-
- I hereby admit I was wrong. It will be worse.
-
- A couple of years ago, I put forward the idea that the
combined effects of Y2K and the collapse of the stock market bubble would
lead to a "devolutionary spiral", somewhat analogous to the fall
of the Roman Empire and the beginning of the dark ages. At the end of
one of these articles I concluded "Of course, I could be wrong. It
could be worse" In another article I showed, mathematically, that
the Y2K problem could never be completely solved and that the residual
failures resulting from the fixes themselves would be enough to cause significant
economic impacts, even without failures from all of the unfixed systems.
I also predicted, perhaps overoptimistically, that the stock market bubble
would burst in the first quarter of 1999. I hereby admit I was wrong.
It will be worse.
-
- I was wrong about the timing of that collapse, but not
about the state of Y2K or about the eventual crash of bubble.com. I am
so very, very sorry it didn't collapse when I predicted. Not because I
want it to happen, but because the delay means that the final crash will
indeed be much, much worse than it needed to be. If the market collapse
had occurred at the end of 1998 or beginning of 1999, as it logically should
have, there would have been a full year for everyone to revise their expectations
and to make major economic, budgetary and business planning changes before
Y2K itself slams us in the first quarter of 2000. A collapse back then
could still have been partially controlled, the market did not have so
far to fall, and the first business failures and unemployment situations
could have been handled with a mostly functional infrastructure and support
systems. In short, we would have been forced (and able) to make realistic,
useful contingency plans instead of relying on the nonsensical, irrational
and mathematically impossible concept that Y2K has actually been fixed.
-
- It is now completely inevitable that Y2K and the bursting
of bubble.com will occur at one and the same time, leading rapidly to a
new Great Depression far worse, far deeper and far longer lasting than
that of the 1930's. Because of the confluence of these and other events,
I am now also convinced that we will also see a complete breakdown of the
global monetary system, a series of vicious dictatorships and, within ten
years, World War Three. Instead of 66% over fifty years, I now expect
more than 90% of the world population will die within the next ten years.
But, again, it could be worse. If a major nuclear exchange cannot be avoided
in World War Three, the human race will quite simply cease to exist. Under
present global political conditions, I consider this to be a very real
possibility, if not yet a probability.
-
- Either way, as a species, we have lost our one chance
to get off this planet and to survive, long term, as a civilized race among
the stars. (I am referring here to my own Devolution theory, to the Olduvai
theory, to astronomer Hoyle's similar theory, and to other scientifically
based approaches which predict that we have only one shot at developing
a successful technology based civilization).
-
- I know this will likely get the pollys jumping up and
down on their perches but, frankly my dear, I don't give a damn. The time
for debate ended about a year ago and there is no longer any useful purpose
to be served in countering the polly arguments -- their damage has already
been done, the lives of innocents have already been recklessly endangered,
and previously possible recovery efforts have already been sabotaged by
the shortage of bits in their processors. We'll let them squawk later,
when we clean out their cage in the bubblegate trials. Until then remember
that, although able to repeat complex sentences over and over again when
carefully taught, polly's comprehension of the related subject matter is
limited by an intellectual capacity roughly equivalent to that of a three
year old child.
-
- To regular readers, who know that I rarely insult my
opponents, I apologize for the above. I also apologize to my own parrot
for dragging him down to this level. But, after all the vicious attacks
so many of the pollys have made on me over the last few years, just for
once, I couldn't resist the temptation. It's about as close as I normally
get to losing my temper, so please forgive me, because this article is
not aimed at them but at those of you who are prepared for Y2K -- in response
to the many eMail requests I have received to "come out of retirement"
and present an update of my views. I am happy to do that, as a onetime
event, just seven days before the rollover. But first, I'd like to tell
you why I dropped out and where I've been.
-
- In the fall of 1998 I decided not to take any more Y2K
contracts because I had already reached the conclusion that at that point
remediation was a lost cause, and the only viable (partial) solution to
Y2K was a massive contingency effort. It would have been dishonest for
me not only to charge for work I professionally considered to be useless
but also to allow a client to continue in the false belief that remediation
could actually solve the problem. I have had talks with a few clients
and some bodysnatchers about Y2K audit and follow up work, in the hope
that I could do something useful to alleviate the awesome consequences
of Y2K. Nothing serious came of this, however, in large part because so
few organizations have done enough remediation to be worth auditing and
validating. And of those that have, so many are still laboring under the
delusion that fixing individual software problems is a meaningful act,
while continuing to ignore the real problem of the dependencies and the
inevitable collapse of the system of systems itself.
-
- At roughly the same time, I also renewed contact with
"NymphoMagic", a lady friend from my misspent youth. And so,
after a few hunting trips and a well earned winter vacation, with my own
Y2K preparations largely in place, I decided to take a sabbatical and leave
the digital dastards to their own devices. I spent most of this year in
Northern California, renewing old friendships; sitting under a shady tree
with a glass of fine wine; cooking my own special version of Beef Wellington
over a charcoal fire; enjoying the last days of my faithful but ancient
Golden Retriever; working on a Java based Bible study program; and making
my peace with God before facing the fall of Babylon and the great tribulation.
In short, I had a life and enjoyed it.
-
- I even found time to occasionally follow the flame wars
of CSY2K. But I must be honest and admit that I didn't find much worth
responding to. As I said before, the useful debate was over about a year
ago. We don't know for an absolute fact who won, and we won't for another
month or so, perhaps as much as three months or even a year. But neither
side will concede anything more than they already have. Our case is based
on facts, logic, mathematics and prior historical experience, which the
pollys simply reject out of hand. The polly case is based on nothing but
emotion, corporate and government lies, greed, good "feelings"
and an irrational belief that nothing could possibly go that badly wrong
because the inimitable "they", the "authorities", will
always fix it. It's the same, age old conflict between good and evil,
right and wrong, right and left, nature and nurture, reason and emotion,
freedom and serfdom, Christ and antichrist. It won't be settled until
one side or the other starts dying in greater numbers. That won't be long
now, but until then why waste any more energy arguing?
-
- For those, then, who are calmly preparing for the gathering
storm here is my current weather forecast (not to be confused with Cory
Hamasaki's Washington Weather report). Let's begin with the state of Y2K
itself.
-
- In my expert professional opinion, the global prognosis
is worse today than it was a year ago. Progress on remediation has been
slower than even I expected and in many areas we have clearly regressed.
In particular, the residual failure rate in "remediated" systems
appears to be higher than I originally predicted. IV & V results show
that the majority of these ostensibly repaired systems, almost all in fact,
still contain potentially disastrous date errors, capable of crashing the
system. In large part, this is due to the fixed deadline, the inevitable
delays in the code change projects and the consequent lack of time for
adequate testing. Even those best prepared, those who have been testing
for two years or more, are still finding errors in their systems. These
best of the best organizations tend to lower the overall error rate per
million LOC but, obviously, this means that the residual error rate is
much higher than average for those less well prepared than the best. Sadly,
this applies to the great majority of all organizations and most of their
so-called compliant systems will enter the new year still containing disastrous
date errors.
-
- Closely akin to the residual errors, but far more insidious,
are the errors remaining from inadequate and incomplete assessment and
remediation, particularly when these tasks were performed by personnel
not properly qualified to perform them. I have a good friend, an army
Lieutenant, who is responsible for Y2K in the administrative section he
commands at a local base.
-
- Discussing the issue with him last year, I found that
he had checked the real time clocks on all of his PC's and reported himself
compliant, honestly thinking that was all he had to do! Even after I pointed
out that his real problems were things like software, spreadsheet formulas,
database programs, macros and historical data; and all of these would have
to be tested; he still had no intention of doing so. As far as I know
he still hasn't properly tested his systems and he's still reporting himself
compliant.
-
- In my experience, this situation is the rule rather than
the exception in small organizations without direct, professional IT support.
It makes a mockery of the claims of compliance by many government departments,
by small businesses and, to a somewhat lesser extent, even by large, technically
proficient corporations. If even we professionals admit we can't fix the
Y2K problem, amateurs don't have the slightest glimmer of a chance.
-
- To make matters worse, many of the system replacement
projects are also failing. We have seen new system failures at brand name
companies like Hershey's, Royal Doulton and W.L. Gore. Businesses have
been losing millions in lost revenues, even before the rollover, because
these new systems (which may or may not be compliant) are simply not capable
of replacing the functionality and capacity of the old systems they are
supposed to be replacing. At least, not without considerable further development,
refinement and testing, for which there is no more time.
-
- Similarly, many of the new federal, state and local government
systems are failing the acid test of real world deployment. As we approach
year's end, the reports of these failures are increasing, just as I predicted.
But I strongly suspect that the number and scope of these failures is
really much larger than their "owners" would have us believe.
In retrospect, it has typically taken months for news of the failures
to become public. Logically, the most recent failures, which are indeed
occurring in greater numbers, have yet to be reported and probably won't
be until next year. Ask yourself, how many of these failures have been
openly reported (not even one) and how many have been covered up and lied
about until the very last moment? How many replacement system project
managers are just now reporting the failure of their project to meet the
deadline? How many desperate, doomed attempts are currently underway to
patch up the old systems they were supposed to replace?
-
- Finally, there are the systems that nobody has even tried
to fix. The ones their owners are supposedly going to "fix on failure"
-- the most ridiculous, brain dead solution of all. This category includes
the vast majority of systems worldwide, probably more than 90% by number
and certainly more than 50% by economic activity. Small businesses alone
account for half of all our economic activity and yet almost none of them
have done any meaningful testing or remediation. Most have done absolutely
nothing, some waiting to see what actually fails and others still in total
denial that there even is a Y2K problem.
-
- Of those that have addressed the problem at all, most
have not made use of professional help and are probably in the inadequate
or improper remediation group (as are most local governments). Very, very
few small businesses are likely to have really fixed their problems in
advance. In fact, except for my own, I don't know of a single local business
I could honestly pass as ready for Y2K. And sometimes I'm not too sure
about my own!
-
- Big business and large government agencies are no better
off. Some really have fixed almost all of their problems, because they
started early, planned well, financed and then staffed their projects adequately
and allowed years for thorough testing in a complete, expensive, real world
test environment. All they have left are a few residual errors as described
above (although even these could still prove disastrous). However, such
organizations are very few and far between -- probably less than 5%.
So few that I cannot think of a single organization which I personally
know or accept on their own assurance to be more than 70% ready, not even
the clients for whom I have done Y2K work.
-
- The claims of compliance by the great majority of large
corporations, and all government agencies (without a single exception)
are nothing more than willful, flat out, bald faced lies based on the myth
of "mission critical" systems and intentional or culpable misrepresentation
of the actual remediation data. Let me explain this with a little history,
for those who are not familiar with large scale systems development.
-
- Except for Antisocial Insecurity, which got started early,
the US Grabit and most of the Fortune 500 didn't wake up to the reality
of Y2K until the very beginning of 1997. (Smaller companies, most States
and foreign governments and almost all local agencies were even further
behind). At that time I was working for a large beverage company and I
know for a fact that their top IT managers, with whom I worked, were largely
unaware of the problem and it's consequences for the company. At this
point, with only three years to go, it was already too late for most large
organizations to fix all their systems in time to meet the only truly immovable
deadline most computer professionals have ever had to face.
-
- Through the grapevine, those of us who actually understood
the true scope of the problem (mostly system software and long range planning
specialists) already realized the task was larger than the available time
and resources. Regardless of our individual clients and employers, and
working back from 2000, we all knew we needed at least a year for integration
testing, a minimum of a year or two for all the application software changes
and basic testing, another year to set up and test the extra development
and test facilities, a year or two to bring the system software up to date,
another year or two for system inventory, evaluation and planning. Let
alone the minor tasks like finding and training the extra staff or contacting
and verifying the compliance of customers and vendors. Even with parallel
tasking, the remaining critical path simply could not be completed in time.
-
- For the system replacement approach the situation was
even worse since, from initial start to finish, implementing a package
like SAP is a minimum five year process for a large organization. In addition,
before we could even start to look at the details of the problem itself,
we had to convince non-IT management that the problem was real and extremely
critical to business continuity (in Y2K terminology, this phase is known
as "awareness"). For many, this phase alone took six months to
a year and most large organizations, including the major bank for which
I later worked on Y2K, didn't really get started with remediation until
well into the spring of 1998.
-
- In short, for most large businesses and government agencies,
totally fixing the Y2K problem never was a realistic possibility and the
vast majority of compliance claims are and always have been a lie. From
the very beginning I am certain that almost all of the real experts were
completely honest about this and recommended to their management that the
Y2K effort should be focused on the most critical and profitable business
functions and the rest should be dealt with by contingency plans -- including
the orderly shutdown of areas which could not reasonably be fixed in time.
Those of us with a little more insight even recognized that, spread over
the economy as a whole, the controlled and uncontrolled shutdown of unfixed
and unfixable business functions would inevitably lead to a minimum of
a severe recession and advised an adjustment of the overall business plan
to take this into account. I know I did, even though this led to my leaving
more than one Y2K project.
-
- No, the decision to lie about Y2K was not ours. It was
a political decision made at the highest levels of business management
and government. The first lie they told was to themselves -- that the
problem could still be fixed, if only enough pressure could be brought
to bear on the stupid peons who actually write the software.
-
- Quite simply, in arrogance and ignorance, management
didn't believe what they were being told by their own experts and they
simply dictated an unreasonable schedule to fix everything anyway. In so
doing they drastically reduced the effectiveness of Y2K remediation (by
spreading time and resources too thinly) and virtually guaranteed there
would be no accurate reporting of real project progress, no feedback on
what was really happening. On more than one occasion I was personally
asked (actually ordered) to falsify my time records to show that I had
been working on a later phase of the project when in fact I had still been
working on an earlier phase whose completion deadline had already passed.
Certain levels of management above me (other than my own immediate manager)
were simply too scared (or too ignorant) to report the truth and, as a
result, the client's top management never did find out just how far behind
their projects already were, even in the beginning.
-
- Anyway, after a while, reality did begin to raise it's
eyebrows, although it never exactly lifted it's ugly head. Most large
organizations, including my client and, more especially, the Federal Grabit,
began to realize that all of their systems would not, in fact, be ready
for the rollover rectifinium. In this respect the Grabit was by far worse
off than, for example, the major banks. They had literally billions of
lines of old, poorly documented code running on vast numbers of obsolete
and non-compliant computers. In addition, they had extremely limited in-house
expertise and a pathetic track record of 100% failure to meet deadlines
and costs in previous software projects. I seriously doubt that it ever
was possible to fix more than 10% of the Grabit's code, a figure which
is very roughly borne out by the number of systems they claim to have fixed.
(The Fortune 500 were much better off with perhaps an average 60% fixable,
but still nowhere near all of it).
-
- Obviously this could never be admitted either by the
Grabit (scared of the sheeple) or by big business (scared of the shareholders).
Ever the leader in lying, it was the Grabit which came up with the first
deception -- changing the size of the problem from the experts' meaningful
billions of lines of code into the seemingly smaller and utterly meaningless
measure of thousands of "systems". Bureaucratically brilliant
because this vague term can mean a single piece of hardware, a collection
of hardware, a single software program, a group of programs on a single
piece of hardware or even a group of programs running on many pieces of
hardware connected across multiple different networks. It can even be
used to describe a manual operation in which computers are not even used.
Obviously, such a loose term could easily be adapted to whichever lie
of the day they wished to issue. For example, at one point, the US Navy
claimed to have made compliant a "system" which consisted of
a few guys sitting around drinking coffee in an office, but no computer
at all.
-
- The real beauty of this "system" measure, however,
is it's utter meaninglessness when it comes to estimating the amount of
work to be done in remediation. The total lines of code (LOC) is a meaningful
measure because it directly correlates to the amount of work which needs
to be done in inspection, modification and testing of the code. But, the
number of LOC varies enormously from one system to another. I have worked
on systems with as few as 2,000 lines of code and others with several million.
In addition, to be really useful, a valid measure would have to include
weighting factors for things like language, complexity, age, documentation
quality, etc. By using the "system" as a measuring unit, the
Grabit willfully and intentionally made it impossible to accurately measure
their progress or, more honestly, their lack of progress in Y2K remediation.
It was then easy for an individual agency, such as the FAA, to say that
90% of their systems were fixed with only 10% to go. When Jane Garvey
told that particular lie, it is far more likely that they had only fixed
their smallest systems, with perhaps 25% of the total code lines. The
remaining 75% of code lines hadn't, and probably never will be fixed.
-
- Disgustingly, it didn't stop there. The next great deception
was the invention of the mythical "mission critical" system.
This was necessary because, given the vast extent of the Grabit's problem,
even the use of a dishonest measure could not by itself disguise or cover
the magnitude of the impending failure and the monumental incompetence
of those who had allowed it to happen. Taking the sound advice of the
real experts to concentrate on the most critical functions, the venal vassals
of verbal prevarication rapidly spun and twisted this essential, emergency
approach into an absurd and totally dishonest concept in which only a few
"mission critical" systems needed to be repaired in order for
the entire Grabit to continue on its merry way of monstrous maladministration.
Needless to say most of the fortune 500, desperate not to lose the confidence
of their shareholders and customers even before Y2K, were only too happy
to follow the Grabit's dishonest lead. This is why most companies continue
to hand out meaningless but glowing reports of progress on their mission
critical systems, while remaining largely silent about the remaining, unprepared
systems.
-
- In fact, on the global scale of Y2K, there is no distinction
in failure effect between mission critical and non-mission critical systems.
All systems, without exception, perform work that is considered useful
by their owners. If that were not the case, none of these "non-critical"
systems would ever have been created. In my more than thirty years experience
I have not seen a single business or government system project which was
not justified in advance by some kind of cost-benefit analysis. Lose even
one of those systems and the global economy as a whole loses the benefits
provided by that system. In most cases, the "benefit" we lose
is the productivity gain achieved by implementing that system. Lose 50%
of all the systems and we lose 50% of the benefits and increased productivity
provided by all of the systems we have produced in the last thirty years.
Effectively, we lose 50% of that part of the economic growth of the entire
planet which is attributable to the computer revolution, beginning around
1970. Calling the other 50% "mission critical" does not change
this mathematical fact, even if they continue to work.
-
- In reality, the situation is much worse. In most cases,
we no longer have the capacity to replace the failing systems with manual
operations. This means that when a system fails we lose not only its productivity
gains but also the entire underlying economic activity itself. In addition,
because of the interconnected nature of all economic activities, only a
fairly small percentage of failures is needed to cause a near total failure
of all global economic activity (as described in Charlotte's Web). Exactly
what the critical failure rate is nobody knows, including myself. But I
am certain it is far lower than the 65% global system failure rate I am
expecting (averaged from 90% failure rate for governments, 30% for big
business and 70% for small business). I suspect the critical rate is about
15%, but that's probably academic now, since such a low rate is no longer
attainable.
-
- That's the good news. The bad news is it can't be fixed,
not even in thirty years. We have taken one giant step forward and now
we are about to take two equally giant steps back where we came from. In
1970 we started out with a fully functional, even robust economy and it
still took thirty years to get where we are now. After the collapse of
Charlotte's web there won't be enough of an economy left to pay for the
repairs and replacement systems we need for a full recovery. Without either
computer or manual labor to perform their functions in the short term,
large numbers of businesses and even entire economic segments will cease
to exist (particularly in the service sector). This is a simple fact and
emotional appeals to human ingenuity and necessity can never change it.
Creating or fixing computer software takes lots of time and lots of money
and we won't have much of either. Remember, historically, after major
information systems disasters, 50% of medium and large businesses declare
bankruptcy within a month and 90% within a year. And that is under ideal
economic conditions, with widely available capital and manpower for recovery.
-
- Since so much will be lost, the global economy will no
longer be able to support the current population of six billion souls.
Millions are going to die because of lack of jobs, money, food, water,
sewage, medical treatment, etc. Let alone by violent acts and wars arising
from the devastating economic conditions. This again is a simple fact
and emotional appeals are not going to change it. As they die, there will
be fewer people to sustain even what's left of the global economy and it
will shrink still further, leading to more deaths, and so on. This is the
beginning of the devolutionary spiral I have long been predicting. We're
not just going back to a 1930's depression, we're going back to the middle
ages, if not worse.
-
- But, just for the sake of argument, let's say that I
am wrong and the Good Feelings Fairy gave Santa a whole bunch of perfect
Y2K fixes to drop down every chimney, fixing the entire problem just in
the Nick of time! Was there one in your stocking? It wouldn't make any
difference if there was. Even if everything really were completely fixed
and there were no residual errors left, Babylon will still be fallen, be
fallen. Ironically, this is because and in spite of attempts to avoid the
consequences of Y2K by our beloved pollyticians and economystics. As usual,
they just made the problem worse.
-
- For example, to avoid liquidity problems and potential
bank runs before the rollover, Alan Greenspan has printed billions upon
billions in new dollar debt. If Y2K doesn't finally burst bubble.com his
monopoly money certainly will. Ignoring the immorality of fiat currencies
and fractional reserve banking in general, it might be normal to add reserves
slowly when the economy is expanding, but over the last few weeks, as we
approach year's end, Mr. Greenspan has pumped billions of inflationary
dollars per day into the banking system just for Y2K (and to prop up bubble.com).
Presumably, his assumption is that these reserves can then just as easily
be withdrawn when January passes with no significant Y2K failures. Not
only is he wrong about the failures, he is also wrong about withdrawing
the reserves. It is much easier to print monopoly dollars than to withdraw
them, especially at this time when the dollar currency itself is on the
verge of collapse (more about this below). Even if there were no Y2K failures
at all, by the time he thinks it safe to withdraw these dollars, he will
find they have already cycled into the broader economy, starting a new
period of the dreaded inflation and, by inference, finally bursting bubble.com
and unleashing all of those related consequences.
-
- You see, it really is the economy, stupid (to quote our
faithless leader). It always was, and Y2K itself was never anything more
than the trigger, in spite of it's own massive potential for disaster.
I've often seen Y2K compared to the Titanic, a doomed ship waiting to sink
us all. More accurately, Y2K is the deadly iceberg sitting silently in
the ocean waiting for its unsuspecting victim (and what we have seen so
far really is just the tip of the iceberg). Aboard the good ship U.S.S.
Enterprise it's "full speed ahead, Mr. Greenspan, and damn the icebergs,
we're unsinkable". While in the first class lounge the bubble.com
band plays endless soothing songs for the sheeple, oblivious to their coming
shock and terror.
-
- With the iceberg dead ahead it's already too late to
change our course. The time and place of the collision are fixed and the
outcome is already determined. In spite of the Captain's unfounded optimism,
the good ship Enterprise is not so strongly built and it certainly isn't
unsinkable. The protecting plates of the hull, and the rivets holding them
together, are brittle and ready to break under the slightest unexpected
pressure. After they do, the watertight compartments will not work as designed
and we'll find there are not enough lifeboats for all of us on board.
But the bubble.com band will keep on playing, until they sink with the
ship and most of the dancers to their deadly siren song.
-
- In the real economy, the bubble.com insanity is the most
obvious immediate danger and its inevitable collapse will have immediate
repercussions for everyone on the face of this planet. It is often compared
to the "irrational exuberance" which preceded the 1929 crash
and the Great Depression. But there's really no comparison at all. Real
measures of value, like P/E ratios, earnings and dividends, show that this
is by far the most overvalued market since the beginning of the industrial
revolution, far more bloated than in 1929. It is quite probably the biggest
bubble in recorded history. When it bursts, as all bubbles always do, the
effects will be worse than any crash in history, worse than the Great Depression,
and they will last for decades if not centuries. This is true even if
there were no Y2K problem and there were none of the other economic problems
I describe below.
-
- As with Y2K, there are no reasonable chances for a short
term recovery. In 1929, the economy was driven mainly by manufacturing
and agriculture whose products were still required after the crash. Today,
it is driven by services which will be much less in demand. In 1929, we
still had good money, backed by gold. Today, we have monopoly money backed
by nothing more than promises to pay debts which really never can be repaid.
In 1929, we had a very small national debt and no welfare state. Today,
we have massive government debt and a millstone welfare state which together
suck the majority of the revenues raised by the Grabit. In 1929, taxes
were low enough that revenues could be increased by additional taxes (like
Antisocial Insecurity) without worsening the problem or starting a revolution
-- we could still spend our way out of the depression. Today, total taxes
are in excess of 50% of income and cannot be further raised without further
damaging the economy and actually reducing revenues.
-
- In 1929, the general population was reasonably well educated
in practical matters, were able to maintain their own homes, cars and equipment,
and could hunt and gather much of their own food. Today, the masses have
been dumbed down by an educational system which teaches little of practical
value, very few are now able to perform the most rudimentary maintenance
on their vehicles and even less know how to hunt or grow their own food.
In 1929, the average family was a solid unit, with many children and all
able to rely on each other for support. Today, many are single mother
units, with few of the traditional male skills, low incomes and a high
dependency on the welfare state. In 1929, people were generally peaceable
and respected their elected and appointed authorities. Today, Y2K terrorism
is a real possibility, children have no qualms about shooting each other
in school and there is little love or trust for a Grabit which has grown
far beyond control and no longer serves a useful social function. In 1929,
the average worker walked to work (or rode a bicycle). Today, he lives
miles away from any commercial or industrial center and cannot go to work
without a car (and the endangered oil it takes to run it).
-
- Lest you think this is too far in the past, and things
are "different" now, let's compare to a more recent example,
Japan in 1990. Japan had a positive balance of trade, ours is increasingly
negative. Japan had a positive savings rate, ours is negative. The bubble
in Japan was relatively small, ours is the largest in history. Japan has
an industrial economy whose products are mainly useful, ours is a service
economy whose products are largely superfluous in a belt tightening situation.
The Japanese people are generally well educated, hard working, respect
authority and are unarmed. Ours are generally ignorant, lazy, dependent
on Grabit handouts and are likely to use their own or stolen weapons to
plunder and murder their better prepared neighbors when the Grabit can
no longer bribe them with welfare handouts. The global economy was not
dependent on the Yen, it is dependent on the dollar (because of the need
to buy oil with dollars, as we shall see). Japan still had a foreign market
when their bubble burst. We won't.
-
- With all of these advantages, ten years later, Japan
still has not recovered. Even the claimed turnaround earlier this year
has fizzled out, with continued contraction of their economy in the third
quarter. Their projected, minuscule 1% growth for next year is nothing
but pie in the sky nonsense, especially given their extremely late start
in the Y2K races. Now consider that after 1929, even with a smaller bubble,
and lots of monopoly money inflation, it still took more than twenty five
years for stock prices to recover their pre-crash values. But, we are told,
this is a new "paradigm" and all we'll see is a tiny bump in
the road. Nowadays, we really know how to precisely control and fine tune
our economy, even though the intelligent Japanese, using the same bankrupt
economic theories, completely failed to save their own economy just ten
short years ago. According to our new age counselors, if we just leave
our money in the market it won't crash and any "corrections"
will be small and rapidly recovered. I think not. The only "pair
a dimes" I'd put my trust in were minted in silver before 1964.
-
- We know the bubble will eventually burst, as bubbles
always must and historically always have. But the question remains, will
it burst at the same time as we face the worst of the Y2K failures? After
all, I was wrong in my prediction of the timing of the crash in early 1999.
Well, I truly believe these two events will indeed be simultaneous and
I'm willing to go out on a limb again and predict that by the Ides of March,
the Second Great Depression will have already started. I've even put my
money where my mouth is and, since late 1997, I've invested exclusively
in precious metals (physically stored with close relatives outside the
US and the UK and beyond the likely threat of confiscation). This is more
than I can say for certain bank "consultants" like Martin Armstrong,
who led the charge against gold for Republic Bank in New York, but who
is now facing contempt of court charges for the hoarding of $16M worth
of gold coins and bars, allegedly embezzled from his billion dollar Japanese
clients.
-
- It looks like I'm in experienced (if not honest) company
and I'm not the only one who prefers to be a year or two early rather than
a single day late. In fact, I believe that at least some of the downward
trend in gold prices over the last year is due to willful manipulation
by large banks and institutional investors, as well as oil producers, who
wanted to move out of worthless paper and into physical gold at the best
possible price. They even timed their exit to precede the double ought
disaster and did everything they could to bolster the bubble and keep as
many as possible completely in the dark about the true condition of the
Y2K problem. More charges for the bubblegate trials?
-
-
- But back to the question of timing. Firstly, the greatest
number of Y2K problems will indeed occur in the first two months of the
year 2000. There are certain "experts" who have said that the
majority of failures have already occurred, before the actual rollover.
Bovine Scatology. Because of the very nature of the record keeping task
inherent in most business systems, almost all digital dates are historical
and so, except for the limited and shoddy testing of Y2K fixes, dates with
a zero-zero year cannot possibly enter most systems until after December
31st, 1999. Only a tiny fraction of dates are computed in advance and
the failures we have seen so far are therefore only a tiny fraction of
those we are going to see next year. In my expert opinion, almost all
Y2K failures will be experienced in January, and at the beginning and end
of February (as month end and leap year processing adds to the general
confusion). There will be a secondary spike at the 2000/2001 boundary
but, basically, most of the failures will have already occurred by early
March, 2000. That does not mean they will be fixed by then, of course.
Most of the failures will take days, months and even years to fix, as
we have already seen with several of the early failures. In some cases,
the systems will never be fixed and their benefits will be permanently
lost to their owners and to the economy as a whole. Some of their owners
will also fail, taking with them the benefits even of those systems which
didn't fail and starting the widely predicted domino effect and the collapse
of Charlotte's web.
-
- Secondly, not only is bubble.com bigger than a year ago,
but there are increasingly ominous indications of an impending crash.
Massive inflation has been hiding in the balance of trade and in the stock
market for years (that's what caused the bubble in the first place) but
now it is beginning to show in the general economy as well (particularly
in oil prices). In addition, interest rates have been steadily rising
since the last quarter of 1998. Also, it is becoming apparent to savvy
investors that the corporate earnings of many high flying technology companies
(particularly Microsoft) have been artificially exaggerated by questionable
accounting practices which use employee stock options to inflate the bottom
line. If these options were more honestly accounted for, many of these
companies would be showing massive losses instead of profits. All of these
factors trend toward lower future corporate earnings, making the market
less attractive to investors. This last is borne out by the fact that,
since April of this year, more stocks have declined than advanced, indicating
that the smart money has already left the market and the bear cycle has
already begun. Only the amateurs, frantically feeding the internet beast,
are keeping the indices where they are today. Indeed, the hindsight of
history may actually show that the decline really did begin in the first
quarter of 1999 and my original prediction was in fact correct!
-
- In addition to Y2K and bubble.com there are five more
major economic areas which are shaping up for a simultaneous crisis in
the year 2000. They are oil, gold, the dollar, the yen and the euro. These
five factors are so closely related and intertwined that I find it useful
to lump them all together under a single name derived from the two with
the most important long term implications -- the gold/oil or GO crisis.
In my not so humble opinion, the GO crisis has the potential to trigger
World War Three, starting in the Middle East, and quite possibly involving
a nuclear exchange with Israel. It is vital that we understand all of
these factors if we want to survive the great tribulation of the coming
decade.
-
- Let's begin with oil, the lifeblood and lubricant of
the global economy. In fact, oil has two major crises to face in or very
close to the year 2000. The first, a short and medium term problem, is
the effect of Y2K itself, both on embedded systems and on the conventional
business systems used in it's production and distribution. Given the tardiness
of Y2K remediation in most oil producing countries, we can be certain that
there will be interruptions in supply, but by how much and with what effect?
-
- During the Arab oil embargo, a mere 6% reduction in production
led directly to the deepest global recession since the Great Depression
itself. Today, the US, Europe and Japan are all far more dependent on third
world oil (the most in danger) and even this minor reduction would burst
bubble.com and induce a major worldwide recession. However, even conservative
government agencies, like the CIA, are estimating reductions of up to 30%
and I have seen credible estimates of losses up to 70% of production.
For the US, the problem is even more acute because it's largest single
foreign supplier is Venezuela. Not only is this country still at the Y2K
starting gate, but it has recently experienced a major natural disaster
with which it will still be struggling at the start of the year. To make
matters worse, Venezuela has also just adopted a new constitution which
is almost certain to lead to a Marxist dictatorship unfriendly to the west.
I think it should be obvious that the US will lose at least 50% of it's
foreign oil.
-
- For how long? The problem with the oil industry is its
heavy dependence on embedded systems, not just in well head production
and transportation, but even more so in the refineries. This last is the
main reason for the higher estimates of 70% production loss. Although
the failure rate may be lower, and I'm not even completely convinced of
that, these systems are much more difficult to fix than conventional business
systems and the effects of their failure are frequently disastrous. The
main reason for this is that embedded systems are, by definition, always
an integrated part of a larger and more complex system -- the equipment
plant they are controlling or measuring.
-
- This makes them harder to replace with modern, compliant
equivalents because they must all be individually interfaced to their hardware
and then individually tested. This alone is a mammoth task which just
hasn't been done on anywhere near a large enough scale to avoid a major
problem. Witness the Van Nuys sewage system failure which, months later,
still hasn't been fixed with anything more than a manual workaround. So
far, it has proved impossible to replace or repair the subsystem which
actually failed.
-
- Far more important than this, however, is the distinct
possibility of a single embedded system failure bringing down the entire
outer system, the entire production plant, and not just for a few hours.
In fact, most recent industrial disasters have been ultimately caused
by the failure of a single subsystem. We saw this on New Year's Eve, 1996,
when a simple leap year date problem essentially destroyed two aluminum
smelters in New Zealand and Australia. Oil refineries are even more complex
and, according to engineers more knowledgeable than I, after similar subsystem
failures it would often be less expensive, and less time consuming, to
build a new refinery rather than repair the old one. With less crude oil
available, and in times of economic distress, that just isn't going to
happen. Much of the production loss will therefore be essentially permanent.
-
- Unfortunately, oil has an even bigger, long term problem
to face than just the Y2K date rollover. At this moment in history, we
have used up and burned approximately half of all the cheap oil God ever
created on this planet, and we only took 100 years to do it. In the 1950's,
a geologist by the name of Dr. M. King Hubbert defined the basic laws which
describe the production and consumption of finite resources, like oil.
He found a bell shaped curve of production which typically peaked at the
point when half of the resource had already been used. Using this, he successfully
predicted the peak of US oil production in 1969. Passing this production
peak is the main reason the US will always and increasingly be dependent
on foreign oil (at least until it all runs out).
-
- According to recent, credible research, the peak for
global production as whole will be reached around the year 2000. It might
even have been passed in 1999. Venezuela has already passed it's peak,
and the North Sea is also peaking about now. The Middle East will be last
and may not pass their peak until 2010. This is politically highly significant,
because prices tend to decline before the peak (in response to increasing
supply) but they rise steeply afterwards, because of increasingly shorter
supply. From now on, the Middle East will have increasing control over
more and more of the production and price of this vital commodity. Unlike
the earlier oil embargo, this sea change will be permanent and oil prices
will continue to increase, forever.
-
- Which brings us to gold. According to our beloved bankers,
who strangely still want lots of it for themselves, gold is just a "barbarous
relic" whose only viable modern use is strictly as an industrial commodity.
In reality gold is still, also, money. To those of us who own it, gold
is the only true money there is, created directly by our most high and
living God, in a fixed amount which can never be inflated by pollyticians
or economystics, and which grows in circulation only slowly in response
to human endeavor. It is the only money worth having when the other moneys
begin to return to their intrinsic, commodity value. Government paper
money, unless backed by an irrevocable promise to repay in gold, is intrinsically
worthless. When it fails, as all fiat moneys eventually do, about the only
thing you can do with it is burn it for heat or flush it down the toilet
(after appropriate terminal usage, of course).
-
- The founding fathers knew this truth when they constitutionally
limited the individual states to money consisting solely of gold and silver
coins (a restriction which is legally still in effect and which was certainly
also intended to apply to the Federal Grabit). Franklin Roosevelt knew
this truth in 1933 when he defaulted on the Grabit's solemn promise to
repay US citizens in gold for the hard earned sweat they had deposited
into the bankrupt Federal Reserve system. Richard Nixon knew this in 1971
when he, too, defaulted on the Grabit's promise and stole from trusting
foreigners the gold that they were entitled to from the same bankrupt Federal
Reserve. The Arabs who control the world's oil have known this for thousands
of years and it was only a gentle reminder when they were among those whose
gold was stolen by the Nixon default.
-
- The Nixon default was the real cause of the Arab oil
embargo and the global recession which followed it. Contrary to conventional
American prejudices, Arabs and other Middle Eastern peoples are not a bunch
of stupid sand diggers. In many cases they are far more intelligent and
much better educated than the average American. This should not surprise
us since they spring from the same well of civilization, between the Tigris
and Euphrates, from which ancient and modern Babylon are also watered.
Historically, gold has been the only trustworthy means of exchange, the
only reliable store of wealth, in this turbulent region of constantly changing
borders, countries, princes, dictators and even religions. These intelligent
Arabs have always known the true and finite value of their only major resource,
even when they were being exploited and cheated by the Anglo-American companies
who first possessed the technology to retrieve their oil.
-
- In fact, it was their understanding of their lack of
other resources, their lack of a modern industrial infrastructure, and
their desire to acquire both, which induced them to trade their oil in
the first place. But only for something of equal value, something which
could in turn be traded, even after many years, for something else of equal
value. In short, they always wanted historically reliable gold for their
oil and, in this respect, they are certainly more intelligent than the
average American or European.
-
- Prior to the Nixon default, the Middle Eastern countries
happily accepted dollars for oil because, effectively, they were "as
good as gold". Each and every dollar they received really could be
physically exchanged for a fixed and promised weight of gold -- real,
true money. Americans lost this right in the 1933 Roosevelt default, and
were too stupid even to complain about it. Not so our Arab friends. They
knew the value of their gold and when Nixon stole it they were pissed.
The oil embargo was their way of recouping their losses through higher
prices and it didn't end until an agreement was reached through which they
could once more reliably receive physical gold for their oil, as we shall
see.
-
- I doubt that Nixon ever really understood what was happening
back then, just as I doubt that most of the Americans reading this today
even understand what I am saying. But try very hard, because I'm talking
about the cause of World War Three and the kind of misunderstandings which
can lead to it. In 1971, Richard Nixon was faced with a problem. Because
of inflation and the rapidly escalating trade deficit (sound familiar?),
foreigners were losing confidence in the dollar. When they received dollars
for their goods, it made a lot more sense to invoke their legal right to
redeem them in gold, rather than hold the paper dollars and watch them
daily depreciate in value. As a result, the US Treasury was being rapidly
drained of it's gold reserves and would soon be unable to keep it's promise
to repay it's dollar debt in gold. Nixon could not possibly understand
why these crazy foreign persons would prefer gold to the almighty dollar.
After all, he received his own salary in paper dollars, which seemed to
work quite well, and he didn't feel any need for any gold of his own (in
fact, after the Roosevelt default, it would have been a felony for him
to own any). From his parochial, bigoted American viewpoint the solution
was really very simple. If the promise would have to be broken eventually
anyway, why not just break it now and keep the gold reserves the bankers
said was necessary to keep the bankrupt Federal Reserve from completely
collapsing? After all, when Roosevelt did that in 1933 it worked and everyone
had to keep on using paper dollars, even if they did lose their value over
time. Why couldn't foreigners, especially Arabs, understand and accept
this as the American sheeple had?
-
- Which brings us to the dollar. Believe it or not, the
software which runs area navigation systems like INS and GPS determines
the predicted position of an aircraft by first deciding where it isn't!
Likewise, we can best understand the paper dollar by first describing what
it isn't. In the first place, it isn't money and it isn't legal tender.
The US constitution clearly limits the member states to gold and silver
coins as the only form of legal tender they may use for private and public
debts. It also reserves to the United States (the Grabit) the duty to
mint such coins and specifically forbids the individual states or private
individuals from doing so themselves. It does allow the United States
to emit "bills upon the credit of the United States" but has
no provision, and indeed prohibits, the use of such "bills" as
legal tender. In fact, there is no place in the US Constitution, or in
federal law, or in the constitutions or laws of the individual states,
which actually defines what a dollar really is or where it comes from.
-
- This has interesting intellectual and legal implications
which I personally find fascinating, but in the context of this particular
discussion they are largely irrelevant. The question for us is where do
practical, every day dollars come from and what are they really worth?
As I write this, I have before me a single dollar "bill", taken
from my wallet, with the serial number "H04383516F" (which obviously
must make it very important and very valuable). But let's take a look at
what is actually printed on this "bill" and what it legally means.
-
- First, the largest typeface is used to say "The
United States of America" at the top, and "One Dollar" at
the bottom. Both phrases are criminally, fraudulently deceptive. This
bill may be printed by an agency of the Federal Grabit, but only on the
orders of a privately owned banking monopoly called the Federal Reserve,
which is solely responsible for actually issuing it. This is why it is
called a "Federal Reserve Note" in smaller text at the very top
of the bill. The even smaller print in the top left says "this note
is legal tender for all debts, public and private" which is completely
and utterly false. Even the US Congress has no power to make anything
legal tender other than gold or silver coin, and it certainly has no power
to delegate such authority to the privately owned corporations which make
up the Federal Reserve. It is in no way, shape or form a bill emitted
by congress against the credit of the United States, and there is absolutely
no obligation for anyone to pay anyone else a "dollar", even
if there really were such a thing as a real dollar. This bill is not money
and it is not legal tender. It is a counterfeit.
-
- The only reason Americans accept this fraud as money
is because this country has been under the thumb of an illegal, unelected
dictatorship since 1913, when the Federal Reserve was first created.
At this time, a cartel of criminal bankers traded the unpayable debts of
the bankrupt United States for the greatest power of all -- the power
to print the people's money. This gave them the power to steal all of the
real money, the gold, of the United States but, being the sly scum they
have always been, they didn't want to do this directly or openly in case
the sheeple woke up, put on their wolf's clothing, and tore them into
tiny pieces! In any case, they didn't have to. Given the lack of interest
and study by average people of the important, but boring subject of money,
it was easier for them to steal the gold slowly and quietly through the
greater fraud of fractional reserve banking.
-
- When banks are allowed to keep only a tiny fraction of
their customers' deposits in the form of "reserves" (currently
about 2%), they are free to create billions upon billions of new paper
notes out of thin air, just by issuing loans to other customers from the
remaining deposits. This is because the loans themselves first become
new deposits, and are recycled through the banks to create even more loans
and more deposits of imaginary money. It works like this (greatly simplified,
of course). Mr. A deposits $1,000 and the bank must place 2% or $20 with
the Federal Reserve. But there is still $1000 in the system, the number
in A's account. Mr. B wants to build a house and borrows $500, which would
build a pretty good house back in 1913. He doesn't need all the money
right away, so he leaves it in his account. The bank has to place 2% or
$10 with the Federal Reserve but there is now $1500 in the system, $1000
in A's account and $500 in B's account, created out of thin air. Now Mr.
C wants to outdo Mr. B and build an even bigger house for which he borrows
$1000. The bank is allowed by law to lend him this money because there
is enough to do so with current deposits, less the reserve. Likewise, C
doesn't need the money straight away, and leaves it in his account. Again
2% or $20 goes to the Federal Reserve and the banking system now has $2500,
mostly created out of thin air from the original $1000. To repay the banker
for his generosity, the law also lets him charge 10% interest on the $1500
in loans, while paying only 2% interest on the original $1000 which got
this whole thing started.
-
- Would you like to be a banker? Sorry, ordinary people
are not considered to be "honest" enough! If you didn't understand
this before, you stand in good company. From the parable of the ten talents
it is clear that, in His human form, even Jesus Christ didn't fully understand
the insidious evil of bankers (although they weren't quite as bad back
then). In His heavenly form, though, I'm certain He fully understands
their behavior, and I really would not want to be a banker when He returns.
I also have no regrets about charging banks large fees to fix Y2K problems
I helped to create in the 1970's.
-
- But back to the dollar problem. The fabrication of imaginary
paper dollars could continue indefinitely, were it not for inflation.
As the money supply becomes inflated, there are more and more dollars chasing
the same goods, services and commodities. Prices begin and continue to
rise, especially the price or value of the ultimate commodity -- gold.
At some point, the general public always loses confidence in this inflated
funny money and converts it into something of real value, like gold and
silver. In 1913, the Federal Reserve wanted to forestall this inevitable
loss of confidence so they lied, and pretended that their paper notes could
always be exchanged for the gold which supposedly backed them. But the
bankers knew that very few of the sheeple would actually do this, since
paper money is so much lighter and more convenient, especially as their
numbers are inflated and more of them are needed to buy everyday items.
Their scam worked for twenty years and would have gone on much longer
if it weren't for something that happened in 1929.
-
- In October 1929, what was until then the biggest equity
bubble in history, burst. The huge economic contraction which followed
put an end to the myth of gold for dollars. The smartest money saw the
same signs we are seeing today and got out of the markets before the bubble
even burst. Taking the Federal Reserve at their word, they converted Reserve
Notes to gold, and stored it in their bank safety deposit boxes. After
the crash, the other money took what they had left and tried to convert
that into gold. They were too late. As everybody and their uncle tried
to convert paper dollars into gold the paper was quickly becoming worthless.
So in 1933, just twenty years after its founding, the Federal Reserve defaulted
on their notes and Franklin Roosevelt not only made private ownership of
gold illegal he even went so far as to steal it from safety deposit boxes.
This is why I keep most of mine away from the US and its UK puppet. I
keep only enough to get me out of the country and to my stores of wealth.
-
- Thus, by 1933, the United States was completely under
the illegal dictatorship of the Federal Reserve and their White House shill.
The sheeple were forced, by fiat and dictate of a Dammcorrupt pollytician,
to accept meaningless and valueless reserve notes as their money. But
even a Dammcorrupt couldn't dictate to the rest of the world, because nuclear
weapons had not yet been invented. If Americans still wanted to buy goods
and services from the rest of the world, and they did, they would have
to buy them with dollars which were at least perceived to have real value.
After 1929, it took the bankers four years to come up with the idea to
use the same scam they had started in 1913. Just change the geography
and limit the redeemable dollars to the few in foreign hands and we're
back in business, just about where we were in 1920 when we started that
stupid bubble!
-
- The new scam worked until the end of the Second World
War, which was a historical accident. Our benevolent bankers only ever
start little wars, and revolutions, and only for strictly financial reasons.
World wars only happen when they make a mistake and lose control of the
situation. At the end of the war, the global economy was a shambles. Only
America still had a workable economy, and that only because a geographical
accident had protected
-
- American industry from being bombed back into the previous
century, allowing American business to reap a windfall at the expense of
the rest of the global economy. At this point, however, even the bankers
realized the world needed a stable global reserve currency (as long as
it wasn't gold and only they could print it, for nothing, out of thin air).
The result was the Bretton Woods agreement, which simply devalued the
dollar to a lower rate against gold, allowing more, redeemable dollars
to be printed in order to finance a restart of the global economy.
-
- Which brings us to the yen (and the mark, and the pound
and the franc, etc.). All of these foreign bankers were thoroughly familiar
with the pyramid scheme of fractional reserve banking, because they had
been using it themselves for years. But they had always felt the need
to back their scams with some real gold, to give at least a semblance of
honesty (and to give themselves an exit strategy into real money when that
became necessary). That's why they would not themselves accept an unbacked
foreign dollar. They watched in sheer amazement as this fiat dictatorship
continued to work in America. After all, historically, all previous similar
scams had always ended in disaster when the sheeple woke up and the fiat
currency collapsed in a worthless pile of paper. What they failed to recognize
was that the sheer size (and dynamics) of the US economy, compared to their
own, was merely slowing the rate at which domestic confidence was being
lost in the dollar. In addition, they initially missed the true significance
of creating a special class of money which was redeemable in foreign trade
but intrinsically worthless at home. They didn't realize that this, too,
was just slowing the rate at which the dollar would eventually become worthless.
-
- Each of the major nations created, (or redefined) an
intrinsically worthless domestic fiat currency, which they could force
their citizens to use by fiat or dictate, and which traded internationally
not against gold, but rather against the dollar. But only foreign exchange
dollars which the Federal Reserve pretended were still fully redeemable
in gold. The intent, and I do mean intent, was to create a huge supply
of inflated paper trade dollars, backed by a fractional reserve consisting
of all the gold in Fort Knox, gold stolen from American citizens by Roosevelt
in 1933. But the pyramid scam was still the same -- these dollars were
not worth the amount of gold which the Federal Reserve promised to pay
for them. There was never enough gold to pay off even the foreign trade
dollars at the official price. The smart money (the Arabs and others) knew
this from the start, and they traded their dollars for gold as soon as
they received them. By 1971 it was clear that the gold would soon run
out. Which led to the Nixon default (by a Republicoward this time, may
a pox be upon both their houses). Which led to the Arab oil embargo.
-
- Which brings us to the Euro. After the Arab oil embargo
and the following recession, it was clear to the rest of the world that
the dollar was no longer viable as a long term global reserve currency.
It was not as "good as gold" and the defaults clearly proved
it was not backed by the full faith and credit of the United States of
America. In addition, the rest of the world was more than a little miffed
at the unfair advantage given the US in creating a mountainous balance
of trade deficit simply because of the reserve status of the dollar. In
effect, the rest of the world was subsidizing the US national debt simply
because of the need to accept dollars which could then be used to buy oil.
This need in turn only arose because of a private agreement between the
US, Britain and the OPEC nations to end the embargo in return for a way
by which the Arabs could easily and cheaply convert dollars into the gold
they demanded for their oil (more about this later). The world needed
a new trade (reserve) currency, but it couldn't be gold. If it were gold,
eventually all of the smart money would be converted into gold and all
of their fiat currencies would become worthless (actually they already
are). The rest of the world was temporarily forced to use those worthless
dollars, but eventually there would have to be a reckoning.
-
- With that strange synchronicity which seems so tightly
bound to the year 2000, there were two events which occurred in 1999 to
start the reckoning. One was the introduction of the Euro (almost twenty
years in the making, after the Nixon default). The other was the US running
out of gold with which to pay for oil. I admit that I don't have all the
details, and probably nobody ever will, but the signs are clear for those
who want to see them. There have been rumors for years that the gold is
no longer there in Fort Knox, that "somebody" has stolen it.
The "proof" is that "they" have not allowed it to
be audited since long before the Nixon default.
-
- This view is probably more than a little naive. The gold
is probably physically still there (and in other repositories elsewhere)
it just doesn't belong to the sheeple any more. Some of it has been fraudulently
transferred to the bankers, and more has been secretly paid to the Arabs
in return for their oil. For me, the clearest indicator of something rotten
in the state of the Fort is the recent gold sales by the Bank of England,
initiated by the socialiar Klinton Krony living at Number 10, Downing Street.
Why on earth would a G5 nation publicly announce the sale of half it's
gold reserves in such a way that it would inevitably force down the price
of that gold, thereby greatly reducing the number of worthless dollars
the BOE would receive in return for their valuable gold? Why would the
European Union respond by forcing Britain to publicly join them in a repudiation
of more gold sales and an elimination of the gold lease short sale scams
which have depressed the price of gold and pushed the gold mining industry
to the brink of destruction? Why would they make sure that a European
announcement was made in New York? Why would the price of gold, determined
largely by insiders, then immediately jump by about $70 per ounce?
-
- The nudge-nudge, wink-wink answer is that the BOE is
covering for one or more deeply short members of the LBMA (London Bullion
Merchants Association). Bravo Sierra. A G5 nation doesn't put up half
of all it's real money just to cover a few banks. It doesn't have to.
It just prints more paper and takes the inflation hit, as America has
done time and time again. No, a bailout of this magnitude is only done
for another nation, and a very close ally at that. The only nation close
enough to Britain to receive this kind of special treatment is the United
States. In fact, a bailout of this size isn't even likely for a close
ally, just on it's own merits. Even if Bully Blair does owe his temporary
Downing Street address to the Klinton Machine and to campaign funds provided
by Goldman Sachs (the villain of the Ashanti gold mine disaster). Such
a bailout could only occur if Britain itself is also in deep monetary trouble.
All of this will come out in the bubblegate trials but, in the meantime,
the most logical conclusion is that the US Treasury and/or the Federal
Reserve and Great Britain are heavily short of the mellow yellow metal.
-
- But the Arabs still want gold for their oil. Which is
why the Euro will fail. It took twenty years to craft this first attempt
at a European monetary hegemony. It has much to offer. A simple, interchangeable
currency for the whole of Europe would be a godsend to business efficiency
and it is even backed 15% to 30% by gold (depending on the price of gold
and how you look at it). As is, it is far more dependable than the dollar.
But it isn't gold and it can't be simply and legally exchanged for gold.
If it isn't a complete, 100% genuine certificate, permanently redeemable
for physical gold, the Euro is worthless. It's just another piece of counterfeit
paper. Which is why the Euro will fail. But the Arabs still want gold
for their oil.
-
- The EEC is making the same fundamental mistake as Nixon
in the 1971 gold default. These stupid bankers really, truly, believe
their pathetic paper is actually worth something to intelligent people
and that there are enough sheeple to believe in it and keep the ponzi scheme
going. But the Arabs still want gold for their oil. Which is why the
Euro will fail. If the Euro doesn't pay out in gold, if the dollar can
no longer be easily exchanged for gold, there will be no more cheap oil
from the Middle East.
-
- This, then, is the crux of the gold-oil, or GO crisis.
Like it or not, the Middle East has control of both the remaining oil
and the gold to pay for it (past and future). The world needs oil and
gold to keep the wheels of the economy turning. Without them, the world
we know won't GO, it will STOP. If either stops flowing, there is no human
alternative but to switch to the other precious metal, lead, at an average
velocity of 2750 feet per second. Or its precursor, uranium, which after
certain transitions also becomes a form of high temperature lead. I have
no doubt that, militarily, we would win such a World War Three. But do
we have the right? What is the cost to our souls?
-
- These, then, are the first three horses of my apokalypsos
(a simple Greek word meaning "revelation", not necessarily the
immediate end of the world).
-
- They are Y2K, bubble.com and the GO crisis. But, like
my namesake John, I have a fourth, pale horse whose rider is named Death,
and Hades follows close behind him. So far, I have placed all of these
problems synchronously in the 1999/2000 time frame, and I feel confident
enough of my technical
-
- ability, analysis and knowledge to do so. The fourth
is a public health problem but, even though I started out to be a medical
student, I don't really feel qualified to place it absolutely in any particular
time frame. Nevertheless, I feel it's spiritual presence within me at
this time. Many great historical changes have been accompanied by sickness
and death. The departure of Israel from Egypt. The Black Death of the
middle ages. The influenza epidemic of 1918 (which basically ended World
War One).
-
- We are overdue for another flu epidemic like this. And
there are other diseases appearing with greater frequency all over the
world, in spite or perhaps because of modern medical marvels -- AIDS,
the resurgence of antibiotic resistant TB, the deadly Hanta virus right
here in Arizona and Ebola and similar viruses which jump from the jungle
and leap with certain death from victim to victim in a matter of days or
even hours. I am certain about the first three horses and I am certain
they will produce conditions in which fresh water and reliable sewage treatment
are at great risk. Do not be surprised to see my fourth horseman riding
through your neighborhood at the same time as all these other disasters
are happening. I pray that the Lord will be with you, with your children,
and with mine.
-
- And now, for something completely different, let's close
with two simple lines from the world wide children's game -- Hide and
Seek:
-
- . . . one thousand nine hundred and ninety nine, two
thousand! . . . ready or not, I'm c.o.m.i.n.g ! ! !
|
