To extort the maximum value from a population, when one has control of monetary system, leverage the laws of supply and demand. Use deflation, inflation, and hyperinflation all as tools to transfer wealth. All have a place and a purpose.

The banker's guide to owning it all

Become majority lender in an economy of people with assets you want.

Encourage indebtedness by loaning generously while securing on assets of interest.

Loosen lending standards until the assets you seek to capture are attached. (this makes the economy debt dependent)

Once debts are significant for the bulk of the population, sharply tighten lending standards. <-- Economic shock - Onset of deflation

Backstop losses with public guarantees if possible. This is gravy if one can get it. (Fannie and Freddie guarantees, for example)

Permit default 'without risk' on the assets you wish to sieze to maximize wealth transfer. (stall foreclosure, stay repossession orders etc)

Stall the economy to maximize default positions and deplete private liquidity. <-- We are here

Successively ratchet the economy downhill, while bettering secured positions.

In a series of large actions, sieze all security for default. Target the assets of greatest interest first. (This deals a heavy economic blow and can help cause the ratcheting required for step 8.)

Transfer asset ownership, but retain prior owners as renters where possible. (This reduces public lashback and helps maintain the asset for resale)

Once the bulk of assets of transferred, write them down to leverage the public financial backstop.

Buy up as many remaining assets on the cheap as possible. Hide this action.

Hyperinflate to destroy the external claims on wealth. <-- Onset of hyperinflation (This destroys treasuries, gov't bonds, currency. Ensures free title on new assets. May cause war.)

Stabilize the currency or devise a new one, resume lending at a reasonable pace. Sell the assets back, secured of course, at your chosen price in new currency.

Hyperinflation is only a risk to the wealthy if the population has the assets. Make note of that statement. It is key to timing the shift from deflation to hyperinflation.

I combined known events of the 1930s with those of other collapses and this is the model that results. Instead of positioning myself as a victim of the collapse, I positioned as the one that would profit.

The approach is reverse engineered, so it may not be entirely accurate. I expect it is close.

Ethics aside for the moment, one might consider the following in order of execution:

Eliminate secured debt.

Store preps to carry you through steps 8-13.

Secure precious metals for when the currency is collapsing. At that time, assets will become very cheap in terms of both gold and silver.

Exchange for assets while public stampedes into PMs in a panic.

If the gold price rises too high for your tastes, loan sums of cash against assets of much greater worth. Ensure you have a first on the security.

For those of limited means, directing capital can be very important. This model is deflationary while assets are transferred. It relies on limiting the panic in this period as well. From this, we can gather that accomodation is likely to remain available. Food will become a larger percentage of household spending (due to income reduction), and guns won't help against this enemy (protection will still matter though, as always). This can help prioritize where limited prep funds are spent.

For those with excess, items three and four may feel ethically questionable. Remember that private ownership of most of these assets will not survive this process with or without your involvement. Following in the footsteps of the banks directs some of their windfall to you... instead of them. I am personally comfortable with only the first three of the steps listed above. The fourth is a difficult one. I could only do that if I knew a bank was going to loan the money and complete the fleecing in my absence. But even then, I don't think I would take on the roll of aggressor.

I am bullish on both gold and silver from the point destruction of the dollar picks up momentum. For the immediate future, TPTB will jack the price all over the place to shake out the speculators. The choice to hold gold or silver must be based on market fundamentals, not the gamed valuation systems.

I am bullish on both gold and silver, but most bullish on silver. To an untrained eye, $1000 in silver looks like a LOT more than $1000 in gold. The market will soon become saturated with untrained buyers. They will be panicked and buying in haste. They won't know what to buy based on research or sound fundamentals, rather they will respond based on visual cues and heuristics. A suitcase of silver may buy a house because it looks like a lot, while the equal value in gold will not. As well, those little plastic sleeves will be big money makers. They will ensure a case filled with any PM looks more tangible. Less will become more when well packaged.

Emulating the actions of a banker would enable you to share in their spoils. It's hard to ensure you will have the dry powder to spend in step 12, and there's risk that a twist on this strategy could still come forth. But if it holds true, your suggestion would be effective.

source HERE

Posted by Mr Thx Monday, January 4, 2010

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