Tag: derivatives

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History Money

The CME is just a Giant Financial Casino

Over The Counter Derivatives What Are They?

So how big is the Derivatives Market Most people who follow the derivatives say that the amount can be as high as one quadrillion? Let us take a look at what derivatives are, these are acutely just bets. On underlying Securities or Commodities to try to insure the value of their products. But today these are No different than a financial Casino.

A Small Cash Amount Controls Much With Risk

With financial derivatives you just put a small percent down to control a much larger amount of paper. With a derivative of the notional price for that derivative moves in a direction away from the position that you took then you need to come up with money to cover, this is called a Margin Call.

What the Futures Markets were Created to do

Originally when derivatives were created, they were a kind of insurance mainly used by Farmers in order to protect their profits or the cost of growing their crops. The farmers could take a position contrary to the value of their crop. In other words, if the value of their crops was less than normal or expected, then the bet placed in the derivatives market was the opposite, so they could collect on that investment thus balancing out.

Its Out of Control Now!

But what has happened over the years since the inception of the Futures Markets is that many more players have gotten involved. You may be thinking so what? Well now days Banks and even Pension Funds have gotten into this game.

They have done this because as their normal investments like Bonds began to pay less they required more money to keep up with the payments that they needed for their pension beneficiaries. Today these banks bet on interest rate derivatives. Now can you begin to see the problem here? Derivatives are a way to achieve leverage and the banks should not be involved in risky products like those in the derivatives markets in my opinion.

Are Banks Gambling With Our Money?

Banks especially have the ability to rig these markets because they have virtually unlimited supply of money since in a Central Banking System, banks can go to the Federal Reserve Window and get Fiat money at let’s say 2 percent, and then take that money and place bets in these derivative markets. In other words they can use their power to manipulate these markets. And we already know what happens when manipulation takes place in these markets it will not end well.

Final Words

In my opinion what has been created is nothing more than a giant financial Casino. And we all know that in a casino you don’t always win. That is all I want to say at this time on this subject, but I recommend that you get better informed and look into this dilemma.

Categories
Money

The Trick of the Bankers

The Trick of the Bankers

Continued from; Why you may want to buy Gold and Silver Now!

When I was a kid, I can remember how quarters and dimes had silver in them not pot metal.

Back around 1000 years ago when Rome ruled the world, the people would leave their money with the bankers and the banker would issue them a receipt for their money. The reason for this was it was easier for them to travel with the receipt than with the actual gold.

Which was at that time was only gold or silver. The trick, was that when the bankers realized that the people were not all coming for their gold at the same time, they realized that they could create more receipts than the amount of gold they were storing.  And this became common practice among the bankers.

This is the first Fractional Reserve system.

So what is a Fractional Reserve System?

A fractional reserve system is one where the banks hold back a portion of the deposits but are allowed to issue more currency than what they have in the vault.

Now days it supposed to be ten percent held back, but some say they aren’t even adhering to that today.

Sounds crazy but that’s how modern banking actually works today.

I am hoping that as you read this you’ll see the absolute absurdity of all of this. Especially when you consider that you want your money to be safe.

It even gets worse when you consider that banks are allowed to gamble in derivatives of all kinds these days.

Derivatives what are they?

To make matters even worse the bankers in an effort to increase their profits they place bets on weather a commodity will rise or fall. That’s what derivatives are. When you think about all of this it will make your head spin and make you dizzy.

You probably like me thought that banks had a charter to do good things for the communities in which they resided. But not so these days they are just interested in making more and more profits for the bank.

The banks have been caught many times defrauding savers and manipulating those derivative markets. Don’t believe me check the news.

What’s the Difference between Currency and Money?

You must remember that currency is a banks game. That’s because they create it.

To be continued…

Categories
Mind Control

The Building Blocks of Language

The Building Blocks of Language

Continued from, Why are Words so Important’

“In ancient times men would no doubt understand the roaring and rumbling of a thunder storm as the battling of the gods in the heavens”

The Metaphor What is it Made of?

In Dr. Jaynes book he does a good job of breaking down the metaphor to its constituent parts.

In the most basic sense, what we do in language using metaphors’ is to shed light on something that is not readily understood. We do this by using something more familiar.

This is the main purpose of creating a metaphor. Dr. Jaynes broke the metaphor down into these parts, the Meta-phrand, Meta-phier, para-prand, and the para-phier.

The Meta-phrand explained

The Meta-phrand which is operated on by something he called the Metaphier, similar to in mathematics where we operate on a Multiplicand by a multiplier.

An example would be, the process he says is intensely practical.

“To designate an arm of the sea as a better place to find shell fish, or to put the head on a nail that it might hold a board to a stanchion.”

To understand something is to arrive at a metaphor for that thing to be described.

In practice we might say I see, or I get it now’

Over-looked by so many of us just how complex all of this really is. Consider the metaphor “ the snow blankets the ground.”

The meta-phrand is something about the completeness, and even the thickness with which the ground is covered by the snow.

The meta-phier is the covering on a bed, something that we all know! The nuances of the metaphor are the paraphiers of the metaphier, the blanket.

Then there are paraphrands of the meta-phrands, and all of this is packed into the simple use of the word blanket, pertaining to the way it covers the ground. The paraphiers here act on the para-phrands.

Hopefully you can now see just how complex all of this is, and how language grows? And we’re not even done!

It’s the paraphrands of the metaphrands that create what could not not have been possible be there.

The Analog and the Map Maker

This very important feature of language we will examine the example that Jaynes gives of a Map Maker.

For the map-maker, the metaphrand is the blank piece of paper on which he operates with the metaphier of the land which he has surveyed.

For the map user it’s the other way around. It’s the land that is unknown; and, it’s the land that is the metaphrand. Where as the map is what he’s using to understand the layout of the land.

So as we can see the analog is a representation of something, but not the actual thing.

The Analog in Modern Times

An important aspect of the analog is how it is generated through language. Analogs are used everywhere these days.

In the world of finance, if you think about it, there are what are called derivatives, aren’t they just analogs of some other things?

People gamble in these derivatives every day. Weather a derivative of something will increase or decrease in value. These derivatives are called futures’ and there’s a huge market for these.

But I digress, moving on now. By now I can only hope that you’re starting to understand how language is generated.

In summary- the metaphrand (the subject) which gets operated on by the metaphier (something more familiar) and what pops out is a metaphor.

The Analog is representation of something but not the actual thing.

I know I took a circuitous route but believe me you understand by the time we are done.

We’ll be moving faster soon, but covering this stuff was necessary.

To be continued…