Topic: General

The Before Message

by

Leo Crocker Rogers

September 25, 2008

Preservation is about understanding before, before.

Federal attorneys are now counseling Federal Regulators that if the Regulators do not understand a financial instrument which the banks, mutual fund advisors, mortgage lenders, investment advisors, and other creative financial pundits offer, the Federal Regulators should shut them down. No longer is the public to be led to believe that there is a free lunch.

Complexity in financial matters leads to high risk because only the creators understand the convolutions of the offerings.  "If you don't understand it, don't do it." Why? Because the institutions telling you it is okay can be, and recently have been, dead wrong. Fancy money manipulations has its rewards, but it kills like a machine gun spraying death to more than its creators.

When clients or customers do not understand a financial instrument, and they sign it anyway, they given up all notion of responsibility and the ability to morally control their own financial destiny.

As of last week, Money Market funds were not covered by any insurance. I and millions of others were thus transferring funds to treasury bills. The volume of such transfers was so high that brokers could not move the money fast enough. Had the Feds not stepped in and insured the Money Market funds, there would have been the closure of several money market fund makers, not the least of which might have been several large brokerage firms. In reality, moving those funds was really just a journal transfer in the same firm, but when that much money begins to move, it generates cracks in other institutions and the blood begins to flow. Bottom line for every person, family, church, and institution is: If you don't understand it, don't do it. We are on own worst enemy for trusting an expert who tells us to trust him. "Tad Rivelle, chief investment officer at Metropolitan West Asset Management which manages $26 billion in fixed-income assets said, "We were on the verge of putting every Wall Street firm out of business."

Clearly, the brightest men and women in the USA did not understand the consequences of their financial cleverness. Now we all suffer. It was last Monday that Putnam closed its own Money Market Fund. Its smart people did not wish to add to the agony of the financial corrections which lie ahead. They had not even guessed the extent of their own vulnerability. They understand that vulnerability now and do not wish to continue being clever. Cleverness is adroit thinking and implies being able to anticipate future dealings. Clever financial dealings was epitomized by Enron.

The finest thinkers in the world often migrate to the manipulation of money. Of those select few, the very best keep things simple rather than dealing in complexity, but those that understand the morality of simplicity are few and far between.

While the financial matters of the USA are far from over, there is a matter that will make the financial difficulties but a mere shadow in a future possible darkness.

Remember, preservation is about understanding before.

Think of this: Computers are needed to keep cars running, planes flying, and railroad cars rolling. Computers are needed to balance the electrical loads of cities and states to keep the lights on. Computers are needed for both phone and visual communications. Computers are needed to govern the stock market and the financial institutions.

Now consider this:  Computers use semiconductors to function, "Intel is inside." Ask, "What would happen if the basic building block of computers, the source of semiconductors -- polycrystalline silicon -- were no longer available?" (See: http://en.wikipedia.org/wiki/Polycrystalline_silicon ) The USA would shut down. First,, the Feds would be alarmed just as they are now with the financial situation. But unlike the financial situation where the treasury simply prints more $100.00 bills, the Feds could do little. After their concern, there will be a slow down in all transportation, limited electricity, erratic communications, and financial institutions will melt like snow in the Phoenix August sun.  Second, the USA would become vulnerable to every enemy it has ever had.

How many semiconductor polycrystalline silicon plants are there in the USA?  One major semiconductor polycrystalline silicon plant. Take it out of production and the solar polycrystalline silicon plants could replace its supply. How many solar plants are there in the USA? Two major plants. That makes three terrorist targets.

Three commandeered Boeing 737s plowing into those three plants could bring the USA to its knees. Money and political influence would be of no help.

Are there other polycrystalline silicon plants in the world? There are. But the output of those plants run the rest of the world and the output is not available to us without sacrifice to the  military and commercial strength of those countries in which those plants reside.

There is no complex thinking in this regard. There are no financial instruments that are so complicated that even their creators do not understand them.  Lack of polycrystalline silicon is a simple scenario understandable by us all.

Simply, the most valuable bartering chip in the world is not gold; it is not oil or natural gas; and it certainly is not the US dollar; it is "polycrystalline silicon" words that such as Henry Paulson have likely never heard.

What is closer to all humans in the USA than money? It is the silicon that is in every watch, cell phone, t..v., refrigerator, air plane, car, computer, radio, traffic light. Want to see the USA melt? Take away its polycrystalline silicon.

Does the US government have a reservoir of gold? It does. Does the US government have a reservoir of oil? It does. Does the US government have a reservoir of polycrystalline silicon? It does not.  We stand naked in a country that must have polycrystalline silicon to function at all levels of commerce and military.

You think the financial melt down is horrific, just wait.

This is the "Before Message".  "Preservation is about understanding before."

Is there a "Before Plan" that can prevent the real meltdown of the USA?

There is.