Showing posts with label Bad checks. Show all posts
Showing posts with label Bad checks. Show all posts

Sunday, March 17, 2013

The chequeing scheme, where micro meets macro


This is about as a rounded and admittedly loose connection as one can make but a connection nonetheless. Let me get straight to the back story.

My lady friend of 18 years & counting refuses to use a debit card. She despises credit. She also prefers to not use cash either. She's still the mindset of 20 years ago when everything revolves around cheques. Now, in her defense there is a practical reason behind it. She feels if you really want to buy something that added step of writing it out reduces impulse buying and judging by her sterling accounting of our finances; I offer no debate.

A few weeks ago she unexpectedly ran out of cheques. Unfortunately this coincided with the long Martin Luther King Day weekend thus the banks were closed. So with no ability to access her money, she had two choices: use credit or dont buy what she needed until the next day. As we were just one day from our annual winter getaway to Florida... I enter with option three: me picking up the tab. And being the loving spouse I am, I chose to use my cheques. One part out of respect for her and partly because I just haven't written one in so long. At the same time, I felt it would make it an interesting exercise to practice my cursive. 

So a few transactions and a few chicken scratches later, we were on our way. When we got back home is when it got interesting. It seems due to inactivity and I moving my direct deposit out of that bank, my account was closed. Unbeknownst to me, I had written three cheques without having an account at all. I quickly made contact with the vendors and paid in cash the amount + fees. This suddenly made me remember why I stopped using cheques over a decade ago: overdrafts.

Now at this point It was behind us. One week later came the letters from collection agencies demanding the funds to cover said cheques. So, I called to explain to them the situation. A manager on duty of the collection service then hit me with this...

"Sir, if you dont have proof you made good on these cheques we require a payment to take care of that. We except two forms of payment. Western Union and Cheque by phone."

Cheque by phone, I asked? I told her I wrote a bad cheque, why would they accept another cheque? She then begins to tell me it happens all the time. That people knowingly write bad cheques and then make payments to the collection agencies with more bad cheques. If this process seems completely irrational and made up; its only the same exact thing that our government does (and gets away with) regarding the dollar.

Now I did say it was a loose connection and you made it this far so bare with me.

We effectively print dollars with no tangible backing whatsoever, just "confidence" that the dollar will not crash and that in turn will not lead to a run on the bank. Remember, due to the modern practice of fractional reserve banking, bank's tend to only keep a small fraction in liquid reserves. Thus any major fluctuation of withdrawals in a one day period can make things very interesting for a bank.

Now with that said, after the banks make these monopoly based dollars, they just sit back and operate the biggest shakedown modern civilization has ever seen.

By way of OPEC taking only US dollars for its oil (thank you President Nixon and King Faisal), it forces oil buying nations (read the entire world) to naturally obtain US dollars so they can obtain the OPEC oil (which holds about 2/3 of the worlds oil supply). OPEC then takes those US dollars and reinvests them into US banks further strengthening our place as the preferred empire of the world over.

So, like a guy armed with a closed chequing account and a fistful of cheques, you too can play the game of tangible assets/commodities for nothing too. Buy the goods and services with cheques that, like our dollar, are essentially worthless paper backed by nothing; THEN use the same cheques to pay off the creditors! You come out with goods and everyone else is stuck holding worthless paper. Then rinse & repeat.

The difference between the guy running that scheme with a closed chequing account is eventually the jig will be up. Unless you’re real slippery and willing to constantly move and change your name quite often; it will all come to an end. But what about the US petrol-dollar scheme? How long before that hustle is over? When you think about it, from the US point of view, it’s paramount that the US remains the reserve currency for oil. For if not, we can expect a lot of dollars coming back home and when I say a lot, I am talking the SHIT-TON of quantities.

If that happens our standard of living (even at a declining rate) will all but disappear. This will create instant hyperinflation and eventually a sell-off so large that the immigration issues on the borders wont be commonly known from Mexican people trying to get as they are today but instead it will be American citizens trying to get out.

Its pretty obvious the lengths our leaders will go to keep this asset bubble propped up. So, what happens if you don't agree with this petrodollar recycling scheme? What if you are in favor of, say a more "open competition" regarding how to pay for oil? As I stated last year in this piece; it usually doesn’t end well for you.

Now with Iraq and Afghanistan wrapping up, all the sabers are waving towards Iran and they are running out of time. Friday, President Obama put them on notice Friday saying:
"Right now, we think it would take over a year or so for Iran to actually develop a nuclear weapon"

Then eloquently added:  "but obviously we don’t want to cut it too close.”

The President then went on to call a nuclear Iran "a red line". You have less than a year Iran. Less then a year before you continue or end your nuclear program. But remember, the nuclear program is a guise. The real threat remains the precedent you are making with disrespect for the dollar. So, close your oil bourse and fall back in line or else.

Now picture that guy again with the cheques and the false chequing account. Hes cashing cheques and receiving goods and when you want to collect or end the scheme he shows up at your place of business with an army and guns and tells you if you dont change your ad's or paint your store Tropicana yellow hes gonna shoot the place up and remove you. You like your job dont you? Your kids eat waffles dont they? You need money to buy waffles. The American hegemony alive and well; Tony Soprano don’t have nothin’ on us.