completely harmonious.

But I haven’t got $95 million. Who cares? Somewhere down the line banks’ little IOU’s will have lost all value. And so will ugly pieces of art.

Fear not, go for genuine beauty.

Love,

Leo

Copyright © Leo Foresta 2012

Assignats for royal jubilee

During the French revolution, authorities issued assignats, which were IOU’s between bonds and actual currency.

As no limit was set to printing this new money, hyperinflation ensued, and soon enough assignats turned worthless.

Now consider the US, UK and EU in 2012. Printing assignats has taken the form of “Quantitative Easing” (QE).

With QE the central bank buys government debt and pays for it by crediting the accounts of commercial banks. Thereby money is created and long term interest rates are kept low, which enables government to run further deficits.

This, of course, cannot go on indefinitely.

But central bankers, in cahoots with governments and multinationals, do as if it could. Which keeps financial and commercial markets afloat for the moment and maintains the illusion of business as usual.

In the UK, land of credit and debts starting from university, authorities are particularly keen on QE, as outlined in the following article by the Financial Times’ chief economist “Why quantitative easing is the only game in town”:

http://www.ft.com/intl/cms/s/0/de9be724-6df6-11e1-baa5-00144feab49a.html#axzz1pGdNx1Gq

Here is an extract:

The sums involved are startling. At the end of its third round of asset purchases, the Bank of Englan will own £325bn of financial assets, predominantly government bonds (or gilts), which it will have bought with newly created money. It will own close to a third of the gilt market.

Yes, this is monetisation. So is it effective? Is it even dangerous?

The BoE’s view is that QE is a natural extension of monetary policy, necessary when the short rate is 0.5 per cent, the lowest rate in the 318 years of the BoE’s existence.

With conventional measures exhausted, the BoE, like the Federal Reserve and the European Central Bank, has been driven to try highly unconventional measures instead.

In plain language, the authorities are desperate and the system is near to collapse.

When the financial crisis broke out in 2008, the Queen of England, on a visit to the London School of Economics, famously asked why no expert had seen the crisis coming.

Is anyone telling her about the QE fireworks arranged by the Bank of England to celebrate her Jubilee?

Fear not, and do not believe official propaganda on economics, or on any other subject.

Love,

Leo

Copyright © Leo Foresta 2012

Ex Goldman Sachs speaks out

Here is a choice piece illustrating the total decay of finance, even by its own dubious standards:

“Why I am leaving Goldman Sachs” by Greg Smith, published in the International Herald Tribune of 14 March 2012:

http://www.nytimes.com/2012/03/14/opinion/why-i-am-leaving-goldman-sachs.html?_r=1&scp=1&sq=greg%20smith&st=cse

Also take a look at the comments.

In fact, nothing surprising there once we fully realise the magnitude of current vibrational changes on the planet and associated system collapse.

Fear not, and don’t leave your savings with banks.

Love,

Leo

Copyright © Leo Foresta 2012

Public deficits are rich’s surpluses

Reducing government deficits is one of the most prominent themes of public debate.

But a related basic fact hardly ever gets mentioned: all deficits are counterbalanced by surpluses, and the sums on both sides are equal.

A deficit occurs when your revenues are less than your outlays in a given period.

Because your outlays are necessarily someone else’s revenues, and your revenues someone else’s outlays, your deficit implies that the rest of the world economy has a net surplus vis-à-vis you exactly equal to your deficit.

If you are the Greek or British government, or any government, the rest of the world economy includes all other economic actors in your country and all economic actors abroad.

For sake of clarity, non government economic actors can be clustered into households and companies.

A public deficit in, say Britain, implies a net combined surplus for households and companies in Britain plus all foreign households, companies and governments dealing with Britain.

In the present climate, a majority of households have serious difficulties covering their expenses. Likewise, many small and medium size businesses are far from enjoying big surpluses.

So where are we to find the surpluses counterbalancing the huge public deficits?

Simply put, they are with winners in the global economic game: multinational companies, their top managers, investors, bankers, accountants, lawyers, and the host of individuals and entities of various kinds gravitating around them.

But what about emerging countries? Aren’t they benefiting from deficits of developed economies?

Yes, in the sense that their exporting companies are enjoying surpluses, and so are their owners, senior managers, and officials having some control over them.

At the end of the day, wherever you look, a very small group of people in the global economy take the lion’s share of surpluses counterbalancing public deficits.

Can this continue for much longer?

To find the answer, let’s bring debts and financial assets in the picture.

If you have a deficit, there are only two things you can do: use some of your savings, or incur debt.

If you have a surplus, there is only one thing you can do: pile up savings.

Savings can be either in financial assets, such as cash, bonds, shares, hedge funds …, or in real assets, such as land, houses, jewellery, gold, wine….

Financial assets are the flip side of the coin of debts and liabilities: they are claims on economic actors who have borrowed (or issued shares).

These days, holders of financial assets face a problem: governments have such high levels of deficits and debts (from past deficits) that they will find it increasingly difficult to honour their obligations.

Which means that sooner rather than later, substantial financial assets will disappear in smoke.

Ah but, say economists, governments will be able to meet their obligations if only the economy grows, allowing government revenues (mainly taxes) to increase, and if government expenditures are squeezed.

We hear this sort of stuff almost daily.

About Greece, Portugal, Spain, Italy, Britain, the US,…and a host of other countries.

The key question is always left unanswered: where will the extra demand for goods and services necessary for growth in the world economy come from?

Governments, whether national, regional, or local, have to reduce their demand.

The vast majority of households can hardly spend more given the squeeze on their incomes and job prospects. As for companies, they are busy minimizing expenses and investments to maintain profits and cash flows.

So where to turn for extra demand in the economy? We are left with the ultimate winners: the rich.

But will the rich, who have enjoyed surpluses and accumulated savings in the past, spend more in the future?

They see that reductions of government deficits will entail smaller surpluses for their businesses, and they see increasing threats to the value of their accumulated savings.

In short, it looks like the end of the road for the present economic set-up.

Frantic growth in the last decades was fuelled by cheap debt as central banks pumped easy money in the system.

But the debt mountain is now so high that confidence in the system is evaporating.

Without confidence, no growth is possible. Without growth the debt mountain cannot be repaid.

Substantial default is thus inevitable; it has already started with Greek bonds. Enormous turbulences will ensue.

This, broadly speaking, is where the world stands in purely financial terms.

As you can appreciate, it is not so difficult to grasp, once you see through the shower of jargon confetti blown in our faces by the system’s experts.

It’s good to be clear once and for all about the global financial story.

We can then put it in a corner and concentrate on the essential: the amazing vibrational and spiritual changes taking place on the planet.

Fear not, enjoy harmony in its delicate manifestations.

Love,

Leo

Copyright © Leo Foresta 2012

Sunday reading

The following article from the Financial Times makes strange Sunday reading:

http://www.ft.com/intl/cms/s/0/9659eefa-4e86-11e1-8670-00144feabdc0.html#axzz1lVoY1oHI

Here are a few extracts and selected reader comments:

“Church of England doubles hedge fund investments”

February 3, 2012

By Sam Jones, Hedge Fund Correspondent

Over the past two years, the Church of England has more than doubled the amount of money its multibillion-pound endowment has put into hedge funds, the Financial Times has learnt.

Against a backdrop of widespread public anger about ‘corporate excess’, the Church’s £5.5bn portfolio, managed by its commissioners, is now one of the largest UK investors in an industry that has gained notoriety for its large pay packages.

About 10 per cent of the Church capital is invested with hedge fund managers, up from 4 per cent at the end of 2009.

So far, hedge funds have brought a healthy profit to the Church, which has sometimes seemed to struggle to reconcile its internal differences over questions of morality and mammon, most notably during the Occupy St Paul’s protests last year.

(….)

Pay-outs for top hedge fund traders typically run into the tens of millions – multiples of salaries dozens of times over – and easily eclipse those paid to most leading corporate executives.

(….)

A spokesman for the Church acknowledged the unease such high pay caused.

(….)

The Church only invested in “carefully selected hedge funds” that met its rigorous ethical criteria, he added.

The commissioners – led by a body that includes the Archbishops of Canterbury and York, Rowan Williams and John Sentamu, and the prime minister – began increasing its hedge fund investments in 2010 to diversify the portfolio. They continued making substantial allocations to the sector in 2011.

(….)

”If we’re asked as a Church about the responsibilities of wealth, our answer is: ‘Be generous with the wealth you have been blessed with.’”

Selected (on line) reader comments:

February 5 10:33am

The church should be leading the way by investing LONG TERM in quality equities and bonds – not giving “their” money to gamblers.

They should also be carefully providing seed capital for start-up businesses and charities and doing good for the community at large, in the same way as they preach.

February 5 9:28am

Jesus would be so proud. I think the next step is for the Church of England to become a Plc and put together a nice IPO with no other than Goldman Sachs and we are in heaven. Take that, Facebook.

February 4 10:48pm

I seem to recall some preaching about usury but…

February 4 2:33pm

Will take time but RIP religion and all its hypocrisy!

February 4 12:12pm

What was it all those Bishops were going on about just before Christmas again? I’m sure it was something about greed and traders or the like? It’s always one thing then another. No rhyme nor reason. Messages blowing about like a flag in the wind. I can never keep up with Anglican core values…

February 4 11:32am

The hypocrisy of religion is staggering. The notion of the COE hogging on to £5.5bn whilst moralizing about bonuses is sordid and disturbing.

February 4 10:48am

Didn’t the FT just run a story about how most hedge funds exceed at enriching their employees while destroying capital?

No comment from me.

Fear not, relax.

Love,

Leo

Compare for yourself

As the financial crisis is becoming central in the global crisis (these days finance seems to degrade even faster than the natural environment), you may wish to form your own view.

Here are two sources of info that don’t sing from the same hymn book:

Financial Times (powerful voice of the system)     http://www.ft.com/home/europe

Zero Hedge   (boutique contrarian)            http://www.zerohedge.com/

If you haven’t got the time, or if you are bored by that sort of material, don’t worry; at the level of eternal consciousness, it is not so important. Anyway, you can keep reading this blog.

Fear not, have a glass of red wine or two.

Love,

Leo.

The speed of unravelling

Italy has a new prime minister, former EU commissioner and ex manager at Goldman Sachs. His government is entirely composed of non elected “experts”.

Greece’s new prime minister is a former head of his country’s central bank.

He was in that post when Greek authorities produced false public accounts, blurred by the use of financial derivatives arranged (i.e. sold at great profit) by … Goldman Sachs.

The European Central Bank’s new chief is a former manager at Goldman Sachs.

The US government includes several ex managers at Goldman Sachs and the same is true of the Federal Reserve.

While Italy’s public debt is € 1,900 billion, the US federal public debt has just hit $15,000 billion (almost 100% of GDP). It was “only” 10,000 billion in September 2008; thus, an increase of five trillions in three years.

Will the “experts” be able to save their financial system?

Not a chance. But they will try, and they are going to be ruthless (and undemocratic) in the process.

The only question is the speed and details of the unravelling.

There could be a sudden event triggering runs on banks and economic free fall, or a more gradual shrinking, which has effectively already started with the 50% moratorium on Greek debt agreed recently.

For lucid observers of the global crisis, none of this comes as a big surprise.

Their priority now is to refine reflexions on how to adapt to increasing turbulences, emphasising simplicity and reduced dependence on big systems (see first post on that subject of 14 November).

Fear not, be resilient, keep smiling.

Love,

Leo

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