Money and Energy

The Money Valve II

Nature Bats Last,

6 June, 2014

Off the keyboard of RE

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Published on the Doomstead Diner on May 31, 2014

Discuss this article at the Economics Table inside the Diner

In my last article, I diagrammed out the gross flow of downhill energy through the Money Valve, down through Industry and Consumption toward its final destination as Waste. Readers interested in this aspect of Industrial Economics may be interested also in the Waste Based Economy series here on the Diner.

Waste Based Society
Waste Based Society II: Vendor Financing & Planned Obsolescence
Waste Based Society III: Solutions & Alternatives

The basic flowchart turning resources into waste through the Money Valve of Central Banks is straightforward and easy to understand. However, it does not look at all the various Feedback Loops that are engineered into the system in order to keep it operating. Most notably what is not included in the diagram is how Goobermint and the Military are involved, or how taxation and interest serve to capture wealth out of the system for the Elite class of society.

So for this installment of the Money Valve series, I made a basic Web diagram to show the relationships of these portions of the economy, and from that define where the waste is produced at each level. Rather than try to show all the flows and backflows on the diagram with a bazillion arrows and colored lines (which would have taken forever), what I did was to label each of the Nodes with a number, and each number has a corresponding explanation below for the connections. So, let’s look at the Web of Connections in the Waste Based Economy.

The large number of connections that results from even a restricted number of nodes results in a lot of information to cover, much more than you want to eat for the Diner Brunch on a Sunday Morning. So I have broken this analysis up into 3 parts, and for today we will look at the first 5 nodes and their relationship to the rest of the economy.

1- Energy Resource

The whole game begins with a large stock of Energy yet to be accessed. In the example I will use here, we are looking mainly at the FSoA in the mid-1800s when Standard Oil first began pumping Oil out of Pennsylvania, then Texas and Oklahoma and California, right up to today fracking the last of it out of the Bakken and Marcellus shale formations. However, all the principles apply globally as well to Saudi Arabia, Iran, Russia, everywhere the Industrial Economy moved to either on the Extraction or Consumption end.

In order to gain control over the resource in any given area, you need a Military to take control over the area.

2- Military Acquisition and Control

In the case of the FSoA, using the Military to gain control over the territories was done during the “Manifest Destiny” period, clearing the land of the Native Population that still remained and making it “safe” for the Industrial Economy begun in Europe to move into. The Civil War was a part of that Battle, pitting Industrialists from the North against the more Agrarian based economy of the South. Globally speaking, WWI & WWII were about taking control over the vast Oil Reserves held in the Middle East, and bringing those resources under the control of the Industrial based Economy.

General Smedley Butler wrote about how the Military functions as the enforcement arm of the Capitalist Racket in his paper War is a Racket.

You see 4 Connections in addition to the Energy Connection on the Web from the Military Node, to Industry, Consumers, Goobermint and Infrastructure.

The connection to Goobermint should be obvious, your Goobermint provides the Justification for your Army. If you don’t have the Stamp of Approval for Violence from Da Goobermint, then you are Thieves and Murderers. Goobermint has a monopoly on Legal Violence, and provides Political and Legal justifications for all military actions.

Industry is essential for the Military in the modern age, since all warfare is conducted using Machines made by Industry. As Smedley Butler wrote, the folks who benefit the most from War are those who control the factories that make the War Machines. Industrialists profit by selling Guns & Bullets to BOTH sides of any War

Why are Consumers necessary for the Military? Consumers are the Cannon Fodder! Where else are you gonna get people to go out and fight from? The Elite certainly aren’t going to get out in front of the Bullets and RPGs!

Infrastructure? Just how much do you think it costs each year to maintain hundreds of Military Bases here in the FSoA and all over the world? That is some expensive Infrastructure out there! Besides that, you have all those roads necessary to drive the Humvees and APCs on! HTF would the military machine operate without all those roads? About as well as it operated in the Jungle of Vietnam, which is to say EPIC FAIL. Does the Military pay for those roads? Hell no, the Taxpayer pays for them so he can Happy Motor around, longs as he can still afford Gas anyhow.

3- Energy Extractors

Now, in popular parlance these folks are called “Energy PRODUCERS” but in fact they produce nothing so this is a complete misnomer. These folks simply extract Energy that has been stored up underground for a few million years and pitch it out to be burned up. The process of burning it is what generates the gobs of “wealth” the folks controlling this bizness have, so it behooves them to encourage as much consumption as possible. At least it did as long as they had gobs of it easily available to dig up anyhow.

The energy because it came up so cheap and easy served as a Loss Leader for the other Industries it was based on, specifically the Automotive Industry, the Aircraft Industry, the Electrical Grid and the Telecommunications Grid. Each of these Industries requires copious amounts of cheap oil and cheap credit to keep functioning. At the moment, these industries continue to be supported by cheap credit, but they run shorter each day on cheap energy to keep them functioning. Even if they still have access to credit, if the Consumers do not, they can’t sell it.

4- The Money Valve: Central Banking

Obviously the topic of Central Banking is way too deep to explore in a couple of paragraphs here. Basically however, once you have control over a Resource, you need to also have control over the credit creation mechanism for people to begin to buy that resource from you. It is no coincidence of course that the very same people who are the energy extractors and Industrialists involved in this game are ALSO the people who issue out the credit to buy it. John D. Rockefeller and J.P. Morgan both live on today as JP Morgan Chase, Standard Oil lives on in Exxon-Mobil and so forth. The Banking and Energy Industries are integrally tied together, one does not function without the other.

In presenting it, you notice I use a much larger Font for the Banking System, and also present this before Goobermint in the structure. Why?

Well, in the olden days, Goobermint came before Banking and Money, but in the modern world, Banking controls Goobermint. Entities like the Bank for International Settlements (BIS) and Da Federal Reserve Bank (really a Private Company, not a Goobermint Agency) are all controlled by a supra-national Cartel, often referred to as the “Illuminati”. Basically these are just all the people and families which took control of the Banking System beginning in the Medici Era, continuing through the Colonial Period and currently running the entire economic syste that built up through the period.

Today, this system can even make somebody like Vlad the Impaler in control of Russia capitulate. Remains to be seen if a Chinese-Ruskie alliance is strong enough to combat the economic sanctions and loss of credit from the International Bankster Cartel.

So for today, and for at least the last couple of Centuries, Banking has led Goobermint in control over the kind of civilization that developed, which of course is the Waste Based Economy.

5- Goobermint

On the administrative level, Goobermint is necessary as a means to make Legal Warfare, and provide cover for the Banking System. J6P is sold the idea his Goobermint is Democratic and represents what he wants, when really it represents what the Banking Cartel wants. Nobody gets elected without kowtowing to the Banksters, money required to GET elected is beyond the reach of all but Billionaires these days, so each person elected to a Representative position in a “republic” is in fact beholden to numerous Special Interests that funded his campaign. Whether Democrat or Republican, every member of Congress and State legislatures is beholden to the folks who can fund their campaigns.

Once IN office, anyone who has even a sliver of moral decency left in their soul is bombarded every day by various Lobbyist, all also funded by Industry. The end result is that all legislation that gets passed is directed to benefit the Industrialists who run the system. Even supposedly good Agencies like the EPA just serve as an excuse to offshore industry to cheaper labor countries where they don’t have strict laws regarding pitching pollutants out into the atmosphere and water supply. The EPA would never have gained any ground at all if industrialists didn’t KNOW they could simply move the factories to other locations.

As you can see, Goobermint has numerous connections to all the other areas of the Economy, primarily funded by Taxes on all the Commerce going on, and Debt floated by the Money Valve Banks. Taxes worked OK in the early days of the Ponzi, now it is all increasing Debt that keeps Da Goobermint floating. In theory a Goobermint should be able to issue it’s own money, however since the International Banking Cartel took over the Money Biz going back to the Medici Era, it has been close to impossible for any Goobermint to do this independently. The Cartel steps all over them, cuts them off from Credit, their Money Hyperinflates and they are screwed. In the current case of the Ruskies and China, they are trying to break free of this and may be large enough to do so, but even if they succeed it just crashes the whole global trade system. No win situation there, damned if you do, damned if you don’t.

Besides providing Justification for the Military arm, the main job of Da Goobermint is to provide Infrastructure to make the whole system work tha Industry doesn’t want to pay for, because if they did they couldn’t sieve off any Profits. This includes all the Road Maintenance, Police necessary to enforce laws and Private Property claims,Teachers and Schools to Warehouse kids until old enough to get a job (assuming any exist in the economy when they get out of school in their 30s sometime) etc. Also of course the ballooning SS and Medicaire liabilities incurred here over time. Da Goobermint provides the sinkhole for all the stuff Industrialists don’t want to foot the bill for. Which of course becomes greater all the time as the system becomes more complex and involves a greater population size, while at the same time revenues decrease across the board because of a decreasing energy stock available at a cheap credit price. its a combination of positive feedback loops that send the debt levels exponential as the Ponzi draws to a close.

The main difference in this part of the network chart is the curved lines I drew between the Money Valve and Goobermint. What those represent is the Revolving Door that exists between these two entities that allows for stuff like Regulatory Capture to occur and keeps all legislation favorable to Industry. It is the system of Fascism which underlies all Goobermints participating in this monetary system, which is essentially all of them around the Globe today. Central Bankers and Financial Ministers are all selected from the ranks of Banksters who worked for Goldman-Sachs or JP Morgan Chase. Lobbyists all come from the ranks of ex-Politicians who get juicy high paid jobs from Industry after leaving office. Agencies like the SEC which supposedly regulate the system are entirely in the pocket of those they are supposed to be regulating. Together, these two entities form a parasitical symbiosis that feeds on the rest of the surrounding economy.

In Part III of The Money Valve series next Sunday, we will look at the connections between the core Infrastructructure and Systems elements of the economy that serve as the engine which drives the machine forward, so long as there is sufficient available energy to drive it.

RE