I’m re-posting an amazing article ( “Financial Matrix: The Elite’s Third System of Control”) by Orrin Woodward. Articles about economics and history make some people bleary eyed and bored to tears while others crave the knowledge and are energized with new information. The thing is, whether you ‘like’ these reading topics is not really the issue. Economic and history are the study of the world we live. You can live the life you wanted, or live a life that you happen.
Orrin’s Financial Matrix gives us a nugget into understanding what’s happening in these curious economic times, and what to do about it. A great first step is to educate yourself about the playing field of finances with a ridiculously valuable Financial Fitness pack from Life.
My twenty years of research into the political, economic, and social histories of state and society have revealed some startling discoveries. In essence, the aristocratic elites of every generation have developed control matrices to exploit the productive capacity of the masses. Indeed, one of the first clues came from reading French political philosopher Bertrand De Jouvenel. In his book On Power, he wrote, “Whoever does not wish to render history incomprehensible by departmentalizing it – political, economic, social – would perhaps take the view that it is in essence a battle of dominant wills (elites), fighting in every way they can for the material which is common to everything they construct: the human labor force. (masses)” (parenthesis mine) In other words, the aristocratic elites (dominant wills) seek methods to control masses (human labor) production. labor.
With this perspective, I reviewed the economic field where I noted the classical economist were the first to identify the three factors of all production – labor, land, and capital. John Stuart Mill, for instance, wrote, “The Law of the Increase of Production Depends on those of Three Elements— Labor. Capital, and Land.” When I combined these two concepts together, it became clear that in order for the elites to control the masses production, they must do so through controlling the three factors of production – labor, land, and capital. Invariably, this theory of control is confirmed by history.
The Financial Matrix, in other words, is not the first matrix of control. On the contrary it is the third one based upon the three factors of production. In reality, most of the readers (assuming you didn’t sleep through history class) already know about the other two matrices of control – the Physical Matrix (human slavery) and the Land Matrix (feudal serfdom). Paradoxically, although Western Civilization’s founders (the Greeks and Romans) wrote about liberty and justice extensively, they hypocritically exercised a Physical Matrix to enslave their defeated foes. The slaves were forced to do the manual work in society since the classical civilizations thought physical work only worthy of slaves. This allowed the ancients the leisure to speak, write, and lead while the slaved toiled away in the Physical Matrix. Indeed, the preferred method of control throughout the classical period was the Physical Matrix until Christianity permeated the Roman Empire.
Christianity changed the social norms of the late Roman society. Whereas slavery for conquered nations was acceptable previously, Christianity taught that all men were created equal before an almighty God and that fellow-believers were all brothers and sisters in Christ. Of course, enslaving one’s brother or sister became increasingly difficult to justify (unfortunately, the same cannot be said for infidels). Thus, the Physical Matrix collapsed under its own weight. Naturally, with the loss of the Physical Matrix, the aristocratic elites sought another control matrix to replace it. With labor no longer controllable, moving to the next factor of production (land) seemed like a reasonable course of action and the Land Matrix was born – feudal serfdom.
The elites simply moved the matrix of control from the Physical Matrix to the Land Matrix. Because they owned all the land, the aristocratic elites (princes, kings, and lords) forced the serfs to pay rent to the lord who owned the land. The serfs, not strong enough to resist the powerful lords and having no other options simply complied. By surrendering around half of their agricultural production plus agreeing to work the lord’s fields several days a week, the serfs were permitted to live on the lord’s land. Although, the people were no longer slaves, they were not much better off since they had no freedom of movement and were taxed over 50% of their productive capacity. Feudalism may have ended slavery (Physical Matrix) in most of Europe, but only to turn the people into serfs (Land Matrix).
During the late middle-ages, the reintroduction of gold and silver changed the economics of feudalism. The serfs no longer needed to live on the lord’s land in order to survive. Instead, serfs began moving to the growing cities where in the city air, the bakers, butchers, and candlestick makers could live free by selling their services for money. They, in turn, could then use their accumulated money to purchase other necessary items to survive. This development freed the serfs from the land and the subsequent economic losses caused the Land Matrix to collapse. Both the Physical and Land Matrix were now history, however, there was still one other factor of production left, namely, capital. Not surprisingly, for nearly four hundred years (from the early 1500’s through the early 1900’s) a battle raged between the elites and the masses to determine whether money would be set by the market (gold standard) or set by the controlling elites.
It’s important to remember that money was not created by the state. Rather, as Mises points out, entrepreneurs created money by trial and error through realizing that gold and silver could be exchanged for current production at any time. Money simply was a measurement of exchange value ratios. Indeed, the rediscovery of gold and silver money led to an explosion of middle-class wealth as people were rewarded for producing more. The gold standard ensured justice for the masses against elites attempts to manipulate the exchange values of monetary system. Because gold is a fixed-quantity and difficult to mine, inflation was low and predictable, whereas the increased division-of-labor caused by the capitalistic system to create more wealth for more people than at any time in recorded history. The gold standard, in short, ensured justice for all by checking the elites desire to create a Financial Matrix by controlling capital.
Unfortunately, however, the elites will not rest until they build a matrix to control the masses wealth. Hence, at the turn of the 20th century, the state and its elite cronies, broke through the gold-standard barrier and created the Financial Matrix. Through using fiat money (money not backed by gold or silver), the elites flooded the marketplace with bogus exchange values causing rapid inflation and rampant injustice. The Financial Matrix was birthed through a web of fractional-reserve banking (FRB), increasing national debts, and increasing taxes. One can recognize the extent of the monetary injustice caused by the Financial Matrix when studying what inflation has done to the value of the US dollar. For instance, the value of one dollar in 1913 is now worth less than four cents today. Or, said differently, one needs 25 dollars today to buy what one dollar purchased in 1913.
Inflation, however, is just one of the many injustices associated with the Financial Matrix. When inflation is combined with the increased personal and national debts (which result in an increase in taxation), one can see why the masses across the civilized world struggle to make ends meet. Indeed, the government-sponsored fractional reserve banking (FRB) system allows banks to partner with the central bank to create the majority of society’s money out of thin air. That’s correct, the FRB system permits banks to loan money into existence while the borrower must pay this fiat loan back with money he must earn through production.
In essence, artificial dollars are created without any real production and then loaned to people who must pay back the loan with interest from real production. Absurdly, the FRB system allows banks to create fake units of exchange that must be paid back by the borrower with real units of exchange plus interest. This is why the FRB system is the root of the new matrix of control and why the Financial Matrix is the most effective form of elites control ever developed. Moreover, the crony-capitalistic FRB system sets the low-interest rates which create the boom/bust cycle plaguing modern society. And, to add insult to injury, once the FRB system fosters the predictable boom/bust cycle, the boom is credited to the ingenious money controllers while the bust is blamed on the free markets. Apparently, its a loaded game of heads and tails where heads means the elites win and tails means the masses lose!
Although economists the caliber of Ricardo, Mises, and Von Hayek have insisted the FRB system is fraudulent and unstable, it survives through the masses ignorance and the elites support. Perhaps British Monetary Reformer, Michael Rowbotham, described the fraudulent nature of the FRB system the best when he wrote:
The creation and supply of money is now left almost entirely to banks and other lending institutions. Most people imagine that if they borrow from a bank, they are borrowing other people’s money. In fact, when banks and building societies make any loan, they create new money. Money loaned by a bank is not a loan of pre-existent money; money loaned by a bank is additional money created. The stream of money generated by people, businesses and governments constantly borrowing from banks and other lending institutions is relied upon to supply the economy as a whole. Thus the supply of money depends upon people going into debt, and the level of debt within an economy is no more than a measure of the amount of money that has been created…
In effect, today’s Financial Matrix relies upon millions of people voluntarily selling themselves into financial slavery. For when one combines artificially-low centrally-controlled interest rates to the FRB system, one has an irresistible combination that leads consumers and entrepreneurs to borrow money into existence. This money-creation, however, leads to the inflation. The inflation causes the boom/bust cycle when prices skyrocket. At this point, the consumers and entrepreneurs default on the loans they can no longer service and the bust wipes out the inflated values created during the boom. Not surprisingly, the boom/bust cycle occurred twice during the Greenspan-controlled central banking era. In both cases, the artificially-controlled low interest rates fueled the consumer’s appetite for speculation and “easy” profits. The internet bubble increased the Nasdaq nearly by a factor of five during the boom between 19995 and 2000, but it then preceded to collapse by over 60% between 2000-2001.
Regrettably, controllers seem to be perpetual optimist go from failure to failure without learning anything. As a result, when the twin-towers came crashing down, Greenspan repeated the same policy which caused the previous boom/bust cycle. This time, however, money poured into the housing markets and prices shot upwards of 50% in just a few short years. Not shockingly, the mortgage companies sought to maximize profits by helping everyone qualify for a home mortgage, even those who didn’t have steady jobs. The increase in mortgages exploded the money supply which further fueled higher priced houses and mortgages. The housing bubble was blowing up. Predictably, however, when the non-qualified borrowers could not make their mortgage payments, the housing bubble collapsed, the money supply collapsed, and the financial house of cards nearly followed them, but for government bail outs.
Above all, however, is the loss of house equities that have occurred since 1950. Disgracefully, the Financial Matrix has gutted the home-equity percentages (amount of value owned after subtracting all mortgages), decreasing home-equity percentages (percentage of ownership free from house loans) from over 80% to just over 30% today. This indicates that the Financial Matrix has gutted nearly 50% of the USA’s $25 trillion housing market in the last 60 years! That’s correct, nearly $12.5 trillion dollars (almost as much as the total USA national debt) lost by US citizens without so much as a whimper.
Americans sense something isn’t right, but few have a clue what it is, let alone how to fix it. Indeed, both the Occupy Wall Street and Tea Party movements formed as protests against injustice and exploitation. Protests without plans, however, usually leads to rebellion and peasant rebellions have a poor historical track records in generating positive change. Instead, the masses must learn to exit the Financial Matrix through a disciplined plan of financial defense and offense. This is why we formed LIFE Leadership and why we created the Financial Fitness Program – to teach people how to exit the Financial Matrix without violence. Remember, one is not coerced into the Financial Matrix, but rather enticed.
To me, the Financial Matrix is eerily similar to Neo’s discovery of the matrix in the movie called The Matrix. In several scenes, Morpheus reveals to Neo that the world is not as it seems. That a matrix controls the masses whether they are working, playing, or sleeping. The matrix is, “the world that has been pulled over your eyes, to blind you from the truth.” Neo, needless to say, asked what truth Morpheus was referring to and learns, “That you are a slave, Neo. Like everyone else, you were born into bondage, born into a prison that you cannot smell or taste or touch. A prison…for your mind….Unfortunately, no one can be… told what the Matrix is… you have to see it for yourself.” Morpheus places two pills before Neo and explains that if Neo takes the blue pill he will live an illusion and never escape the matrix, but if he takes the red pill, he will learn the truth about the matrix and learn how to set himself free.
If you, like Neo, have been searching for answers, the good news is: the search is over. The blue and red pills have been placed before you. Do you take the red pill, read the rest of the book, and learn how deep the rabbit hole goes or do you take the blue pill, set down the book, and believe the illusion of whatever you want to believe. Your destiny hangs in the balance. Choose wisely.