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Confounding Compounding Perspectives

 -- Published: Monday, 11 May 2020 | Print  | Disqus 

By Rob Kirby

In recent interviews I have “borrowed” a descriptive I originally heard from Chris Martenson explaining the effect of compound interest and exponential growth.  The descriptive involved picturing Yankee Stadium and beginning with a drop of water and doubling the amount of water until the stadium was full.  Regarding the compounding visual – I misspoke somewhat when I originally explained – the reality is that the timeframe used – 50 minutes – is correct.  I should have said the doublings only have to occur every MINUTE [not every second] and the outcome remains the same – stadium fills up in 50 minutes, with all the “action” [water going from ankle deep to overflowing the stadium] occurring in the last 5 minutes – this is the power of compounding.

Now On to Compound Interest

The underlying mathematics that supports the model explained above is understood by monetary officials responsible for stewardship of the world’s reserve currency – the US dollar.  They and their “propeller head” quant clowns model EVERYTHING.  Now consider the interest rate derivatives market where there are hundreds of trillions in notional outstanding.  The clueless quants will try to argue that these are “notional amounts” [typically settled ‘net’] and the principal amounts do not get exchanged. 

My response:  “an interest rate swap is an exchange of fixed rate payments for floating rate payments and it’s the ‘interest’ that KILLS – not the principal”.  Reason:  the destabilizing aspect of fiat money with compound interest ‘IS’ the notion that when money is loaned into existence – the principal is created but NOT the interest that must be repaid.”


You see, with hundreds of trillions of notional interest rate swaps already in existence we [humanity] are already up to our necks in this crap.  Realization of this is might be why monetary officials have been feverishly trying in recent quarters to DECREASE the gross amount of notional outstanding in the interest rate derivatives complex – this developing trend bears watching in the future. 

-      According the Office of the Comptroller of the Currency [OCC] in the US – the gross total of notional derivatives [in Table 2 of the quarterly derivatives report] held by the top 25 Bank Holding Cos. In the US has diminished from 280 Trillion in Q2/2019 to 228 Trillion in Q4/2019.

Who knows, maybe the cliché of, “the best way to get out of a hole is to stop digging and put down your shovel”, is/was – at the end of the day, not lost on American centric monetary authorities - perhaps proving the adage that you really can teach “old dogs” new tricks.  

This is also why no one from officialdom will address the missing 21 Trillion of “off book” dollars that have disappeared [documented by Catherine Austin Fitts and Dr. Mark Skidmore] – the scum bags have already “chewed through” that [and likely much more] and they needed to introduce a pandemic and shut down the economy to justify the creation of many trillions more. 

You see folks, acknowledging the true nature [shortcomings] of our Keynesian money system – fiat with compound interest – would lead to a real discussion and examination of the facts surrounding the missing money and why it was created.  This is why officialdom sick the attack dogs in the mainstream press to discredit [hopefully kill] the messenger like this erroneous headline from the “toilet paper of record” – the New York Times:

The Misleading Claim That $21 Trillion in Misspent Pentagon Funds Could Pay for ‘Medicare for All’



Despite the disinformation “bum wad” served up by the New York Times, the latest round of newly created trillions will not solve ANYTHING.   The real problem is where to put the next round of exponentially growing dollars so they don’t produce a DOLLAR COLLAPSE [hyperinflation] via a complete loss of faith in the currency.  When this occurs, odds are that we will see this manifest by foreigners refusing to sell their national output in exchange for dollars.  Hopefully, when this occurs [which it will], it is not viewed as an act of war [likely].

There are some enlightened thinkers who have intuitively [if not figuratively] figured this out – that our current fiat monetary system is teetering on collapse.  Just yesterday, we saw the admission from hedge fund luminary Paul Tudor Jones admit he was buying Bitcoin [BTC] as it hit a recent high of $USD 10,000 – comparing it to GOLD.

Intuitive, sage investors know that precious metals prices have been suppressed – which is why they are seeking and willing to make big bets on other US dollar alternatives to protect themselves from Central Bank monetary debasement.  What this means, all dollar alternatives are going UP, if by nothing else but Central Bank money creation and hedge fund decree.

We are out of road to kick the can down and the risk of global war is growing by the day.

Exponential money growth is more dangerous to humanity than a rapidly metastasizing cancer is to a human body – not an easy concept to grasp – and it took me a long time to fully understand it, but its pure math.



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 -- Published: Monday, 11 May 2020 | E-Mail  | Print  | Source:

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