M3 and the King of Uganda

(Conspiracy Nation, 12/05/06) -- The year in which John Hanning Speke embarked upon his journey, hoping to find the source of the Nile River, was 1859. Among his supplies were included large quantities of beads. These would be used for trading with the African natives. Well, this must have been an evil white man, you might think. Imagine that, trading worthless beads for valuable native possessions. Or, you might think, those Africans sure were dummies. Imagine that, for some crummy beads they gave away things like cattle and ivory. The year in which Americans embarked upon their journey to find the source of the money supply was 1913. The trail led to "a private corporation, under minimal government control, that creates the money we all carry in our wallets." (Wilson, Robert Anton. Everything Is Under Control. New York: HarperCollins, 1998) The King of Uganda was happy to get those beads from John Hanning Speke. Beads like that were a scarce item in Uganda, at the time. Since they were scarce, that made them valuable.

There was trade between white adventurers and the natives. Though Speke was an explorer first and foremost, and not after profit primarily, others, notably Arabs, enriched themselves through trade. And so did the Ugandans enrich themselves. Ivory was scarce and valuable in Europe and the Middle East. Beads were scarce and valuable in Uganda.

In the old story of Dick Whittington, all poor Dick has to trade is his cat. He sadly sends it away with the merchant, at whose house he works in a lowly position. But the merchant travels to a land which has no cats, and is over-run with mice. That makes Dick Whittington's cat immensely valuable. In exchange for the cat, the merchant receives a fortune in valuables. He is an honest merchant and does not steal the fortune for himself, but gives it to Dick Whittington.

The Ugandans were not dummies. In 1859, in Uganda, those beads were valuable. Later though, as more and more beads arrived, they became less and less valuable. Maybe there were complaints about "inflation." Maybe the natives sighed and said, "Last year, a cow cost only 5 beads. This year it is costing over 100 beads."

But at least the King of Uganda did not tell his people, "It is the wage and price pressures which are causing the inflation." The King of Uganda probably realized his people were not that stupid.

The money we carry in our wallets is like those beads. It is created right here in the U.S., not brought in by adventurous explorers. Until last year, we could see how many new beads had been made, through the M3 statistics. But the bead monopoly decided to hide that data.

Now, fortunately, one web site is reporting, "We have located 2 separate sources for the reporting of M3. The first is Nowandfutures.com. As this article discusses, recreating M3 from publicly available data was relatively easy to do (to 5 nines accuracy)." (http://bigpicture.typepad.com/comments/2006/11/the_return_of_m.html)

Suspicions had been aroused that the bead monopoly was attempting to cover their tracks by hiding the M3 data. Suppose they were scheming to enormously increase the supply of beads? Well Lo and Behold, this seems to be the case! Since March of 2005, the growth rate of beads has gone up! (http://www.nowandfutures.com/articles/20060426M3b,_repos_&_Fed_watching.html)

It is all in the Repo numbers, young Master Dick Whittington. The bankers who get the beads from the bead monopoly have so many, they don't know where to put them all. A lot of those extra beads are used to buy stocks, and this has buoyed the stock market.

And you, Mr. and Mrs. Average American, don't seem quite as savvy as a 19th-century Ugandan native.

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Conspiracy Nation
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