Evidence of Economic Growth

GDP is a terrible way to measure wealth. If someone was to invent a simple method to increase and improve food supply while at the same time reducing the need for oil and machines, everyone would be better off. Food would be better and more plentiful. However, this would send the GDP numbers down. Politicians and their economists would conclude that something bad had happened. Wasteful activity, on the other hand, is seen as good. People spending their entire lives at an office desk is seen as wealth, while people enjoying a low consumption lifestyle is seen as poverty. Clearly, the GDP numbers are meaningless as a measure of wealth. It captures economic activity. It doesn't capture to what extent the activity is meaningful.

True wealth is leisure, well being and security. A society in which people live long and well is a wealthy society. A good measure of overall wealth in a society is therefore the measure of life expectancy. This happens to be greater in Europe and Canada than in the US. One of the richest countries of them all is Portugal. The fact that Portugal has the lowest GDP number in the western world doesn't accurately reflect the overall well being of its population.

Another measure we can use is the general look and feel of an area. This gives a much more reliable indication as to the local conditions than any GDP numbers can give us. Taking a walk in our neighbourhood, we quickly get a sense of how things are going. If the streets and houses are improving over time, we have economic growth, if things are falling apart or being abandoned all together, we have economic contraction. Walking the streets of Porto, especially down town, we see everywhere signs of economic growth. Immigrants from all over the world are moving to Porto to escape deteriorating conditions in their own countries. They buy properties which they refurbish and improve. They go out and spend. Porto has truly come alive over the 12 years I've lived here.

Some locals complain that the immigrants are pushing up prices. However, many of the houses they have refurbished were uninhabitable before they came. They can hardly be blamed for pushing up prices when the alternative would have been no houses at all. The same can be said for the fancy restaurants. They were simply not there in the past. Cheap housing and food can still be found outside the town centre. The centre has to a certain extent been taken over by foreigners. But was it any better when the centre of town was dilapidated and empty? The improved look and feel of down town Porto is a sure sign of economic growth.

Finally, we can look at our own personal situation. Do we feel better off ourselves? Are we surrounded by people who are doing well? Wealth is after all a subjective matter. It is of no use to know that the politicians are happy with the GDP numbers if we ourselves are feeling increasingly miserable. If we feel healthy and better off, and we see our nearest friends and relatives prosper, if we see our town and neighbourhood improve and feel more prosperous and secure, if we sense an optimism about the future, then we have economic growth.

We live longer and better lives now than we did half a century ago. Some towns and countries are seeing continued improvements in the standard of living. This is evidence of economic growth. Unfortunately, other places are seeing a fall in life expectancy, a general decay of the standard of living, and a sense of deteriorating personal security. Not all areas of the world is experiencing economic growth. While there are pockets of growth, there are also pockets of decay.

View of Gaia from Porto

Evidence of Economic Contraction

Economic growth is conventionally measured as an increase in economic activity. The aggregate number for this activity is the GDP, closely watched by investors and politicians alike. However, the GDP is a terrible measure. All it tells us is how busy people are. When it goes up, there is more activity. When it goes down, there is less activity. But when did activity in itself equate to wealth?

What about people who value leisure? Such people will feel wealthier when their economic activity goes down. I feel personally much richer today than I did ten years ago. I have retired. My contribution to the GDP has gone down.

Very few people love their work so much that they prefer work to leisure. Most people dream of an early retirement. Yet, the age at which we can retire keeps creeping up. We are in other words becoming less wealthy. All the while, the GDP is going up.

Things have gotten so bad that most families no longer can afford to have only one bread winner. Children are locked away in schools while both parents work. The children of today are clearly less wealthy than they were a few decades back. Women who would prefer to be at home rather than work long hours at the office are also less well off today.

The only people who are better off are the few who love to work long hours and the politicians and their cronies who are able to extract more taxes through the higher GDP rate.

Politicians are paid through the taxation of their fellow men. The more their fellow men interact in the economy, the more opportunity there is for taxation. This is why politicians are so obsessed with GDP numbers. Their pay checks depend on a high level of economic activity.

Propaganda is constantly pushed onto people to ensure GDP growth. Consumption is promoted. The increased participation of women in the labour force is seen as somehow liberating for those who are forced out of their homes and away from their children in order to make ends meet.

However, the truth is finally starting to dawn on people. No longer able to make ends meet, people are coming out in the streets to protest. They don't seem to know what they want as an alternative. But they know one thing for sure. The political class has screwed them good and hard for decades. Life isn't as good as it used to be. The economy hasn't grown. It has contracted.

The social contract

Dinosaurs in Ancient Art

There is a Mesopotamian cylinder seal on display in a museum in Paris with a clear depiction of dinosaurs on it. There are brontosauruses with inter-winding necks and tails. Their depictions are so accurate that they rival dinosaur depictions made in modern times.

Some Bible enthusiasts have concluded from this that someone back in ancient times must have seen a dinosaur. How else could they make such an accurate depiction of one? Furthermore, the cylinder seal is not the only dinosaur depiction. There are depictions of other dinosaur species as well. There are at least a handful of very accurate dinosaur depictions found in ancient art.

While the depiction of a single dinosaur species could be considered a coincidence, a handful of them do suggest that the artists had accurate information related to the dinosaurs. Someone must indeed have seen a dinosaur. However, it does not follow from this that anyone had seen one alive. The most likely explanation for these depictions, as well as the many stories about dragons and other monsters, is that people from time to time uncover dinosaur skeletons.

Ancient artists could make accurate depictions of dinosaurs for the same reason we do so today. They had sufficient skeleton remains to make complete pictures of what they must have looked like when they were alive.

By Gryffindor - Own work, Public Domain, Link

The Art of Doing Nothing

A year ago, the internet was overflowing with ads related to crypto-currencies. Had I acted on any of them, I would have been down at least 80 percent on my investment today.

Lately, I've been bombarded by ads related to options trading. Apparently, the way to retire rich these days is to sleep, eat and trade, non-stop.

Needless to say, I'm not much interested in spending my time doing nothing but sleeping, eating and trading. It sounds horrible, and it's a sure fired way to losses.

The secret to successful investing is not to constantly act, but to do close to nothing. How do I know? Well, that's how I managed to retire at age 47. I was lucky enough to inherit a small fortune at age 30. It was sufficiently large to grow into a decent fortune, and it grew to this size by virtue of my inactivity. I did absolutely nothing until two years ago when I sent the inheritance on to my children.

I was also lucky with a hose in Norway that I bought back in 2004. I sold it at the very top of the housing bubble that popped in 2016. The proceeds were enough to cover my retirement.

The trick to successful investing is inactivity coupled with an understanding of when to act, and what to do. It's that simple. The assets we can choose from are either stocks, bonds, real estate or gold. There are other assets of course, but they are on closer inspection only variations on these four assets. Silver and crypto are for instance variations on gold. Options are variations on stocks, etc.

The right time to act is when an asset class becomes expensive relative to another. This happens once in so many years or decades. Trading every day is therefore a meaningless activity. I made a trade every decade or so. That's how I grew my small fortune into a sizable one. However, no-one needs a small fortune to get in on this. Anyone with any savings can do it, and the exact details of what to look for is available in my free book on the subject.

By Jessie Eastland - Own work, CC BY-SA 4.0, Link

No Need for Rebalancing

It's almost two years since I sold my house in Asker. From the proceeds, I paid down all debt on the apartment my wife owns here in Porto, I bought some gold and put the rest into a savings account. The allocations were as follows: 2 parts to pay down debt, 4 parts gold and 1 part cash. No part was allocated to stocks which I found too expensive at the time.

As things stand at the moment, the current distribution is: 3 parts apartment, 4 parts gold and 1 part cash. Very little has changed since the original allocation. There has been little price inflation in consumer goods, so the cash is what it was. The gold price has not moved. Only the apartment has appreciated in price. Stocks have not gone up during this period, so I have lost nothing by staying out of the stock market.

Looking forward one year, I expect the apartment to stay at the current elevated price level. This is due to continued immigration from France, Belgium, Brazil, England and Germany. I expect gold to go up due to global unrest and the fact that the Dow/Gold ratio is above 20. I expect cash to retain its current purchasing power. I expect stocks to go down for the same reason I expect gold to go up.

In short, there's no need for any rebalancing of my portfolio.

British gold sovereign

By Benedetto Pistrucci - Own work, Public Domain, Link

Ice Age Equator

The equator during an ice age is unlikely to be where the equator is located during mild periods, such as the one we are currently experiencing. This is especially true if our planet is hollow. However, we do not have to accept the hollow Earth hypothesis to come to the conclusion that the location of true north, and hence the location of the equator is different during ice ages than when Earth is relatively ice free.

The physics for this is simple. A spinning body must have a balanced distribution of mass, otherwise it will wobble catastrophically until a balanced distribution is found. Either way, it will always seek to find a balanced distribution. The orientation of true north and the location of the equator today are therefore reflections of a balanced distribution of mass.

However, during the last ice age, the enormous ice sheet covering the northern regions of our planets were not distributed equally across what we have as true north today. The center of the ice mass was located at Hudson Bay in Canada. True north must therefore have been somewhere between current true north and Hudson Bay. The equator must for the same reason have been skewed farther up in places like Siberia, and farther down in places like Peru.

As it happens, we have some evidence in support of this. The magnetic north pole has been located close to Hudson Bay for most of modern history, suggesting that this may have been true north at some point. Siberia was ice free during the last ice age, suggesting that it may have been located closer to the equator.

Another striking observation is that the biggest, most sophisticated megalithic sites are located close to a great circle that cuts through both Egypt and Peru. This great circle may very well have been the equator at the time. With ice covering large parts of the globe, it is natural to expect human settlements at the time to have been clustered around the equator. It is therefore very telling that these settlements clustered around a great circle that is askew from the equator we have today.

What's more, some of the most ancient monuments known to us are oriented along this same line. The people building these monuments were very much aware of it, much like we are aware of the east-west axis we have today. We like to orient monuments like churches along the east-west axis. The same was almost certainly true for early humans.

This again gives us a way of dating ancient monuments. Those that are clearly oriented along the current east-west axis are post ice age. Those that have a clear orientation parallel to the ice age equator are from the ice age.

Hudson Bay and associated drainage basin

By No machine-readable author provided. Joseph B~commonswiki assumed (based on copyright claims). - No machine-readable source provided. Own work assumed (based on copyright claims)., Public Domain, Link

The Aether as a Fluid

In my book on physics, I come to the early conclusion that there has to be an aether with a ready supply of low energy photons and neutrinos. This is needed in order to explain the sudden appearance and disappearance of detectable photons and neutrinos. Alternatively, we have to conclude that such particles can come into existence from nothing but "pure energy", an idea that I dismiss as nonsensical.

I further conclude that the aether has to be very dense. The electric, magnetic and gravitational force can then in turn be explained as high and low pressure areas in the aether. The constant movement of the low energy photons and neutrinos making up the aether explains why particles vibrate. It is not the particles that possess wavelengths, it is the aether that constantly push them about. The double slit experiment can thus be explained.

Pilot wave theory explaining the double slit experiment

Towards the end of my book, I show that the existence of an aether can explain such phenomena as time and the Mercury anomaly. Empty space is reduced to a void without properties. Time and space are properties of matter interacting with the aether. The Mercury anomaly is due to a high density of low energy photons. Subatomic particles are smaller close to massive bodies. The aether is correspondingly denser.

This in turn leads to the final conclusion of my book. There is no need for two separate physics to explain the universe. Quantum physics and relativity can be joined together, provided we accept the existence of an aether.

A criticism of my work has from the start been that I do not include sufficient math to support my claims scientifically. My work remains an outline for a theory without the required math to support it. However, now it appears that there is in fact some math already in existence in support of much that is deduced logically in my book. Stefan Dorman, a Facebook friend of mine, was kind enough to point out that a certain Dr Franck Delplace has come to very much the same conclusion as I have, but through a different line of thoughts.

Dr Franck Delplace has written a paper in which he uses fluid dynamics to join relativity with quantum physics. He concludes that a very high density and highly fluid aether can account for the observed universe, both at the subatomic and the astronomic level. With a fluid model of the aether, we no longer have to curve space-time. All that is required is for the aether to be denser close to massive bodies than farther away. This is pretty much identical to my own conclusion, and now, thanks to Dr Franck Delplace's paper, we have mathematical formulas to back up this claim.

Robbed

The classic liberal era lasted a hundred years up until 1913 when progressives took over with the introduction of central banking. During the liberal era money was sound. This means that there was no debasement of the money. Prices did not rise, they fell.

The mechanism behind this can be illustrated with an example such as a fine coffee table. If someone has an extra coffee table, he can sell it and put the saving sin a bank account. During the liberal era, that money would earn interest above the rate of inflation. At some later time, the money can be withdrawn, a coffee table of equal quality can be bought back, and there will be some extra money to spare.

The reason this was possible was that the money in the bank was invested sensibly. Among people who borrowed money, there might have been a carpenter borrowing the amount equivalent to the coffee table. This money was used to buy tools and materials. He produced perhaps three fine coffee tables from the money borrowed. One table was then sold in order to pay for the loan and the interest to the bank. Another was sold so that he and his family had food and a place to live for a month or two, and the third may have been sold for money to save.

Not only did the original coffee table provide its original owner with some capital gains, it enriched the carpenter and the society at large. One coffee table was turned into four coffee tables.

Today, this is no longer how things work. Interest is below inflation. No coffee table of equal quality can be bought back later with money saved in the bank. The reason for this is that money put into a bank seldom goes to productive use. Central banks and fractional reserve banking encourages consumption and big government. It is not the carpenter that gets the money, its some well connected bureaucrat with access to cheep credit. This drives up the prices of everything. Once sold, a coffee table is forever lost. The same is the case for other things, such as houses. Very rarely can a person expect to buy back a house that he has sold.

What makes it even harder to buy back the coffee table or house that was sold is that the meager interest that is earned is taxed. The state does not only push up prices by redirecting resources from carpenters to bureaucrats, it imposes a penalty on savings as well, and it never hesitates to point out that this is to combat greed, as if the person who sold his coffee table is somehow greedy for wishing to buy back a similar table at some future point.

The rational way to act in such a system is to buy and never sell. It is better to keep the coffee table than to sell it. However, this is not an optimal way to organize ones affairs. Only the rich can do this. The middle class sell stuff every now and again, and they loose purchasing power every time. What used to make us richer now makes us poorer. The parasitic activities of government and banks siphon wealth away from the middle class and into the hands of self important busybodies, collectively known as the elite.

By U.S. Government - Extracted from PDF version of the Federal Reserve's Purposes & Functions document (direct PDF URL [1])., Public Domain, Link

Clueless Elite

In light of what's going on in Paris these days, with people protesting the increasing cost of living and the fact that it is getting impossible for the lower middle class to make ends meet, it is interesting to see where the political elite chooses to focus. Yesterday, immediately after reports from Paris, a TV interview was dedicated to the opinions of two environmentalists. Privileged, and paid by generous government grants, no doubt, they lamented the fact that things were too cheep! The cost of living for the poor and downtrodden was simply not high enough.

"Imagine," one said to the other, "It is possible to get a T shirt for the cost of a sandwich." The other shook her head in disgust. "This is clearly not sustainable," she said. "Something has to be done."

What they were clearly unable to imagine was the effect such musings would have on the TV viewers. Imagine for a minute being in the situation that a sandwich out of doors is simply too expensive to pay for, and the only clothing within reach are the cheapest items. Now suddenly, you are deemed not only poor, but vulgar as well. Is it any wonder that people in Paris are rioting?

The problem is not cheap clothing, but expensive bureaucrats. If we could get rid of them, prices of all goods would go down, and the poor and down trodden would no longer be poor. But this is of course impossible to see for those in the privileged position of a state grant or other government sponsored program. We will never hear the elite propose that they abolish themselves. They will come up with all sorts of schemes. What they won't do is to get off of people's back.

Unrest in Paris

Paris has been rocked by protests lately. It started with transportation workers protesting a fuel tax, but has since grown to include other grievances. The lower middle class is revolting against the current system. However, there does not seem to be any clear vision among the protesters as to what is at the heart of their problems.

Commenting from the sideline, several libertarians have vented their opinion. Ron Paul has pointed to the problem of direct and indirect taxation. He sees the problem from the point of view of the French government. The Euro is not being sufficiently debased by the European Central Bank, so the French government has to introduce direct taxes to cover their expenses. This has to be targeted directly towards the productive side of the economy, and transportation workers with their need to burn fuels in order to make a living were a convenient group for this purpose. Despised by the green movement, these outcasts of society could be targeted without much political backlash. So was the theory. However, as we now see, the despised and down trodden have now had enough. They have finally started to protest.

Egon von Greyerz takes a similar view. Purchasing power has been steadily eroded through debasement of the currency to the point where the lower middle class no longer manages to make ends meet. The fuel tax was the visible spark that made everyone realize that their problems come from government. They may not as of yet realize the role of the central bank in creating their hardships. However, they are starting to realize that their problems are being foist upon them by the busy bodies micromanaging their lives. Seeing transportation workers demonstrating in the streets, other members of the lower middle class have also come to realize what has been made blatantly clear to transportation workers. Government is at the heart of their problems.

Finally, I find it interesting that the protests are happening in Paris and Brussels. These are places close to the heart of the current system. The bad money issued by the European Central Bank is finding its way into these cities first. This creates all sorts of hardships for the average worker. The unproductive but well paid functionaries of the system drive up prices, making it increasingly difficult for the productive underclass to make ends meet. This problem is far less pronounced in peripheral areas. Unrest starts at the center because that's where the bad money created by central banks make the most damage.

However, as long as the protesters are clueless to the role of central banks and the bureaucracy that it enables, the protests will come to nothing. Populist politicians will not solve the problem. They may rip the EU project to shreds. But they will not abandon central banking. Any respite coming from an EU exit will be fleeting and short lived.

Bad Money for You, Good Money for Me

I have long since given up on the idea that anything can be achieved through political dialog. It's a waste of time to try to convince people of the virtues or evils of various systems. Besides, the vast majority of people do not actually live according to their teachings. Politics is for most people little more than an exercise in convincing others that what is good for yourself is also good for everybody else, or it is merely a mindless repetition of what others have said, with no filter or independent thinking added.

This is especially true when the topic of central banking is on the table. People will defend this evil with all sorts of fallacies, most of them appealing to some greater good or common good. It is somehow Utopian or selfish to want a system independent of central meddling. However, if someone were to talk to such a defender of central banking and offer this person the choice between a fixed annual income in gold coins or in fiat money, that person would be completely irrational to choose fiat money. Everybody knows that fiat looses value over time, and that this hurts fixed income recipients such as pensioners and people on welfare.

All of a sudden, the vague uttering about a common good or the impossibility of being paid in gold vanishes. In this person's special case, gold coins are preferred. However, for everybody else, fiat is ideal.

This, together with the less than genuine concern that many have for the climate, illustrate perfectly that what is needed is not political dialog but direct action. If we prefer gold for ourselves, then we should buy gold instead of leaving our savings in a bank account. If we are concerned about the climate, we must get out of debt and save for the rainy (or dry) day that we believe to be imminent. Talking politics is simply a waste of time.

By Pieter Breughel the Younger - Web Gallery of Art:   Image  Info about artwork, Public Domain, Link

Climate Worries

There is much evidence to suggest that our climate is currently at the cusp of a great change. The upper atmosphere has cooled dramatically and ocean currents are slowing down. This may be due to CO2 or it may be the Sun going into a grand solar minimum. Which one it is is hotly debated. Whenever climate change is mentioned, people get all excited, making all sorts of claims as to the cause. However, what we do not see is any corresponding action to suggest that any of the debaters are in fact believing that a great change is about to happen.

If people truly believed that climate change will cause considerable hardships going forward, we would not see people loading up on debt and investing heavily in speculative assets such as tech-companies and crypto-currencies. People would be busy preparing for the upcoming changes. They would get out of debt. They would sell their speculative positions and invest in liquid assets as well as companies that will be of importance during years of agricultural stress.

History tells us that famine strikes the unprepared and the indebted far harder than the well prepared and debt free.

Four Horsemen of the Apocalypse

By Viktor Mikhailovich Vasnetsov - http://lj.rossia.org/users/john_petrov/166993.html, Public Domain, https://commons.wikimedia.org/w/index.php?curid=2649874

The fact that hardly anyone appears to be worried about their personal well being, while busy bickering over political issues, tells us that we are at the moment visited by the second horseman of the apocalypse. There is strife but no worries. The king thought of man-made global warming, represented by the first horseman, has ushered in a period of political strife.

However, all over the developed world we see an increase in human misery. The number of homeless people is on the rise. Food insecurity is becoming increasingly common. Poverty and hunger is on its way. The third horseman has entered the stage, and if we get the adverse changes to the global climate that everyone is harking on about, Death will soon follow.

Mistaking the Garden for the Treasure

In the world of archetypes, there is a great distinction between the garden and the treasure. The garden is where we spend our time planting seeds and growing things. It represents the many projects we embark on through our lives. Some projects grow into profitable ventures, others don't. Mostly, they keep us occupied and with a reasonable income, but nothing more.

The treasure, on the other hand, represents our savings. We do not spend much time looking at it. It's invested in gold, real estate or financial assets, depending on what part of the business cycle we are in. A balanced portfolio will have a bit of everything with a weighting towards whatever is most likely to happen over the coming decade or so. Above all, it's invested in safe and sound things.

Compared to our garden, treasures are boring. It is therefore easy to give treasures less value than they have. A young man with an exciting project is easily tempted into staking his inherited treasure on the success of his project. He puts his treasure at way too much risk compared to the odds for a positive outcome. More often than not, such ventures fail, and whatever was invested is lost.

Another pitfall of the garden is that we may grow so fond of it that we neglect our treasures. Happy to spend our days in our garden, our treasures are slowly eroded by taxation and other expenses. We fail to protect it. We fail to see that changes in our lives have to correspond to changes to our investments. There has to be the occasional re-balancing for the treasure to grow.

By user:ozgurmulazimoglu - https://www.flickr.com/photos/mulazimoglu/with/5154611142/, CC BY 3.0, Link

Dead Dinosaurs

It's a popular myth that oil and natural gas are the products of dead dinosaurs. However, the sheer quantity of hydrocarbons found in the depth of our planet is sufficient evidence to invalidate this hypothesis. The vast majority of dead dinosaurs decomposed completely. What few remains we have, apart from some very rare exceptions, are skeletons only. Their flesh were eaten and rotted away as is the normal fate of dead animals.

Brontosaurus: by MCDinosaurhunter Own work, CC BY-SA 3.0 https://commons.wikimedia.org/w/index.php?curid=33465760

The popular myth is likely to have had its origin with the coal fields that display clear evidence of having once been forests. If trees can be turned into coal, why not dinosaurs too? However, much of the oil and gas that have been discovered come from rock strata far below where life has ever existed. There is also methane and ethane lakes on Titan, Saturn's largest moon. Those hydrocarbons were surely not produced from dinosaurs.

There are also molecular clouds in space containing methane and ethane together with simpler molecules such as water and carbon monoxide. Hydrocarbons are everywhere. There is no need for dead dinosaurs to explain their existence in the depth of our planet.

The fact that our planet has hot internals, far warmer than would be the case if nothing was going on, is seen as proof that there must be radioactive processes taking place. This in turn explains the expanding Earth, and also the abundance of salt, water and hydrocarbons found deep below Earth's surface.

Radioactivity produces lighter elements from heavy elements. This is known as radioactive decay. It produces heat together with hydrogen, carbon, oxygen, chloride, sodium, nitrogen, etc. These lighter elements combine in turn to produce organic compounds of various kinds. Salt, hydrocarbons and water are all produced continuously inside Earth as byproducts of radioactivity, and this too produces heat. The heat inside our planet comes from both radioactivity and chemical reactions.

Our planet is not a dead and inert body. It shivers with earthquakes, often in response to solar flares in our direction, it erupts lava, it expands and it produces organic compounds. Earth is very much a living planet, connected to a living universe.

Ocean Drains

The Mariana Trench is the deepest natural point in the world, located in the western Pacific Ocean approximately 200 kilometers (124 mi) east of the Mariana Islands. It is thought to be a subduction zone where the seafloor of the Pacific is gobbled up by the continental plate to the west. It must therefore have come as a surprise to researchers that this zone draws in water at an enormous rate.

Subduction implies a reduction of seafloor area. The quantity of water in a subduction zone should therefore go down. It should push water out to the sides as seafloor is gobbled up. Alternatively, subduction trenches must grow deeper at a rate that exceeds the volume lost by the shrinking seafloor. Since the Mriana Trench is not growing deeper at the required rate, and water is nevertheless rushing in towards it, the explanation must be that subduction is not in fact happening, or there are drains at the bottom of the trench, forcing water into the Earth.

Unwilling to give up on the idea of subduction, and unable to find holes for the water to drain into, geologists have come to the conclusion that water is somehow mixed with the rocks that are subducted in under the continental plate to the west. This would mean that the rocks that sink into the Earth are of very low density, making the whole subduction story all the more fantastic. Nowhere in physics do we see low density materials sink in under denser materials. But in geology, this is supposed to happen at an extraordinary rate.

A more logical conclusion would be that the Mariana Trench is not in fact a subduction zone but an expansion rift. An expanding seafloor at the trench, even if expanding at a very slow pace, would require huge amounts of water to fill the the volume created.

South pole view of the expanding Earth

What the geologists have discovered is not another fantastic mechanism of subduction where water gets gobbled up by Earth's crust, but further proof that Earth is expanding.

Gypsy Stories

There was a very popular teacher at the school my son is attending here in Porto. She was young, intelligent, empathetic and in every way what kids like in a teacher. It was also clear that she was genuinely interested in and fond of the children in her classes. However, she is no longer teaching at my son's school, and I only see her every now and again when I happen to deliver my son to school at the same time she delivers her daughter.

She has received a scholarship from the EU to write a paper on gypsies, and the prestige and money associated with this was evidently enough to sway her away from her teaching position at the school.

I'm not going to pretend I know all the details about her assignment, or why she accepted it, but I'm pretty confident that this is a classic example of how direct interference from governments makes everybody poorer and less content than they would otherwise have been.

Here we had a teacher doing a fine job in every way, and very much enjoying her work, that got an offer she could not refuse. The money she would make by writing a paper on gypsies and their lives in Portugal was more than she could make as a teacher. In addition, there is no doubt a good deal of prestige associated with the paper, and its purpose harmonized with the teacher's left leaning sympathies.

The stated goal of the EU when it comes to gypsies is to have them fully integrated into "the system". Living outside the system, gypsies do not pay any taxes. In the eyes of the progressive left, this is synonymous to being helpless and lost. But the reality of it is that the system has in fact always been the enemy of gypsies, especially in progressive nations such as Norway. Even the most superficial study of that nation's progressive past will produce mountains of evidence for the evils that progressives have hoist upon gypsies in the name of assimilation.

However, Portugal was under the rule of Salazar during the worst of the progressive era. He was a reactionary dictator who proudly proclaimed his anti-progressive stance. While the rest of Europe was busy persecuting gypsies, breaking up families, forcefully sterilizing and lobotomizing them, and even killing them right out, gypsies were allowed to continue their lives outside the system in Portugal. It is therefore excusable that a young progressive in Portugal would be relatively unaware of the decidedly sinister undertone of an EU program to assimilate gypsies into the system.

An EU grant carries a lot of prestige with it, but I suspect that the young teacher has figured out by now that the paper she is writing is at best useless, and at worst an excuse for some serious mischief. The paper, if it carries the desired conclusion, will be used as a weapon in some internal power play in the bureaucratic halls of the EU machinery. If it carries the "wrong" conclusion, it will be discarded and ignored. No-one in politics cares about truth or knowledge. All that matters is power.

However, the money to fund the paper does not come out of a vacuum. It was brought in in the form of taxes. People in productive employment had to give up a share of their earnings to finance the grant and the bureaucracy that administered it. The reason teachers are paid as badly as they are is in part due to the fact that money is siphoned off of their productive work in order to give away as grants.

The result of this is that good teachers, doing productive and meaningful work, are being burdened by taxation and at the same time lured away from their position by financially attractive yet meaningless assignments. Instead of having happy, prosperous teachers, we end up with over-burdened teachers and unhappy researchers.

Public Domain, Link

Bankrupt Farmers

Bankruptcy among farmers in the Mid-West is on the rise. This coincides with a fall in prices of not only farm products but input factors such as oil and petrol as well. There is overproduction. This in turn is due to credit expansion that has now come to an end.

Large Mid-West farms have adopted an industrial approach to farming, including an industrial approach to financing. Capital goods such as tractors and harvesters are financed with loans. Farmers do not save money for future investments, instead they borrow and invest when credit is cheap. This means that investments in farm equipment is centrally orchestrated through the interest rate set by the central bank. Investments happen all at once. What would otherwise have been a randomly distributed activity becomes an activity synchronized through central planning. The result of this is the boom and subsequent bust known as the business cycle, and it appears that we now are in the bust part of the current cycle.

Going forward, we can expect prices to drop further before going up again. Once we reach peak bankruptcies, prices will bottom. Thereafter, overproduction will gradually turn to underproduction. Prices of essential goods will rise, prompting fear of price inflation. The text book response to this by central bankers is to set interest rates even higher, thereby exacerbating the problem. Not only will the cost of living go up, the cost of borrowing will go up too. However, this will continue until the central planners again find it necessary to stimulate the economy with cheap credit, thereby starting a new cycle of boom that will inevitably be followed by a bust.

By Lozsie - Own work, CC BY-SA 4.0, Link

Malinvestments and Wages

When capital is employed productively more products are produced at lower cost. This enable producers to undercut the prices of their less efficient competitors, which in turn benefit consumers. The more capital we have employed productively in the economy, the more there is to consume at a lower price.

From this, we may infer that malinvestments come with a benefit, namely lower prices. However, on closer inspection, we see a big distinction between low prices due to efficient allocation of resources and low prices due to malinvestments. Where resources are allocated efficiently, only products of value are produced. In the case of malinvestments, we end up with products of little or no value. In both cases, prices go down, but it is only in the first case that prices go down for products of value.

Our purchasing power is not affected positively by malinvestments. Rather, the opposite is the case. When bad ideas get funded, it is necessarily at the expense of better ideas. Taking crypto-currencies as an example, we have engineers employed to produce numbers that can be traded speculatively in exchanges. This diverts labor, equipment and energy away from productive employment in favor of purely speculative activities with no productive output.

A lot of effort is spent with nothing of value to show for it. However, the well paid engineers are consumers. They drive up prices for products of value, making them less affordable for the productively employed. Had the crypto-engineers spent their energy on something of value, everyone would have benefited. But when they spend time, energy and scarce resources on worthless activities, they function solely as a drain on the economy.

When the crypto-bubble finally collapses, worthless crypto-tokens will be on sale together with computer equipment and other capital. But this does not benefit the productively employed in the same way that they would have benefited had the malinvestment not happened in the first place. The unwinding of a speculative bubble comes solely as a relief to the productively employed, allowing their purchasing power to raise back to where it should have been all along.

As mentioned in my post on Gresham's Law, bad money drives good ideas out of the economy. The fact that as many as 40% of all workers see their jobs as meaningless, indicate that we are currently awash in bad money. We are in the midst of a speculative bubble in which bad investments are made at the expense of the productively employed. Labor is greatly undervalued, and capital is correspondingly overvalued. Only an implosion of the current system, with a purge of central banking and political meddling, can rectify this problem.

By Brad Miller Millertime83 - Own work, CC BY-SA 3.0, Link

Malinvestments and the Dow/Gold Ratio

In theory, prices measured in gold should end up lower than their starting point after a complete credit cycle. Credit expansion spawns malinvestments which have to be liquidated during the subsequent credit contraction. With a surplus of products and capital goods produced through the cycle, prices end up lower than they started.

With credit cycles being enhanced and made bigger through central banking, the progressive period that we are currently living through should see larger swings than the liberal period that preceded it. There should be evidence of a marked change in price fluctuation, starting late 1913 when the Federal Reserve was established.

As it happens, this is exactly what we see. By studying a 200 year chart of the Dow/Gold ratio, we see a dramatic difference in market behavior between the liberal era and the progressive era. Less than 20 years after the introduction of central banking, there is a huge overshoot to the upside in the value of the Dow. In the late 1960s there is another overshoot, almost as bad as the one in 1929. Finally, there is a pronounced but less severe overshoot in 1999.

Just as predicted by theory, the overshoots are each followed by undershoots. Prices ended up lower than where they started. It also appears that the upward trend channel has been damaged. While the upward price trend is steady and confined during the liberal era, the progressive era has seen such large price fluctuation that no clear trend can be discerned. While it is possible to simply continue the trend channel upwards from the liberal era, a more horizontal line would fit just as well.

Keeping in mind what we know about credit cycles and malinvestments we can reasonably predict that the current price ratio is likely to be a top. Massive monetary easing and credit expansion that dwarfs anything we have seen before has taken us from a low of about 7 in 2009 to a little over 21 in 2018. This looks and feels much more like the bounce during the decline in the 1970s than the start of a new push towards another all time high.

With 2009 marking the start of a massive credit expansion, we can predict that prices will fall below this level over the next decade or so. Adding to this that the entire progressive era can be seen as a gigantic credit expansion, we can be fairly confident that the coming price drop will go beyond the 1980 low of 1. It is not unreasonable to call for a 0.5 bottom. This means that we have no reason to invest in the stock market as long as the Dow/Gold ratio is above 7, and that we should be cautious even at that level. There is no reason to be excited about low prices before we are well below 3.

By Brad Miller Millertime83 - Own work, CC BY-SA 3.0, Link

Credit Expansion and Contraction

While malinvestments always lead to lower prices in the end, they start off with prices going up. This happens as a direct result of credit expansion. Banks take the signal of low interest rates from the central bank and convert it into credit that it hands out to customers. Investors get credit notes in the form of dollars, euros, pounds etc. They subsequently go out and spend it on raw materials and property. Capital goods are produced with an increased supply of finished products as result.

However, credit is not money. It is merely the trust of an institution in a future payment. The investors command credit because the lenders trust them to pay back on their loans. It follows that credit cannot be infinitely extended. At some point, the limit to what we can trust people to deliver is reached, and no more credit can be extended without loss.

What happens when interest on loans are kept artificially low is that banks can afford to trust people more than they should. They expand credit beyond the reasonable, and since interest rates are determined centrally for all customers, the expansion goes to everyone in the economy. Everyone leverages up on debt at the same time.

When interest rates starts to rise, everyone get in trouble at the same time as well. Positions have to be unwound in order to cover debt. Suddenly, there is a rush to sell, and prices fall. This is the moment when malinvestments become clear to see. There are too may houses, they are too big, they are in the wrong area. There are too many products of various kinds. The demand was not based on real wealth but credit. The customers are no longer there.

Prices may well continue to go up in nominal terms. Relative to dollars and euros, prices may rise. However, relative to gold, prices go down. As things stand right now, it appears that we have reached the peak of the current expansion and that a drop in prices relative to gold is inevitable.

By US-gov - From an SSA poster: http://www.ssa.gov/history/wallst.html, Public Domain, Link

Malinvestments

A malinvestment is a misguided investment made as a direct consequence of price-signals coming from central banks. Artificially low interest rates makes it profitable to invest in projects that would otherwise not be undertaken. Capital gets typically diverted from immediate concerns to more secondary concerns. The production of capital goods get a boost at the expense of more pressing issues.

The strip mining of the tar sands of Alberta is but one example of a massive mallinvestment. All concerns for the environment have been pushed aside in favor of huge investments in capital goods and infrastructure. The destruction of rain-forests is also enabled through artificially low interest rates.

The damage to the environment caused by central banks is clear to see. However, rather than blaming the central planners, the entrepreneurs and capitalism are blamed, and more central planning is called for. The historic fact that central planning always result in waste and destruction does not seem to sink in with the average environmentalist, and they certainly don't see the connection between malinvestments and central banking.

While it's understandable that those unfamiliar with the concept of malinvestments are clueless to the destructive side of central banking, it's a little strange to hear people familiar with the concept express opinions that are clearly at odds with what they claim to understand.

It has been known ever since Ludwig von Mises wrote in his books on the subject that artificially low interest rates cause malinvestments, especially in capital intensive industries such as mining and manufacturing. The result of such investments are always a fall in prices for both the capital involved and the end products. Both oil prices and the capital invested in oil production are therefore headed for a fall in prices.

Another malinvestment that has seen a spectacular rise and fall over the last two years is the crypto-currency industry. This whole industry came into existence for the sole purpose of getting away from central planning. Its very existence is due to central banks messing around with currencies. If central banks had stuck with a gold standard, no-one would have had any reason to look for alternatives.

The very fact that we have to constantly monitor the crypto space for technological developments tell us that crypto is not money. Money is a store of value while technology is fleeting. We can put a gold coin in a box and know with certainty that the coin will be valuable many years down the road. The same cannot be said about crypto, which almost certainly is headed to zero, certainly if there is a return to a gold standard at the end of the recession we are currently headed into.

Alberta tar sands and crypto are some of the best current examples of malinvestments. Still, we have Peter Schiff talking about malinvestments one moment and the near certainty of a sustained price rise in oil the next moment, and Maneco64 does the same with crypto. It is baffling to hear such well educated people get these things so wrong when everything else they say makes perfect sense.

Syncrude mildred lake plant

By TastyCakes is the photographer, Jamitzky subsequently equalized the colour. - Transferred from en.wikipedia to Commons., Public Domain, Link

Exploding Meteorites

Meteorites have been in the news lately for having allegedly caused two major catastrophes in human history. First, it was the discovery of a large impact crater on Greenland. The meteorite responsible for it appears to have struck during the Younger Dryas some 12,000 years ago. The impact was so energetic that it may well have caused extraordinary floods, tsunamis, volcanic eruptions and earthquakes.

Another meteorite appears to have struck during the biblical time of Abraham, giving support to the story about Sodom. Archaeologists have found evidence to suggest that an enormously hot wind flattened a town located by the Dead Sea. The only explanation for this is that a meteorite exploded very close to the settlement, wiping it out in an instance, as described in the Bible.

Meteorite exploding in the sky

While there is a crater on Greenland, there is no crater by the Dead Sea. This tells us that the impact on Greenland was much more energetic than the explosion above Sodom. However, it does not follow that the crater on Greenland is the result of a kinetic collision between a meteorite and Earth. It too can be the result of an explosion, and there is strong evidence to suggest this.

An interesting feature of the crater on Greenland is that it has a raised center. This is the tell tale footprint of an electric discharge. The return stroke of a powerful lightning will pull matter up with it, leaving a raised structure in the center. The meteorite that hit Greenland most likely got zapped to pieces by a lightning bolt between itself and Earth.

It appears then that all meteorites above a minimal size explode before impact, no matter how big they are. Impact craters are not due to kinetic collisions. Rather, they are the products of shock-waves from electrically induced explosions.

Gresham's Law

When there are two different kinds of money in circulation with identical nominal values, the least valuable of the two will stay in circulation while the most valuable one will go out of circulation. No-one in their right mind would use a gold sovereign to buy a beer, even if its face value is one British pound. We use our legally mandated fiat currencies for our daily purchases. Gold and silver coins are kept as savings.

This is known as Gresham's law, and is so self evident that it does not require much explaining. However, there is an important related aspect that is somewhat less obvious. When good money is pushed out by inferior fiat currencies, a general corruption of society follows. Good ideas and good people are pushed out as well.

Fiat currencies are easily inflated. They loose value over time, and holders of such currencies are therefore constantly looking for investment ideas. This spawns malinvestments. Resources are redirected from productive to unproductive work. Bad ideas that wouldn't ordinarily get any funding, are suddenly everybody's favorite investment darlings. Truly insane and destructive fads become speculative bubbles.

This in turn drive honest people to the sidelines. Seeing through the madness and realizing that it is all speculative nonsense, honest people withdraw from the fad driven part of the economy. However, with a lot of resources allocated to fads, there is not enough resources allocated to good and honest ideas to provide everyone with  meaningful employment.

Good people and good ideas become marginalized through bad money. The more corrupt the money, the more marginalized is the good and honest side of society. Financiers, politicians, lawyers, bureaucrats and other busybodies get a large part of the funding that should have gone to farmers, engineers, factory workers, nurses, and other good people.

Not only does bad money drive out good money, it drives out good and honest people as well, thereby corrupting society as a whole.

Sovereign

By Heritage Auctions for image, Mary Gillick for coin - Newman Numismatic Portal, Public Domain, Link

Bitcoin Trading Volumes

It used to be that Bitcoin trading volumes would remain unchanged from weekdays or even go up during weekends. Most of the big moves were also during weekends. This was especially true around the peak of the mania. However, this pattern has since changed, and has now definitely reversed.

High volume days with big price action no longer happen during the weekends. They happen during weekdays. This indicates that the type of people involved in Bitcoin have changed. While they used to be the average Joe, unemployed or employed, with weekends therefore especially busy, the typical Bitcoin trader now is a professional.

Bitcoin prices are now at their most stable during weekends. Prices are flat or moderately up, all on very thin volumes. Weekdays on the other hand have of late become tremendously busy, with sharp prices drops.

What we can see, is that the pattern in volume changed before the latest price action. The professional traders did not start smacking the price down right off the bat. Rather, they have spent much time accumulating their positions. The volumes reveal this to be so, and from the price action it is clear that the professionals are short Bitcoin.

They have most likely shorted futures while at the same time buying Bitcoin. With their short future options coming due, they are now busy dumping Bitcoin into a market with very few buyers. This results in losses in their Bitcoin positions, but gains in their futures. Since they are more heavily invested in short futures, they net a profit for themselves.

This is exactly what many predicted would happen once Bitcoin futures trading started a little less than a year ago, and this will continue until Bitcoin finally goes to zero. Bitcoin has no utility except for speculation. There is no drain on Bitcoin. Their numbers are fixed. This means that there is no downward limit except zero. The professionals know this. They will accumulate Bitcoin while going short on futures. They will then smack the price down by dumping large volumes of Bitcoin. Taking the profit from their futures they will again accumulate Bitcoin and short futures. This will continue until there are no genuine buyers left and Bitcoin finally goes to zero.

Whale

By Michaël CATANZARITI - by Michaël CATANZARITI, CC BY-SA 3.0, Link

Queen

While the king represents the visible and physical side of a household, the queen represents the subtler and less visible sides. The king protects the realm by his physical presence. He moves deliberately and confidently in harmony with God. While he may be swift and forceful at times, there is never anything frantic about him. His wife can move confidently within his sphere without having to worry about his mental state or physical abilities. This makes her free to take care of the subtler issues of the house.

The fact that the king is the visible and physical side of the household does not mean that he is somehow better than his queen. It is merely a reflection of his masculinity. He might not even be the true head of the household. It may well be the queen who owns and controls everything. But the good queen does not make any big deal out of this. She thrives under the protective wing of her king. Why point out to people that things are somehow different from what they appear? That would only serve to expose her and make her vulnerable.

A great example of this is a family I've had the pleasure of getting to know here in Portugal where I live. In charge of a small domain, and independently minded, the head of that household can properly be termed a king. He is always seated at the head of the table. Calm and deliberate in everything, he is the image of a king in harmony with God.

His wife never makes much of a fuzz about anything. She makes sure that dinner is prepared and that all the guests are properly taken care of. She sits sometimes at his side, sometimes at the other end of the table, and other times at whatever place she finds interesting company to chat with. With a good sense of humor and a sharp wit, she is always busy chatting with friends and family, but never excessively so.

It was not until quite recently that I realized that it was the queen that was in fact the true proprietor of the realm, and that the king was in large part a figurehead. To start with, I wasn't even sure who of the other people in the room the queen was. She was that discrete.

The reason for the queens discretion was not due to some sort of conditioning. The family is as modern and open minded as any. Rather, it is a great arrangement for her to have her husband take care of the physical and visible side of things. His business activities bring in a reasonable income that she administers in partnership with him.

A funny anecdote in this respect was an episode in which the queen told her king that she was going out to do some errands. He told her that she had his permission. She smiled and thanked him. Then she turned to me, as a somewhat puzzled bystander. "Not that I need his permission, but isn't it great to be both free to do whatever I want AND have his permission?"

The good queen plays this kind of games all the time, and her king plays along. It is a great partnership under any circumstance. However, it comes in particularly useful in times of unrest. While he protects and directs the household physically and visibly, she moves deceptively into and out of conflict.

By MichaelMaggs - Own work, CC BY-SA 2.5, Link

Feeling Safe

To feel safe, we have to feel sheltered and in control. A house or apartment provides physical shelter. Friends and family can provide moral support and physical shelter. Government can do the same, or at least pretend to do so. Physical treasures give shelter for the proverbial rainy day.

During good times, we feel sheltered by our circumstances, and we are willing to take risks. There is little need for physical treasures when we feel safe and in control. The future is bright. We are all going to get rich. Who needs gold and silver when we can make a fortune in tech stocks and crypto.

However, when the wind turns and storm clouds gather, things suddenly don't look so good. What exactly are these tech companies producing? Is this crypto thing real, or just as fake as gold points scored in role playing games? Can I afford the big mortgage I took out on my house? Is my cash in the bank safe? Is the government going to save us? Will they be able to keep the currency from collapsing?

It is during times of uncertainty that physical treasures become valuable and sought after. The more uncertain we feel, the more we long for a pot of gold. This is why gold always goes up in price during crisis, even when prices of everything else go down.

By Arnold Paul - Selbst erstelltes Foto, CC BY-SA 2.5, Link

King

To be a king, in the proper archetype sense of the word, a man must not only be the head of a household, with loyal descendants, he must also have control of a domain. This domain is the realm of the king. This is typically his private estate and any associated properties, not necessarily owned by him.

The good king will protect anyone inside his realm. If under attack, the entire realm will be defended by the king. This is often due to purely practical considerations. A majority stake holder in an undertaking cannot easily defend his part without also defending everybody else. However, the good king makes no fuss about this, and the natural reward from the minority stake holders is admiration and loyalty, which in turn makes the defense of the realm all that more easy to perform.

The bad king on the other hand is a despot. He seeks to use his stake as a means to dominate everybody else. He will demand protection money in the form of rent. He will demand admiration, loyalty, and even thanks and praise for his actions. In this respect, every nation but a handful of mini-nations scattered around the globe, is in the hands of despots. The political leaders of nations everywhere demand taxes, praise and thanks while constantly subjecting citizens to harassment in the form of needless regulations and micromanagement.

However, there are lesser kings everywhere. We do not have to sway political power to be king. What is required is a sense of sovereignty. Anyone rejecting the sovereignty of the political establishment is automatically an aristocrat. This was pointed out by Fernando Pessoa a hundred years ago. Add life experience, an estate, loyal descendants and friends to this, and we have a king.

By MichaelMaggs - Own work, CC BY-SA 2.5, Link

House

Nature, wild and untamed, is by and large a horrible place. That's why we need to create a garden, preferably with a wall to separate it from the untamed world beyond. However, this is not enough. We also need a place to shelter ourselves from the weather, especially during winter. We need a house, a comfortable and safe place to spend the nights and winters.

The house is the control center of our existence. It is from the comfort and security of our house that we direct our affairs. This is why the word house is also used to mean estate and dynasty. When we put our house in order, we are not merely cleaning the house. We are taking care of matters that need sorting out. This may be business related or strictly private.

Similarly, the house of Windsor is not merely a house, it is a dynasty. The head of this dynasty is the queen of England. Its members include the crown prince, the prince and their spouses as well as more distant relations.

We tend to think of dynasties as strictly confined to royalty. However, any family can operate as a dynasty, and there is much evidence in the form of folk lore and old religious texts to suggest that this was the normal mode of operation for most families in the past.

What is required for a dynasty is a house and loyalty to the head of the household. The house does not have to be directly owned by the head of the family. It may be a rented apartment. The key factor is loyalty. If it rests with the head of the family, as opposed to some other person or organization, we have a dynastic arrangement. In their strictest form, dynasties operate as independent kingdoms, with loyalty to the head of the family rather than the state.

What separates successful families from less successful ones is the way they operate relative to the state. Family members inside a dynasty do not feel obliged to pay respect to the state. On the contrary, they seek to own it and control it for themselves. A dynastic family in the publishing business will for instance seek control and ownership of the departments of culture and education. A family on welfare may seek to influence and control the bureaucratic process related to their welfare payouts.

Members of a dynasty will often proclaim loyalty to the state. They will encourage people to embrace the state and pay their taxes. However, they will only do this to the extent that they profit from it. Members of a dynasty with no ownership in the state apparatus have no reason to say anything publicly about the state.

By Vesahjr - Own work, CC BY-SA 3.0, Link

Garden

A garden is nature tamed. It is a managed piece of land, often walled off from the untamed nature on the outside. In our garden, we feel contented and happy. It is our own private heaven. We see things grow. There are flowers and berries. There are herbs and vegetables. Our garden provide us with food for our body and our soul.

This is in stark contrast to nature in its wild state which is full of dangers and very much lacking in the comforts and foods found in our garden. However, nature untamed is all that God provides for us. It is up to us to turn His creation into a garden. The idea that we can somehow produce a garden without effort or through coercion and power over others is saturnistic. If we want others to help us in our garden, we have to pay them. We cannot simply force them to do work. Nothing good ever came under threats of punishment.

Heaven is closely associated with a garden. We have Eden, a mythical garden that tended itself, and we have paradise, God's garden in heaven. A garden is the physical representation of peace and tranquility. When we work in our garden we come in contact with God. We learn that small seeds grow into big plants. We learn the importance of care and attention. We also learn that some things come to nothing, no matter how much effort we put into them, while other things grow almost without effort. The garden is in this way a perfect metaphor for life.

Left untended, a garden returns to nature. An unattended garden is a sad sight. It indicates decay and death. The unattended garden is spooky because of this. We half expect to see ghosts and monsters appear where things have been left to rot. The owner of such a garden, if still alive, is either physically or mentally ill.

A man's garden is a reflection of his soul. Some gardens are wild and loosely tended. Other's are strictly measured out. We have the formal gardens, and the English garden. One emulates the strict hierarchy of order. The other is a representation of liberty. Each in their way, they represent man's stewardship of God's creation. As long as the garden is well tended and a pleasure to look at, it indicates mental health and prosperity.

A garden is therefore a wonderful therapeutic instrument. Angst and depression can be remedied with a garden. A garden gives meaning to existence. It connects us with God. It fills us with tranquility and peace of mind.

A garden does not have to be a real physical place. Any creative project can be seen as a garden. I personally like to write. This blog is therefore a garden. I have a small allotment as well, so I have both a physical garden and a continuous project. The combination of the two help me reflect on things. It makes it easier to navigate through life.

By Roland zh - Own work, CC BY-SA 3.0, Link

Bank of England's Empty Vaults

The Bank of England recently denied Venezuela access to its own gold. The request was for 14 tonnes to be delivered, hardly an astronomic amount considering the thousands of tonnes supposedly held in the vaults of Bank of England. However, all sorts of excuses were fabricated to deny the Venezuelan government the delivery.

The immediate implication of this is that no nation can expect to get their gold delivered on request. Gold held in the vaults of the Bank of England may not be delivered, and it will certainly not be delivered in the event of a crisis, which is the exact moment gold comes in as the ultimate store of value.

The rational response to this by any government holding gold in these vaults is to get it out as soon as possible. However, if the vaults are empty, and this is the real reason Venezuela was denied access to their gold, then any request will be met with resistance and delays.

Asking for a mere 300 tonnes of gold held in the US, the German government had to wait several years for delivery. This happened some years ago, and was the first clear sign that gold held in safe keeping in the US and the UK is not in fact held in their vaults. The gold bars delivered to Germany were not the ones they had once delivered for safe keeping. The gold had been sourced from the open market.

There is no reason to believe that gold held in the UK is any more safe than gold held in the US. More likely than not, the gold has been leased out or sold. Deliveries will therefore take a lot of time, considering that it has to be bought off the open market.

The best way for foreign governments to get their gold back may therefore be to take care of the open market purchases themselves. They can ask the Bank of England to sell their gold into the open market. If this is announced ahead of time, gold prices may fall initially as speculators panic. The money received from the Bank of England can then be used to buy the gold.

The Bank of England will of course not sell any physical gold that it does not hold. They will issue paper gold contracts and ETFs. How long they will be able to keep this going is anyone's guess, but one thing is certain. The sooner a government takes action to repatriate its gold, the more likely it is to get most or all of it back. The latecomers are in serious danger of not getting anything. Since everybody involved now know this to be a fact, a run on gold seems imminent. Expect a short-lived  downward manipulation of the gold price before physical gold disappears from the market.

When the manipulation and deception is clear to all, no-one will part with their gold before some sort of new world order is established. The opening price, after the reset will be much higher than the price is today.

Sovereign

By Heritage Auctions for image, Mary Gillick for coin - Newman Numismatic Portal, Public Domain, Link