Nov 15, 2018 Galen Chadwick
“While some number of analysts have pointed to China and its indebted system as the next crises point, others have suggested that high-levels of global debt that currently stands at a record $247 trillion will be the kicking point.” (CNBC News)
Two months ago, Hurricane Florence floated into the Carolinas with an estimated 18 trillion gallons of water. Imagine what the 22 Trillion US national debt looks like if one dollar equals one gallon and it’s the same scale of catastrophe. Now, multiply by ten to get 247 Trillion, and you’re eye-balling the neighbor’s ark. This note is for readers who like to dismiss my finger-in-the-dike yelps as alarmism.
Last week, I wrote that all of us are steeped in the usage of a type of money that expressly serves a short-term, inherently exploitative relationship with the planet. Like it or not, this equally applies to all of us desirous of an environmentally sane relationship to life. Today’s topical goal post is: “Discounting the Cash Flow equals Discounting the Future,” so let’s get the ball moving with a look at a money system that profoundly time-compacts our economic relationship to nature itself.
Monetary Instability, one of the four megatrends bearing down upon us, did not start with the ten trillion dollar meltdown that erupted Sept. 15th, 2008. The largest banks “got in trouble” in the collapse of 13 different South American currencies in the 1980’s, swore they had nothing to do with the failure of 1,043 out of 3,234 Savings and Loans from ’85 to ’96; promised they’d “get to the bottom” of the Japanese troubles, the Scandinavian rescue, and the Mexican bail-out in 1995. Today’s laugh track: “This must never happen again!”
We are paying dearly for this spectacle with our treasure and our freedom. The bulk of speculative volume in the global casino is due to banks’ own currency trading departments. From the Dutch tulip bust in 1637, to the clocklike crashes in the US economy, Banksters have led the thankless search to ferret out “Where DO these pesky bubbles keep coming from?”
The capital development of the entire globe is now dwarfed by the activities of these ‘constituencies for instability,’ with national currencies being the ideal tool of speculation in the casino. Each of these swings between monetary highs and lows grows ever larger over the previous one, from 10’s of billions in 1982 to tens of trillions in 2008, a span of just 26 years. At the same time, some 80% of all financial assets in America are now handled by ten giant banks in New York.
It’s all about the consolidation of money and power. The next crushing swing will result in a global currency collapse as the consequence of massive speculative activity. And the Bankster’s endgame? A Global Reference Currency that arises from a systemization of corporate barter. Apple, Microsoft, Google etc., have created special subsidiaries, with strong liquid balance sheets, to issue their competing corporate scrip and provide them with strong credibility. The ‘New World Order” and “Deep State” are about economic hegemony: Not up for a vote.
Each of the other trends, i.e., the age wave, the information revolution, and biodiversity extinction are joined at the hip by this monetary system. The ark we’ll need is the FRC 20 Year Plan in which local currencies play the part of a lifeboat. Securing an independent water and food security for our neighbors brings hope; we’ve still got a chance for sustainable abundance to be a reality.
The need to act is because the global money market is absolutely unstable, or volatile, as they say. The United States, the largest debtor country in the world, is now approaching a full-blown economic struggle with China as the prelude to war for global dominion. The art and science of economic collapse (as the hermetic intelligence of hereditary power), is a strategy for desired results, guaranteed.
If I dwell on the need for a local currency, it’s because this is a bad time to be an ostrich; too many vital parts of our anatomy are at high risk. My intent is to force into the conversation an awareness of certain incompatibilities between our most cherished ideas about ourselves, and long-established habits, that are directly counter-productive to our own survival. We’re the deer in history’s headlights.
I don’t ask the reader to agree or differ with me. This column isn’t an echo chamber. Required is a different approach to thinking itself. Create any thought form in your mind; let’s say it’s an apple. You can see it in your mind’s eye, smell it, heft it, change its color and even throw it in my general direction. In short, a thought has all the properties ordinarily ascribed to the external material world.
But to say that “mind,” as a collection of thought forms, is just a finer form of matter is simply not the case. We’d have found evidence for that by now, if they existed in the material brain itself. But if we consider the brain to be like a TV set- (the programs are not stored inside the box itself), they are received- then these forms are a form of electro-magnetic resonance. What you think, and who you are being, depends entirely on the “reality” channel you are watching.
At birth we just witness these forms. Then, we connect them to words, or sounds, based on our growing list of likes and dislikes. Then, we identify with our bodies and the world becomes filled with separate things. Next, we operate from our desires and aversions- we call them “feelings.” We want to control things, to make our environment both predictable and own-able, which lands us in the providence of money and power. If we forget how we got here, how to change channels, it’s lesson-time. It’s “cast into the outer darkness,” headlights-time.
There’s a formula for changing the channel: In the Beginning, we knew we were One. Then, to have fun, we pretended to forget. Then, to make it more interesting, we pretended to forget that we forgot. And then, we forgot that we were pretending. Remember? I’m not writing to educate, but to initiate change.
Not everybody is ready to go here with me; time-perfected hierarchical management structures are programmed into our heads from birth. My appeal is really a last-minute, last-call effort. I have a finite number of A Small Medium @ Large missives in mind. There’s a swansong for the All Star Shofar Marching Band.
So, my point of writing about converging megatrends, and the stages of societal collapse, is to raise solutions: The community best fit to survive will be formed in advance by networks of people not coordinated by anybody; the participating bodies coordinate themselves. If achieving a higher and happier plane of consciousness is the goal, then we’d best be boarding our plane or ark right now.
That said, the Discount Cash Flow is the idea that money on hand today has more value than an equal amount collected, or paid, at some time in the future. This is an application of the time-value of money management. In modern finance, this concept plays a central role in decision support and planning. When investment projections, or business case results, extend for more than one year into the future, financial professionals usually want to see cash flows presented in two time value terms: Present Value (PV), what the future cash flow is worth today, and Future Value (FV), or the value that flows in or out in the future.
For each cash flow event- say a yearly payment on a $1,000 loan- the present value is discounted below the future value. A $100 dollar loan payment that will arrive in two years from now, say, would have a present (spending) value of $95 in today’s terms. The amount you can purchase with the same $100 will drop because of inflation. Our analyst knows he could deposit $91 dollars in a bank today at a 10% risk-free rate of return, and will automatically get a $100 a year from now- a better deal. By the same reasoning, the second year’s $100 would only be worth $83, the third year $75, etc. So what looked like a perfectly reasonable investment, getting $1,500 on a $1,000 investment? Not so hot.
This reasoning is assiduously applied to all monetary investments and creates the well-known pressure by the financial system for short-term returns over any long-term consideration, including long-term sustainability. It used to be the time-return focus was on quarterly reports; then it became weekly and now it’s hourly.
When a homeowner declares it’s too expensive to install a solar system for his home, he is implicitly saying that the cost of purchasing electricity from White River Coop (in the long run, as discounted to today’s dollar power), is still cheaper than the initial capital outlay required. With every financial transaction, each of us expressly serves a short-term, inherently exploitative relationship with the planet. Each of us is programmed for behaviors that suit short-term gains; the net result is the global ecological catastrophe on the planet we are desperately trying to “save.”
But demurrage money systems, as previously introduced, dramatically lower the cost of capital by simultaneously reducing both interest rates and the cost of equity. Do you contribute to an eco-organization, if only to feel better? Perhaps I’ve given you reason to pause. Are they willing to realign their financial interests and investments with long-term sustainability goals, or not?