The Keys to the Kingdom
"It is thus necessary that the individual should come to realise that his own ego is of no importance in comparison with the existence of his nation; This state of mind, which subordinates the interests of the ego to the conservation of the community, is really the first premise for every truly human culture... we understand only the individual's capacity to make sacrifices for the community, for his fellow man" - Adolph Hitler
"And so a lot of people say there's too much personal freedom. When personal freedom is being abused, you have to move to limit it." - Bill Clinton
"We are on the verge of a global transformation. All we need is the right major crisis, and the nations will accept the New World Order" - David Rockefeller
The key to successful control of the world is the ability to create and manage severe economic contractions. The key to understanding economic events unfolding on a daily basis is to understand how economic contractions are created and the ultimate conquest of those that have created the collapse. To understand this, we must correctly interpret events, that while they appear unrelated, are very much interconnected. We must be able to critically analyse all information in order to weed through the illusion that now engulfs the world. This is essential, if we are to see that not only can a small group effectively control the world, but comprehend how it is developing on a daily basis.
To begin, we must appreciate how important money is in accomplishing this task, and why it was critical that money move away from a Gold Standard. When money was based on a commodity (GOLD), its creation or destruction was difficult to manipulate. Moreover, money had to be earned. In sharp contrast today, money is created by the governments and the banks of the world - and can be created instantly in unlimited quantities. Governments create money by simply printing it; and banks create money by making loans. Every loan that a bank makes, an equal amount of money is created.
The ability to create money now allows financial bubbles and economic distortions to develop - which eventually must burst, leading to economic destruction. Furthermore, information must be carefully managed in order to produce, spread, and maintain the illusion.
The world's present economic situation is the result of an explosion in debt -that has created vast sums of money. Excess capital has exploded asset prices to multiples far beyond economic fundamentals, subsequently creating an excess of marginal business projects. Additionally, false information is circulated to create further illusions. Popular concepts of wealth are altered in order to eventually deprive people of their savings and livelihood. Most people now consider "paper" money to be wealth, failing to see the similarity between government "notes" and the daily newspaper used to start the evening fire.
Conventional thinking believes Government bonds to be a prime asset class. They are NOT. They only represent a transfer of assets between bondholders and taxpayers. Economists tell us that the transfer of assets from the private sector (either though taxation or borrowing) somehow represents economic growth, and that simply the transfer of assets can yank the economy out of a recessionary period. The worlds universities are filled with these false concepts spun by master illusionists.
Now that the illusion has been created, we are entering into the time period of the managed economic contraction. Except that this will be no ordinary economic contraction, but rather the total collapse of all paper currencies, bond stock markets. Securities market crashes will lead to industry shutdowns, accompanied by human suffering unparalleled in history.
It is painfully clear that if someone were to devise an economic system specifically designed to fail, and to inflict the maximum suffering on mankind, it would be very difficult to improve on the destructive financial system that exists in the world today.
Starting in Thailand, spreading to Indonesia, South Korea, Malaysia, Hong Kong, Pakistan, and Russia, all have collapsed or are on the verge of total breakdown. Indonesia and Russia have defaulted on their debt; Pakistan has threatened default if new loans are not extended; Malaysia has warned of "drastic action;" and South Korea's 543 listed companies have just reported a combined loss of 13.7 trillion won for the first six months of 1998. Without profits there are no funds to repay internal or external debt.
While the world believes that economic growth in China has only slowed down, this too is an illusion with China at the very brink of collapse. During the first five months of 1998, China's industrial output is said to have increased by 8%, while power generation grew by only 1.3%. During May 1998, power generation fell by 2% year over year, while industrial output is said to have grown by 9.3%. It is clear that both of these statements cannot be correct.
The seemingly positive economic growth flies in the face of reality. Some have suggested that China's trade in 1998 might even be in deficit, as opposed to the stated surplus - resulting from a flood of smuggled imports which may now exceed legal imports. The drop in China's FOREX reserves and the recent pressure on the Chinese yuan (both in the official market and the black market) tend to support the thesis that China's growth is markedly slowing.
Profitability of Chinese business has disappeared -- with some manufacturers halting production and subsequently importing lower priced products Inventories of goods and buildings are increasing at an unsustainable rate (and now exceed 35% of GDP). And in a desperate effort to boost sales, Chinese exports can now be purchased via 180-360 days financing. Even worse, deflationary pressures are building - as reflected by the retail price index, which was down 3.2% in the month of June.
An insolvent banking system that is financing a massive inventory overhang (35% of total bank credit), and burdened with non-performing loans of bankrupt companies only adds to the problem. A recent government bond offering was purchased entirely by government owned banks, giving only the appearance of a functioning capital market. In effect monetizing the national debt. Sound familiar?!
The Japanese economy is contracting at a 5% annual rate - with official statements warning of "a more severe state" to come. The Economic Planning Agency (EPA) report released on August 11, 1998 stated that falling real wages and a high jobless rate had tightened consumer purse strings, reduced housing construction and decreased capital spending. The EPA disclosed production was declining and corporate profits sliding. Bad loan estimates at commercial banks have soared to U.S. $1 trillion, and will inevitably rise as the economy continues to contract. The extremes of Government debt levels, insolvent banks and bankrupt companies will soon decimate the Japanese economy.
Per some estimates the present financial meltdown already affects about three billion people around the wold. Uncollectable debts worldwide exceed U.S. 2.5 trillion dollars.
Asian economic and financial woes are not contained to the Far-East. Already Brazil, Argentina, India, New Zealand, Australia, South Africa, Canada, and numerous other countries have suffered the first tremors from the Asian financial earthquake.
However, it is the United States that is the ultimate destination of the Asian Contagion. Needless to say it is in the United States where the greatest bubble has been created. Beginning in 1995 vast sums of money began flowing in from Europe and Japan. Europeans were "concerned" about the Euro. Japan had the yen-carry trade. In a move of the grand illusionist, Japanese banks created out of nothing, vast quantities of Yen - which were converted to U.S. dollars in order to invest in U.S. Treasury Bills and/or the U.S. Stockmarket. These were the prime motive forces of the great Wall Street bull market. Americans blinded by their good fortune flocked to the stock market, motivated by their unbridled greed. With paper wealth greatly increased, they have increased consumer debt by 50%, and driven national savings below 1%. But this wealth is only an illusion. As bank loans continue to increase, and money supply growing at 10%, cracks are now beginning to show in the economy.
Despite the best economy in history, and a record increase in wealth due to a rising stockmarket, Federal bankruptcy filings climbed to a record high 1.42 million for the 12 months ending June 30th, spurred by a 9.2 % increase in personal bankruptcies. The American consumer can no longer afford to repay current debt levels. NONETHELESS, the illusion continues. As the U.S. trade deficit is expected to reach a massive annual rate of 256 Billion during the 1998 4th Quarter, the U.S. greenback continues to rise against all other currencies. Currency valuation is no longer related to trade, but to investment flows causing massive distortions.
The next step in managing the economic contraction will be the pop the U.S. stock bubble - consequently causing a stampede out of the U.S. dollar. Two thirds of the world's official currency reserves (which total $7.5 trillion) are held in U.S. dollars. Furthermore, forty percent of private investment portfolios are held in U.S. dollars. These official currency reserves represent a huge debt of the U.S. government. When repayment of this debt is demanded, when investors no longer want to hold the trillions of U.S. dollars in world financial markets, it will trigger a loan default and collapse of the bubble of the U.S. economy.
Two of the major institutions that will be used to manage this worldwide economic "contraction" are the International Monetary Fund and the new European Central Bank. Already, we are seeing every country under the IMF Control being financially devastated. Instead oh helping countries, the IMF policy of high interest rates in over-indebted countries are flattening these economies.
The European Central Bank comes officially into existence on January 1, 1999. It will control vast holdings of foreign exchange and the gold of the 11 member countries. It will be the most powerful financial force in the world. Boasting a trade surplus the region's European Central Bank will control a vast geo-political area - an economy unlike the U.S. Moreover, the Europeans hold hundreds of billions of U.S. dollars in American investments - much in excess to their needs. Once Europeans begin to liquidate their U.S. investments, there will be a stampede out of U.S. dollars and into gold and the Euro. The U.S. dollar will then cease to be the worlds reserve currency.
The master illusionists are at work even in the gold market. Beginning in 1995 a financial bubble in resource stocks was created - fuelled by several mining scams, the greatest being Bre-X. While the gold price began collapsing in 1997, these mining scams became exposed. Both events resulted in a massive liquidity decline in the resource market. Many junior-gold stocks have seen their prices decline in more 95%. Companies with world class deposits - which are extremely profitable even at today's commodity prices - are trading at ONE times forward cash flow. This under-valuation seems incomprehensible, especially when compared with NASDAQ stocks - where the average stock trades at a P/E ratio of 85 to1. These world class deposits will soon be owned by Powerful organisations, before any increase in the price of gold is engineered.
Despite record demand for gold, which is outpacing mine supply, the price of gold has collapsed significantly over the last year. This is a direct result of a massive leasing program of the world's Central Banks. We are told that the banks are leasing the gold to earn extra income, even though the extra income from lending gold at 1-2% interest represents at most a rounding error in some governments' budgets. Moreover, in lieu of the fact demand far exceeds mine supply, there is no identifiable source of repayment for these loans. The making of gold loans at a negligible interest rate with no identifiable source of repayment would not normally be considered to be a prudent lending decision. These gold loans must be seen as a deliberate attempt to drive down the price of gold, while "shifting" the yellow metal to strong hands without it looking like a sale. It is quite likely that very few of these gold loans will ever be repaid.
Those investors who foresaw the currency crisis and worldwide financial meltdown, and sought to seek refuge with gold and quality resource stocks have seen their portfolios devastated. The illusionists have been very astute to insure that only they have any lasting wealth as they seek to dominate the world.
It is no coincidence that as the world approaches the financial Armageddon, we see the birth of the European Central Bank, and increasing coverage of the Y2K problem. I am no expert in computers and must leave it to others to warn of any potential meltdowns resulting from Y2K Bug. From a financial perspective, this is somewhat academic - for it is the threat of the problem, real or perceived, that will drive world markets in 1999. Concern about Y2K will drive people to take money out of the banking system. With only about 1.2% of banking assets in cash, 98.8% of depositors will be wondering about the security of their wealth. This fear will drive people into gold, which will begin its move to spectacular heights as the controllers of this economic contraction create a bubble in the asset that they control and own. The control of the treasuries of Europe through the European Central Bank will be the key element in collapsing the U.S. dollar and driving up the price of gold.
It is quite possible that the world will see increased political instability on a global basis - and possibly the impeachment of the U.S. President. This will be done to reduce investor confidence, further driving down the U.S. dollar and increasing the price of gold. Regional wars are also likely to flare-up, bringing more fear and anxiety on world populations. The use of nuclear weapons should not be ruled out - for they are the ultimate instruments of terror. Many of these wars will be blamed on religious fundamentalism, and there will be calls to prohibit religions in order to reduce the violence. This will be the ultimate illusion - with religions that teach love and peace being blamed for death and destruction. The ultimate paradox.
The collapse of the international financial markets, political instability, and increasing violence are designed to create terror and severely traumatise world populations. Indonesia is a good example of what is to come. Governments will then be in a position to introduce emergency measures to deal with the crisis. These measures will concentrate on removing wealth and freedom from individuals, a form of political and economic rape. Individual stockpiles of gold and food will not guard against these political moves, as they become the property of the State, especially for those who oppose the New World Order.
Those who think that this could not happen in the United States, Canada , or Europe too soon forget recent human history. Moreover, one has to question the extraordinary sequence of Executive Orders that gives the President of the United States dictatorial powers.
Executive Order 10990 allows the government to take over all modes of transport. Executive Order 10995 allows the government to seize and control the communications media Executive Order 10997 allows the government to take over all electric power, gas fuels and minerals. Executive Order allows the government to take over all food resources and farms. Executive Order 11000 provides for uncompensated work forces under federal supervision Executive Order 11002 empowers the Postmaster General to register every person in the United States. Executive Order 13083 revokes state and local authority whenever local laws undermine federal regulatory goals. This effectively abolishes the 10th amendment to the Constitution.
All that is missing is an "emergency" that will trigger these Executive Orders and turn the United States into a dictatorship. We must remember that Hitler found his emergency by blowing up the Reichstag, the German parliament building, after which he was granted emergency anti-terrorist powers.
I do not know the people behind this move to a New World Order. Others have pointed to secret groups such as the Committee of 300, the Illuminati, Club of Rome, or Freemasonry. However, their actions are clearly seen on world financial markets and they will manifest themselves as they consolidate all wealth and power. It is important to stress that this economic collapse is not about economics, just as the Bolshevik Revolution was not about economics. The claimed purpose of the Bolshevik Revolution was the liberation of the common man from the capitalists. Yet it resulted in the murder and torture of 100 million of these common men, women and children.
The people behind this New World Order are ruthless, as can be clearly seen by the design of world financial markets. As we go forward, we must reflect on the events of this century, a century in which 250 million people have died in wars and genocide. These events provide a blueprint, an action plan for the reign of terror that awaits the world. To combat these forces, people must get to know the truth. Only then, can people of good-will band together and rise up against these forces.
We stand on the threshold of a totally irreligious period - fashioned by man's egotism which will lead to his own destruction.
In my next article, I will attempt to relay what some prophets and mystics have to say about our times, and relate this to the political and economic forces in the world.
John Kutyn
24 August 1998
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